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17 January 2019Big Pharma

Life sciences lawyers shocked and concerned amid Brexit uncertainty

Lawyers have told LSIPR they are concerned about the continuing UK political uncertainty having a negative impact on life sciences investment and the Unified Patent Court (UPC).

Last night, January 16, UK Prime Minister Theresa May’s government narrowly survived a vote of no confidence—by 325 votes to 306—just one day after UK lawmakers rejected the proposed Brexit Withdrawal Agreement by 432 votes to 202.

Political talks are continuing today, January 17, on a potential way forward. As things stand, a no-deal Brexit is the only option currently available.

Jane Wainwright, partner at UK-based IP firm Potter Clarkson, said she was deeply concerned by the Withdrawal Agreement’s defeat on Tuesday.

“Life sciences businesses, along with those in other sectors, all need some certainty in relation to Brexit so they can plan and move forward. The current limbo as to what will, post-Brexit, be the trading situation makes investment in the UK more difficult to justify,” she argued.

A no-deal Brexit appears to be significantly more likely now, which would add further bureaucracy for a sector that relies heavily on Europe for collaboration, people and investment—and may jeopardise the UK’s ability to be competitive with their European counterparts, she added.

“Uncertainty on all of these will inevitably lead to many businesses, at least in the coming months, being more conservative in how they spend their money which will reduce the scope of research projects and therefore slow the pace of high quality innovation in the life sciences industry in the UK.”

Joachim Wachenfeld, partner at Vossius & Partner in Münich, Germany, said Tuesday’s decision “was of course a shock for most continental Europeans, although it certainly did not come as a surprise”.

He pointed to life sciences’ companies concerns over the future of the UPC, which is currently on hold as the German Constitutional Court is set to hear a complaint filed against the UPC by Düsseldorf-based attorney Ingve Stjerna.

UPC proponents had been hoping that, depending on what happens in Germany, the UK might be able to join the UPC during the Brexit transition period—which was due to run from March 30, 2019 to December 31, 2020. However, after Tuesday’s vote, this option seems unlikely.

Wachenfeld, who said it is presently unclear when the German court will issue the decision, admitted it may be difficult for the UK to become part of the UPC unless further deals are concluded.

On a more positive note, Wachenfeld does not expect any significant changes in the patent prosecution strategies that his clients intend to follow. This is because most patents in the biotech field are probably filed through the European Patent Office, a non-EU institution.

“I do not see any advice necessary to change patent filing strategies at present,” he confirmed.

Despite this, Wainwright said companies may spend less on patenting in the next few months, given the current climate of uncertainty.

“If research output slows then fewer new inventions would be made, so fewer patents would be filed.

“Additionally, you could see companies wanting to conserve cash in the short term while they see how Brexit plays out by simply slowing their patent filings down,” she said.

On this second point, Wainwright said, “I would expect the filings to be made eventually, but just delayed maybe a few months to a year (depending on when more certainty was achieved on Brexit and of course commercial deadlines for the company/academic institution)”.

If there was a delay in filings, there may be a sudden spike in new applications filed at the end of 2019 and/or early 2020, to fit with when the most common budget year ends, she added.

On a final note, Wachenfeld said that “biotech companies like the rest of the world are keenly interested in the outcome of the British decision(s) as well as on the decision of the German court”.

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8 January 2019   The UK government has published further guidance on the regulation of medicines, medical devices and clinical trials in the event of a no-deal Brexit.
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