22 Feb
2016

EU referendum means UK may never sign the UPC agreement - UPDATE

The referendum to determine whether the United Kingdom will remain a member of the European Union is to be held on 23rd June. Coincidentally, that is around the time it was expected that the UK would ratify the Unified Patent Court agreement, so bringing Europe’s new unitary patent system closer to launch.

With the UK and France fully signed up, it would need only Germany – and a total of 13 EU member states – to do the same for everything to kick off. And with the Germans now beginning to move towards ratification, with a view to having it finalised by the end of this year, some time during March 2017 has emerged as the best bet for UPC launch day. If, that is, the UK votes to Remain. If it doesn't, the story might change.

Whether the British decide to vote In or Out will make little difference to the legality of the UPC project, it does not need the UK in order to operate; but the choice made at the referendum will surely affect the UK’s ratification. It must now be highly unlikely that this will occur before the vote; while a decision to Leave may mean that the UK never signs up. That would then create an interesting situation. The UK would not immediately leave the EU following a Leave vote; instead, an exit deal would have to be negotiated - a process that is likely to take two or even three years. While that were happening the UK would remain an EU member state.

So, what happens to the UPC if, during the time a Brexit deal is being hammered out, the UK does not ratify? On exit, the UK would be replaced by the Netherlands as one of the mandatory signatories needed for the regime to come into force, but that might not happen until 2018 or even 2019. In the meantime, would the UPC be in limbo or would the UK ratify only to pull out on Brexit? It's complicated stuff, but an answer is needed. A two or three year delay would, of course, give others the time to think again, or for everyone to decide that actually the UPC is not worth the bother.  

Whatever happens, if the UK does opt for Leave, patent owners will need to take account of the fact that the country would be an entirely separate jurisdiction in which the unitary patent is not valid. For some that may well tip the cost balance – making the classical European patent or even national patent route a more attractive option.

The result of the EU referendum in the UK is going to be close. Internet opinion polls indicate a very tight outcome, with Leave just in the lead; while telephone polls have Remain comfortably ahead. I expect Remain to win, just, but would not be at all surprised if Leave comes out on top. The good news is that we will know either way relatively soon. A referendum next year – as was originally envisaged – would have meant another 12 months of total uncertainty. But don't expect a Leave vote to clear things up completely. It may delay the UPC coming into force for a number of years, or it may not. Does anyone know?

UPDATE - On 24th February, in an email sent to law firm Pinsent Masons a UK IP Office spokesperson stated that UK ratification of the UPC is now "likely to be post referendum". What remains unclear, though, is whether that will be the case whatever the result turns out to be. If it is, then the UPC is likely to be up and running by the end of March next year and the UK will subsequently depart the system once it leaves the EU, probably in late 2018 or 2019.  However, if the UK does not ratify following a Leave vote the prospect of a delay in the implementaiton of the UPC until Brexit happens is potentially a real possibility. If anyone has any further idea on this, please let me know.  

Joff Wild

Author | Editor-in-chief

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Joff Wild