A blow for the unitary patent?

The election of a Conservative government in the UK earlier this year has made a referendum on the country’s continued membership of the EU almost certain.  The prospect of leaving has sparked debate, in particular with regard to how departure might affect the UK economy at a time in which a large proportion of investment is said to come from overseas businesses seeking to establish a port of entry into the rest of Europe.

One consideration, less often discussed but of crucial importance to businesses, is how intellectual property might be affected by the vote.  Patents, for example, can provide businesses with vital protection against competitors seeking to make use of successful innovations in which they have not invested.  In the 1970s IP law responded to the increase in overseas trade with the introduction of a central route to seek patent protection across Europe, via the European Patent Office, alongside the national systems for seeking protection separately in each country.  The European system, although cheaper and simpler than using the national systems at the outset, also ultimately results in individual IP rights for each territory, which must be separately enforced.

The move towards a Unitary Patent system, which would make available a single right to cover the whole of Europe, has been gathering ground over the last few years.  In order to come into force, 13 of the possible signature countries must ratify the agreement (7 have done so to date).  Of these France, the UK and Germany must be included.  The main Unitary Patent Courts are intended to be housed in Paris, Munich and London, with London courts focussing particularly on chemistry, which will be important for big pharma.  The UK is also expected to play an important role in the development of the system, both prior to it coming into force and after.

The prospect of the UK referendum in 2017 has created uncertainty and could delay the introduction of the Unitary Patent.  However, if the UK does leave the EU it may not mean the end of the Unitary Patent system.  In this event, another country (most likely the Netherlands) could take the place of the UK as the third that must ratify the agreement in order for it to take effect.

Depending on whether and when ratification takes place in the UK, not being a part of the EU may mean that it cannot be a part of the Unitary Patent System either.  In this case patent protection for the UK would need to be sought through other channels, such as the national and European routes currently available.  The Unitary Patent System has, however, come up against strong criticism particularly regarding the proposed cost of renewal fees and it is unclear for the moment how well accepted it will be.  Businesses considering their approach to the Unitary Patent should therefore take into account how this might need to be adapted in light of the impending referendum.