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!"
Fordham 25 (Report 2): Brexit and IP Fordham 25 (Report 2):  Brexit and IP Reviewed by Annsley Merelle Ward on Thursday, April 20, 2017 Rating: 5


  1. Regarding Unitary Patents: Couldn't the UK Government simply legislate unilaterally to recognise the effect of Unitary Patents in the UK? No agreement with the EU or official negotiation of an agreement under Article 142 EPC required?

  2. And so, the summary is?? It's hard to tell whether the 'oh, it'll be alright' is knowledge, blind optimism or desperation. CH and NO seem to be complicated whereas UK is tootling along nicely (although it is still complicated?). I'm lost. 2017? 2018? 2019?...

  3. It is amazing to see what is coming out now in order to save the UPC.

    UPC is an agreement reserved to EU member states. This is a fact which seems conveniently forgotten.

    As long as UK is member of the EU it might ratify. Once out of the EU it cannot any longer be part of the UPC, at least in the present form.

    This means that:
    1) the participation of UK in the UPC post Brexit will be part of the bargaining under Art 50. Any more enchanting perspective?
    2) provisions have to be found how to transfer pre-Brexit judgements of the UPC into the UK legal system. This might be the easiest part, although it does not appear as simple as it may look at a glance.
    3) provisions about enforcement post-Brexit of UPC judgements in the UK have to be devised. This is a point which has been conveniently dodged up to now by all proponents of the post-Brexit participation of UK.

    I see here three reasons of great uncertainty. Can, in all honesty and in view of this uncertainty, any representative suggest to his client not to opt-out until any of those points are cleared?

    That US industry and PAEs are interested in the UPC is pretty obvious, but should not be taken as a push to satisfy this need.

    Here the Commission oversees a great danger and belittles the point of view expressed for instance by IP2P(?) about the danger of trolling. I am not convinced that the harmonisation effect heralded by the Commission will eventually be a benefit for European industry in general and SMEs in particular. In the case of patents subsidiarity might be better.

    And now CH and NO should come into the UPC! Ever heard of Opinion 1/09? One should not forget that it was the death knell of EPLA!

    As a commenter wrote: is this "knowledge, blind optimism or desperation"? A nice summary!

  4. Any idea what I tell my client about UPC cases that are ongoing on Brexit day? For example, if on Brexit day there is an ongoing UPC case where infringement is exclusively in the UK, what happens?

    Quite frankly, the statement that "uncertainty is unlikely because legal provision will inevitably be made to deal with the treatment of, for example, pending UPC cases on Brexit day" is ridiculous. That uncertainty already exists and will continue to exist unless and until the specifics of the assumed provision are finally decided on.

  5. Uncertainty is not unlikely it is likely! The statement should be read correctly.

    That an ongoing case in UK on Brexit day will continue is not at stake here. The uncertainty lies in the how it will happen in the UK. This might be solved if only UK is at stake.

    There is however also an uncertainty, but much larger then, on what will happen if it affects not only UK but other contracting states on Brexit day, whether or not it is taken by a UPC court having its seat in UK.

    This leads inevitably to the post Brexit enforcement problem.

    Not everything revolves around an island bordering the North Sea. After all ridiculous for ridiculous, who is the more ridiculous??

  6. Those who remember the introduction of the 1977 Patents Act may remember the mess that the Parliamentary Draghtsmen made of the transitional provisions vis a vis the 1949 Act, where conflicting 1949-Act and 1977-Act patents would both have had priority over each other. When this was belatedly realized, the solution adopted by the Patent Office was to delay grant of all 1977-Act patents until all the 1949-Act patents had been granted, thereby ensuring that conflict would never arise. One applicant who had been informed his patent was in order for grant and whose business was being ruined by imports of "infringing" products whose import he was powerless to prevent, managed to get the courts to grant him an order of mandamus which forced the Patent Office to grant him his patent.

    I seem to remember a judge describing the transitional provisions of the 1977 Act as something like " ... a paradigm of unclarity and anfractuosity". Hopefully they will do better this time, but I'm not betting on it.


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