Wednesday, 28 September 2016

Decisions, decisions, decisions.....

The UK government has many decisions ahead of it including the BIG one, of when (or whether) to trigger Article 50: and a small one, of whether to ratify the UPC.

It is near certain that consideration of whether to ratify the UPC will not factor highly in the decision of whether or not to trigger Article 50: however the decision of whether or not to trigger Article 50 will affect the outcome of ratification.

Some of the concerns about  ratification address hypothetical circumstances of any post-Brexit arrangement being found illegal, and there being no satisfactory solution. Legal certainty does not exist in a politically uncertain world, but it needs to be dealt with.

Both UK Counsel opinion referred to in this post and opinions of others, [for example the position paper  of the Deutscher Anwaltverein (DAV)], consider this legally feasible.

Politically therefore, the question may resolve to, “What decision should the UK make to maximise the chances of a good outcome from a UK perspective?”

The chart below shows a decision tree on the (seemingly reasonable) assumptions that:-
  • If the UK triggers Article 50 before ratification no form of arrangement that permits continued UK participation will be developed [simply because politically that would be extremely messy and would require goodwill that may be missing – see part IV of the DAV position paper].
  • If the UK ratifies before triggering Article 50 an arrangement that permits continued UK participation could be developed if desired [See UK Counsel opinion and part I of the DAV position paper].
  • The decision to trigger Article 50 is independent of UK ratification of the UPC (because in the scale of things, we are small beer) so the probabilities for triggering Article 50 are identical on both sides of the chart at the value “x”.
  • If Article 50 is triggered after UK ratification of the UPC, with no ongoing UK participation in the UPC post-withdrawal, the probability of no transitional provisions preserving rights is assumed to be close to 0. It is in no government’s interests for rights to be lost.

In the chart, if Article 50 is triggered, the probability of an arrangement permitting ongoing UK participation in the UPC (if wanted) is “y” and the probability of this being found legal by the CJEU is “z”.

As can be calculated the probability of a good outcome (a functioning UPC including the UK as a member) is:-
  • if UK does not ratify before the decision of whether to trigger Article 50 = (1-x)
  • if the UK ratifies before the decision of whether to trigger Article 50  = (1-x) +x.y.z

Regardless of the values of x, y and z (which must all be positive and less than 1) – the probability of a good outcome if the UK ratifies before triggering Article 50 is greater than if the UK does not ratify. 

If Brexit means Brexit and x=1 the difference is between having a chance and no chance.

A sheer self-interested calculation should tell the UK government to ratify now.   

Saturday, 17 September 2016

Should the UK ratify UPC (yes): can it continue post-Brexit (yes)

We are in a critical position concerning the unified patent court and unitary patent.

Netherlands has deposited its instrument of ratification, and agreement to ratification has passed the  Italian Chamber of Deputies. There is thus considerable momentum towards getting the Court established, and the question that is being asked is whether the UK and Germany (necessary signatories for the agreement to come into effect) will ratify.

Even on UK departure from the EU, continued participation by the UK is both legally feasible and practically desirable provided there is good will from the rest of the EU: and this is confirmed by the recently published opinion of Richard Gordon QC and Tom Pascoe of Brick Court Chambers a copy of which is available here.

In summary, this opinion states that for the UK to continue post-Brexit a number of criteria would need to be met. None of the legal criteria are insuperable.

In summary, quoting the main conclusions:-

The UK may only continue to participate in the unitary patent by entering into an international agreement with the EU and Member States.

Such an agreement is not necessary for the UK to ratify now: only for the UK to remain a participant post-Brexit. With appropriate political will and legal care, this is feasible.

It would be constitutionally possible for the UK to continue to participate in the UPCA after ‘Brexit’, so long as it signs up to all of the provisions of the Agreement which protect EU constitutional principles.

Were the UK to enter an EEA type agreement, this would be necessary in any case. If the UK were part of an international agreement it could withdraw at any time if this posed a practical problem.

UK divisions of the UPC would have to cease operating if the UK ratified the UPCA, without amendment, and subsequently left the EU. In those circumstances, it would be necessary to adopt detailed transitional provisions in order to protect accrued rights and to regulate the position of litigants with pending proceedings.

The detail of these provisions need not be very detailed. For example, should such a withdrawal arrangement not be achievable, the UK need only provide that:-
·         no person loses patent rights in the UK through UK withdrawal (e.g. for unitary patents in force at the time of withdrawal it could be provided that a European (UK) comes into existence in its place);
·         the result of litigation concluded before the UPC will be respected;
·         litigation already underway in the UPC at time of withdrawal would be dealt with (most simply by providing that it continue before the UPC and the result be respected (including for any new European (UK) that came into existence)).
In such circumstances it cannot be doubted that the remaining member states would make similar provision to ensure that there was no loss of rights in either direction.

The opinion of course said that nothing was certain (eminent QCs do not become eminent QCs without being prepared to consider they may be wrong - even if this is a low probability); and that the CJEU has the power to find otherwise, although no reason is given why they would find otherwise. Indeed the opinion implies that if the CJEU did find otherwise, the legality of other multilateral agreements might come into doubt (e.g. European Common Aviation Area Agreement, the International Tribunal for the Law of the Sea, and the EFTA Court).

In short, UK participation post-Brexit is eminently feasible, if politically desired. The extent of political desire of course depends on political circumstances.

While the UK is in the EU and honouring its EU obligations, ratifying is both possible and desirable: but this is a dissipating opportunity. The longer the delay, the less goodwill there will be for reaching a solution that includes the UK.

If the UK government is interested in promoting UK industry as a whole, then prompt ratification makes sense, both short term and long term.

Of course, those with a vested interest in complex and expensive litigation (large companies seeking to steamroller smaller ones by pushing up cost; some lawyers who thrive in making matters difficult so as to justify high costs; those whose jobs rely on making matters more difficult than they need be) will oppose this.

Some of these opponents may argue that delay will strengthen the UK’s negotiation position post-Brexit, despite the undoubted case that the longer the delay the less goodwill will be present to reach a conclusion including the UK. This argument for delay is self-serving nonsense. and should not be allowed to impede introduction of a system that will be to the benefit of industry in the UK, Europe at large, and the World.

So yes please HMG - ratify the UPC, and ratify in 2016.

Thursday, 1 September 2016

European Patent Grants - update

In a previous post I commented on the high number of patent grants at the EPO during the first 6 months of 2016.

Patent grant numbers at the EPO continue to rise, with over 9,800 granted in August alone.

On the current basis my best guess for grants during 2016 would be around 93k ± 5k.