The Unified Patent Court and the frustrated promise of IP protection: Investors’ claims in (post-)Brexit Britain
| DOI | 10.1177/1023263X19896917 |
| Author | Riccardo Vecellio Segate |
| Date | 01 February 2020 |
| Published date | 01 February 2020 |
| Subject Matter | Articles |
Article
The Unified Patent Court
and the frustrated promise
of IP protection: Investors’
claims in (post-)Brexit Britain
Riccardo Vecellio Segate*
Abstract
Tensions between the EU’s legal order and the internat ional investmen t law regime are not
exclusive to the Brexit era, but they certainly gained momentum in the aftermath of this
referendum. By incautiously declaring that the UK will remain a party to the Unified Patent
System regardless of Brexit, the British government arguably shaped (il)legitimate expectations
on the part of investors who aimed at exploiting their intellectual property rights in the UK while
benefitting from the judicial protection of the forthcoming Unified Patent Court as much as of
the European institutions (and market) as a whole.Indeed,notonlytheSystemitselfwillundergo
a process of major rebalancing after London’s departure from the EU, but more importantly, the
UK will most probably be unable to retain its membership in the System after the actual delivery
of Brexit. These complications trigger a wide spectrum of fundamental dilemmas investing the
definition and scope of concepts such as unilateral declaration, indirect expropriation, reason-
able expectation, estoppel, and public policy exception, under both EU law and international
investment law. It is therefore essential to explore these intersections as to anticipate possible
scenarios in the event of both domestic court and international arbitral claims lodged by patent
investors pre- and post-Brexit, having due regard for competition concerns on the side of the
EU, yet referring to recent Canadian case law which opened the gate to investor-State claims in
the field of intellectual property.
Keywords
Brexit, international investment tribunals, legitimate expectations, reasonable expectations, unified
patent court
* ‘Talent Program’ PhD Researcher in International Law, Faculty of Law, University of Macau, Taipa, Macao; Visiting Scholar,
School of Law, Tsinghua University, Beijing, China; Incoming Visiting Fellow, Centre for Law and Technology, Faculty of
Law, The University of Hong Kong, Hong Kong
Corresponding author:
Riccardo Vecellio Segate, University of Macau, E32 Avenida da Universidade, Taipa, Macao.
E-mail: r.vecelliosegate@connect.um.edu.mo
Maastricht Journal of European and
Comparative Law
2020, Vol. 27(1) 75–104
ªThe Author(s) 2020
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DOI: 10.1177/1023263X19896917
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1. Introduction
Since the Eli Lilly v. Canada award of 2017, the relevance of international investment law for patents
has been known to a wider public. In response to the revocation of two Canadian patents concerning the
compounds olanzapine and atomoxetine by Canadian courts, the US pharmaceutical company Eli Lilly
initiated arbitral proceedings against Canada on the basis of the investment chapter of the [NAFTA].
Even though Eli Lilly lost the dispute, the award made clear that international investment agreements
(IIAs) matter for patents because the arbitral tribunal found that, in principle, patent decisions by host
state courts can be challenged before an international investment tribunal on the basis of an IIA.
1
A number of fairly radical analyses have purported the chance for foreign investors in the
United Kingdom of Britain and Northern Ireland (UK) to make recourse to international invest-
ment tribunals (IITs) to sue the UK for damages actually or potentially occurring due to Brexit.
Whilst we deem these analyses falling short of valid-enough arguments, the niche of intellectual
property (IP) literature in this respect is probably worth exploring: the conjunction of Brexit and
the limping project of unifying patents in Europe could well constitute a betrayal for investors in
European patents.
The reading proposed hereinafter forms part of the enormously vibrant academic (and practi-
tioners’) debate unleashed by ‘Brexit’ around the possibility for the UK to still participate into the
Unified Patent System (UPS),
2
and more specifically, to remain a party to the Unified Patent Court
(UPC
3
). The mentioned debate has unfolded virtually all possible arguments against or in favour to
such a participation, crystallised in a seminal study
4
and an anonymous rebuttal
5
to the latter.
6
1. S. Klopschinski, ‘International Investment Arbitration, the Eur opean Patent Offic e, and the Future Uni fied Patent
Court’, Kluwer Pate nt Blog (2018), http://patentblog.kluweriplaw.com/2018/08/01/international-investment-arbi
tration-extraordinary-remedy-concerning-decisions-european-patent-office-future-unified-patent-court/. A valuable
introductory analysis is provided in D. Gervais, ‘Intellectual Property: A Beacon for Reform of Investor-State
Dispute Settlement’, 40 Michigan Journal of Int ernational Law (2019), p. 289-325.
2. The fundamental laws on this system are contained in Regulation No. 1257/2012/EU of the European Parliament and of
the Council of 17 December 2012 implementing enhanced cooperation in the area of the creation of unitary patent
protection, [2012] OJ L 361/1 and Council Regulation No. 1260/2012/EU of 17 December 2012 implementing enhanced
cooperation in the area of the creation of unitary patent protection with regard to the applicable translation arrangements,
[2012] OJ L 361/89 together with the ‘Rules relating to Unitary Patent Protection’, which can be retrieved from:
European Patent Office (EPO), ‘Legal Framework’, EPO (2019), https://www.epo.org/law-practice/unitary/unitary-
patent/legal-framework.html.
3. Unified Patent Court, not to be confused with the Unitary Patent granted under the 1973 European Patent Convention (at
times improperly referred to—even in academic literature like PhD theses—as ‘Unitary Patent Convention’). For the
main differences between the two, see Bardehle Pagenberg, ‘Unitary Patent and Unified Patent Court’, Bardehle
Pagenberg (2018), https://www.bardehle.com/fileadmin/Webdata/contentdocuments/broschures/Unitary-Patent-and-
Unified-Patent-Court-in-Europe_BARDEHLE_PAGENBERG_IP-brochure_2018-08.pdf.
4. M. Lampin and H. Ullrich, ‘The Impact of Brexit on Unitary Patent Protection and its Court’, Max Planck Institute for
Innovation and Competition Research Papers Series No. 18-20 (2018), https://pure.mpg.de/rest/items/item_2632587_
18/component/file_3000178/content.
5. See European Patent Lawyers Association (EPLAW), ‘Reply to the studies on ‘‘TheImpact ofBrexit on Unitary Patent
Protection and its Court’’ by Hans Ullrich and Matthias Lamping’, EPLAW (2018), http://eplaw.org/wp-content/
uploads/2018/10/2018-10-05_Reply_to_Lamping_Ullrich_Brexit_UP_UPCA.pdf.
6. Both the original study and its rebuttal can be retrieved from European Patent Lawyers Association, ‘UPC reply to Max
Planck impact study of Brexit on the Unity Patent Protection and its Court’, EPLAW (2018), http://eplaw.org/upc-reply-
to-max-planck-impact-study-of-brexit-on-the-unitary-patent-protection-and-its-court/.
76 Maastricht Journal of European and Comparative Law 27(1)
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