Fordham 25 (Report 2): Brexit and IP

The Brexit and IP panel at Fordham

Next up was a blockbuster session on Brexit and IP.  A topic that is frankly wearing the AmeriKat down, but of interest to the more diverse Fordham faculty.  The panel was a veritable who's who with Margot Frohlinger (Principal Direcotr, Patent Law and Multilateral Affairs, EPO), Mr Justice Arnold (High Court, London), Trevor Cook (WilmerHale), Judge Klaus Grabinski (Federal Supreme Court, Karlsruhe), John Pegram (Fish & Richardson), Nicholas Saunders (Barrister, Brick Court Chambers) and Joel Smith (Herbert Smith Freehills).  The IPKat's additional paws on the ground in the form of the intelligent temporary Kat Laura Whiting reports:

"Having dried off her somewhat soggy paws after the morning's rain storm in the comfortable environs of Fordham Law School's Skadden Conference Center, this (temporary Guest)Kat settled in comfortably to report on the second panel of the day, dealing with one of the favourite topics du jour: Brexit & IP.

The speakers were introduced by Prof Hugh C Hansen, Director Fordham IP Institute (all agreeing, with only the slightest encouragement, that Fordham was their favourite IP conference).

Margot Fröhlinger kicked the discussion off by outlining the remaining steps to be taken before the Unitary Patent and Unitary Patent Court are brought into effect.  She reported that implementation is still on course for December 2017 and the key ratifications of the UK and Germany remain on track.  However, there is still much work to be done behind the scenes before the doors can open.  

Margot Frohlinger

The 840 applications to be UPC judges have included applications from all (or at least most) of the most experienced patents judges in Europe, including one from a UK patent judge made the day after the result of the Brexit referendum. Margot commented that although she thought this was optimistic at the time, now that the UK government appears to be going ahead with participation in the UPC, it was perhaps simply prescient.  Her view was that since the role of the CJEU in the UPC system is marginal, providing there is sufficient political will for the UK to be involved in the system, it can be.  Addressing concerns about legal uncertainty resulting from a change in the UK's UPC membership status at the end of the 2 year negotiating window, she felt that such uncertainty is unlikely because legal provision will inevitably be made to deal with the treatment of, for example, pending UPC cases on Brexit day.  Margot expressed her hope that the UK would participate post-Brexit as the UPC would be "so much more attractive with the UK in" not just because of the geographical coverage, but also because the UPC needs the participation of the UK judges and UK practitioners. 

Joel Smith commented that the UK political will is there to support the UPC, however the recent calling of the general election may mean that this issue no longer enjoys such high priority as it did.  Nicholas Saunders, Barrister, Brick Court Chambers, mentioned that although the UKIPO has as its top corporate priority the implementation of the UPC, the treatment of the UK after Brexit day requires fundamental revisions to the Agreement and there are real practical issues as to how those may be addressed in the context of the wider Brexit negotiations.

Hon Mr Justice Arnold, (co-author of this recent paper on the IP consequences of Brexit) commented on the effect of the Great Repeal Bill, which he noted does the opposite of what its title suggests, repealing only the European Communities Act and otherwise converting existing EU laws into national statutes.  The UK government has confirmed that the implementation of new EU legislation will continue up until Brexit day, albeit with some "necessary adjustments".  For example, the government will need to consider the post-Brexit position on EEA exhaustion of trade mark rights: he said it is unclear whether the government will continue with the status quo, or move to an international exhaustion regime (which, he commented, would be more consistent with the desire to leave the EU). 

Mr Justice Arnold

In relation to CJEU case law, he said that the White Paper indicates that decisions handed down prior to Brexit day will have the same status as UK Supreme Court decisions – thus binding all UK courts.  After Brexit day, the white paper leaves the status of new CJEU decisions entirely open.  Moving on to references, Arnold J commented that the absence of the reference mechanism in future could be problematic, particularly in relation to relatively new EU legislation, for example the Trade Secrets Directive (due to be implemented in summer 2018), which contains a number of provisions which are open to interpretation.  The UK courts will have to do the best they can on their own without recourse to the CJEU. 

In relation to further developments of the existing CJEU law, the UK courts face a dilemma: they can "improve" upon the existing EU jurisprudence, but that risks cutting the UK off from the wider European position which may be undesirable from a harmonisation perspective.  Future CJEU decisions can be accorded persuasive authority in UK courts, but this will not guarantee a consistent approach in the UK vis-a-vis the EU.  

Hon Dr Klaus Grabinski agreed with Margot Fröhlinger that since the UPC was an ex-EU system, there was a good chance to keep the UK in the system post-Brexit.  Flipping the question of CJEU jurisprudence on its head, he felt that post-Brexit UK decisions would continue to have persuasive influence in other EU courts, based on the quality of those decisions and the UK judges. 

Trevor Cook cautioned against forgetting (in the debate about the UK's involvement in the UPC) about the Unitary Patent (UP), which is a creature of EU law.  Whilst he could envisage suitable amendments being negotiated to allow the UK to continue as a member of the UPCA, he felt that continued UK involvement in the Unitary Patent after Brexit day was impossible.  Judge Grabinski and Margot Frohlinger were both more positive about this and considered that a solution for the UK to be in was possible (since the UP is a product of not just EU but EPC laws), but this would require a separate agreement between the EU and UK in order to extend the unitary effect of UPs to the UK.
John Pegram, Senior Principal, Fish & Richardson sparked a debate with Prof Hansen by suggesting that companies should beware of opting-out of the UPC by default during the transitional period.  Prof Hansen disagreed, since an opt-out was in effect an effort to retain the current status quo. 

Nick Saunders

Nick Saunders commented on the nature of the CJEU being in effect a forum in which the EU institutions and the Commission decided on the future path of EU laws.  Because of the transparency issues at the CJEU, it was often difficult for private parties to have the same access to the underlying documents on which those decisions were made.  Those difficulties would also apply to UK judges post-Brexit.

Joel Smith commented on the conflict between the number of policy issues to be addressed in the Article 50 window, just in relation to IP, and the very limited time available.  He said that this meant that many of the IP questions would be unlikely to be fully resolved until some time after Brexit day.  Trevor Cook agreed that the 2 year window was very short and that clients should bear in mind the possibility of hard Brexit if no agreement is reached in that time and have a plan for it. 

Arnold J wrapped up the session by commenting that one potential benefit of Brexit could be if it led to the UPCA being re-negotiated in order to allow other non-EU EPC states such as Switzerland and Norway to participate in the system.  Others on the panel felt that would simply complicate an already complicated situation further!"