Patent law: Theresa May's new Brexit battlefield

"No matter how you approach it, there is no way to square what the government is doing on patents with its red line on the ECJ."
"No matter how you approach it, there is no way to square what the government is doing on patents with its red line on the ECJ."
Ian Dunt By

The only people who really care about patent law are patent holders, patent lawyers and patent academics. And yet Theresa May's rash promise to remove the UK from the jurisdiction of the European Court of Justice (ECJ) is about to turn this esoteric area into a major Brexit battleground. No matter how you approach it, there is no way to square what the government is doing on patents with its red line on the ECJ.

The fundamentalist fringe of the hard Brexit movement has started to notice too. A couple of weeks ago, Douglas Carswell put down an early day motion demanding a change on patent policy.

The Daily Express covered it with its usual restraint. "EXPOSED," it said. "Secret plan to tie Britain to EU". Ukip warned of a "stealth attempt" by ministers to carry out some sort of Brexit conspiracy.

Put aside the hysteria and they're right about one thing: the government has been incredibly coy about its patent policy. 


Downing Street wants to press ahead with plans for two projects: a unified European patent court and a unified European patent. Taken together, they are designed to standardise and streamline patents in Europe. They are the system the continent will be using for years to come.

The government first confirmed it would press ahead with the new patent system in November, just a month after May had first promised the Tory party conference that we would be out of the jurisdiction of the ECJ. In January, intellectual property minister Jo Johnson confirmed to the science and technology committee that the government intended to "proceed with preparations" to ratify the court. (You can see the exchange in this video if you fast forward to the 11:07:30 mark)

The government's explanatory memorandum on the court goes out of its way to insist that there is absolutely no connection between it and the EU. It is so disingenuous as to be grossly misleading.

The first words of the agreement establishing the court are:

"CONSIDERING that cooperation amongst the Member States of the European Union in the field of patents contributes significantly to the integration process in Europe"

This assumption that the court is for EU member states continues throughout the document. This is a patent court designed for EU member states, to create and rule on patents in EU member states, which comes under ECJ jurisidction on questions of EU law.

So what's going on? Why does the government think it can stay in the new patent system while pursuing a hard Brexit?

The key to the strange little game that is being played here comes in the history of European patent law, which has always been a horrible mess. The patent court in Munich looks like an EU office but it isn't. It sells little bundles of patents applying to particular markets – so a technology manufacturer might get one for its major markets in Britain, France and Germany, alongside a Scandinavian country. Smaller markets, like those in eastern Europe, are often ignored.

All of this is expensive, both on the front and the back end. In terms of validating a patent it involves an awful lot of translation costs. Often it ends up costing around 20,000 euros - far more than the 2,000 euros you'd expect to pay in the US. And if you come to litigate, it gets worse. The court cases need to take place in different markets, so after multiple rulings you can end up with a patent being maintained in Britain but rejected in France.

The EU, it goes without saying, hated the system. More than anything else, the EU is a standardisation project, a one-size-fits-all solution to a continent's economic structure. The idea that something would be validated in the UK but not France was anathema to the whole endeavour. So it slowly went about changing things. They wanted one unified patent which applied across the EU and one unified patent court to rule on it.

The trouble is that patent lawyers were very cautious about the ECJ, because it has a pretty poor track record on patent rulings. So when the agreement setting up the unified patent was written it was actually an international treaty rather than an EU regulation. It's this key fact which seems to have given the government the confidence to think it can still press ahead.

That, however, is where the good news for May ends, because while the agreement setting up the unified patent court was an international treaty, the agreement on the unified patent itself comes from an EU regulation. And then there are those other rather significant problems: namely, that the court agreement relates only to EU member states and that it will bring its members under the ECJ interpretation of European law.

May's government probably believes it can get rid of a lot of this stuff behind the scenes. They have good reason for thinking so. The UK has considerable leverage. The people behind the new patent court want Britain in the system. It's one of the main countries for patent filing and litigation in Europe and it has many highly respected judges working in the area. With the UK, the new system will cover 400 million consumers, including four G8 economies, and have a GDP close to that of the US. It could quite quickly become a major patent jurisdiction, possibly even overtaking America. Without the UK, the new arrangements would lose a lot of their esteem.

