Monday, 7 July 2014

What happens to the Unitary patent if the UK exits the EU?

A commenter to a previous post on this blog asked the question: what if the UK would decide to leave the EU? 

The current British Prime Minister David Cameron promised a referendum to decide whether or not the United Kingdom should stay in the EU or exit it, the so-called brexit. The referendum would take place after the elections, somewhere in 2015.

Should an EU referendum really happen, than the outcome would be a gamble.  A referendum on the EU does not necessarily do well. I remember the 2005 referendum on a European Constitution in the Netherlands, for example. On the other hand, Denmark recently showed that an EU related referendum could work positive for the EU.

It is no question that should the UK leave the European Union that would be a great loss for the European economy.

Likewise, for the unitary patent, I would venture to say that a UK exit would be disastrous. That Spain and Italy, the fourth and fifth economy of the EU (by GDP according to Wikipedia), are not joining the unitary patent is bad enough. If the United Kingdom would be absent that would mean that a traditional minimal validation of the big three (Germany, France, United Kingdom) would no longer be covered by a unitary patent.

So it would be bad news for the unitary patent, if the UK would leave the EU. But could the unitary patent still enter into force?


I'm not sure if an UK exit would necessarily blow up the whole system. In fact, if the UK would stay in the EU, but not ratify the agreement, that would be worse, since that would imply that the unitary system would certainly not come into force. (Article 89 of the Agreement)

Below I'll assume for simplicity that an UK exit would be before the unitary patent system is in effect.

EU regulation 1257/2012

After an UK exit, the UK would no longer fall under the scope of article 3 of regulation 1257: A unitary patent would not have effect in the UK. Entry into force of the EU regulation only depends on the entry into force of the Agreement on a Unified Patent Court. The latter is determined by the Agreement, discussed below.

Note that even if the UK would leave the EU, the UK would continue to be a party to the European Patent Convention (EPC), thus one could obtain patent protection in the EU, through traditional national validation of a European patent.

Agreement on a Unified Patent Court

Entry into force of the agreement requires ratification of "the three Member States in which the highest number of European patents had effect in the year preceding the year in which the signature of the Agreement takes place" (article 89 Agreement).  'Member states' refers to Member State of the European Union here. So this includes Spain and Italy, but after an exit would exclude the UK.

The question thus becomes which Member state had the highest number of European patents in effect in 2012, after Germany, and France (and the UK).  Google wouldn't give me the answer to that question unfortunately, but I would guess that it's the Netherlands. Although possibly, it could be Spain or Italy. (If it is Spain, the unitary patent is also out the window.)

The agreement is not EU legislation, but an international agreement made outside the EU. This is why Italy can join the unified patent court without joining the unitary patent. Nevertheless, I don't think the UK could still ratify this agreement, or continue to stay a member, if it were not a member state.

I couldn't find an explicit requirement for being a member state, but the Agreement seems to assume it throughout. For example, the agreement requires for signing that you are a member state. (Technically, this would not be a problem for the UK, as the UK have already signed the agreement.)

So I'll assume the UK would also leave this agreement in case of an EU exit. This would leave the Agreement in an odd state, as London is explicitly mentioned. Article 7 requires that there is a section of the central division in London. That would be difficult, if the United Kingdom weren't a member.



Conclusion

The unitary patent would lose a lot of luster if the UK drops out, but as far as I can tell, the unitary patent could still continue after an UK exit. Neither the regulation nor the agreement explicitly require that the UK participates.

The agreement may be salvaged as is, depending on which member state had that largest number of European patents in effect. Alternatively, these problems, as well as the reference to London,  may be resolved by amending the agreement. 

2 comments:

  1. According to official filing statistics from the EPO (see http://www.epo.org/about-us/annual-reports-statistics/statistics/patent-applications.html), the Netherlands would probably become the third member state with the higher number of patents. Assuming that the Netherlands has not an usual number of withdrawals or refusals, which I think is a safe assumption.
    With respect to accession to the Unified Patent Court, Article 84(4) of the agreement opens accession to "any Member State", however Article 2(a) defines Member State as a Member State of the European Union. So an UK exit would leave them explicitly out of the agreement and probably would render the whole agreement void.

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  2. Antonio Pizzoli11 July 2014 at 10:59

    According to these statistics, Italy should be the fourth country by far:

    http://www.voxeu.org/article/another-reason-eu-patent-declining-validation-rates

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