Counsel's opinion on Brexit and UPC provides limited comfort

Counsel's opinion on Brexit and UPC provides limited comfort

05 October 2016

The opinion of Richard Gordon QC and Tom Pascoe (here) has been widely reported as providing reassurance that there are no legal difficulties in the way of the UK participating in the UPC post-Brexit.  As one of the sponsors of the opinion, Bristows does not share this viewpoint.  The opinion merely reaches its conclusions “on balance” and other views remain perfectly credible.  Moreover, it is a purely legal analysis and does not, of course, comment upon the political realities of the requirements it sets forth.  The opinion makes it very clear that several boxes would have to be ticked in order to maximise the chances of the CJEU deeming the system legal, which are more or less inconceivable in the present political climate, especially following the Prime Minister’s speech at the recent Conservative Party conference.  At least in the short term there is virtually zero chance of the UK ratifying the UPC Agreement, and the real question arising is:  what are the longer term prospects for salvaging the UPC project – with UK participation?


The opinion was requested to help clarify whether it might be possible for the UK to participate in the present incarnation of the unitary patent and Unified Patent Court (UPC) in a post-Brexit era.  In particular, what changes to the legal structure would be required, and what would the CJEU require of the UK and the remaining contracting states in order to approve the arrangement.  The backdrop to this was that the CJEU would ultimately be the arbiter of the legality of any arrangement, because inevitably one day someone sued in the UPC would, as a defence, challenge the legality of the Court, and this would go to the CJEU for decision.  The concern was that in its opinion 1/09 of March 2011, the CJEU had struck down the legality of the arrangement then on the table, and this was widely interpreted as meaning that EU membership was a strict requirement of participation.

The key legal findings of the opinion can be divided into three categories.

  • First, the UK would have to accept the primacy of EU law “in its entirety” (Counsel’s emphasis).  This would include not only existing EU law, but future amendments and additions.  As part of this, the CJEU would have the ultimate power to decide upon the meaning of EU law upon referral from the UPC, meaning acceptance also by the UK of the ultimate authority vesting in the CJEU.
  • Second, revised legal arrangements would be necessary, including at least a formal treaty-type agreement between the UK and the EU.
  • Third, the CJEU would indeed be the ultimate arbiter of the legality of the new arrangements and there is a risk it would find against the arrangements.

The first point raises a very obvious and indeed huge political problem.  Giving the EU authority to legislate over the important area of innovation policy, and accepting the CJEU’s authority to rule on the meaning of EU law are both flatly at odds with Theresa May’s speech on 2 October at the Conservative party conference.  All calls upon the UK to ratify the UPC Agreement before the end of this year as had previously been planned are now futile.

The second point raises a potential further political problem.  Spain has long been an opponent of the present system.  As best one can judge, there has been no real moderating of its position in recent times.  For example, in September, Spanish industry refused to endorse a letter from Business Europe urging the Competitiveness Council to press on with the UPC project despite Brexit.  Hence the question also arises as to whether Spain could veto any EU-UK agreement required for the new arrangements?  Or if not exercise a veto, then make it politically impossible for the EU to deliver its part of the new deal?

The third issue is purely legal in that it depends upon an assessment of the case law of the CJEU as to the legality of this type of arrangement.  The view of Counsel is that the case law supports the legality of the arrangement provided sufficient safeguards are present to ensure the supremacy of EU law and the CJEU’s own authority.  The opinion rightly points out that opinion 1/09 did not say expressis verbis that EU membership was a criterion for the legality of the version of the agreement then under consideration.  A detailed critique of the reasoning is not appropriate in a piece of this nature, but as well as noting that the opinion itself acknowledges that the CJEU could, of course, come to a different conclusion, two points alone are sufficient to demonstrate that there remains very significant uncertainties.  First, the contemporaneous interpretations of opinion 1/09 in 2011 by the Commission (presumably with advice from its Legal Service) and by the Council Legal Service were both, in effect, that the agreement must be limited to EU member states.  In May 2011 the Commission stated (in its “non-paper” here): “As a result of opinion 1/09 of the CJEU it appears that the participation of third countries must be excluded.”  In October 2011 the Council Legal Service, in its opinion (here) on the compatibility of a revised draft agreement (similar to the one the UK is now being asked to ratify) with opinion 1/09, described (in paragraph 27) the fact that the revised draft would be concluded by EU states alone as a “key difference” from the draft objected to by the CJEU.  The result was that Switzerland (which had been a major player in shaping the system) was excluded, a step which presumably was not taken lightly, and not without considerable thought.  Second, there is no exactly parallel situation which can be relied upon by way of analogy, and hence this is a case of extrapolating from the closest cases.  Such extrapolation is obviously difficult and an inexact art.  For himself, your author happens to disagree with the conclusion.  He also has concerns that the case law reveals (irrespective of the issue of EU membership) very significant issues with the role of the EPO in granting unitary patents when it itself has no power to refer matters to the CJEU on matters such as the Biotech Directive:  one can conceive of circumstances where the EPO denies protection to patentees, yet the CJEU has no say whatever in this process.

Overall, therefore, the opinion is a very useful start in the debate, but no more than that.  It holds out hope that the UK might be able to participate, if the political price could be paid.  This brings us to the future.

Long term prospects

What is impossible now politically, may be much more possible in a post-Brexit era.  Let us suppose that there is a “hard” Brexit, with the CJEU having no residual power over the UK courts, and all the present political “heat” has disappeared, with the most ardent of Brexiteers satisfied.  In such a climate, the suggestion that in the rather narrow field of patents, perceived to be largely irrelevant to the man on the street, the UK might reach a new international agreement along with the EU, might receive a wholly different reception than would an identical suggestion made now.  Perhaps all the more so if: the UK were but one of a number of sovereign non-EU EPC states joining in this process; part of the deal was that the UK retained an important part of the central division and its own local division of the UPC; and enforcement of “foreign” UPC judgments were (in theory anyway) regulated by UK courts.  Certainly this has to be the hope, for the alternative is far less appealing from a UK perspective, and also from a wider international perspective.  That alternative is that the UPC proceeds without the UK.  If so, the London part of the central division would have to be relocated and it would be very difficult to imagine it ever being repatriated to London if the UK were to join in later.  Setting up a UPC without the UK seems very much a one way street.  The only real opportunity to include the UK is now – or rather in the next few years.  Otherwise, the ship will have sailed.  So to extend that analogy, will the remaining states have the patience to remain in the port a little while longer for their UK passenger?  Will they modify the ship’s layout a little to accommodate our new circumstances?  One thing is for sure:  there is now absolutely no useful purpose in telling the UK to hurry up and get on board now.  It simply will not happen any time soon.

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