It’s been almost four years since the United Kingdom voted to leave the European Union and debates started among patent specialists what consequences this would have for the UK’s role in the Unitary Patent system. Last Friday the Brexit finally became a reality and on Monday prime minister Boris Johnson gave a speech on the future UK relationship with the EU. Kluwer IP Law interviewed Luke McDonagh, senior lecturer in IP and constitutional law at City, University of London, about the latest developments.

Has Johnson’s speech brought any clarity about the UK’s participation in the Unitary Patent and Unified Patent Court?

“In my view it is much less likely that the UK will participate in the UPC as a result of the new government’s policy. There seems to be a hard line on issues relating to the CJEU’s jurisdiction, which is tethered to the UPC on EU law matters. It is still early and the UK government may soften its approach as the deadline approaches, but the signs are ominous.”

Johnson has stated he doesn’t accept the jurisdiction of the European Courts. Although it has often been argued this means the UK will have to leave to UP system, similar statements were made in the past by, for instance, former PM Theresa May. This didn’t stop her government from approving the ratification of the UPCA. What’s your impression? Is this an issue that could be the subject of negotiations?

“On the Irish border question, in Autumn 2019 Johnson essentially accepted the EU proposal on Northern Ireland remaining in the EU single market for cross-border issues – effectively creating a quasi-border in the Irish sea, putting Northern Ireland into a different economic zone to Great Britain. This was the very same proposal that May had rejected as one that no Conservative and Unionist Prime Minister could ever accept. Yet Johnson did it – and (seemingly) got away with it. He is a better salesman than May, and has a much larger majority, so he has more ‘wiggle room’ than she had.

The UPC, however, is way down the list of pressing matters for the EU-UK Free Trade Agreement. If overall negotiations go well, the UPC might be slipped in as a positive step for judicial cooperation between the EU and UK. But if negotiations are fraught, which looks likely, the UPC will probably fall by the wayside as far as the UK is concerned.”

Johnson has called for a Canada-style free trade deal, saying the UK will return to the Withdrawal Agreement if such a deal is not reached. Can you explain what that would mean for the UK’s patent regime?

“Because of the EPC being outside of the EU legal order, there will be little change to patent grants/oppositions regardless of what trade deal the EU and UK reach. However, there may be changes to the enforcement of legal rulings (including on patents) if the UK falls outside the EU Brussels Convention/Regulation and the EFTA Lugano Convention. The UK may also choose to diverge on biotech standards if there is a very loose EU-UK legal relationship in the future. The legal regime for parallel imports and exhaustion will be in doubt.”

How good or bad, in your view, are the Brexit and Johnson’s plans for the UK’s position in the worldwide patent industry? Britain has already lost the European Medicines Agency, for instance.

“The loss of the EMA was a body blow but it has generated remarkably little commentary in the UK press. The loss of the UPC life sciences division would be another blow. On the positive side of things, the new UK government has suggested it seeks to invest a greater share of GDP in R&D which would be welcome since UK R&D investment lags behind other European states. But it remains to be seen whether and how this will occur in practice.”

Luke McDonagh

According to the EU’s draft negotiating mandate, which was published on 3 February 2020, (point 50): “The envisaged partnership should establish an appropriate mechanism for cooperation and exchange of information between the Parties on intellectual property issues of mutual interest, such as respective approaches and processes regarding trademarks, designs and patents.” Do you think this text is problematic for the UK government? Could you explain?

“I don’t think this is a problematic area for the UK government. The exception is Geographical Indications – if the UK signs up to a deal that recognises the EU’s GIs this would limit the ability to strike a trade deal on e.g. agricultural imports with the US. But I do not see the patents sphere as a problematic one for EU-UK talks. It is far more challenging for UK-US talks, where the US will undoubtedly push for the UK to pay higher prices for patented drugs on the NHS, which will be controversial.”

Will Aldgate in London be the location of the UPC’s central division in charge of chemical, pharmaceutical and life science sectors, somewhere in the future?

