“Take the politics out of setting
up the system… and realise
that the impact on the
competitiveness of IP on the
EU-market versus U.S.,
China, etc. is immense,
both positively and negatively”
Contents
Time to get real – are you ready for a 2017 launch?
4
The UPC: European attitudes
6
Two years on: the survey results
8
Will the UPC benefit your company?
9
How prepared are you?
10
What makes it difficult to prepare?
11
Are senior management clear about the implications?
12
What’s your approach to the UPC?
14
Which patents are you leaving in... and why?
16
What patents are you opting out... and why?
18
What patents are you undecided on... and why?
20
How clear is the opting out and opting back in process?
22
Are UPC costs appropriate?
24
What are you most uncertain about?
26
How will you handle future filings?
27
Brexit: Final roadblock or last straw?
28
Time to get real –
are you ready for a 2017 launch?
Debate over Europe’s unitary patent system and court (UPC)
has been going on for so many years, it is hard to believe that
its launch is just around the corner
The big decisions on costs, venues and processes have been made, judges are currently being selected and ratifications are going according to plan. The final roadblock is Britain’s referendum on leaving the EU, to be held on 23 June – ironic, since the UK has been a major advocate of the unified patent system and UK companies have abandoned their initial scepticism to become its greatest supporters, according to our new survey. If the British vote to leave, it would at the very least delay the start of the UPC since arrangements would need to be reconfigured (see page 28). If they vote to stay, as polls now suggest, the UPC will kick into action in early 2017. Our survey shows that many companies have engaged deeply with the implications of the UPC over the past two years. While just half of companies expect the new unitary system to benefit their business – down from three-quarters in 2014 – their reasoning shows that there has been a shift away from blanket, black and white views of the UPC. Their approach now is considerably more
nuanced and mature, designed to meet business needs and protect existing patents, while ensuring that companies play a part in shaping the new system. The findings also suggest that the better-prepared companies are broadly happy with the compromises that have been reached on controversial issues such as costs, and that they are relatively relaxed about how the UPC will tackle challenges such as non-practising entities trying to play the system. But not all companies are ready to face the future. A third of respondents – especially those with small and medium-sized portfolios – say they have not moved beyond the early stages of preparation, and a similar proportion claim it’s still a long way off. They are wrong. Although latecomers do have the easy alternative of initially opting all their patents out at no cost until they can make a final decision, they will find that the UPC system develops its own dynamics quickly, making light of the seven-year transition period when unitary, national and European patents run in parallel.
51%
of businesses think the
UPC will benefit them
Those dynamics will be shaped by the complexity of companies’ strategies that we see in the survey. Sectors like life sciences/pharmaceuticals, which depend on a few crown jewel patents for the bulk of their business revenues, look set largely to opt these few patents out of the UPC system, litigating them in their heritage systems, while at the same time making sure that they can play an active role in shaping the UPC system with other patents. Industrial companies and those in the technology, media and telecoms (TMT) field, on the other hand, are more likely to leave a sizeable number of important patent suites in the UPC system where they can test the viability of pan-European injunctions and ensure that the system develops with their input. Overall, companies are more likely to leave patents in.
Once a body of solid case law starts to emerge, companies will start to review their decisions. In all likelihood, within a few years’ time, the market will split: large companies will gravitate towards using unitary patents as a matter of course, leaving national patents for small and medium-sized companies. By the end of the transition period, barring a disaster, the current European patent will become a mere footnote. Once the Brexit referendum is over, it will be the last chance for those companies that have waited for the UPC to become reality to make decisions based on their own business needs, rather than be forced to react to the actions of their peers and competitors. The UPC represents the biggest change in the European patent system in decades and it is going to affect everybody. It’s worth entering that new era with a clear strategic view that will make it simpler to both shape and adjust to the new reality.
The UPC:
European attitudes
We assessed the views of companies across Europe towards
the business impact of the Unified Patent Court
Five key insights
Benefits but answers needed
Time is running out
1
2
With just one year to go businesses with large patent portfolios are still undecided onwhat to do with 44% of their portfolio, rising to 53% for smaller portfolio companies and climbing to 63% for mid-sized portfolio companies.
