Cameron EU speech could threaten Unitary Patent

British Prime Minister David Cameron has given a speech on the UK’s relationship with the European Union, which could have grave implications for the future of the proposed Unitary Patent (UP) and its associated court.

While the speech made no specific mention of the Unitary Patent, Cameron did commit the UK to an ‘in-or-out’ referendum on EU membership during the next parliament, should his Conservative party win the next UK general election in 2015.

Taken alongside the 2011 European Union Act, which provides for a referendum in the event that sovereign powers are proposed to be transferred from the UK to the EU, the speech and possible referendum may put the UK’s ratification of the UP in doubt.

The UP and the Unitary Patent Court (UPC) were agreed by the European Parliament and Council late last year, but require ratification by 13 participating states, of which the UK, France and Germany must be three.

While the timeline set is for ratification to take place by November of this year, there must be some doubt over whether that is feasible, given the UK’s increasingly confrontational position. The situation is further complicated by the fact that the UPC will have a Central Court in London, as well as Munich and Paris.

A UK Foreign and Commonwealth Office spokesperson told WIPR that the organisation would “continue to do all the work we’ve committed to in all policy areas”, including the UP programme.

Alan Johnson, partner at Bristows LLP in London, said:  “our understanding (from the UK IPO’s European Focus Group, of which I am a member) is that the UK expects to ratify the UPC agreement in spring or summer 2014.”

“Assuming the other mandatory ratifying countries (France and Germany), plus 10 others also ratified, the UPC system should be up and running by about 2015,” he added. “Obviously the UK could delay ratification for all manner of reasons unconnected with this political development (for example until the cost of setting up the new court system is known - and Germany may take a similar view on that), but absent that or other countries slowing the process down, this would mean that the system would have started up with a London branch of the Central Division in place, and Unitary patents being granted covering the UK, well before any 2017/18 referendum.”

If the UK were to leave the EU, it “would certainly create a degree of chaos as the UK’s involvement was unscrambled,” Johnson said, though it probably wouldn’t lead to collapse of the UP system.

Gordon Harris, partner at Wragge & Co LLP in London, said Cameron’s speech was “unhelpful ... from an IP perspective.

“How can the UK ratify the agreement for the Unitary Patent System when it is threatening to hold an in-out referendum on Europe?” he added.

“The implications are quite serious. The rest of the countries involved in this system will wonder about the wisdom of involving one who might leave ... Why would they want to have a Central Court in London if the UK might decide to leave the EU?”

Harris adds that in the event the UK did leave Europe, “it would be mayhem. All CTMs would have to be converted, also all Community Design Rights – everyone would have to protect the UK separately. There is the added potential chaos as to what it does to Scottish independence. A UK decision to leave might make Scottish independence more likely if they didn't want to leave the EU, and that would have implications for UK IP rights."

At the moment, a referendum is hypothetical. The Conservatives may not win a majority at the next election, and it is of course possible that a referendum may end in a vote in favour of European membership. But in the meantime, there will be uncertainty.

Graham Burnett-Hall, litigation partner at Marks & Clerk LLP in London, said: "I’m breathing a sigh of relief that agreement was reached on the Unitary Patent and the court before this was been announced! I doubt we could have secured part of the central division if we had announced a referendum before."

He added: "Given what's been invested in this, I can't see that anyone will want to renegotiate the agreement based on a hypothetical referendum." "

It’s always possible with ratification of any international treaty that for purely domestic reasons someone could seek to delay ratification for their own political ends, but I think Cameron’s speech might placate some of the potential objectors.  And we’ve ended up with a very good deal."

Given what is at stake with the UP system, it may well be business as usual, meaning that the patent may yet be available in 2014. What happens in the medium to longer term will be key.