29 Jun 2016 in Newsletter
Brexit: Consequences on Patent Prosecution in Europe
The UK’s decision of leaving the European Union has shocked global markets and unleashed uncertainty. Although this decision is likely to impact the date at which Europe’s Unified Patent Court (UPC) can begin operations, the current routes available to applicants for obtaining patent protection in Europe are unchanged.
Multinational patent protection in Europe may still be obtained by filing European patent applications and Euro-PCT applications, i.e., PCT applications entered in the European regional phase. Indeed, while the UK is expected to leave the European Union (EU) after a long and complex exit procedure, the UK is and will still remain a member state of the European Patent Convention (EPC), which governs both European and Euro-PCT grant procedures. The European Patent Organization is an international non-EU organization that has 38 member states, ten of which are not EU states, including Switzerland, Norway, and Turkey.
Because the EPC is not tied to the EU, applicants will still have the possibility of seeking protection in the UK via a European patent, be it originated by a direct filing before the EPO or by a Euro-PCT application, as is also the case with any other non-EU state that is part of the EPC.
As to the future impact on European patents with unitary effect, a consequence will be that the territorial scope of European patents with unitary effect will not include the UK. This is because the two EU Regulations establishing a European patent with unitary effect, which will come into effect once the UPC Agreement comes into force, cannot apply to a non-EU state. It is in fact very unlikely – although not impossible – that the UK proceeds with the ratification of the UPC Agreement before leaving the EU.
Once a European patent is granted under the future unitary protection regime, applicants will be given the option of requesting unitary patent protection for the EU participating states, thus saving costs in a number of cases. Simulations made following the introduction of the top 4 fee schedule have shown that savings may be obtained when protection in at least 4-5 countries is sought, depending on the countries, in particular during the first half of the 20 year-term. At the beginning of the new unitary protection system, European patents with unitary effect will cover at least 13 countries, which is the minimum number of countries required for the new unitary protection system to start. In the long term, at the most, European patents with unitary effect will cover the remaining member states of the EU (with the exception of Spain and Croatia), which makes a total of 25 countries. As consequence, in the future, applicants of European patents will have to consider whether annuity fees have to be paid at the national level also for the UK, as for any EPC country outside the unitary protection system as well as for any EU country not yet participating in the UPC.
Following Brexit, the destiny of the UPC is not clear, in particular in terms of whether law changes are needed to let the UPC start. The UK is currently one of the three mandatory ratifying countries, in addition to France, which has already ratified the UPC Agreement, and Germany, which is in the process of doing so. Will Article 89(1) of the UPC Agreement have to be amended to reduce the number of mandatory ratifying countries to two? Will the UPC Agreement have to be amended to replace the UK with another mandatory ratifying country, such as Italy? Or will it be left unchanged, letting the other states proceed without the UK without additional delay? The answers to these and other questions, such as the destiny of the London branch of the Central Division and, most importantly, the value attributable to a unitary enforcement system not including the UK, will mainly depend on the political positions assumed by the UK and the EU institutions as well as their member states in the coming months.