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27 September 2018Patents

AIPPI 2018: UK judge talks post-Brexit exhaustion rules, UPC and SPCs

“I’m afraid I haven’t provided you with any answers, but merely posed the questions,” said Mr Justice Henry Carr of the English High Court while concluding a talk on the UK’s post-Brexit future.

Carr was one of six panellists (all speaking in a personal capacity) who took part in the “Briefing: hot topics in IP” session during the 2018 AIPPI World Congress in Cancún, Mexico, which finished yesterday, September 26.

While refusing to express any views about the wisdom of Brexit itself, Carr noted that one of the most difficult topics to deal with post-Brexit will be IP exhaustion.

He said: “If exhaustion is throughout the European Economic Area (EEA) and the UK is no longer a part of this, then legislation doesn’t provide for exhaustion in respect of products and services in the EEA. This potentially means that international exhaustion is on the cards.”

On Tuesday, September 25, WIPR reported on the UK government’s latest guidance on a no-deal Brexit, which included a focus on exhaustion of rights.

Stephen Bennett, partner at Hogan Lovells in London, said that businesses will be keen to avoid a system of international exhaustion at the end of the temporary period discussed by the government, as international exhaustion could allow goods sold in the developing world at low prices to be re-sold in the UK.

For Carr, a decision on how exhaustion will operate is not for a judge to make, but rather a political choice.

“Whilst I became a judge to make big and important decisions, this is not a decision I relish making … but I may have to,” he added.

Carr also highlighted the legislative opportunities for the UK after the country leaves the EU.

“We have the opportunity to enact more legislation that is favourable to innovators. We could extend supplementary protection certificates (SPCs) to medical devices and review whether the [protection] term should be longer,” he noted.

This could mean that the UK becomes a more friendly environment for inventors and attracts investment, but could also create a situation where the rights of pharmaceutical companies are extended in only one state, and therefore medicines in the UK become more expensive.

“If you had the opportunity to review the decisions of the Court of Justice of the European Union (CJEU) in relation to the interpretation of IP directives, what would you change?” he asked, adding: “In theory and probably in practice, we have that opportunity.”

One area he believes the CJEU may have got wrong is the clarification of when a product is ‘protected by a basic patent’ within the meaning of article 3(a) of regulation 469/2009 (the SPC regulation).

Carr explained that according to the CJEU, the basic patent must identify the active ingredient with specificity.

“The function of claims in a patent is to protect—it is not to identify. A more sensible solution may be to identify the core inventive advance and then ask whether the commercialised active ingredient embodies that core inventive advance.”

Finally, on the Unified Patent Court (UPC) Agreement and the unitary patent, Carr said: “In my opinion, if we reach a deal then I think the UK will participate … and we have a valuable contribution to make. If there’s no deal, I think it’s unlikely that we will participate ... I don’t think it would be in the interests of other European countries to allow us to do so.”

Also in the session, Judge Klaus Grabinski of the German Federal Court of Justice discussed the UPC Agreement in more depth.

“When you look into the UPC’s life, you may get a feeling that we are now in a situation which is rather unclear. Europe has been struggling to get a common court in the patent field for more than 60 years,” he said, before adding that Brexit and a constitutional complaint in Germany are the two main roadblocks to the UPC.

Grabinski believes that for the UK to stay in the UPC and the unitary patent, the agreement will require amendments.

In February this year, the German Constitutional Court agreed to hear a constitutional complaint disputing the legitimacy of the UPC; it questioned the democratic accountability of the regulatory powers overseeing the UPC’s operation and the independence of the judiciary.

“The case is on the to-do list of the Judge Rapporteur in 2018, but this doesn’t necessarily mean that this case will be decided this year,” added Grabinski.

An audience member suggested that there had been a rumour that the court will refer the case to the CJEU.

Grabinski said: “Of course, it is possible but there is no indication whatsoever that this is going to happen in this case. There is an application from the plaintiff’s side to do so … but there’s no indication that there has been a decision on this.”

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