In summary, it was concluded that, upon Brexit, the UK
may only participate (or continue to participate) in the
UP and the UPC by entering into an international
agreement with the EU and the participating EU member states.
Such an agreement would only be legally enforceable if
appropriate safeguards were put in place to protect EU
constitutional principles. The UK would be required to accept the
supremacy of EU law in its entirety as regards patent disputes
before the UPC. This would include, for example,
competition law, fundamental rights arising under the Charter and
general principles of EU law, as well as the specific patent rules
contained in, for example, the Biotechnology Directive.
However, there would remain a possibility that the Court of
Justice of the European Union (CJEU) would, at a later stage, rule
that non-member states were precluded from inclusion in the
(modified) UPC and UP system.
It would be possible to seek a pre-emptive opinion from the
CJEU on the legality of the modified system, but
only if the EU became a party to the UPC
What if the UK were, before Brexit, to ratify
the UPC Agreement in its current form, in order to get the
system up and running, and the UK then left the EU without the
requisite international agreement being reached?
In that situation, the most likely consequence of Brexit would
be that any divisions of the UPC situated in the
UK would have to cease operating.
The Opinion of Richard Gordon QC and Tom Pascoe highlights some
significant practical difficulties of finding a way forward for the
UPC, with these difficulties unlikely to be eased
by the political situation in the UK.
For the UK to participate in the UPC and
UP system after leaving the EU, it would have to
submit to EU law (including future EU law) in its entirety as
regards patent disputes before the UPC. In the
current political and popular climate in the UK, this would be
significant and controversial.
If the UK were to ratify the UPC Agreement now
(assuming there was the political will to do so), in order to get
the system up and running, the UK's continued participation in
the system upon Brexit would depend upon both international
agreement being reached regarding the UK's continued
participation and the CJEU being satisfied with
the legality of the agreement reached. The prospect of such
agreement not being reached, or later being declared illegal by the
CJEU, and therefore of the UPC
"rug being pulled out" from under the London division of
the UPC, would weaken the UK's negotiating
position in Article 50 negotiations.
On the other hand, while the UK continues not to ratify the
UPC Agreement, the system, at least in its current
form, cannot come into force. If the EU and the participating
member states fail to reach an agreement enabling (or at least
attempting to enable) continued UK involvement, there will be no
upheaval in the UK patent litigation system upon Brexit, and no
UPC operating elsewhere in Europe. This would
appear to strengthen the UK's negotiating position in Article
50 negotiations, compared with the scenario in which it had already
ratified the UPC Agreement.
As the public cloud services market continues to mature and grow, concentration of computing resources into cloud data centres is increasingly attracting the attention of NPEs as a target for patent litigation.
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