Published: 1 November 2019
Can the UK still play a role in the UPC after Brexit and can the CJEU accept references from the UK? Alan Johnson (Associate) looks at the possible answers to these and other UPC-related issues
As readers will be well aware, the UK ratified the UPC Agreement (‘UPCA’) on World IP day 2018, leaving only Germany as a mandatory ratifying country holding the key to the start of the UPC. Equally well known is that the challenge before the German Constitutional Court (the BVerfG) continues to stall Germany’s ability to ratify. Whilst little hard information is available from the Court, based on the progress of cases in the list, a decision in 2019 now seems unlikely, but it is nonetheless reasonable to expect a decision within a relatively few months. Further, most commentators expect the Court to dismiss the complaint. Hence, the German Government may well, within perhaps six months, be in a position to give the green light to the commencement of the UPC by depositing its instrument of ratification of the Protocol on Provisional Application and some months thereafter deposit its instrument of ratification of the UPCA itself. This leads to a consideration of the impact of Brexit on the decision to be taken by Germany (presumably in conjunction with the other Contracting States) because although the UK has ratified the agreement, and although it is an international treaty technically unconnected with the EU, the UK’s changed status is far from irrelevant for a variety of reasons.
The most recently stated position of the German Federal Government on the effects of Brexit on the future of the UPC (as stated on 31 July 2019 in response to questions from the Free Democratic Party) was as follows:
“The question of the exit of the United Kingdom from the European Union (so-called Brexit) and its effects on the European patent reform play an important part in the subsequent implementation process of the Treaty on a Unified Patent Court. The actual and legal effects of an exit must be reviewed in relation to the Treaty and coordinated at European level. Currently, this opinion forming process is not yet complete, not least because significant factors of the likely exit are currently not yet known.”
Whilst non-committal, one thing this statement tells us is that the type of Brexit is regarded as relevant to what happens next. So what will be the position if the UK leaves the EU without a deal? Various commentators, notably Ullrich and Lamping (Max Planck Research Paper No. 18-20) have argued that there are all manner of legal question marks over the commencement of the UPC. Of these, those which deserve some analysis are (in summary):
Can the UK, as a non-EU state participate in the UPC? This raises several interlinked issues:
- Are the references in the UPCA to EU member states an issue?
- Can the Court of Justice of the European Union (‘CJEU’) accept references from the UPC with the UK participating?
- What of the fact that the UK will not be subject to the Brussels Regulation?
- Are there any issues concerning the governance of the UPC if there is a need to modify the UPCA to align it with developing EU law?
- Can the UK, as a non-EU state participate in the unitary patent?
Can the UK, as a non-EU state, participate in the UPC?
Are the references in the UPCA to EU member states an issue?
The UPCA was drafted as an agreement between EU member states. The UK’s new status outside the EU is a potential issue, therefore, but hardly one of substance. A Protocol could be adopted by the Contracting States saying that references to an EU member state should be construed as references to a state as of the date of execution of the agreement (in 2014). That should be an end to the issue.
Can the CJEU accept references from the UPC with the UK participating?
This is a matter of some controversy. Under article 267 TFEU, the CJEU may accept references from the UPC (under article 21 UPCA) if it is a national court of a member state. Despite being an international court in the sense that multiple nations have agreed (in the field of patents) to delegate their national jurisdiction to the UPC, it can properly be regarded as a national court. However, one view is that the CJEU can accept references only from a national court of member states exclusively. The other view is that provided it is a national court of some member states, that is sufficient when the uniformity and autonomy of EU law is safeguarded – in this case by the provisions of the UPCA (to which the UK has signed up) – which include accepting the primacy of EU law. Ultimately this is a matter, however, which only the CJEU itself can determine. No mechanism exists to ask the CJEU for a preliminary ruling before UPC commencement. However, what is certain is that any issue could be dealt with by an agreement on the UPC between the UK and the EU. Hence, even if there is a no-deal Brexit, a subsequent agreement could fix the problem. Therefore, if Germany would wish to be risk averse and would not want the UPC to start with the UK as a participant in case the system was later declared illegal, it could promote the idea of an agreement on this issue (be it a standalone agreement or a part of a larger post-Brexit agreement).
What of the fact that the UK will not be subject to the Brussels Regulation?
The international jurisdiction of the UPC is founded on article 31 UPCA. This references both the Brussels Regulation and the Lugano Convention. Hence, exclusion for the Brussels Regulation regime is not obviously a bar to the UK’s participation in the UPC. However, it would appear necessary that instead the UK should join (re-join) the Lugano Convention. It is understood that this is in any event UK government policy.
One slight “wrinkle” in this is that because Lugano has not been updated in the same way as Brussels Regulation, there is a mis-match between the two regimes. Most notable among these is the absence in Lugano of articles 71a-d of the recast Brussels Regulation, which make specific references to the UPC. Ideally, Lugano should be updated.
Are there any issues concerning the governance of the UPC if there is a need to modify the UPCA to align it with developing EU law?
Ullrich and Lamping have argued that governance of the UPC to align it with future developments in EU law might be blocked by the UK. Whilst in any event only a theoretical issue, in fact amendments to the UPCA can only – under Article 87(3) – be delayed by an individual country. In the event of a country objecting to a decision of the Administrative Council to revise the UPCA, a Review Conference (a diplomatic conference) must be convened, and at such a conference no one country may apply a veto under international law (the Vienna Convention 1968). Hence this point would appear to lack any real substance
Can the UK, as a non-EU state, participate in the unitary patent?
This raises a rather different issue in that the UPC could go ahead and yet the UK might still not be a part of the unitary patent part of the system – the situation Italy was in at one stage – because the Regulations are EU instruments separate from the UPCA. The unitary patent and translation Regulations will not apply to the UK under a no-deal Brexit. However, in principle EU instruments including Regulations can be extended to non-EU statews. The European Common Aviation Area is an example and includes acceptance of CJEU jurisdiction to interpret EU law (though in any event, the UK has already accepted the primacy of EU law and that the UPC shall base its decision on EU law including the unitary patent regulations – see articles 20 and 24(1)(a) UPCA). Such an extension would require an agreement between the UK and the EU. Accordingly, once again, the issue can be addressed if that is wanted by contracting member states.
In summary, any problems there may be with UK participation have a work-around. As Margot Fröhlinger has often said “where there’s a will, there’s a way”. If Germany and the other contracting states want the UPC to go ahead with the UK, this will be possible – and at present there appears to remain a political will to include the UK. Further, this could include being a part of the unitary part of the package too. But alternatives are possible.
In the immediate aftermath of the Brexit referendum and before the UK had re-pledged its support for the UPC, it had already indicated informally that it would not stand in the way of the UPC going ahead without it. That was at a time before it had ratified, but nonetheless one would imagine that (with regret) the UK would take the same line again if other states made it known that they wanted the UPC to go ahead, but considered it too risky to launch a system at risk of being struck down by the CJEU.
And finally, of course, there is always the possibility that the UPC project could be abandoned as too risky to include the UK, but not sufficiently worthwhile to proceed without it.
Your author has very mixed feelings about these alternatives. Having followed the UPC for 20 years, it would be a great shame to see it go ahead without the UK, and equally regrettable if it did not happen at all. Having recently retired from private practice, he no longer has any “skin in the game”, but overwhelmingly he hopes it will go ahead with the UK fully involved. There really is no good reason why not.
Alan Johnson – former Partner, Bristows LLP – retired 31 October 2019.
Also published in the Brexit edition of the CIPA Journal.