Can the UK become and stay a member of the UPC?

The European Parliament Think Tank has issued a paper on the question of whether the UK can remain a member of the Unitary Patent Court (UPC) in a post-Brexit world. The cautious conclusion of the paper is that “it seems not per se legally impossible that the UK can stay within the UPCA [UPC agreement], even when not an EU Member State”. The problem of the UK’s continued membership of the UPCA arises from the fact that, when the UPC was conceived, nobody envisaged the UK unilaterally deciding to leave the EU.

The EU paper outlines the issues contributing to the uncertain future of the UPC and the potential involvement (or not) of the UK in the UPC project going forward. These include the reluctance of Germany to ratify the agreement before Brexit and the unclear position of the UK Government on whether the UK still wishes to be a member of the UPC (and thereby subject to the jurisdiction of the CJEU).

Germany is dragging its feet

The UPC agreement (UPCA) will come into force as soon as 13 EU member states have ratified the agreement. Germany, France and the UK must be among the 13. Theresa May’s UK government ratified the UPCA back in April 2018 (IPKat post here) ["Remember, Boris?"questions Merpel]. France has also ratified the agreement, but Germany has not. German ratification has been held up by an esoteric legal challenge to the UPCA in the German constitutional court (Bundesverfassungsgericht) (IPKat post here). The outcome of the constitutional court decision is expected by the end of 2019 or early 2020. However, the German parliament has indicated that, even once they have the go-ahead for ratification from the Constitutional Court, they will not ratify the agreement until the outcome of Brexit is clarified. With Brexit now scheduled for January 2020, it therefore seems unlikely that the UPC will be in force as and when Brexit occurs.

The Brexit/UPC paradox

The UK Government’s position is that the UK wants to “take back control” of its laws by leaving the jurisdiction of the CJEU. However, the UK Government has also ratified the UPC agreement (UPCA). According to the UPCA, the UPC will apply EU law and decisions of the CJEU will be binding on the UPC. Therefore, as things stand, if the UK continues to be a member of the UPC post-Brexit the UK will continue to be under the jurisdiction of the CJEU.

In the opinion of the EU paper it is “highly questionable that the UK itself would accept the arrangements of Article 20 and Article 21 for the UPCA which foresee the primacy of EU law and its application…as the end of the jurisdiction of the CJEU in the UK was one of the main intentions of the whole Brexit process” [Merpel: According to who? Merpel does not remember “the end of the jurisdiction of the CJEU” being on her Brexit referendum ballot paper].

The current position of the UK Government is also that they wish to leave the EU Single Market and Customs union. This appears to be legally incompatible with the UPCA, given that UPCA makes it clear that the UPCA is an instrument for the benefit of the single market. However, the report does not consider the possibility that the present Governing party in the UK, the Conservatives, may not achieve a majority in the upcoming general election. The “Brexit plan” of the main opposition party, Labour, is to retain a “close single market relationship”.

The issue of the London section

At the moment, the UPCA states that one of the unitary patent courts (the life sciences and pharmaceutical section) will be located in London (Article 7(2) and Annex II). The EU paper finds notable the unanimous decision of the EU Council to move the headquarters of the European Medicines Agency (EMA) from London to Amsterdam in the context of an imminent Brexit. However, relocation of the London section of the UPC would not be easy. As an international agreement, the UPCA could only be amended by unanimous decision of all the contracting states, including the UK (so long as the UK had not withdrawn from the agreement).

The position of the UK Government – as clear as mud

The Government’s “IP and Brexit Guidance” is uninformative on the issue of the UPC. The UK Governments guidance “Patents if there’s no Brexit deal” does mention the UPC. However, the Government hedges its bets and indicates that, in the event of no-deal: “The UK will explore whether it would be possible to remain within the Unified Patent Court and unitary patent systems”. In any case, this guidance has now been withdrawn after Prime Minister Johnson failed to meet his “die in a ditch” Brexit deadline of 31 October 2019. 


Brexit metaphor
The 2018 draft withdrawal agreement with the EU (i.e. Theresa May’s “deal”) did not mention patents. Boris Johnson subsequently renegotiated 2019 withdrawal agreement also does not mention patents. The non-binding political declaration accompanying the 2019 withdrawal agreement merely mentions that “[t]he Parties should establish a mechanism for cooperation and exchange of information on intellectual property issues of mutual interest, such as respective approaches and processes regarding trademarks, designs and patents”. Regardless, the Government’s withdrawal agreement bill was not approved by parliament before the general election was called. Also, as noted above, the Labour party has promised to renegotiate the withdrawal agreement should they win the general election.

