European Unitary Patent Court—Back on Schedule for 2017?

Following the United Kingdom's referendum vote to leave the European Union, the patent community in Europe has been waiting for a signal of the UK's intentions in relation to the Unified Patent Court Agreement ("UPCA"). It had been thought likely that the UK would now not move ahead with the new system, at least for the time being, and many businesses have put their preparations for the new system on hold. However, the UK Minister of State for Energy and Intellectual Property, Baroness Neville-Rolfe, has announced that the UK is proceeding with preparations to ratify the UPCA. The Minister further stated that the UK will continue to play a full and active role as long as it is a member of the EU, and she appeared to envisage continued UK involvement in the new system even after the UK leaves the EU, although that may depend on the forthcoming negotiations between the UK and the EU.

The UK's ratification plays a key role in the launch of Europe's new patent system: for both the Unified Patent Court and the Unitary Patent to come into force, the UPCA has to be ratified by each of Germany, the UK and France as well as 10 other EU Member States. So far, 11 Member States including France have ratified the agreement, leaving only the UK and Germany to ratify it in order for the new system to be activated. The UK's intentions have therefore been closely watched.

While the UCPA is not an EU court, it has been set up by the EU, and certain aspects of the new court are due to be subject to EU law. Whether and how the UK will be able to stay within the new patent system after it leaves the EU will be resolved only once the negotiations for the UK's new relationship with the EU have made some progress. Accordingly, whilst the UK has now announced that it is proceeding with its preparations to ratify the UCPA, that does not necessarily mean that the UK will press ahead for an immediate ratification. In the circumstances, it may choose to move more slowly toward ratification pending some progress with the negotiations between the UK and the EU.

Germany is expected to ratify the UCPA after the UK has ratified it and after the technical preparations and appointment of judges have been completed. The UPCA will then enter into force on the first day of the fourth month following Germany's ratification. If the UK does move ahead promptly, the new system will come into force before the end of 2017.

Businesses that put their preparations for the new patent system on hold following the UK's referendum vote now need to revisit this in the coming few months—they need to consider whether or not to opt out their existing European patents and patent applications from the new system, readdress their technology transfer agreements and reconsider their positions with respect to ongoing patent disputes. In particular, opt-out decisions will need to be made during the "sunrise" period ahead of the new system coming into force if patentees intend to protect themselves from inadvertently being drawn into the new system. The reasons for and against opting out are outside the scope of this Alert, although the uncertainty about the UK's involvement in the new court system in the long term may be an additional factor for some businesses to take into account.