UK’s EU referendum – if vote is for Brexit, what happens to the UPC?


The starting point is that it is not possible for a non-EU Member State to take part in the proposed UPC regime (CJEU Opinion 1/09).  Hence, if the vote on 23 June 2016 is for the UK to leave the EU the future of the UPC become complicated. What might happen in the event of a UK exit?

  • The UK will not have ratified the UPC Agreement by 23 June.  However, it could still go ahead with ratification in any event, albeit in the full knowledge that it would have to leave the system again at a later date as part of a wider exit package, likely to be two years later (Article 50 of the TEU as amended by the Lisbon Treaty). If the UK does decide to ratify, and participate in the system until EU exit, then the likely UPC start date of spring 2017 could still stand (provided Germany and two more Member States ratify).  Whilst such a scenario is legally entirely possible, whether it would be politically possible is another matter. In particular, would the government, in the face of an exit vote, then sign up to an arrangement which gave primacy to Union law as required by Articles 20 and 24(1)(a) of the UPC Agreement?  If it did occur, then (as the UPC arrangements do not provide for a party leaving the EU) provisions would have to be agreed, e.g. a granted Unitary patent could “divide” into an EP(UK) patent and a Unitary patent with a scope excluding the UK.
  • Assuming that the UK does not ratify the UPC Agreement, the system could not start until the UK was actually no longer an EU Member (unless the UPC Agreement is amended). This is because Article 89 (1) provides: “This Agreement shall enter into force … on the first day of the fourth month after the deposit of the thirteenth instrument of ratification or accession in accordance with Article 84, …..including the three Member States in which the highest number of European patents had effect in the year preceding the year in which the signature of the Agreement takes place …” (emphasis added).  The three relevant countries included the UK.
  • As and when the UK leaves the EU, Italy would replace it to join France and Germany as the three mandatory ratifying countries.  This is because it was the fourth most popular country for validation in 2012. (The Netherlands was in fifth place, but was included in the Unitary patent “True Top 4” list because, at the time, Italy was not intending to join the Unitary patent part of the system.)
  • Article 7(2) specifies that “The central division shall have its seat in Paris, with sections in London and Munich ….”.   Notwithstanding the CJEU ruling, there is probably no strict requirement that the Court should be physically located within the EU, so in theory a section of the central division could still be in London.  This seems unlikely to be considered desirable by the remaining Contracting Member States.  Instead, it is probable that a substitute location is selected.  The UPC Agreement would then need to be amended (and presumably ratified again by those countries which have already done so).  Agreeing on a substitute location might well involve very difficult negotiations as to the fate of the London section (due to cover, inter alia, chemical and pharmaceutical patents), with competing claims likely from Paris and Munich, and perhaps Milan and/or The Hague. (It will be recalled that the original split of the central division was contentious and Germany was reportedly not pleased with its share.)
  • Article 49(6) requires central division proceedings to be in the language of the patent.  As this is unlikely to change, about 70% of cases in the central division would still be in English.  However, there would be no UK judges (Article 15(6)) or UK lawyers representing clients (Article 48(1)), although UK European Patent Attorneys would apparently still have a right of representation if they qualified under Article 48(2).
  • Unitary patents with a scope of protection excluding the UK would be markedly less attractive to industry. However, there is no reason in principle why there should be any change to the already agreed fee structure, notwithstanding it took a “True Top 4” approach, which included the UK.

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