Risk of being blocked from all European markets (centrally revoked) creating major uncertainty for business, according to 43% of respondents.
A real concern that one-third (34%) have not moved past the early stages of preparation.
UPC needs to help educate business,in particular SMEs, on how the system will work. Businesses with larger patent portfolios are more
likely to believe the UPC will benefit their business
than those companies with smaller portfolios.
Getting clear answers to questions on how the system will work in practice remains the biggest challenge for business, according to 68% of respondents.
44
%53
%63
%68
%
80
%
Eggs in different baskets
The spectre of Brexit
Sentiment reversal
UK-based companies are now the UPC’s biggest supporters, after being the most sceptical in 2014.
are opting out to design enforcement strategies by jurisdiction, and avoid putting
One in three companies think the UK’s absence from the UPC system would be a problem in terms of efficiency and costs.
3
4
5
The crown jewel strategy has changed and of those who intend to leave patents in the UPC, fewer will be leaving their most valuable ones in –
down to 27% from 82% in 2014.
47
%
1. Companies have come a long way over the past
two years and many are ready for the launch
next year. They have put people and processes
in place and have started working out what the
unitary patent could mean for their business
and how best to respond. The more prepared
they are, the more they see the benefits.
2. Responses have matured. Companies are taking
a more sophisticated and differentiated view of
how to handle their portfolios, thinking carefully
and strategically through which patents to leave
in the system and which to opt out.
3. Some companies will benefit more than others.
Those with large patent portfolios that are
validated in many jurisdictions know that they
will benefit most from the UPC and will use
the system intensively – companies with fewer
patents or ones that require fewer validations
have less to gain and many will continue to use
national filings or the existing European patent.
THE SURVEY RESULTS
Three important findings emerge
from our new survey:
Will the UPC
benefit your company?
We think so, but we’re not entirely sure
74%
Total ‘yes’/ ‘probably’
31% 43% 14% 1 3% 8%
2014
21% 30% 24% 11% 5% 10%
2016
51%
Total ‘yes’/ ‘probably’
31% 43% 14% 1 3% 8%
2014
21% 30% 24% 11% 5% 10%
2016
Yes Probably Probably not No Don’t know Too early to tell
As companies have started to prepare for the introduction of unitary patents and the UPC, there has been a dramatic shift in their expectations and overall a less rosy view of the impact on business. Just over half (51%) now expect it will be positive for their firm – down from three-quarters (74%) two years ago. Significantly, however, those categories most concerned about the impact of the UPC in 2014 are now the most bullish –
80% of companies with large patent portfolios say it will probably benefit them (twice as many as in 2014) and UK-based companies have shifted from being the most skeptical in Europe to become the UPC’s biggest supporters by far, with three-quarters (76%) believing it will bring them benefits, compared to less than a quarter in France (22%).
While that is ironic given that the Brexit referendum on 23 June is
the final roadblock to the launching of the UPC system (see page 28), the explanation is less national than structural. The UK corporate structure includes more companies with large patent portfolios than the French, and the sample also has twice as many companies that validate their patents in more than six countries. Similarly, German skepticism stems largely from medium-sized industrial companies with smallish portfolios.
Question asked: Do you think the unitary patent and the Unified Patent Court will benefit your company?
2016v2014 comparison
Question asked: What work, if any, has your business undertaken so far in preparation for the arrival of the UPC?
37%
40%
42%
38%
39%
23%
32%
26%
5%
9%
1%
2%
37%
40%
42%
38%
39%
23%
32%
26%
5%
9%
1%
2%
We have undertaken a portfolio audit to identify crown jewel patents and secondary patents within our portfolio We have determined whether we should obtain the new unitary patents or
continue obtaining classic European patents* We have identified which patents to opt-out of the regime**
Other 2016 2014
34%
Not beyond early stagesHow prepared
are you?