The opinion of the CJEU

The EU paper summarises the (similarly unclear) position of the CJEU on the UPC/Brexit conundrum. CJEU Opinion 1/09, on the question of whether a 2009 draft version of the UPCA was compatible with the provision of the EU Treaty, has been read as indicating that membership of the UPC is only open to EU member states. The CJEU was of the opinion that Article 14a of the draft UPCA allowed non-EU member states to be a party to the Agreement. The relevant provision was removed from the final UPCA agreement. However, the recent EU report obliquely notes that “there is an increase in the number of votes that want to show a right-dogmatic way of facilitating the participation of the United Kingdom (and possibly other non-EU countries in the future as well)".

The paper concludes...

According to the EU paper, it may be possible for the UK to remain a member of the UPC post-Brexit. However, UK UPC membership would need “innovative legal solutions, as the UPC is an international court applying EU law – and the reason for Brexit was all about not applying EU law any more” [Merpel is again not sure why the author of the report is so sure about this]

Another option, of course, would be for a majority of the UK electorate in enough constituencies to vote Liberal Democrat, who have promised to revoke Article 50, and then the whole mess will go away...[Another famous cat, the Number 10  cat, may be wishful for that prospect if only to eject the recent dog from his territory].
Can the UK become and stay a member of the UPC? Can the UK become and stay a member of the UPC? Reviewed by Rose Hughes on Friday, November 08, 2019 Rating: 5

12 comments:

  1. It is not correct to say that “German ratification has been held up by an esoteric legal challenge to the UPCA in the German constitutional court”. What is esoteric if a citizen complains about the lack of respect of the Constitution of its country in the ratification process of the EPCA? It is not only a question of whether there was the necessary quorum for the ratification, but more fundamental questions have been raised.

    Do you honestly think that the German Constitutional Court would have requested the President of the Republic not to sign the ratification act if it would have been for some esoteric challenge? For more than two years the proponents of the UPC, especially the British ones, have stated that the FGCC would decide imminently.

    Now it is for the beginning of 2020. What established fact or statement authorises this assurance? The GCC publishes a list of cases it intends to decide in the coming year. There is however no obligation whatsoever to abide by it. (Btw I take bets it will be the same before the Boards of Appeal of the EPO).

    When one looks at the situation before the GCC, there are older complaints about the independence of the Boards of Appeal of the EPO. Before deciding on the UPC, it appears logical to decide first about the EPO, as a UP is a patent granted by the EPO.

    That Brexit might be a historical mistake is one thing, but the EU paper explains why it is “highly questionable that the UK itself would accept the arrangements of Article 20 and Article 21 for the UPCA which foresee the primacy of EU law and its application…as the end of the jurisdiction of the CJEU in the UK was one of the main intentions of the whole Brexit process”.

    The “paper” can be found under the following URL:

    https://www.europarl.europa.eu/RegData/etudes/IDAN/2019/596800/IPOL_IDA(2019)596800_EN.pdf

    Whether Merpel “does not remember “the end of the jurisdiction of the CJEU” being on her Brexit referendum ballot paper” is therefore irrelevant. If the Tories do not reach the majority of seats in Westminster will be clear after December 12th. Any conjecture about this seems premature.

    If Brexit was not “all about not applying EU law any more”, what is it then good for? Cat N° 10 has anything in mind but to accept supremacy of EU law. But even if Art 50 is revoked, do you in all honesty think that the other member states will continue allowing the UK to have a special status? You cannot be member of a club and only want to abide by the rules you think are favourable to you, and disregards the other.

    The “paper” simply looks at the situation as it is known presently. The paper contains however a heavy mistake. At the end of Point 2.3, the “paper” states that “Power of appeal decisions is taken away from EPO and it’s Boards of Appeal (see above 1.) which loses its quasi monopoly, as it will be a Court and finally the Court of Appeal which will review the decisions of the EPO (objections to granted patents. or refusing an application). This is anything but correct.

    Here again, any straw which swims by is grasped by the UPC proponents, but they fail to convince in many aspects. It is getting tiring to be confronted with such wishful thinking. A corresponding blog has just been published on Kluwer Patent Blog.

    http://patentblog.kluweriplaw.com/2019/11/07/paper-ep-cjeu-opinion-1-09-doesnt-exclude-non-eu-member-states-from-upc/

    Techrights: FINGERS OFF!!! Directly or indirectly.

    ReplyDelete
    Replies
    1. Dear Attentive Observer,

      Thanks for your clear contribution.

