Brexit and the UPC

Most of the IP community now sees little prospect of the UPC being established in the near future. Only 1% of those at IP-owning companies think that the court will be up and running in 2019 and only 15% think that it will in 2020. Although 49% believe that the UPC will be established further in the future, 29% are unsure. This closely mirrors the predictions of those in private practice, where only 17% believe that the UPC will be in operation by the end of next year and 54% expect the court’s inception further in the future.

Expectations regarding the UPC have shifted drastically since the United Kingdom’s decision to leave the European Union and the German constitutional challenge to the court. In 2017 only 29% of respondents from operating companies believed that we would have to wait until after Brexit – then expected to take place in 2019 – for the UPC to be established. That figure increased to more than 50% in last year’s survey and the United Kingdom’s ratification of the UPC Agreement shortly after the close of our 2018 survey has not reversed this trend in expectations.

Nevertheless, the IP community – as in previous years – remains confident that the UPC will be established eventually. Only 6% of corporate respondents doubt that it will come about, with 9% of private practice professionals sharing that view. In 2018 those figures were 8% and 10%, respectively.

Indeed, our respondents are supportive of the proposed UPC. The establishment of the pan-European court has been rated as very important by 26% of law firm professionals and 24% of corporate respondents, and as somewhat important by 40% and 53%, respectively. Most participants also want to see the United Kingdom play a part in the UPC. For 63% of private practice respondents, this is very important or somewhat important – a sentiment echoed by 67% of those at IP-owning companies. Only 9% of those at firms and 7% of those in-house stated that this was not at all important.

Interestingly, respondents at IP-owning companies and in private practice expressed different views on the significance of Brexit (if and when it happens) for European IP strategies. While 57% of in-house professionals said that it will make little difference to their company’s strategy, only 33% of those at law firms said the same of their clients’ strategies. Moreover, although 31% of those in private practice said that Brexit would mean the United Kingdom will become a far less important focus for their clients, only 9% of in-house professionals agree that this would be the case. Just a small minority for both sets of participants said that Brexit would require a fundamental re-evaluation.

Figure 34. When do you think Europe’s UPC system will get up and running? (IP-owning company)

Figure 35. When do you think Europe’s UPC system will get up and running? (private practice)

Figure 36. How important is it that the United Kingdom be part of any future UPC? (IP-owning company)

Figure 37. How important is it that the United Kingdom is part of any future UPC? (private practice)

Figure 38. How important is it that the UPC is established? (IP-owning company)

Figure 39. How important is it that the UPC is established? (private practice)

Figure 40. How will Brexit affect your European IP strategy? (Please choose up to three options) (IP-owning company)

Table 14. How do you expect Brexit to affect your clients’ European IP strategies? (Please choose up to three options) (private practice)

It will cause them to have a complete re-evaluation

13%

They will be worried, but they will wait to see what happens

49%

They will look elsewhere for opportunities

16%

It will make little difference

33%

The United Kingdom will become a far more important focus

4%

The United Kingdom will become a far less important focus

31%

Europe is not important to our clients

1%

Table 15. Please rank the top three biggest threats to your clients’ IP portfolios today (private practice)

  

First most important

Second most important

Third most important

Cost of litigation

33%

20%

10%

Lack of resources

14%

13%

12%

Backlog at major patent offices

7%

13%

9%

Anti-patent sentiment in parts of the world

8%

8%

20%

Uncertainty surrounding patentability

18%

21%

15%

NPEs

5%

5%

4%

Lack of interest from the boardroom

5%

7%

10%

Decrease in patent values

8%

5%

11%

Decisions handed down by the US Supreme Court

1%

9%

10%

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