We’re working on it
Preparations for the UPC remain mixed and around a third (34%) of respondents say they have not moved beyond the early stages of preparing for the introduction of unitary patents – only slightly higher than in 2014. Some 40% have audited their portfolios to identify the crown jewels and secondary patents and 38% have reached a decision over whether to file new unitary patents or to continue obtaining classic European patents. Less than a quarter (23%), however, have identified which patents to opt out of the regime – a considerable
drop from two years ago, suggesting a shift in perceptions on the best strategic approach to unitary patents.
As in 2014, the level of preparation broadly echoes the level of benefits that firms expect to receive from the UPC, as well as their level of concern about key areas. Companies with large patent portfolios and companies with European headquarters in the UK now regard themselves as relatively advanced in their preparations, compared to others – a significant shift from two years ago when both these categories felt themselves to
be lightly prepared. Dutch and German companies are least prepared. French companies have done the most work on their portfolio audits, but fewer have made key decisions on how to handle specific patents. Companies in the TMT sector have made the most progress in preparing for the UPC – and have the highest share (32%) of respondents who are clear that it will bring benefits to them. Nevertheless, fewer overall expect to see benefits than two years ago, possibly reflecting the complexities of their often wide-ranging patent portfolios.
*2013 wording: ‘We have determined whether we should file new unitary patents subject to the UPC or continue filing classic European patents.’ **2013 wording: ‘We have identified which patents to opt-in and which to opt-out of the regime.’
We are only at the early stages of preparing None of the above
Preparing for the UPC still presents companies with multiple challenges, but responses show that many have made important advances over the past two years. More than two-thirds (68%) still say it is difficult to get clear answers on how the system will operate and potential implications. But companies are now significantly less likely to cite internal resources as
a constraint – less than half (46%) say this is a challenge, compared to 68% in 2014. The bigger internal challenge now, noted by 68% of respondents, is getting the right level of expertise on their team. Companies with large patent portfolios have mostly managed to handle the internal challenges, but 60% also say it remains difficult to get clear answers to their
questions, suggesting the UPC still has a way to go in improving its communications to businesses. There is some evidence across the survey of a ‘squeezed middle’ – larger companies are well prepared, companies with a small number of patents have less to worry about, while those in the middle are often floundering.
71%
68%
59%
68%
57%
56%
42%
40%
68%
46%
3%
2%
Getting clear answers to questions we have regarding how the system will work in practice and its various implications for our business, to help inform our decision making Ensuring we have the right level of expertise and understanding of the new system within the team to undertake the analysis required to inform our decision making Keeping up with and monitoring developments and their implications
for our decision making Getting enough resource internally to properly audit and review our
patent portfolio Getting management sufficiently engaged with this issue and realising its
importance for our business
Other 2016 2014
What makes it
difficult to prepare?
Finding the right expertise to understand how it will actually impact us
Question asked: What are your biggest challenges in preparing for the UPC?
There is some awareness but they have not fully grasped the implications this change could have for our business Senior management are fully engaged on this issue and appreciate the
potential implications This is not a strategic priority for our management as it will have little
impact on our business There is insufficient awareness and understanding of the implications
for our business Don’t know Other
2016 2014
Are senior management clear
about the implications?
They are starting to grasp them
Question asked: Which one of the following best reflects whether there is a sufficient level of awareness at a senior level in your business about the UPC, and in particular the implications for your business of opting patents out or leaving them in the UPC system?
39%
43%
13%
26%
29%
19%
2%
16%
10%
1%
2%
A quarter (26%) of respondent companies report that managers are fully engaged and understand the implications of decisions to be taken around the UPC – that is twice as many as two years ago. Among UK and Dutch companies, that share rises to around a third, while in France it sinks to just 15%, echoing perceptions of the benefits of the UPC. The level of engagement also tends to correspond directly to the share of companies thatsay the UPC is not a strategic priority because it will have little impact. Over a quarter of French companies view it as unimportant, a much higher share than elsewhere – and probably a result of more companies having small patent portfolios. Still, over half of French and German companies, mostly industrial companies, recognise that there is some awareness about the business implications of the UPC but this is not fully grasped at senior levels.
