UK's Surprise Exit Casts 'Deep Shadow' Over Unified EU Patent Court
"A 'setback' is probably an understatement at the end of the day," said Morrison & Foerster partner Otis Littlefield of the move. "I think that could be the end of this system."
February 28, 2020 at 06:47 PM
4 minute read
The United Kingdom's decision to pull out from the project for a unified European patent court is a setback that could sound the death knell for the star-crossed project.
"A 'setback' is probably an understatement at the end of the day," said Morrison & Foerster partner Otis Littlefield, whose remit includes managing global patent strategy for life sciences companies. "I think that could be the end of this system."
European nations have been trying to put together a unified patent court for some 40 years. The project gained steam several years ago when 25 of the then-27 EU member states supported a Unified Patent Court (UPC) that would have exclusive jurisdiction over unitary patents, including infringement and validity proceedings. The agreement provided that at least 13 member states would have to ratify, including at minimum France, Germany and the U.K.
Following the U.K.'s Brexit vote in 2016, the administration of Prime Minister Theresa May indicated that the country would remain in the project, even though UPC decisions would be appealable to the Court of Justice of the European Union. But the government of new Prime Minister Boris Johnson announced Friday that that provision is a deal-breaker.
German ratification of the project is still subject to a court challenge that is expected to be resolved later this year. But even if that hurdle is overcome, the withdrawal of the U.K. may prove insurmountable, Littlefield said.
"The UPC agreement specifies in writing that London is going to be one the central courts" in the unified patent system, Littlefield said. So at a minimum the framework would have to be renegotiated or amended. Plus, if one of the top three issuers of patents in Europe is removed, "then you've lost a lot of the value of a unitary patent court system."
He said it's possible the remaining EU participants might still try to put together a unified court. But "I just wonder if there's still a desire to do a full unitary patent court system."
Jonathan Radcliffe, a London-based Reed Smith partner, agreed that the U.K. pullout casts "a dark shadow" over the project. "As Europe's second largest economy and one of its leading patent countries, the U.K.'s withdrawal will unarguably make the UPC of less commercial interest to many potential users," he said via email, noting that Spain, Poland and Croatia have already said they won't be joining.
Radcliffe also called it a de facto strategic power play by Johnson. "By rejecting UPC participation and its EU law oversight, any company that needs to defend its patents across Europe will now have to litigate in the U.K. even if the UPC system comes into being."
Not everyone thinks the Unified Patent Court is doomed though. Jin Ooi, a partner in Kirkland & Ellis' U.K. IP litigation practice, said he sees only a slim possibility that the project won't go forward without the U.K.
"The UP/UPC has been in plan for decades now, and to abandon the project whilst it is now so close to the finishing line is almost unthinkable," he said via email. "The likelihood is that it will proceed without the U.K.'s involvement, regrettable though that may be. Of course, there are skeptics who hold the opposite view!"
Ooi said the outlook is business as usual in the U.K. for patent litigation, along with parallel litigation before the Unified Patent Court and the U.K. Courts once the UPC is up and running.
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