Brexit: FRAND, Pharmaceuticals and Intellectual Property

01/11/16

On Tuesday 1st November, Brick Court hosted the latest in its series of panel discussions on the legal implications of Brexit. The event was moderated by Lord Hoffmann, who opened the evening by observing that IP is likely to be one of the areas of law in the UK that is most affected by Brexit. 

Morag Macdonald (Bird & Bird) spoke first about the Unified Patent Court (UPC), initially highlighting the unique nature of the UPC as the first court intended to deal with civil claims on a multinational basis. She noted that the Brexit referendum has put the UPC in jeopardy, and outlined the issues concerning the ratification of the UPCA and the significance of the role the UK had been intended to play. She considered it very unclear what will happen next. The UK could ratify the UPCA, expecting to fall out of the system on leaving the UK, the remaining EU Member States could carry on with the UPC without the UK’s involvement, or a way to implement the UPCA including the UK could be found. All three options will, however, give rise to difficulties. 

Richard Vary (Bird & Bird) considered the impact of Brexit on FRAND litigation in the UK. He noted that the primary reason for choosing one jurisdiction over another is speed in obtaining an injunction. At present, Germany is the forum of choice for this reason. The International Trade Commission (ITC) in the USA is also attractive given the large number of consumers covered by its jurisdiction. The UPC was on course to become a very fast court, covering more consumers than the ITC. If the UPC does continue without the UK, the UK could respond by refining its court procedures to make the process faster than the UPC. 

Katharine Stephens (Bird & Bird) addressed the topics of EU Trademarks (EUTMs) and Registered Community Designs (RCDs), observing first that these rights will, in the absence of any additional measures, cease to cover the UK on withdrawal from the EU. This could cause significant problems for rights owners, who may seek to pursue claims against the UK Government for deprivation of property. Considering the different ways in which these problems could be resolved, she suggested that the best option for EUTMs and RCDs would be for a scheme to be put in place to bring these rights onto the UK registers. Unregistered designs will present a more interesting challenge given the differing scope of EU and UK protection. She also noted problems concerning enforcement after Brexit, both in respect of newly granted and existing injunctive relief, and touched upon the new Trademark Directive and the exhaustion of rights. 

Simon Thorley QC spoke about supplementary protection certificates (SPCs) and the UPC. He outlined the background and purpose of SPCs, and observed that the UK will have to decide whether to provide such protection after Brexit, and if so in what form. In addition, it will have to be determined whether the European Medicines Agency will remain in London. Turning to the UPC, Mr Thorley QC highlighted the additional issue of the ratification of the Protocol on Privileges and Immunities. Having weighed up the potential options for the UPC, he expressed concern that the Brexit vote may have brought about its demise. 

Finally, Mr Justice Henry Carr considered the future of patent litigation in London. Optimists may consider that the UK has a large economy and a huge market, so the need for litigation in London will continue. Pessimists, on the other hand, would say that no-one sues everywhere, instead looking for an early decision in a key jurisdiction. Further, an amendment to the Brussels Recast Regulation gives the UPC jurisdiction over infringements of EU patents occurring outside the UPC territory in certain circumstances. If infringements in the UK can be added to a UPC claim, there will be no need to sue separately in the UK.  The UK could, however, avoid this consequence by joining the Lugano Convention. 

Mr Justice Carr also noted that he was more positive than many of the other speakers about the prospects of the UK becoming and remaining part of the UPC, and of the UPC surviving even without the involvement of the UK. 

The presentations were followed by a Q&A session. Mr Justice Arnold (the judge in charge of the Patents Court) responded to the suggestion that English procedure could be made quicker by highlighting the Chancery Division fixed end trial scheme and two recent cases in which decisions on patent infringement and validity had been heard very rapidly. In one of these cases the first instance decision and decision of the Court of Appeal had taken only 9 months in total from issue of proceedings.

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