In 2014, companies with medium-sized patent portfolios were the most aware and engaged, but these companies now show a very mixed picture, including a relatively high percentage of respondents (15% compared to 10% overall) who are worried that there is no real awareness of the implications of the UPC. Companies with large portfolios are now the most aware and engaged.
What’s your approach
to the UPC?
Differentiated, but we are leaning more towards leaving patents in
Question asked: Roughly what per cent of your patent portfolio have you 1) decided to leave in, 2) decided to opt out or 3) do you remain undecided about?
29%
Average % of patents leaving in53%
Average % of patents undecided18%
Average % of patents opting outAverage Portfolio
Most respondents remain undecided about how to handle a large number of their patents. On average, no decision has been made on over half (53%) of the patent portfolio – but that marks an improvement on two years ago when the same share was 68%. Where a decision has been made, the number of those leaving patents in the UPC system remains higher than those opting out, but the gap is smaller than it was two years ago. At that time, 85% thought they would probably end up not opting any
patents out at all – but that share has fallen to 53% as companies have analysed their portfolios and considered the implications for different kinds of patents. Just 6% have already decided to leave their entire patent portfolio in the UPC system, while only 4% have chosen to opt out entirely. Two years ago, there was a clear correlation between companies leaving patents in the UPC system and their perception of benefits from unitary patents. That correlation has now broken down, suggesting companies
are starting to take a more sophisticated and differentiated approach, not only hedging risks but also considering strategic benefits across the portfolio. Those companies that are still very indecisive are, however, more worried about the impact of the UPC on their business. Those groups with the highest share of undecided patents – French companies, the TMT sector, smaller companies – are also among the least enthusiastic about the benefits of the system for them.
53% 7% 14% 10% 11% 6% 53% 18% 20% 2 3% 4% 34% 9% 4% 7% 3% 43% Leave in Undecided Opting out 0% 1-25% 26-50% 51-75% 76-99% 100%
Which patents are
you leaving in...
We’re hedging our bets
27%
Among our most valuable patents (crown jewels)
23%
Among our least valuable patents (secondary)
50%
A mix of patents of varying value
Reasons for leaving in
All opting in any of their patents. Base: (n=72)
Value of leave in patents
All opting in any of their patents.
Base: (n=77)
34%
30%
36%
We are unsure whether we may need to enforce these patents We do not anticipate a need to enforce these patents We anticipate the need to enforce these patents
Question asked: For those patents you intend to leave in, are they 1) your most valuable patents, 2) your least valuable patents or 3) a mix of patents of varying value?
Question asked: For those patents you intend to opt in, was it because: 1) We are unsure whether we may need to enforce these patents, 2) We do not anticipate a need to enforce these patents, 3) We anticipate the need to enforce these patents?
All opting in any of their patents. Base: (n=77)
Question asked: What are the main reasons that your business intends to leave in some or all of its patents?
It will be cheaper to enforce patents on a pan-European basis We believe we may be able to obtain injunctions
(potentially pan-European) more easily We intend to leave a number of patents in the UPC system in order to help shape
the system by participating in it from the start It will provide greater legal certainty for our patents on a pan-European basis We want to leave a small number of patents in the UPC system in order to test
the system and gain a working understanding of it before committing to it fully The process of managing our patent portfolio across Europe
will be far more efficient We perceive the risk of opting-out to be too high for us as a business We believe we will be able to achieve a higher level of damages under the UPC Other
49%
45%
44%
44%
42%
38%
37%
32%
3%
Further proof of companies taking a sophisticated business approach towards the UPC is how they decide which patents to leave in the system. Two years ago, the strategy appeared clear – 82% of respondents said they would leave the most valuable patents in the UPC system with the strong expectation they would have to be enforced. Today, that share has dropped to just 27% and half of the companies (50%) are looking to leave a mix of patents of varying values in the system. There is a roughly equal
mix of patents that companies think may have to be enforced and ones where that is unlikely.
