UK participation in UPC confirmed

The United Kingdom has announced that it intends to participate in the unitary patent and the Unified Patent Court (UPC) despite the recent vote to leave the European Union. The United Kingdom plans to ratify the UPC Agreement so that both the unitary patent and the UPC become a reality in the near future, perhaps during 2017.

Together, the unitary patent and the UPC will form a new system for granting and litigating patents in Europe. A unitary patent will have unitary effect across all participating EU member states. The unitary patent will be granted by the European Patent Office (EPO) as an alternative to existing European patents, which will remain possible alone or in combination with a unitary patent – for example, to provide protection in non-participating member states. The unitary patent may significantly reduce costs for patentees (via a reduced translation burden and a single renewal fee). The UPC will have exclusive jurisdiction over unitary patents and European patents granted by the EPO, including those already granted (subject to transitional provisions). The UPC’s rulings will be enforceable across all participating member states, and its powers will extend to revoking unitary patents and European patents across all of those states. One significant benefit of the UPC for a patentee is central enforcement. However, this is balanced against the significant risk of central revocation.

Participation in the unitary patent and UPC system is currently limited to EU member states. Following the Brexit vote, it seems that the United Kingdom will leave the European Union in a few years’ time. As a result, there has been uncertainty regarding whether the United Kingdom is willing to ratify now and whether it can remain in the unitary patent and UPC post-Brexit. The United Kingdom is one of three countries that must ratify before the unitary patent and UPC can come into effect, so it is currently delaying the arrival of the new system for the whole European Union. A legal opinion commissioned by a consortium of IP legal professionals) concluded that the United Kingdom could remain part of the unitary patent and UPC system following the Brexit vote. The opinion identified the amendments to the agreement required for the United Kingdom to remain in both the unitary patent and the UPC.

The major beneficiaries of a unitary patent and UPC system that includes the United Kingdom are likely to be patentees and litigants, who will enjoy the increased efficiency and geographical coverage for patent protection, enforcement and revocation. The next steps are likely to be ratification by the United Kingdom, followed by Germany, which will trigger a final period of four months, after which the new system will finally enter into force.

Patentees need to make some decisions before the unitary patent and the UPC arrive, so now is a good time to start considering the options. During an initial transitional period it will be possible to opt existing European patents out of the UPC’s jurisdiction. There are advantages and disadvantages associated with opting existing patents out of the UPC, which patentees will need to weigh up as part of their overall strategy. Most decisions will be based on the risks and benefits that come with the possibility of central revocation and central enforcement under the UPC. The opt-out strategy should be finalised well before the new system starts functioning, as an opt-out cannot be filed after an action has started at the UPC. It is also a good idea to review existing licences to consider how staying in or opting out would affect the licences and whether they are suitable for the new system.  For future European patents granted once the new system has arrived, patentees will need to decide whether to choose a unitary patent (falling under the UPC's jurisdiction) or a European patent (either opted out from or left under the UPC's jurisdiction), which may be a complex decision given the cost savings offered by the unitary patent versus the certainty of relying on conventional European patents.

After more than 40 years, it seems Europe is finally moving towards a single patent and a single specialist patent court, with all the new risks and opportunities that entails.