EU will find a way to keep UK in unitary patent, says EPO chief

The EU can find a way to keep the UK in the unitary patent after Brexit, even though it will require the country to continue accepting the supremacy of EU law, believes European Patent Office (EPO) president Benoit Battistelli.

“I’m convinced we’ll find a solution even if there is a hard Brexit and the UK leaves the single market,” Battistelli said, speaking at the publication of the EPO’s annual report on patent activity on Tuesday.  

The unitary patent, a long-awaited single system to protect inventions across the entire region, with a unified court (UPC) to resolve disputes, will be valid in 26 countries when it comes into force. Today patents have to be registered and enforced in individual countries.

Although it is not an official EU agency, in its present form, only EU member states can participate in the unitary patent, which is expected to lower the application costs for smaller businesses and research institutes.

The UK government, which played a big role in developing the unitary patent, announced plans in November to ratify the agreement this year, against the expectations of many experts, who observed that opting into the new system directly competes with the government’s stated intention to leave the legal remit of the European Court of Justice (ECJ) after Brexit.

The new patent scheme increases the oversight of the ECJ, as Battistelli noted. “The ECJ today is only competent to resolve conflicts which involve a public party; under the unitary patent it will be able to resolve [exclusively] private conflicts.”

One of the three branches of the new Unified Patent Court (UPC), ruling on pharmaceutical and biotech patent lawsuits, is to be based in London. The UK Intellectual Property Office has leased space for the court and advertised for judges to fill its bench.

Battistelli, whose office will administer the unitary patent, could not confirm if the UK will be allowed to hold on to its branch court after Brexit.

“What will be the situation in two years’ time, I don’t know, it depends on the solution that will be found [in negotiations] regarding the internal market,” he said.

The UK is set to begin Brexit divorce talks sometime this month. The government has not made any promises about its intentions regarding the unitary patent after Brexit, saying last year that the decision to press ahead with the common system, “Should not be seen as pre-empting the UK's objectives or position in the forthcoming negotiations with the EU.”

Brexit is yet another spanner in the works for the unitary patent, which has been decades in the making. But despite the eleventh hour complication and delay to the planning process, Battistelli said the system should come into force on December 1 this year.

“I am conscious that each year I tell you this is going to be the year we see the European patent. It could have happened last year, were it not for the referendum in the UK,” he said. “[But] this year really will be the year of the unitary patent.”

UK position is ambivalent

The Brexit white paper setting out the UK government’s negotiation principles does not refer to the unitary patent.  

However, lawyers believe the UK can remain part of the unitary patent if its rules are changed or the UK makes a concession on the involvement of the ECJ.

“There is some thought that the government wishes the UK to remain within the unitary patent system and will argue that the UPC is an international or even supranational court and consequently, if it was ultimately subject to the ECJ, that would not involve the ceding of any UK sovereignty,” said Gordon Harris, the head of intellectual property at the law firm Gowling.

But, he added, “We don't know and uncertainty prevails. It may be that the government, having allowed the UK to enter the system, is planning to use its future participation as a bargaining chip in the negotiations which will follow the triggering of Article 50. That would seem reckless given the massive uncertainty and adverse implications of going in then out again.”

Continued growth for patents

The EPO’s annual report, published today, shows that the number of European patent applications rose to over 296,000 last year, fuelled mainly by companies from China and South Korea.

The EPO granted 96,000 patents in 2016, 40 per cent more than in 2015 and the most in its history.

There was strong growth again in filings from China (up 24.8 per cent) and from South Korea (6.5 per cent), with Chinese applications outnumbering those from Korea for the first time.

Around a quarter of all patents filings came from the US. Applications from Japan declined slightly, continuing the trend of the past few years.

Patent activity was slightly up in the UK, the latest indication that the vote to leave the EU last June has not yet slowed down the economy.

But in terms of the number of applications filed relative to the population of a country, the figures indicate the Swiss remain the most inventive in Europe.

In general, Europe continues to export more patents than it imports, Battistelli noted.

For example, European inventors filed 93,200 in the US Patent and Trademark Office, while US inventors filed 42,700 at the EPO.

Philips and Robert Bosch set the pace

Dutch electronics giant Philips filed the most patent applications in 2016 for the second year running.

Chinese technology and smartphone giant Huawei was the new No. 2 – moving up from eleventh spot in just three years – followed by Samsung, LG and United Technologies. Filings from Huawei jumped last year by 22.4 per cent.

Germany’s car components company Robert Bosch, which controversially made the part used by Volkswagen to enable vehicles to cheat emissions tests, again headed the list of companies obtaining the largest number of European patents in 2016.

Because it is more expensive to patent with the EPO than any other patent office in the world, it is little surprise that two thirds of last year’s filings came from large companies, with the rest coming from small companies, universities and public research institutes, and lone inventors.

Oxford University was the highest ranked academic filer, with 57 patent applications.

Medtech remains the field with the greatest number of patent applications in Europe, followed by digital communications and computer tech.