“The building is already there and has hosted mock trials and events. Milan wants to host the division if the UK gives it up.”

Is the UP and UPC project dead?

“It is not dead – nor will the UK be the factor that kills it, as there seems to be support for the project to continue even without the UK, with Milan primed to take the UK’s central division. However, if the German Constitutional Court holds the UPC unconstitutional, then it will certainly die a death – because the UPC cannot function without German involvement. We should have clarity on this issue later this year.”


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3 comments

  1. Nice to see publication of another example of a more realistic assessment of the chances of the current UPC Agreement ever entering into force.

    I doubt that any time soon we will see anything even remotely as realistic as this from the EPO (or from any of the usual collection of pro-UPC commentators). That is a shame. Whilst the fat lady may not yet have sung, the writing is certainly on the wall.

    Is there anyone out there who seriously believes that the UK government will do the only thing that stands a chance of making the UK’s participation in the UPC Agreement permissible after 2020, namely sign up to the jurisdiction of the CJEU in respect of all of the aspects of EU law that might possibly have a bearing on cases before the UPC? Indeed, is there anyone out there that seriously expects that, before the end of 2020, free trade negotiations between the UK and the EU will even get close to addressing an agenda item so far down the list as the UK’s participation in the UPC?

    The UK and the EU have much bigger (and equally tricky) fish to fry before they start worrying about the UPC. For starters, there is the UK’s continued participation in up-and-running projects such as the Galileo satellite navigation system and the European Medicines Agency. There is of course a chance of surprise events that surpass expectations, as happened when a large serving of fudge was used to resolve the Irish border issue. However, forgive me if I remain sceptical.

    With regard to those that nevertheless remain optimistic, I can only say that there is surely a point at which optimism becomes blind. Even if we have not reached that point quite yet, it will take a miracle to stop us getting there.

    Finally, can I suggest that this would perhaps be an opportune moment for the legal profession in Europe to invest time and effort into putting together a successor to the UPC Agreement that addresses all of the (numerous and highly problematic) legal flaws in the current Agreement that have come to light? Full compliance with EU law (including the Charter of Fundamental Rights), national constitutional laws and the separation of powers principle would be a good starting point, as would improvements in the accountability and democratic legitimacy of the organs, committees and rules of the court. A big challenge sure enough, but there ought to be the legal talent out there to handle it.

  2. It is refreshing to have a more realistic view from a British scholar over the future of the UPC in post Brexit times. At least he does not have a finger in the pie.

    It is very clear that in view of the political position taken by the PM, the UK will not participate in the UPC. It might not yet be dead, but a further nail has been added to its coffin. The mention of London in the agreement itself might not facilitate amending the UPCA.

    I can fully endorse the proposal to rethink the whole of the UPC, but the initial question should be: do we need such an agreement if it is not endorsed by all the member states of the EU?

    Furthermore, one way of avoiding a clash in case law in respect of validity would be to have the opposition period not limited to 9 months, but like the limitation or revocation, possible during the whole life of the patent. This would however limit a supra-national jurisdiction or national courts to only decide upon infringement.

    It is a daring proposal, and in contrast with established practice, but it should not be dismissed at once. It would at least improve cooperation in IP matters and go over the strict limits of the EU.

    This would however require that the Boards of Appeal of the EPO are truly independent from the general administration and the president of the EPO, and not merely the perception of their independence to be improved. May be the awaited decision of the German Federal Constitutional Court could help to move matters in this respect.

    This could be an excellent topic for a conference of ministers of the Contracting States according to Art 4a EPC, which is long overdue.

    Techrights and zoobab: FINGERS OFF!!! Directly or Indirectly

  3. If Germany ratifies now, they would break the AETR caselaw, by making deals with non-EU countries.

    AETR was used during the debate on EPLA to exclude non-EU countries from participating, such as Swizerland or Turkey.

    And Germany would expose itself to a second constitutional complaint.

    But we have seen worse in this file.

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