When asked why they are leaving these patents in, respondents are hedging their bets and trying to shape the new system in a way that will suit them. Almost half of companies say it could be cheaper, easier and more certain to get pan-European injunctions through the UPC – suggesting there is a level of confidence that the court will function well once it becomes
reality. A similar share say they are anxious to leave patents in the system to help shape case law from the start, while testing it and gaining a better understanding of the system internally. These responses compare starkly to those received in 2014, where those who opted to stay in the UPC had strong expectations of higher legal certainty, greater efficiency and the potential to achieve a higher level of damages – a perspective that has weakened as respondents have learned to better understand the system.
...and why?
What patents are you
opting out...
A mix, but a few more of those we fear we may have to enforce
31%
Among our most valuable patents (crown jewels)
32%
Among our least valuable patents (secondary)
37%
A mix of patents of varying value
Reasons for opting out on patents
All opting out on any patents. Base: (n=77)
Value of opted-out patents
All opting out on any patents.
Base: (n=77)
We are unsure whether we may need to enforce these patents We do not anticipate a need to enforce these patents We anticipate the need to enforce these patents
43%
37%
20%
Question asked: For those patents you intend to opt-out, are they 1) your most valuable patents, 2) your least valuable patents or 3) a mix of patents of varying value?
Question asked: For those patents you intend to opt out, is it because: 1) We are unsure whether we may need to enforce these patents, 2) We do not anticipate a need to enforce these patents, 3) We anticipate the need to enforce these patents?
All opting out on any patents. Base: (n=77)
Question asked: What are the main reasons that your business intends to opt out some or all of its patents from the UPC?
Concerns over bifurcation Concerns over the ability of litigants to game the system It is sufficient for us to enforce a patent in one key jurisdiction in order to
resolve an infringement issue Other
46%
40%
39%
33%
29%
29%
27%
24%
24%
23%
7%
We want to retain the possibility to design enforcement strategies jurisdiction by jurisdiction and don’t want to put all our eggs in one basket
Potential increased cost for litigating under the new system We do not validate patents in enough jurisdictions to warrant
participating in the UPC system Not enough jurisdictions have signed up Uncertainty over how the system will work in practice We have confidence in the current national patent enforcement systems Concerns over the quality of judgements from the new courts in the UPC
As for the decision to leave patents in, companies were roughly broken down into thirds for opting out crown jewels, secondary patents and creating a mix. Companies are, however, tending more towards opting out those patents that
they anticipate having to enforce. The main reason (46%) for opting out is the desire to design enforcement strategies by jurisdiction and avoid putting all eggs in one basket. But companies also reveal doubts
about the quality of judgements from the new UPC courts (40%) and, conversely, confidence in the current national systems. The system needs to be tested before companies are willing to risk more.
What patents are
you undecided on...
Lack of clarity on processes and costs
10%
Among our most valuable patents (crown jewels)
24%
Among our least valuable patents (secondary)
66%
A mix of patents of varying value
Reasons for being undecided on patents
All undecided on any patents. Base: (n=95)
Value of undecided patents
All undecided on any patents.
Base: (n=95)
We are unsure whether we may need to enforce these patents We do not anticipate a need to enforce these patents We anticipate the need to enforce these patents
49%
32%
18%
Question asked: For those patents you are still undecided on, are they 1) your most valuable patents, 2) your least valuable patents or 3) a mix of patents of varying value?
Question asked: For those patents you are still undecided on, is this because: 1) We are unsure whether we may need to enforce these patents,
2) We do not anticipate a need to enforce these patents, 3) We anticipate the need to enforce these patents?
All undecided on any patents base: (n=95)
Question asked: What are the main reasons that your business is still undecided about leaving some or all of its patents in or opting them out?
In 2014, companies were largely undecided about secondary patents, with 87% saying they still had to make a decision. That share has dropped to just 24%, but two-thirds (66%) of companies say they are still working out a mixed bag of patents to leave in or opt out.
