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What comes first – Brexit or the Unitary Patent?


14th Mar 2017

Nine months after the British people voted to leave the European Union, the approval of the European Union (Notification of Withdrawal) Bill by the UK Parliament on 13 March means the UK Government can now begin the formal process of leaving the EU. However, it is still expected to take another two years before the UK officially ends its membership of the EU. In the meantime, if the current timetable is kept to, the Unitary Patent Court will open its doors, and the first Unitary Patents will issue, well before the UK leaves the EU.

Why has it taken so long to start the process for leaving the EU?

There are many reasons why the UK has not yet officially begun the process for withdrawal from the EU, not least the legal steps that have been required to get to this point – including the need for a court case and the agreement of both Houses of Parliament.

The UK does not have much experience of referendums. Since the mid-1970s, the only UK wide referendums have been two relating to membership of the EU (1975 and 2016), and one in 2011 relating to an alternative voting system. The 2011 referendum was a legally binding referendum. However, the legislation for the EU referendums did not specify that these were legally binding. Therefore, they were merely consultative. The effect of this was that the UK Government was forced to obtain an Act of Parliament before being able to start the process of leaving.

To leave the EU, a member state must invoke (or ‘trigger’) Article 50 of the Lisbon Treaty. This requires notifying the European Council of the wish to withdraw from the EU, followed by negotiations to conclude an agreement on the withdrawal. The Article effectively sets a two year term (extendible with unanimous agreement) for this agreement to be reached.

Initially, the Government took the view that it could trigger Article 50 without the need for approval from Parliament. Many thought that if Parliamentary approval were required, the House of Commons – whose members are elected and therefore need to be seen to represent the views of the people voting for them if they are to keep their jobs – would vote to trigger Article 50. However, it was felt that the House of Lords, whose members are not elected, might not feel the need to follow the public vote. Therefore, avoiding the need to have Parliamentary approval would have made things much easier for the Government.

Notwithstanding the Government view, others did not agree that Article 50 could be triggered without Parliamentary approval, especially given that the referendum was merely consultative. Therefore, an action was brought before the High Court for judicial review of the Government’s position. Both the initial decision of the High Court in November 2016, and the subsequent Supreme Court appeal decision of 24 January 2017, held that it was for Parliament to decide whether to invoke Article 50 to leave the European Union. Therefore, the Government was forced to bring a Bill before Parliament earlier this year for approval.

The normal process for bringing in new legislation in the UK is first to present a Bill to the House of Commons. The Bill is first debated in the House of Commons, as part of which amendments can be proposed, and then voted on. If the House of Commons approves the Bill at this stage, it then passes to the House of Lords, where a similar process is carried out. If the House of Lords does not make any changes to the Bill, then the Bill can be passed for Royal Assent by the Queen, after which the Bill becomes an Act and can come into force. However, if the House of Lords has made any amendments, the Bill must return to the House of Commons for MPs to consider the amendments proposed by the House of Lords. If the House of Commons accepts the amendments proposed by the House of Lords, the amended Bill can proceed to be given Royal Assent. However, if the House of Commons does not agree with the Lords’ amendments, or makes further amendments, the revised version of the Bill approved by the House of Commons must go back to the House of Lords. This ‘ping-pong’ could continue for many rounds before agreement is finally reached. However, in many cases, if the House of Commons does not accept amendments proposed by the House of Lords, the House of Lords will back down and agree to accept the view of the House of Commons.

In the case of the European Union (Notification of Withdrawal) Bill, the initial Bill presented to Parliament was very short and to the point – it gave the Prime Minister the power to notify the United Kingdom’s intention to withdraw from the EU. However, the House of Lords did not approve the Bill in this form, and proposed two main amendments. The first was to set a three month period for the Government to make a proposal to allow citizens of other EU countries who currently reside in UK to remain after the UK leaves the EU. The second amendment was to require that there should be Parliamentary approval for the agreement reached with the EU on the terms on which the UK leaves the EU.

Since there was an amendment proposed to the Bill by the House of Lords, the Bill was returned to the House of Commons for them to consider these amendments. Yesterday, the House of Commons rejected the amendments proposed by the House of Lords, and therefore returned the Bill in its original form to the House of Lords for further consideration. This time, the House of Lords decided quickly not to request amendments, and therefore, with both Houses of Parliament agreeing to the original Bill, the Bill will be passed to the Queen for the grant of Royal Assent in the next few days. This means the Prime Minister now has the authority formally to advise the EU of the UK’s intention to withdraw from the Union, setting the two year clock running. Today, the indication is that this will happen in the next two weeks, before the end of March 2017.

So now, nearly three-quarters of a year after the vote to leave the EU, the two year process of leaving is about to start.

What has happened with the Unitary Patent and Unified Patent Court in this time?

Since the referendum, there has been progress on the Unitary Patent and the Unified Patent Court (the ‘Unitary Patent Package’) to give patent protection and a single court for patent litigation across Europe.

At around the time that the High Court was being asked whether Parliamentary approval was needed to trigger Article 50 in November 2016, the UK confirmed to the Competitiveness Council that it was proceeding with preparations to ratify the Unified Patent Court Agreement – an essential step for the Unitary Patent Package to come into effect.

Around the time that the judges in the Supreme Court were reaching their decision, it was indicated that the Preparatory Committee expected the Court to be operation in December 2017, with the first Unitary Patents being granted three months after that, and the sunrise period for opting out in respect of existing patents and applications beginning as early as September 2017.

In the last few weeks, the two remaining pieces of legislation required to bring German national patent law into line with the Unitary Patent Package, and giving the German government the power to ratify the Unified Patent Court Agreement, have progressed to the final stage, with final approval expected in one of the next two sessions of the German Bundesrat in March or May 2017.

Even Spain seems to be considering the UPC with the Spanish Parliament voting to ask the Spanish government to reconsider joining the UPC (albeit with part of the proposal being that the seat of the central division of the court that is currently being set up in London, being relocated to Spain as part of the plan).

So the current signs are that the Unitary Patent Package may come into effect within the next year, long before the UK finally leaves the EU. However, as we have seen over the last year, predicting the future is a very inexact science, and the path towards Brexit and the path to the Unitary Patent Package probably have some mileage left.

This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking any action in reliance on it.

Steve Howe 2Author
Steve Howe
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