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UK Withdraws from Unified Patent Court system - but likely with less impact than you would expect

On 20 July 2020, the UK Government announced its official withdrawal from the Unified Patent Court (UPC) Agreement.  This is a disappointment but not unexpected.  

Does this mark an end to over 40 years of efforts to produce a harmonised IP litigation process in Europe?  Of course not.  The UPC has, in recent years, been the focus of interest for two reasons:

  1. It would have created a unitary patent that promised EU-wide coverage with a single renewal fee that was lower than paying for all states individually
  2. It would have brought in rules of procedure that EU states that benefited from the many years of experience the UK and German courts have built up

Currently, studies have shown that a typical European patent is validated in 3-5 states.  These often include UK, Germany and France - selected not only from a cost perspective (as none of these countries require translations at grant) but also due to market value.  The proposed unitary patent was priced for renewal at similar levels to renewing 3-5 states individually.  While the loss/delay of the UPC means patent proprietors will not have the option to benefit from "free" EU wide coverage, the status quo will be maintained and renewal costs will not change.  If the UPC is pushed ahead without the UK, it is quite possible that its renewals will be priced such that UPC+UK renewal costs will be no different to those proposed previously.  

The UPC rules of procedure and certainty/consistency of approach were viewed by many as a key component of the UPCA.  However, these are not lost.  In fact, they have been in use in UK IP actions for a number of years.  The rules and approach were written with heavy involvement of UK IP Judges and closely based on those of the UK's Intellectual Property Enterprise Court (IPEC).  The IPEC has seen huge success in recent years in its ability to decide complex matters on a limited court-imposed timetable and budget and we expect its use to increase.

In terms of harmonisation of law and approach, the European Patent Convention (EPC) is and will remain the underlying law applied by both the European Patent Office and national offices and courts.  It is a requirement of the EPC that national law is consistent with it. This is something that is part of UK IP law and there is no prospect of change as it has no link to the EU.  Because other EU and non-EU member states have the same legal basis, it is already common to see a decision in one county's IP courts given the nod and made enforceable by another country's court.

In summary, the majority of the benefits from the UPC are already here and available to patentees and defendants.  Williams Powell has a strong litigation team and we have been using the IPEC's rules and procedures as a key strategy in litigation.  It is not just the SMEs and individuals that benefit from constrained costs and timetables - many multinational corporations have seen and used the increased certainty to their benefit.  We would be glad to discuss strategies and approaches with you - please do not hesitate to get in contact if you have questions or issues.

While Brexit will have an impact on the commercial scene, it is our expectation that the IP world will see much less change.  It remains possible that the whole UPC agreement will be renegotiated to include non-EU states, although the question of which body decides questions of law still remains.  More likely, in our opinion, is the expansion of recognition of decisions between courts - after all, IP Judges already talk a lot and are deciding cases on the basis of what is on the whole the same law. 

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