Digging deeper into the lack of decision-making, many people are still worried about the lack of clarity on processes. Around half (53%) say they
are waiting for more detail on how the UPC will work in practice and 50% say that the costs remain unclear to them. A large chunk (45%) are still working on their portfolio audit. Internal obstacles are no longer the big problem for most. Only slightly more than a quarter of respondents still cite lack of senior management engagement or internal resources for their indecision and only 30% claim the UPC is still a long way off.
...and why?
Other We have not been able to get senior management to engage
sufficiently on the subject to make a decision Lack of resource internally It’s still a long way off We are not yet clear on the costs for us We are still in the process of conducting our portfolio audit Lack of clarity on how the UPC will work in practice – i.e. we are
still waiting for detail in a number of areas
53%
50%
45%
30%
28%
27%
7%
12%
Very clear
24%
We are yet to finish analysing the rules in detail
4%
Not clear at all
How clear is the opting out
and opting back in process?
We’re starting to understand it clearly now
Question asked: How clear do you feel the process is for opting out and withdrawing the opt-out if you wish to in the future? For example, do you have clarity on when you can and cannot do so?
Some three-quarters (72%) of respondents say they are largely clear about how the system functions. Although not much higher than in 2014, there are far fewer companies struggling in the dark – just 4% say they don’t understand it, compared to 21% two years ago. A further 24%
are now in the middle of analysing the rules in detail. This is further evidence that companies are focused on working out how the UPC system functions and what it means for them. Again, there is a correlation between lack of clarity and the perception that the UPC will not be beneficial. French companies, the TMT
sector and companies with small patent portfolios are the least clear about how the UPC system works. In contrast, 87% of UK companies and 91% of companies with large portfolios feel they are very or somewhat clear.
60%
Somewhat clear
2016
72%
Total ‘very clear’/ ‘somewhat clear’58%
Somewhat clear
10%
Very clear
11%
We are yet to finish analysing the rules in detail
21%
Not clear at all
2014
72%
Total ‘very clear’/ ‘somewhat clear’
Are UPC costs appropriate?
The fees are about right; the cap is controversial
Question asked: How do you feel about the level of unitary patent renewal fees?
76%
About right18%
Too high1%
Don’t know5%
Too lowLevel of unitary patent renewal fees
Since our last survey, when costs were a major source of uncertainty, the UPC has published its fee structure. It appears to have hit the right compromise. A surprisingly high three-quarters (76%) of respondents
feel that unitary patent renewal fees are about right, and that perception holds across the board. There are diverging views on the cap on
recoverable legal fees – Dutch companies feel it is too high (29%) along with
those in the TMT sector (30%), while UK companies, used to higher caps, see it as rather low – but few respondents are concerned that the cap may be insufficiently high to hold back litigation from non-practising entities.
Question asked: Caps on recoverable legal fees will apply in the UPC. For claims greater than EUR50 million this cap will normally be EUR2 million. What best describes your view of this cap?
52%
About right38%
Too high10%
Too lowWhat are you most
uncertain about?
We all have slightly different worries
Question asked: Which of the following do you see as sources of major uncertainty within the system? Please select up to three
Respondents cite many different concerns around the UPC system, but no single one is of equal concern to all types of respondents. The top worry by far (43%) is that patents might be centrally revoked – but life sciences companies are not particularly concerned, and neither are companies in Germany and France, nor companies
with large patent portfolios. This is a major concern of the TMT sector, UK and Dutch companies and firms with small portfolios. This broad range of different uncertainties is even more pronounced for other areas. Over half of German companies are worried about the high costs of using the system, and smaller companies are
concerned too – for the others this is just one issue among many. The same group has big worries around
bifurcation, but the others are less urgently concerned. As the UPC starts to become reality, it is clear that each company needs to decide on the implications for its specific business.