So far, so good. But there is a flip side to that mouth-watering prospect of future innovation success: Britain wants to be in on it too. David Cameron put in an awful lot of work supporting the idea of the court. British judges were heavily involved in developing its procedures. When it was decided that the court would be split into three locations, Cameron succeeded in making sure one of them – which will rule on pharmaceuticals and life sciences - was in London.

This made sense. The UK had developed a reputation as a key hub in this area. It had the European Medicines Agency. It had several British universities doing strong work. It had the Francis Crick Institute and the Wellcome trust. This was a chance to cement that reputation as a global life sciences hub. So the government went ahead and leased a building in Aldgate for the court and started getting things ready for the big opening.

Over the years a lot of work and money went into the system – work which ministers are not particularly keen to see go to waste. And regardless of that work, they're worried about the future loss of innovation and business interest if the court takes off and Britain isn't part of it.

This mutual benefit might just convince Brussels to ignore the EU membership requirement for the new patent court and maybe even reformulate the mechanism creating the unified patent so that it's no longer an EU regulation. Where it won't work is on ECJ jurisdiction, May's red line from the Tory conference. This is probably the one thing all patent experts agree on. 

The phrase 'ECJ jurisdiction' sounds big and important, like we're discussing a fundamental issue of sovereignty. The reality is that it's a pretty minor quibble. The patent court won't be a conduit for EU law into Britain. It will just occasionally refer to the ECJ on matters of European law when assessing patent cases and then use that definition in future.

Take 'supplementary protection certificates'. These are patent extensions you grant to make up for the very long, trial-based validation process required of products like pesticides and pharmaceuticals. The market value of products like this tend to grow year on year, so their sales are usually at their highest when they get towards the end of their patented life. That's why the commercial value of these extensions is often huge, even if social interest in them is low.

Let's say the patent court needs to know what the definition of patent life is in European law. It would refer to the ECJ and ask:  does patent life start at the point of market authorisation? If so, in which market? The ECJ would answer. And that would be the functioning definition used by the patent court. 

Other references to the ECJ would likely be around biotech, where a lot of  current medicine research is based. We are on the verge of producing bespoke personal medicines, where we take the stem cells from the patient and grow them a new organ using it, thereby eliminating the risk of rejection. 

In terms of patents, this can be tricky. Some areas of life, like animal varieties or mathematical formulas, are excluded from patents. There is quite a bit of debate about the extent to which the same thing should apply for biotech, not least because we have to start growing an embryo to get embryonic stem cells and that's very controversial. An EU law on biotechnology, for instance, eventually led to an ECJ ruling that the use of human embryos for scientific research purposes is not patentable.

So in this case, the unified patent court might need to ask the ECJ what definition of 'human embryo' it uses under EU law. The ECJ would answer. And that would be the definition the patent court uses.

That's the "EXPOSED secret tie" right there. It is incredibly tedious to even have to talk about this being an issue, because it is so minor in its repercussions. Quite probably there was not a single person in Britain who voted for Brexit on the basis of the unified patent court or because it might have to refer a definition to the ECJ.

But whether it's absurd or not: this is the promise that May made. She didn't make it because people on the street were outraged by the ECJ. She made it because she was scared of the headbangers in Ukip and her own party who would demand that Britain extricate itself from every little bit of the EU's legal structure. And now she has to face the practical implications of that decision.

This is what happens when you make hasty constitutional promises on complicated issues: they have a tendency to drag you down in the years to come. Who really wants to lose access to a unified continental patent because of some straggles of ECJ linkage lying about the place? Hardly anyone. Who benefits in Europe or the UK by having a perfectly commendable and potentially highly profitable bit of international cooperation scuppered because of such minor concerns? Hardly anyone.

But now this innocuous development is about to become a Brexit battle ground, with all the standard cries of betrayal and treason we have come to expect from this debate. That speech May made at the Tory party conference may have won her support in the hall, but she will be dealing with its consequences for years to come.

This article is based on conversations with Luke McDonagh, scholar in international property constitutional law, Daniele Selmi, barrister specialising in intellectual property law, Lionel Bently, professor of intellectual property at the University of Cambridge and director of the Centre for Intellectual Property and Information Law, and Steve Peers, professor of EU, human rights and world trade law at the University of Essex.

Ian Dunt is the editor of Politics.co.uk. His book - Brexit: What The Hell Happens Now? - is out now from Canbury Press.

The opinions in politics.co.uk's Comment and Analysis section are those of the author and are no reflection of the views of the website or its owners.

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