Europe’s prospects of becoming the world’s patent powerhouse are back on track after UK announcement

In a massive development that will impact patent owners across the globe, the UK government announced this week that it will ratify the Unified Patent Court (UPC) Agreement in spite of the country’s decision back in June to leave the European Union.

Lucy Neville-Rolfe, the UK minister for energy and intellectual property, confirmed at a meeting of the EU Competitiveness Council that the British government would proceed with preparations to ratify the UPC Agreement. “The new system will provide an option for businesses that need to protect their inventions across Europe,” she said in a statement. “As long as we are members of the EU, the UK will continue to play a full and active role. We will seek the best deal possible as we negotiate a new agreement with the European Union… We want it to involve free trade, in goods and services. We want it to give British companies the maximum freedom to trade with and operate in the Single Market - and let European businesses do the same in the UK.”

Thirteen member states need to ratify the UPC Agreement for it to come into effect, and three of those must be the United Kingdom, France and Germany. The EU unitary patent system has been many years in the making, and the result of this June’s Brexit referendum – in which a majority of 52% of the British voting public elected for their country to leave the European Union – threw the already complicated process into total uncertainty. Many assumed that the project was now as good as dead; or, more likely, that it would be delayed further before launching as a far less attractive prospect without the significant British market under its jurisdiction.

One of the most commonly repeated concerns among British ‘Leave’ voters’ was the desire to stop the loss of sovereign powers to Brussels. The UPC would involve foreign judges making legal decisions regarding UK-issued patents, with the availability of final appeal to the Court of Justice of the European Union in Luxembourg, an institution much maligned among British Eurosceptics. All in all, that sounds very much like ceding further sovereignty to Europe, rather than repatriating it.

Therefore, the UK government’s announcement will come a something of a surprise to many, both inside and outside the IP world. Now only Germany’s ratification is needed as France, Britain and 11 others have already ratified or have indicated that they will do so; meaning that the UPC may well be up and running not too long after its pre-Brexit vote scheduled start date of early-to-mid 2017.

For now, the UK government is adamant that it will be completely extricating the country from the European Union at some point in the not-too-distant future. This means that there will definitely be complications to be ironed out with regards to its participation in the UPC and unitary patent system – although it is important to note that these are not technically EU institutions, and will exist separately from it. 

In any case, the UK announcement is huge news for patent owners and those working in patent licensing and sales. The UPC – and the unitary patent which will be enforced before it – will cover a high-income market of over 400 million people with a GDP roughly the same as that of the United States. The unitary system is expected to come with significant cost savings for patent-owning businesses in terms of pursuing complaints, while the possibilities presented by the availability of injunctions and bifurcated validity proceedings will be attractive to operating companies and NPEs alike. That is likely to mean big opportunities for patent buyers, vendors and licensors alike – and, with the pushback against patent owners in the US system over recent years, could well make Europe the world’s prime patent jurisdiction. If you put your UPC plans on hold because of Brexit, it’s time to dust them off again.

Other Contents by Author