The UPC will not get started in 2017 and don't bet too much on it happening in 2018 either 22 Jun 17
It’s been a big political week in the UK. On Monday, David Davis, the government minister overseeing the Brexit process, finally had his first formal meeting with Michel Barnier, the chief negotiator for the EU27, so beginning the discussions around the country’s departure from the European Union. Then, yesterday, Parliament was opened by the Queen following the inconclusive 8th June election which saw the ruling Conservative government unexpectedly lose its overall majority and, therefore, the ability to control the narrative around Brexit and other legislative issues. With the clock ticking down to 29th March 2019 – the date when the UK is scheduled to stop being an EU member state – the country has an emasculated leader and no detailed Brexit strategy. It’s a mess.
Although the dysfunctionality at the heart of the UK political system and the trauma of the divorce from the EU is largely an issue for us Brits, it does have implications for any IP owners that hold assets here or might wish to do so in the future. There are now under two years until Brexit occurs and all the uncertainties around IP that existed on the day after Leave won the referendum continue to exist today – with no sign yet of them being solved. This has major implications for enforcement and for validity of rights granted by the EU IP Office, as well as those that will be granted over the course of the next 20 months.
Settling the issue of successor IP rights and the jurisdiction of the Court of Justice of the European Union will be complicated, time-consuming work – but whether it will be a priority or not in the Brexit talks remains to be seen given what else has to be sorted out between now and March 2019. The likelihood is that some kind of transitional arrangement between the UK and the EU27 will have to be cobbled together to get us all past the deadline Theresa May created when she triggered Article 50 and started the countdown to departure back in the spring, but that in itself will take some negotiating and cannot be considered a given.
For patent owners, things are slightly less worrisome as the European Patent Office is not an EU agency and will continue to grant rights that apply in the UK in the way that it does now; while those that it has granted will continue to apply in the normal way. Instead, the confusion for the patent community is centred on the fate of the Unified Patent Court agreement, which cannot come into being until the UK ratifies it.
Last November, the British government surprised a lot of people by saying that it would go ahead and do so, but by the time the election was called it still had not happened, despite some progress. During the election campaign, the UK IP Office indicated that everything was on course, but given what happened on 8th June – and given that there is still one piece of legislation required before the UK can sign off – it is difficult to say whether this remains the case.
During the election campaign, the ruling Conservative party adopted quite a belligerent tone when talking about Brexit – framing the process as confrontational rather than amicable. Using the kind of faux patriotic, backward-looking language so beloved by certain types of politician and newspaper, voters were told that domestic “saboteurs” and the EU27 were out to thwart the will of the British people and that only by standing resolute and refusing to surrender would we get the glorious Brexit everyone so craved. Although nothing specific was said, that did rather create the impression that the UK was going to be as obstreperous as possible once the Conservatives won their anticipated huge majority, which threw British willingness to get involved in the UPC separately to agreeing a Brexit deal into question.
But having considered the Conservatives’ arguments, the electorate in its wisdom decided that they should not receive the mandate they requested; so now, with very few aces to play, the government seems to be adopting a much more conciliatory tone. That could mean that it will now proceed as planned with ratification – though time will be tight to get anything finalised between now and 20th July, when Parliament tales a seven week summer break. If everything happens quickly from here, it could be that the UK is in a position to ratify the UPC in the autumn; but if the legislative process moves into September, we are more likely to be looking at very late 2017 or the first part of next year. And, of course, it is not a given that anything will happen at all.
But it is not only the UK now holding the UPC up. Earlier this month, it emerged that Germany’s Constitutional Court – the Bundesverfassungsgericht (BVerfG) - had requested a delay in the German ratification process as a result of a challenge it had received to the legality of the enabling legislation. Neither the substance of the challenge nor the identity of the challenger have been revealed, but according to a Bristows report: “The BVerfG would be expected only to have issued the request on the basis that the challenge could not be found to be totally without merit from the outset.” There is no indication as to how long the case may be with the constitutional court, but one estimate I saw said it might take between four and six months to decide. If that were the case, the earliest Germany could be expected to ratify would now be at the beginning of 2018 – though if the court decided to uphold the challenge it would presumably take a whole lot longer than that.
The upshot of all of this is that there is no way the UPC will begin this year. The UPC preparatory committee conceded as much on 7th June when it announced: “The previously announced target date for the entry into operation of the UPC, envisaged for December 2017, cannot be maintained.” Notably, it did not name a new target date. In this year’s IAM reader benchmarking survey just 6% of operating company and private practice respondents stated that they believed the UPC would be up and running in 2017. They have been proved wrong already. A further 30% of corporate respondents and 29% of private practice respondents identified 2018; while majorities in both categories stated it would either be in 2019 or when the UK has finally left the EU (implying that they do not think the UK will actually be a part of the system). As each day goes by, the pessimists look ever more likely to be proved right.
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