No Unified Patent Court or Unitary Patent system for UK - will the entire project now be abandoned?

Tech-related patents have long been a key business asset in the US, and (despite issues around patenting computer programs) are becoming increasingly important in the EU and UK as more businesses enhance their digital capabilities. Businesses with patent portfolios (or potential patentable inventions) in this space may therefore be disappointed (or relieved) to learn that the UK is no longer intending to participate in the EU’s Unified Patent Court (UPC) and Unitary Patent (UP) system.

For those unfamiliar with the UPC and UP, it is a proposed new patent system in Europe which would comprise of a new pan-European UP right and a complementary UPC system.  Both developments would fundamentally change how companies file and enforce patents in Europe.  Significantly, patent owners could enforce existing European patents and the new UP in one court, and these rights could be subject to central validity attacks rather than individual validity attacks in national courts. In particular, the Central Division of the proposed Court with responsibility for life science patent cases had been allocated to London.  The proposed regime suffered numerous delays (including early challenges by Italy and Spain as well as a yet to be decided challenge on the legality of Germany's accession by the country's constitutional court) and consequently the UPC and UP did not come into effect before the UK left the EU on 31 January 2020. 

The UK government's initial position after the Brexit referendum was that the UK would explore future participation in the UPC and UP.  To that end, it ratified the UPC Agreement on 26 April 2018 (World IP Day)  and indicated at paragraphs 128(h) and 151 in The Future Relationship between the United Kingdom and the European Union (published on 12 July 2018) that the UK proposed "exploring options on intellectual property, including participation in the Unified Patent Court and unitary patent system".  

However, the (now irreconcilable) issue between the UK and EU was the role of the Court of Justice of the EU (CJEU) and EU law. The UPC Agreement  requires the UPC Contracting States to accept both the primacy of EU law (in Arts 20 and 24) and the jurisdiction of the CJEU (Art 33).  These requirements were going to be problematic with the current UK government, who under the leadership of Boris Johnson, has been adamant that post Brexit the UK would not be subject to EU laws or the jurisdiction of the CJEU.  Indeed, in The Future Relationship with the EU The UK’s Approach to Negotiations (published on 27 Feb 2020) it was stated as an Overall Policy Framework at paragraph 5 that:     

"It is a vision of a relationship based on friendly cooperation between sovereign equals, with both parties respecting one another’s legal autonomy and right to manage their own resources as they see fit. Whatever happens, the Government will not negotiate any arrangement in which the UK does not have control of its own laws and political life. That means that we will not agree to any obligations for our laws to be aligned with the EU's, or for the EU's institutions, including the Court of Justice, to have any jurisdiction in the UK."

To date there has been no official announcement by the UK government. However, several organisations have published confirmations from the UKIPO that the UK will not seek membership of the UPC, including by the Chartered Institute of Patent Attorneys (CIPA) and IAM Media.

There are many consequences of the UK's non involvement in the UPC and UP system.  A significant one is that the absence of a G8 economy inevitably means that the entire system will be less attractive to use.  This of itself (or possibly combined with the outcome of Germany's constitutional challenge) may mark the final curtain call for the UPC/UP project - or a encourage complete reconsideration.