The government’s stance on the new initiative makes no senseby Ian Dunt / May 17, 2018 / Leave a comment
Photo: Ye Pingfan/Xinhua News Agency/PA Images This is the business end of Brexit, when all the contradictory promises and impossible dreams come face-to-face with legal reality. Usually we only notice this when it’s about trade, but the same is happening all over society, from security to rules around food recipes. This is the tawdry story of what the government did—and didn’t do—with patents, and why it is now stuck with a series of mutually incompatible promises which are about to collide headlong into one another. It starts with Theresa May saying one thing and then proceeding to do exactly the opposite. In October 2016, she told the Conservative Party conference that Britain would leave the jurisdiction of the European Court of Justice (ECJ). Then, the next month, the government confirmed that in fact it would do the opposite. The first statement was made in the full glare of media attention at a key event in the political calendar. The second was made away from journalists, in a quiet announcement on a departmental website noticed by just a handful of lawyers and nerds. It stated that it would ratify an agreement for a unified European patent court. Most people have no idea what the existing system is for patents or why the planned update to it would interfere with the government’s Brexit agenda. But for those who do, the decision was baffling. The new patent system is deeply embedded in the European Union’s architecture and would make any signatory dependent on rulings by the court May had just rejected. It is designed by EU states for EU states to rule on patents in EU states according to EU law as decided by the ECJ. When you peel back the patents situation it tells several key truths about Brexit and the government’s handling of it. It shows the benefits to countries—especially highly developed ones like the UK—when they standardise the way they do business. It shows how misjudged May’s promise to leave the ECJ was and why she has had to steadily walk it back since she made it. And it shows that British businesses which depend on legal certainty have been left adrift for months on end with no reassurance from ministers. A patent gives an inventor exclusive rights over whatever it is he/she has made for a certain period of time. This could be anything from a system to shorten flight times, to a particular method for robotic movement, to a fact-checking system for newsrooms. Like everything, it has two sides. On the one hand you get patrol-guard patent lawyers, making money by being overly aggressive on behalf of large corporate clients. On the other, you get protections for inventors which stop people stealing their work and encourage further innovation. The trouble with patents in Europe is that they’re a mess. In the United States you can get a patent pretty cheaply. In the EU, you have to get them for different markets in bundles. So you’d purchase the legal protection for your invention for a collection of countries, like Britain, France and Germany, and maybe a Scandinavian country. That’s a pretty realistic example—larger markets dominate, smaller eastern European ones often get ignored. Then you’ve got to pay for all the translation costs. This makes it prohibitively expensive. The EU only really has one approach when it comes to legal or economic problems: standardise. The current plan is to build a unified patent and a unified patent court to adjudicate on it, which, among other things, would save inventors lots of money in translation costs. The initiative is enmeshed in a complex way with the rest of the EU’s architecture. The agreement on the unified patent court is an international treaty, while the agreement on the patent itself comes in the form of EU regulation. The UK is a leading intellectual property player. It could benefit quite substantially from the unified patent system and the system would benefit quite substantially from its presence in it. David Cameron recognised this early on, made sure British judges were heavily involved in developing its procedures and secured London as the destination for the pharmaceuticals and life sciences division of the court system. After the Brexit vote, most onlookers presumed the government would be heading out the system, but then it did its secret little announcement after the conference speech. It passed a few bits of secondary legislation and ratified its membership of the court last month. Throughout this period May smudged her ECJ red line, so that it now only refers to “direct” ECJ jurisdiction. This has no objective meaning, but probably means that the UK will stay in courts or agencies which follow ECJ rulings, but refuses to be in a situation where it could actually be taken to the court. It’s not obvious what the strategy was. Perhaps May thought she could get the patent court on the books and then treat it as a bog-standard roll-over arrangement in the Brexit withdrawal treaty. Or maybe she figured she could use the UK’s heft in intellectual property to push the EU into allowing membership despite the fact it would not be an EU member. Inventors, patent lawyers and the businesses that relied on them were left baffled and without any guidance from ministers. As Barney Dixon, a journalist specialising in intellectual property, put it: “The advance guard of British commercial ingenuity is being hung out to dry.” May said nothing further on the subject. While she has been prime minister, there have been three intellectual property ministers. They didn’t really say anything either. Lucy Neville-Rolfe held the role for two and a half years and was widely admired, so she was naturally replaced by Jo Johnson, who seemed completely uninterested in the subject and barely said a word about it. After a year he was in turn replaced by Sam Gyimah. For several months Gyimah failed to make any public pronouncements on the issue at all. Then finally he made a speech to mark to World Intellectual Property Day. It was the standard vacuous speech you get from ministers about how Britain is a world leader in ingenuity and all that. He did not mention the fact the government’s patent policy is flatly contradicted by its Brexit policy. The government is now committed to leaving the EU, while staying in a system which has direct effect on EU member states, by virtue of EU regulation, involving membership of a court which refers to ECJ interpretations of EU law. That contradiction has to be resolved somehow. There are a few options for doing so, none of them particularly palatable. The government could fight for patents to simultaneously take effect in EU and non-EU countries, either by unilaterally saying it’ll take on the patent system or by pushing the EU to broaden its scope. Or it might try a sneaky halfway-house solution and try to get the EU to rework the patent deal as a special agreement under an existing European patent convention. But this is all elaborate guesswork. The reality is that the government’s current proposals are mutually incompatible and incomprehensible. Its approach to the problem is to say nothing while regularly parachuting new ministers into an area they seemingly have no interest in or awareness of. The debacle says a lot about the Brexit process in general. First, the prime minister makes public promises which her government then undoes on an almost simultaneous basis. Second, her administration is prepared to leave some of the most dynamic parts of British industry in a swamp of legal uncertainty for years on end. Third, continental standardisation systems are valuable, especially for modern services-based economies, and Britain will try to stay in them wherever possible, regardless of Brexit. Giving up a bit of control, it turns out, has its upsides. Duplicity, inaction and confusion, amid a self-inflicted economic threat. It sounds like this is the Brexit debate in microcosm. But actually it’s more depressing than that. This is the better end of the Brexit spectrum. The government is ostensibly doing the right thing. The fact it has to do so very quietly, while ignoring existing legal reality, shows how badly our political climate has deteriorated.