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November 2019

It is a fact of life in the life sciences sector, given its value and competitiveness, that disputes frequently happen between companies who either want to challenge another's patent or enforce their own. It was therefore highly significant when, in 2013, the "human necessities" section of the central division of the planned Unified Patent Court (UPC) was secured for London. This section would be pivotal to patent disputes covering biotech, pharmaceuticals and other health products.

As currently proposed, any revocation action filed against a European patent or one of the new Unitary Patents (which will be introduced at the same time as the UPC), must be filed in the London branch. Because of the pan-European jurisdiction of the UPC, a revocation of a patent here will have effect across most of the Member States of Europe (unlike the present system where a revocation in a national court only has effect in the Member State for which the patent is registered). The UK therefore has in its midst the convenience and kudos of the most important forum for the resolution of life sciences patent disputes in Europe.

The UPC has, however, hit two major snags. The first is that it cannot be ratified (as it must be) by Germany, until a complaint that was filed against it in the German Constitutional Court has been resolved. Current expectations are that this decision will be made in early 2020. If ratification of the UPC is given the go-ahead in Germany, it is still possible that the court could open in late 2020.

The second snag is whether the UK can participate in the court, as a result of Brexit. This is because, although the UPC is not an EU body, it is designed only to admit contracting parties from the EU Member States. The question is therefore whether the UK can legally participate when it is no longer an EU member state? Debate continues to focus on this question and a number of opinions have been expressed on the issue, with different conclusions.

The most recent analysis, however, comes from an EU institution itself – JURI, the Legal and Parliamentary Affairs Committee of the European Parliament. One of the report's conclusions is that "…the jurisprudence of the CJEU is not expressly excluding [sic] the possibility to allow a non-EU Member State forming part of the UPCA."

Rather than seeing a legal bar to UK participation, the analysis instead focuses on how it expects the politics of Brexit to be an obstacle: "Maintaining the UK within the UPCA would need innovative legal solutions, as the UPC is an international court applying EU law – and the reason for Brexit was all about not applying EU law anymore."

However, the UK Government has already said that it will explore whether it would be possible to remain within the UPC and Unitary patent post-Brexit. The narrow scope of application of CJEU rulings to patent disputes, referred by the UPC rather than a UK court, may not be the political problem that the JURI analysis supposes.

The analysis admits, furthermore, that "one can only guess that the willingness of the Heads of State and Government will depend on the outcome of the negotiations on the Brexit", but it also recognises that the UPC, as based on an international agreement can only be modified by unanimous decision of all the contracting states, including the UK.

This means that the life sciences section of the Central Division cannot be removed from London without the UK's consent. Should the UK decide it wishes to participate in the UPC, and keep the London life sciences branch, the upshot of the JURI analysis is that it is in a strong position to negotiate this as part of the future partnership between the UK and the EU.

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