The EU’s new Unified Patent Court will start functioning early next year and will remain in London despite the UK’s decision to leave the Union, although its future will depend on the outcome of the divorce talks.

As a consequence of Britain’s decision to leave the bloc, the two EU agencies based on its territory will move elsewhere.

EU leaders will start discussing candidates to host the European Banking Authority and the European Medicines Agency at the European Council to be held on 22-23 June.

Almost all member states are bidding for either one of the agencies, or even both of them, as is the case for France and Germany.

But another UK-based institution that forms part of the EU ecosystem escaped the attention of the bloc’s capitals: the upcoming Unified Patent Court.

Its importance has been highlighted as it will become the organisation to settle disputes when the long-awaited EU patent finally sees the light of day next year.

The idea of a single patent for all EU members is half a century old. National governments finally struck a deal in late 2012.

“It is indispensable for the EU economy, and mainly for small and medium-sized companies and scientific centres,” said Benoît Battistelli, president of the European Patent Office (EPO), a non-EU body selected to manage the EU patent.

He spoke to reporters invited to follow the European Inventor Award that took place in Venice on 15 June.

The court will represent “an important step in the EU construction because, for the first time, there will be litigations among citizens”, he added.

Complexity

The EU patent court flew beneath the member states’ radar because of its outstanding status, its baroque structure and its complex legal basis.

The court agreement will enter into force four months after thirteen member states have ratified the text, including France, Germany and the UK, the three countries with the largest number of patents.

Once the UK gives the go-ahead, Germany will provide the final rubber stamp for ratification.

Despite the Brexit referendum, Britain said in November that it would be part of the EU patent framework. In late May, the British government confirmed that the UK would join the new system.

The EPO expects the court to be functioning and issuing its first EU patents by early 2018.

But the new institution is far from simple. The central division of the Court of First Instance, the key piece of the settlement mechanism, will be based in Paris and Munich, besides London. The Court of Appeal will be in Luxembourg.

The London seat will escape an immediate relocation after Britain leaves the Union in March 2019 because “it is not an EU agency”, Battistelli pointed out.

Despite the fact that the unitary patent is part of the EU rulebook, the legal basis of the court is an international agreement.

But why did the member states not place the litigation system under the existing EU Court of Justice?

Margot Fröhlinger, principal director for unitary patent and international legal affairs at the EPO, explained that businesses and inventors did not want specialised chambers embedded in the EU court.

“It was not welcomed by the users, because they wanted independent judges, with technical knowledge and a special procedure,” she explained.

Neither did the EU judges have the “appetite” to create specialised chambers, she said.

She added that the legal basis of the court was an international treaty because it was sealed as an agreement between the EU and the EPO members, which include 38 countries. According to the EU Court of Justice, this was the only possible way to set up the EU patent court.

Lack of clarity

Battistelli said that “nobody knows today” what will happen with the court.

Legally speaking, he explained that it could continue to be seated in London, given that it is not purely an EU agency. From a political and economic point of view, “it would be another issue”.

“It will depend on the outcome of the negotiations,” he told reporters.

Neither the Commission nor the European Council presidency contacted the EPO to explore how to handle the future of the London-based branch of the court.