      I am very surprised that/if the EU would allow the UK to cherry-pick the EU-, EU-based and EU-instruments from the EU package if they leave the EU. The UPC is clearly an instrument build on and using EU law, and earlier Luxembourg decisions have clearly provided that non-EU states are not allowed to participate in such instruments. Political pressure and econimical wish may be high, but the solution is simple if the UK wants to maintain EU-benefits: do not leave the EU!

      Delete
  2. The paper does not mention that under Art. 1 UPCA only EU member states can be part of the UPC!
    Moreover, the paper confuses the origin of the European patents with their validation states: in Italy there are twice more European patents in force than in the Netherlands

    ReplyDelete
  3. The Lexico dictionary gives the following meaning for esoteric: "Intended for or likely to be understood by only a small number of people with a specialized knowledge or interest". I find it difficult to see how Ms. Hughes' use of the word can be criticized.

    ReplyDelete
    Replies
    1. Unlike every other complaint to the GCC no doubt? I'm sure the use of the word must be taken into context s how it would be uderstoood amongst those with a working knowledge of the GCC.

      Delete
  4. Dear Kant,

    The objections raised by Mr Stjerna are understood by all those wanting to understand them and not wanting to misunderstand them. This formulation should be well known to those fit in European practice.

    Techrights: FINGERS OFF!!! As usual

    It is correct that the objections have never been published as such by the Court, but they have been heavily commented in the present, as well as in other blogs, and can easily be inferred from publications of Mr Stjerna himself.

    On October 18th, 2018, and revised on July 8th 2019, he published a document with the title “The European Patent Reform –Questions and answers on the German Constitutional Complaint proceedings”

    https://www.stjerna.de/files/Unipat_CC.pdf

    Not later as 21.10.2019 he has published a further article about the lack of scrutiny by the German government of the compatibility of the UPCA with the German constitution.

    https://www.stjerna.de/files/Unipat_BMJV&GG.pdf

    I therefore maintain my opinion that Mrs Hughes’ use of the word “esoteric” deserves to be criticised.


    Dear Anonymous,

    If it is correct that the “paper” confuses the origin of the European patents with their validation, it would represent a further major mistake in the “paper”. On face value of the "paper", the document clearly put NL before IT.

    ReplyDelete
  5. As a point of information, I think the author of the article is, in fact, Dr Hughes.

    ReplyDelete
  6. I fail to understand Piggy William's comment when Mrs Hughes does not herself use her title in the blog.

    I would guess she is in a position to defend herself when necessity arises.

    ReplyDelete
  7. That is okay, you can all call me Rose. Assumptions regarding my marital status will then not be required.

    On my use of the term "esoteric", I will conduct an informal survey of the delegates I meet at the CIPA life science conference this week: Can they explain the reasoning behind the challenge to the UPC in the German Constitutional Court? I will get back to you with the results.

    ReplyDelete
  8. Dear Rose,

    When reading the own documents of Mr Stjerna, the constitutional complaint appears to turn around the following aspects:

    1) Has the quorum be reached when the parliament ratified the UPCA? According to the complainant the required quorum of 2/3 of the parliament members was not reached.

    2) Another question is the compatibility of the UPCA with Union law. According to the complainant, the most recent CJEU decisions in matters C-64/1643 and
    C-284/1644 as well as its Opinion 1/17 address this issue in no uncertain terms.

    3) A further question relates to the powers of the Administrative Committee of the EPC to amend the UPC to “bring it into line with an international treaty relating to patents or Union law”. For the complainant, this poses a constitutional problem should inalienable rights be affected and possibly undermined.

    4) When dealing with the lack legal of scrutiny of the UPCA and the draft legislation for its ratification by the German government, and especially with the Ministry of Justice and the Home Office, those question reappeared and another was added: the costs for the economy, in particular for small and medium-sized enterprises

    To me, none of those questions can be qualified as being esoteric.
    It is only if those questions are put to the participants of the CIPA life science conference, that a fair reply can be expected.

    Techrights: FINGERS OFF!!!

    ReplyDelete
    Replies
    1. Dear Attentive Observer,

      Thx for your clear overview as to the constitutional complaint. I fully agree that they are not at all esoteric. Anyone qualifying them as such does not do justice to the merits of the questions (irrespetive of their answers). Maybe some have political rather than legal objections against it and have no better arguments than such type of qualification?

      Delete
  9. "Merpel does not remember 'the end of the jurisdiction of the CJEU' being on her Brexit referendum ballot paper."

    If fictitious cats were allowed to vote in the referendum, does that provide a ground for challenging the outcome?

    ReplyDelete

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