Joff Wild

Ten days after the UK voted to leave the European Union and we are still no clearer as to what kind of Brexit we will get or how long it will take. Instead of reaching out to the other 27 member states to begin the conversation, the country has turned inwards. Following the Prime Minister David Cameron’s announcement that he is to stand down as a result of his defeat at the polls, the ruling Conservative party is now engaged in a leadership contest. One of five candidates will be crowned Cameron’s successor – but not until 9th September. Until then, the government is in limbo and there is no chance that a UK negotiating position will emerge.

Becoming a key issue is just when the British government will invoke Article 50 of the Lisbon Treaty, which sets the timetable for withdrawal. Once it comes into play, there is a two year timeframe to do a deal, unless both sides agree to an extension. Some in the UK argue it should be invoked immediately. Others state that there is no hurry and we need to be clearer about what we want and whether we will get it before anything precipitous is done. There is no way a decision will be taken before a new Prime Minister is in place and, depending on who it is, it could be 2017 before anything happens – maybe even later.

Then there are the terms of departure. A lot of people are talking about the UK pursuing an EEA/EFTA style agreement, meaning we would essentially remain a part of the single market, would accept single market rules, but would have a slightly higher degree of sovereignty and the ability to conclude our own trade deals. Others say that this would be a betrayal of Leave voters as it would basically allow EU citizens to continue to live and work in the UK with no restrictions, and it would mean that in many areas the EU would dictate UK laws, with the UK having no say over how these laws are framed. What the other 27 member states think does not seem to be getting much weight – maybe not the best way to begin a negotiating process.

In short, the whole thing is a mess. It turns out that the Leave side had no plans for what Brexit would actually entail and no timetable to put it into place. A series of contradictory positions were taken by Leave advocates during the referendum campaign which cannot be delivered on, including: higher government spending, lower taxation, no cuts to public services, no tax rises, ongoing full access to the single market, much lower immigration and so on. It’s a complete dog’s breakfast; no wonder there are indications that buyer’s remorse is emerging among some Leave voters. Remain voters, meanwhile, look on with a mixture of bemusement and no little anger: the humiliation of Leave leader Boris Johnson a rare pleasure amidst the gloom.

For IP owners, all this means dealing with a period of sustained uncertainty. Right now they can have no confidence in predicting what the IP landscape in Europe will look like in two or three years’ time. And that’s because absolutely nobody knows. An EEA/EFTA deal, for example, would have very different IP consequences to one that was based on WTO free trade standards. As things stand, both are possibilities. The best advice that can be given for now is to keep on monitoring this and to remember that the UK is currently a full EU member state. Thus, everything that applied IP-wise on 22nd June continues to apply today. That will not change for a while.

Probably the biggest IP casualty of the Brexit vote is the proposed Unified Patent Court and the EU unitary patent regime. Until the UK leaves the EU its ratification is needed for the system to come into being, so realistically that probably means a minimum of two and a half years’ delay from here. Given all the time and money that has been invested in preparing for what was thought to be its imminent introduction, that’s a big blow.

Perhaps in part because of that investment, over the last week there have been several suggestions (here and here, for example) that there may be ways to bypass the Brexit vote in order to get the UPC up and running in any case. To do this, though, would be a terrible mistake.

On 23rd June, the people of the UK voted to remove the country from the EU and its institutions.  There may be clever legal arguments for claiming that the UPC is not one of these, but to all intents and purposes it is. Only EU member states can be a part of it and for that to change considerable renegotiation would be needed. While it is true that the UK remains part of the EU until it has left – the country’s trajectory is outwards and there is absolutely no desire for more Europe. Politically, it is hard to see any UK government making any decision that would go against that; while morally it would surely also be the wrong thing to do, even if ordinary voters know nothing about the court or patents in general. They have voted for a course of action and that has to be respected.

The UPC already has its critics. They consider it to be the result of a deal done behind closed doors, designed to benefit nobody but big corporations and patent lawyers. That may be an entirely mistaken viewpoint, but one way to reinforce it and to give it more traction is to ignore the implications of the Brexit vote and to concoct a way for the UK to participate in the UPC.

What’s more, it’s not as if industry has been clamouring for this. In the latest issue of IAM, for example, just 10% of corporate respondents to our annual benchmarking survey stated that they were preparing for the UPC “enthusiastically”, while just 12% of private practice participants reported their clients have such an emotion when planning for the system.

A delay in launching the UPC will frustrate many and will undoubtedly delay or even put on hold forever Europe’s emergence as the centre point of global patent litigation. It will clearly mean that European patents are not going to be as valuable as they would have been and it will make it much harder for Europe to set de facto global patentability standards or to lead the way in areas such as patent valuation and collateralisation. These are all wasted opportunities; but that’s democracy for you. If the EU had been better at demonstrating its benefits in the first place maybe we would not be where we are now.

A few days after the Brexit vote the Italian parliament began discussing the legislation required to enable the country to ratify the UPC. That’s a significant development, because after the UK does leave the EU Italy’s signature will join France’s and Germany’s as one of the three needed to bring the UPC into being. As aggravating and frustrating as it may be, if we want a UPC that is regarded as legitimate and worthwhile that is where things have to move from here. The British are saying goodbye, the Italians will step up to the plate. The people have spoken, the bastards.