Yesterday, on 23rd June 2016, the United Kingdom has decided, through a public referendum, to leave the European Union. Aside from the many other consequences of this vote, the decision also has a direct impact on the Unitary Patent/Unified Patent Court system because this new system is not open for participation of a non-EU member state.
As a reminder, the Unitary Patent “package”, whose purpose is to set up a European Patent with a unitary effect on the territories of the 26 participating member states, will come into effect when 13 countries, including France, UK, and Germany have ratified the Unified Patent Court (UPC) agreement. Bulgaria, which was the 10th and latest country to ratify it, did so on 3rd June 2016, meaning only 3 member states (including UK and Germany) have still to ratify.
In accordance with the Treaty on the European Union, a withdrawal agreement must now be concluded between the UK and the EU, and the Treaties will cease to apply to the UK from the date of entry into force of this withdrawal agreement or, failing that, two years after the UK has issued its withdrawal notification (unless otherwise agreed).
It is possible that the Unitary Patent “package” will have to be re-negotiated between the remaining 25 participating member states, noting that UK was a big player in the initial negotiations as well as one of the three top-patenting countries in Europe and that with its withdrawal, the system will be less attractive for companies, especially in term of cost-effectiveness.
The UK could also possibly decide to ratify the UPC agreement to allow its set up, even if it were to leave the UP system eventually at a later date and this could be used as leverage during its negotiations with the EU. Yet, this situation would probably lead to some major issues to resolve regarding the effective application of the UPC system in the UK and in the EU, especially with the central division of the Unified Patent Court being created in London to hear chemical and pharmaceutical patent disputes, as provided by the UPC agreement.
The outcome of the Brexit therefore remains unclear, but it could certainly mean the end of or a significant delay in the launch of the Unitary Patent system, which was initially expected next year.
To read more about Stibbe's Brexit team and other newsletters about the Brexit consequences, please click here.