“BREXIT” and Intellectual Property Protection in the UK and the EU

Journal of Intellectual Property Rights Vol 21, September-November 2016, pp 355-361 European IP Developments “BREXIT” and Intellectual Property Protection in the UK and the EU Trevor Cook† Wilmer Cutler Pickering Hale & Dorr LLP, 7 World Trade Center, 250 Greenwich Street, New York, NY 10007, USA Received: 2 December 2016 The UK referendum vote of 23 June 2016 on “BREXIT”, in favour of leaving the European Union (EU), will have significant consequences for the protection of intellectual property (IP) in Europe. Although the procedure by which the UK will leave the EU has not yet been initiated and will then take at least two years to complete, during which time the UK will remain a member of the EU, in the short term the most immediate effect had been thought to be the delay which it would occasion to the entry into force of the new Unified Patents Court and new European Patent with unitary effect, although at the end of November 2016 the UK Government, to the surprise of many, indicated that it would still proceed with ratifying the Treaty that underlies this new system. In the longer term BREXIT will limit the geographical scope of certain unitary EU IP rights, which will in due course cease to apply in the UK, and will require in some cases that the UK introduce national legislation corresponding to a degree to the EU legislation that will no longer apply to the UK. The precise nature of the consequences for the UK will depend on whether or not the UK becomes a member of the European Economic Area (EEA), although given that doing so would require adherence to many principles of EU law to which those who campaigned for BREXIT most strongly objected, the political viability of this option seems uncertain. Keywords: BREXIT, European Economic Area, Unitary Patent, Treaty on European Union, TRIPS, UPC Agreement, Supplementary Protection Certificates, intellectual property The pro-BREXIT vote in the UK referendum on introduce national legislation to fill the lacunae left by 23 June 2016 in favour of leaving the EU will have EU legislation (such as that relating to geographical significant consequences for IP protection in Europe. indications) as this will no longer apply to the UK. Although the procedure by which the UK will leave The precise nature of the consequences of BREXIT the EU, under Article 50 of the Treaty on European for EU and UK IP will depend on whether or not upon Union (‘TEU’), has not yet been initiated and, once it exit from the EU the UK adheres to the EEA is, will take at least two years to complete, during Agreement, a Treaty between Iceland, Liechtenstein which time the UK will remain a member of the EU, and Norway, and all EU Member States. By virtue of in the short term its most immediate effect on EU IP the EEA Agreement, such non-EU countries secure had been thought to be to delay the entry into force of access to the EU single market, but must agree to the new Unified Patents Court (UPC) and the new implement EU Directives, other than in certain European Patent with unitary effect. However at the specific areas such as agriculture, but including those end of November 2016 the UK Government, to the as to IP, into their national laws. They must also surprise of many, indicated that it would still proceed accept certain other aspects of the EU Treaties, most with ratifying the Treaty that underlies this new notably the free movement of people, and make system. substantial contributions to the EU budget, both of In the longer term the UK exit from the EU will which aspects of EU membership appear to have been limit the geographical scope of certain unitary EU IP significant drivers for those who voted in favour of rights, which will on such exit cease to apply in the BREXIT, thereby making it politically difficult for UK, and will require in some cases that the UK, in the UK to adhere to EEA Agreement on leaving the order to comply with TRIPS, or more general EU. Moreover even if it were to wish so to do, its international IP norms amongst developed countries, ability to do so is not a foregone conclusion as the including those TRIPS plus norms mandated by Free consent of the existing Members of the EEA, Trade Agreements with the EU and the USA, including the EU, would be required. Similarly the —————— network of agreements which Switzerland was able to †Email: [email protected] negotiate with the EU when it chose not to join the Published in Articles section of www.manupatra.com 356 J INTELLEC PROP RIGHTS, SEPTEMBER-NOVEMBER 2016 EEA also mandate the free movement of people, arrangements would have to be made in only a few although a referendum there a few years back called years’ time to address the consequences of the UK no for the renegotiation of this feature of these longer being able to participate in the system, in agreements by the end of 2016. particular for those European patents with unitary Other recent free-trade arrangements with the EU, effect that had already been granted, and for litigation such as those entered into by Australia, Canada and in the UPC that was already under way.4 South Korea, and which might provide models for Some creative proposals aimed at avoiding this post EU exit free trade arrangements between the UK block to the ratification of the UPC Agreement and and the EU, but without requiring the free movement the entry into force European Patent with Unitary of people, mandate certain TRIPS plus minimum IP Effect have been suggested, but none address the norms, but in ways which, unlike the EEA fundamental incompatibility with the EU Treaties of a Agreement, permit of a considerable degree of non-EU Member State participating in an EU Court. latitude in the specifics of implementation. The fundamental nature of this problem was made clear by the Court of Justice in its 2011 Opinion on The Unified Patent Court and the European the precursor to the UPC Agreement, namely the Patent with Unitary Effect 1 Agreement establishing a European and Community Previous articles in this series have discussed the Patents Court,5 participation in which would have progress towards implementation of the UPC been open not only to all EU Member States but also Agreement and the European patent with unitary all other members of the European Patent Convention. effect, which had, before the result of the BREXIT The Court concluded that: referendum became known, been expected to enter “... the envisaged agreement, by conferring on into force early in 2017. The formal position of the an international court which is outside the UK Intellectual Property Office shortly after the institutional and judicial framework of the referendum was that “The UK remains a Contracting European Union an exclusive jurisdiction to hear Member State of the Unified Patent Court at present. a significant number of actions brought by We will continue to attend and participate in UPC individuals in the field of the Community patent meetings in that capacity. There will be no immediate 2 and to interpret and apply European Union law changes.” in that field, would deprive courts of Member This was silent however as to the UK position on States of their powers in relation to the ratification of the UPC Agreement. As matters stand interpretation and application of European the UPC Agreement (and thus the European patent Union law and the Court of its powers to reply, with unitary effect, which would be granted by the by preliminary ruling, to questions referred by EPO over a territory corresponding to those EU those courts and, consequently, would alter the Member States that have ratified the Agreement) essential character of the powers which the cannot enter into force until such time as the UK Treaties confer on the institutions of the ratifies the Agreement. The UK ratification of the European Union and on the Member States and UPC Agreement is necessary for it to enter into force which are indispensable to the preservation of as it requires ratification by thirteen Member States the very nature of European Union law.” including the three EU Member States with the largest Neither does it seem possible that the view of the number of classical European patent validations in Court of Justice would differ even were the EU 2012, namely France, Germany and the UK. France Treaties, as part of the BREXIT negotiations, to be so has already ratified and Germany is preparing to do amended as expressly to provide for UK participation so; as was also the case for the UK until the BREXIT in the Unified Patent Court once it ceases to be a vote. Ratification by the UK would, many thought, be member of the EU. Thus, the Court of Justice has highly unlikely, as it is hard to envisage how, as a more recently held that the Agreement on the matter of EU law, the UK, once it leaves the EU, accession of the EU to the European Convention for could participate in the UPC and be a territory in the Protection of Human Rights and Fundamental which the new European patent with unitary effect Freedoms was not compatible with the EU Treaties could have effect. Thus if the UK were to ratify the despite these same Treaties expressly providing for Agreement now, as some urged,3 this would have to such accession.6 In so doing the Court observed, be done in the knowledge that special transitional referring to its 2011 Opinion on the Agreement Published in Articles section of www.manupatra.com COOK: “BREXIT” AND INTELLECTUAL PROPERTY PROTECTION IN THE UK AND THE EU 357 establishing a European and Community Patents Unitary Intellectual Property

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