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EU referendum: What does a Brexit vote mean for your patent rights?

24-06-2016

Britain's self-ejection from Europe in yesterday's referendum will have long-term implications for businesses across the region. We look at the potential effects of the Brexit vote on a company’s European patent rights. (Click here for our update on trademarks)

It was predicted to be a close result, yet the British public's vote to leave the European Union on 23 June 2016 will still have come as a surprise to many. It has also led to considerable uncertainty. This will be the first time that a significant member of the EU has left, and there is no detailed mechanism in place yet to structure that exit. What will it mean for IP rights?

Implications for patents
As things stand, there will be no change to the current way in which patents can be obtained, maintained or litigated in the UK. However, in the future, when the Unitary Patent and  Unified Patent Court (UPC) system come into being, this alternative way of obtaining a Europe-wide patent and the alternative Court to litigate patents in Europe will not apply to the UK.

What will it mean for the Unitary Patent?
For the (already much delayed) Unitary Patent system to go ahead, it must be ratified by the three EU members who hold the most European Patents – currently the UK, Germany and France. Now that the UK has voted to leave the EU, it can no longer ratify the process. It is likely that either Italy or the Netherlands will take the UK’s place in the process. A Brexit vote has not killed the UPC Agreement, therefore, but it may delay the process.

Now that the UK has voted to leave the EU and, as a consequence, the Unitary Patent system, there will also likely be lobbying by several contracting parties to take the Central (Court) Division away from London. Brussels appears to be a main, neutral candidate. (Find out more about the proposed Unitary Patent)

What will it mean for the European Patent?
A Brexit vote will not mean the UK ceases to be a member state of the European Patent Convention (EPC) that established the European Patent (EP) system. The EPC is not a direct instrument of the EU legislature: it is a multilateral treaty agreed by the member states that are signatories to it.

At present there are 38 member states of the EPC and only 28 member states of the EU. Following Brexit, the UK will become one of the EPC member states that is not an EU member.

Even after Brexit, clients will be able to file an EP application designating the UK. English will continue to be an official language of the EPC (unless the convention is amended – there has been no suggestion this will occur).

The UK has no special validation requirements beyond those of the EPC: there is no official fee to validate in the UK and validation occurs automatically provided the EPC requirements are met, so it seems likely there will be little impact on EP validations into the UK.

What happens next?
Article 50 of the Treaty on the European Union requires a member state that wishes to withdraw from the EU to notify the European Council of its intention to secede. The referendum result in itself does not constitute such a notice, so the process of exit is not yet officially underway. Once the notice has been served, a withdrawal agreement between the UK and EU will then need to be negotiated – the process of withdrawal itself could take up to two years (longer if the remaining member states agree to extend this period).

There is no clarity yet on what exit will mean for future trading arrangements in the EU or the UK's involvement in the European single market. These issues (and others) will only become clear once negotiations progress.

For more on protecting patent rights in the EU or for advice on the implications for your portfolio, get in touch with one of our experts. Click here for insight on the likely implications for your trademark and design rights.