Concern over incentives for NPEs to litigate Our competitors will be able to obtain interim injunctions too readily The Court will not grant interim injunctions when we need them The Court will be too lenient on our competitors’ patents The Court’s approach to damages awards The Court’s approach to final injunctions Our patents may be centrally revoked The costs of using the system Whether the Court will bifurcate and grant injunctions before validity
has been decided Other
43%
34%
33%
27%
26%
22%
21%
20%
15%
8%
43%
34%
33%
27%
26%
22%
21%
20%
15%
8%
None of our future filings The minority of our future filings The majority of our future filings All of our future filings Don’t know
How will you handle
future filings?
Unitary patents will be dominant, but by no means the only ones
18% 29% 29% 8% 16% 19% 47% 15% 4% 15% 17% 37% 25% 3% 17% Unitary patents Classic European patents National filings
The approach is no longer black and white. Two years ago, more than half (55%) of respondents expected unitary patents to make up all or most of their future filings, with just 4% saying they would not use them at all. Two years on, companies are taking a more balanced view, hedging their bets and looking at a mix of different types of patents, depending on strategic and tactical needs. Just 37% say they expect most or all of their patent filings to be part of the UPC
system, while a sizeable 18% are not expecting to file to the UPC at all. Most respondents expect to continue using classic European Patents and national filings alongside the UPC. Some 28% expect to use European Patents for most or all of their future filings and 19% intend to rely predominantly on national filings. As with existing patents, the expected take-up rate for new filings largely hinges on whether firms expect to
benefit from the UPC. UK and Dutch companies, those with larger portfolios and in the life sciences sector are much more likely to see a major role for unitary patents. Companies located in France and Germany are significantly more skeptical, with around two-thirds in each expecting to file few or no unitary patents. Again, this has to be seen in context, with a high number of companies in these countries having a small or medium-sized patent portfolio.
Questions asked:
We expect Unitary patents to make up:
We expect classic European patents with national designations to make up: We expect national filings to make up:
Brexit:
Final roadblock or last straw?
If the polls are correct, the British referendum on 23 Junewould just be the final bump on the long road to launching the UPC. But what would happen if the UK opts to leave the EU? Would the unitary patent system go ahead as planned or disappear under a pile of new political priorities? A ‘leave’ vote would definitely delay the introduction of the UPC. As a key driver of the unitary patent system, the UK plays an important role in its structures. London was selected as the location for one of the three branches of the court and is responsible for life sciences – a key area for the new system. These responsibilities would need to be reassigned if the UK left the EU, but there would be no shortage of offers. Munich would like to add life sciences to its responsibilities, the Netherlands would like to have a court – as would Italy, which is starting to show more support for the UPC.
Another key area that the UPC might have to address is costs. While the unitary patent would still be an advance
on the current setup, losing such a key market as the UK would weaken its efficiency – many companies would still have to validate patents in parallel in the UK. There might be pressure to recognise that shift by reducing fees. Almost half of our survey respondents said the UK’s exit would make them rethink the proportion of European patents they would opt out of the UPC system and the share of unitary patents they would file, but less than a third thought it would have detrimental consequences for their business. UK respondents were among the most relaxed. As large global players with significant patent portfolios, many companies will end up operating within the system whether the country is part of the UPC or not. A UK exit would undoubtedly unleash a political crisis within the EU, but the UPC has developed a commercial momentum of its own. If there is sufficient will to solve the practical issues, the UPC could still be launched in 2017.
“A UP/UPC system without the
UK will reduce the advantages of
having the system, simply because
of the lesser coverage”
Methodology
YouGov surveyed 151 respondents during
11 April-12 May 2016,
27 respondents
completed the survey online,
124 via telephone
.
Weighting has been applied to 2016 data to
better reflect the spread of sample in the
previous 2014 wave.
Overall results are based on 151 respondents
,
which is a sound base for research of this nature
amongst a senior audience, highly expert in a
particular area.
Allen & Overy means Allen & Overy LLP and/or its affiliated undertakings. The term partner is used to refer to a member of Allen & Overy LLP or an employee
or consultant with equivalent standing and qualifications or an individual with equivalent status in one of Allen & Overy LLP’s affiliated undertakings.
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