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22 June 2017Big Pharma

BIO 2017: Panellists tackle patent concerns after Brexit

Panellists discussed the potential impact of the UK’s decision to leave the EU on patents yesterday at the 2017 BIO International Convention.

“The shape of Brexit remains fairly unclear,” explained Matthew Spencer, partner at Boult Wade Tennant.

Spencer was moderating the session “Brexit: What Might it Mean for Patent Prosecution, Litigation and Transactions in Europe?”.

He went on to explain the definition of the unitary patent (a single EU-wide patent), which is to be granted by the European Patent Office.

“This almost certainly won’t be [in force] before 2018,” said Spencer, adding that more questions will be raised after Brexit.

There are two options after Brexit—the UK leaves the unitary patent system (meaning that existing unitary patents would likely be given parallel protection in the UK), or an agreement is reached for the UK to remain in the system.

However, supplementary protection certificates (SPCs) are applied for and granted by national patent offices.

SPCs after Brexit will be granted in the UK under a new form of legislation, and the shape of that will depend on how the UK government takes it forward.

“The simplest solution is that UK law continues to parallel EU law, however our judges have been somewhat less than complimentary about the Court of Justice of the European Union’s jurisprudence in relation to SPCs,” said Spencer.

Marc Döring, partner at Allen & Overy, outlined the Unified Patent Court (UPC) Agreement, which governs a central court system that has jurisdiction over the unitary patent, and potentially European patents.

He added that the UPC could change how companies litigate around the world, but its current status is uncertain.

On June 13, sister site WIPR reported that the German Constitutional Court (Bundesverfassungsgericht) had delayed the ratification of the agreement because of a constitutional complaint.

“Is this another delay?” asked Döring, “or is this the fatal blow?”.

“Commentators are saying that given the constitutional concerns, and the issue of Brexit, why do we not ratify the UPC Agreement at all, and instead wait,” he added.

And, if the UPC is brought into force and the UK exits, the question arises of the future of the agreement.

“If the UK comes out [of the UPC], will that open up all negotiations again on the UPC Agreement?” questioned Döring.

Patrick Duxbury, partner and head of life sciences at Gowling WLG, advised attendees to audit existing documents and work out whether they have issues in them relating to Brexit.

“The most obvious point in existing agreements is where the party has been granted rights by reference to the EU. The question is how it’s defined,” he said, explaining that there are contracts where the term EU means countries “constituting the EU from time to time”, which could present a problem.

One issue relevant to the biotech industry is royalties on a milestone basis.

For example, an existing transaction provides for milestones at the point the European Medicines Agency (EMA) approves medication for marketing in Europe.

“What happens if the UK falls outside the auspices of EU regulation and the remit of the EMA? In the most extreme circumstances, what happens if the first authorisation granted is by the UK’s Medicines and Healthcare Products Regulatory Agency—is that market authorisation going to trigger a milestone payment?” Duxbury said.

Susan Evans, executive director of IP at Nektar Therapeutics, concluded by stating that her company’s default position is to opt out of the unitary patent.

“We don’t want to put our rights up to be revoked throughout Europe, so we’ll take advantage of opting out,” she said.

LSIPR has previously interviewed Döring about his reaction to the UK government’s announcement that it will ratify the UPC.  Click here to watch the video.

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