Brexit impact on European patent strategy

What impact will a Brexit have for my patent strategy in Europe?

With the referendum on the United Kingdom’s membership of the European Union (EU) only a week away, our thoughts turn to how a possible Brexit would impact the patent system in Europe and therefore patentees’ strategies in pursuing patent protection in Europe.

Although the European patent system as exists currently would be unaffected by the UK leaving the EU, a proposed new unified patent system within the EU is scheduled to come into effect in 2017. In the event of a Brexit, this system would probably (at least ultimately) not include the UK if it went ahead and might not proceed at all.

Current European system
Currently, European patents are granted by the European Patent Office but they are enforced as national rights (and thus a European patent must be “validated” in one or more of the contracting states of the European Patent Convention (EPC) to bring them into force).  Owing to the independence of the EPC from the EU, if the UK were to leave the EU, the UK would remain a contracting state to the EPC and thus patent protection in the UK would still be able to be obtained through a European patent (under the current system).

Unitary Patent
The unified patent system, currently scheduled to start in 2017, would enable a “Unitary Patent” to be obtained following grant of a European patent that would have effect within all the EU member states (once they have signed up to the new unified system). Unitary patents will be available as an alternative to the current system and will be enforceable through a newly created “Unified Patent Court” (UPC). However, the Unitary Patent and the UPC could be in doubt in the event of a Brexit.

Impact of a Brexit on the Unitary Patent
It will be appreciated that in the event of the UK leaving the EU, this will have an effect on the proposed unified patent system. A couple of likely scenarios are envisaged.

The UK has not yet ratified the Unified Patent Court Agreement (UPCA – the legislation that brings the unitary patent and court into effect). It is considered unlikely, in the event of a Brexit, that the UK would ratify the UPCA. This would inevitably delay the start date of the unified patent system until the UK left the EU (owing to the requirement that ratification is needed from the three EU countries in which most European patents are validated (currently Germany, the UK and France)).

In the event of the UK leaving the EU and the unified patent system coming into effect, patent protection in the UK from a European patent would not be able to be obtained via a unitary patent. Instead, UK protection would have to be obtained via a UK validation (i.e. as per the current system). Validations in the UK would then have to be enforced through the UK courts, e.g. separate from actions in the UPC for the unitary or national validations in EU member states.

However, there is a possibility that, were the UK to leave the EU, (and not ratify the UPCA), the unified patent system would not proceed at all, faced with a significant delay to the start of the system (while the UK negotiated its withdrawal from the EU) and owing to the lack of political will from the remaining EU states following the withdrawal of one of its main participants (London is planned to be the seat of one of the three Central Divisions of the UPC, along with Munich and Paris).

If the unified patent system were not to materialise, the European patent system would continue as it exists currently and, as explained above, would be unaffected by a Brexit.

Patent applicants and proprietors will continue to be able to obtain patent protection in the UK from a European patent, even if the UK were to leave the EU. The question, in the event of a Brexit and the unified patent system coming into effect following a Brexit (which is not certain), is whether a unitary validation is sufficiently attractive (covering the remaining EU member states but not including UK protection) to patent proprietors to be used enough to make the unified system viable. Alternatively, it may be found that patentees choose to validate their European patents in the UK less than is the case currently owing to it not being covered by a unitary validation.

Thus, for European patent applications currently pending (or to be filed), patentees should be reassured that protection in all countries currently available will continue to be available, regardless of the result of the EU referendum. For patentees currently holding national validations for granted European patents, consideration should be made as to whether or not they should opt-out these validations from the jurisdiction of the UPC for the transitional period (this consideration is valid regardless of whether the UK votes to remain in or to leave the EU).

For detailed UPC advice relating to your own particular circumstances, please contact any of the team here at Dehns, who will be able to support your decision making process, or visit our UPC web pages for further information.

15 June 2016