The UK and the Trans-Pacific Partnership – Could patent conflicts ruin the deal?

One of the most interesting and potentially consequential developments since the inception of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is the United Kingdom beginning negotiations in June 2021 to join.

Though not a "Pacific" nation – and no doubt spurred by Brexit and the desire of the UK to form its own international trade and economic relationships – the UK has made a bold decision to move toward a deeper integration with the fastest growing area economically in the 21st Century. Such a move by one of the world’s largest non-Pacific economies reflects the importance and potential global reach of the CPTPP beyond the Pacific region.

The UK also has a wider geo-political motive: to align with a global structure that can rival and contain China. This includes re-establishing closer trade and political ties with countries which, for historical reasons, share the English language, common law and common economic systems – CANZUK (Canada, Australia, New Zealand) and Singapore. Furthermore, in security cooperation, Japan is viewed as a highly trusted partner of the "Five Eyes" intelligence network.

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The patent issues

The digital technology and life sciences sectors are seen as vital to the future economic success of the UK. Indeed, because of the reliance of these sectors on intellectual property, the UK government specifically highlights provisions in the CPTPP against unfair trade practices such as countries unduly forcing companies to hand over their trade secrets. 

The intellectual property provisions of the CPTPP are found in Chapter 18, where their objective (among other things) is to contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users. Chapter 18 therefore provides a minimum set of rules on intellectual property, and party countries are permitted to go further than these provisions in their national law, providing they do not conflict with them.

Furthermore, parties to the CPTPP must afford nationals of another country intellectual property rights protection no less favourable than they offer to their own nationals. These include minimum obligations on enforcement, such as provisional and final injunctive relief and the payment of damages adequate to compensate for the injury the rightsholder has suffered because of an infringement. 

These measures are familiar in the UK courts, so they won't introduce any change to UK patent practice. There is one issue, however, where there is a difference between UK (and European) practice and the CPTPP. This is the requirement for a 12-month grace period in Article 18.38, which state that each party shall disregard information contained in public disclosures used to determine if an invention is novel or has an inventive step, if the public disclosure:

• was made by the patent applicant or by a person that obtained the information directly or indirectly from the patent applicant, and 
• occurred within 12 months prior to the date of the filing of the application in the territory of the party. 

Although there is a six-month grace period regarding an unlawful or breach of confidence disclosures and disclosures at international exhibitions, there is no general 12-month grace period under the European Patent Convention (EPC), or by implementation of the EPC in the UK Patents Act 1977. The UKIPO has already made it clear that it is aware of its obligations under the EPC, and so it is not entitled to adopt the 12-month grace period. 

So how can UK practice and this minimum requirement of the CPTPP be reconciled? Will something so relatively minor – in the bigger picture of the UK's trade with Asia-Pacific and the Americas – as the patent grace period be a deal breaker which would cause the UK not to join the CPTPP? 

The first point to consider is that the CPTPP is not one-size-fits-all. In particular, the CPTPP does not require all members to share the same market access measures, nor does it require a member to alter its domestic standards on non-exported goods and services. However, the treaty does have certain obligatory and common rules, and these include those on intellectual property in Chapter 18. 

The second point worth noting is that the importance given to the general 12-month grace provision will depend on the relative advantages at stake between the UK and the other parties. For example, in the unlikely event that a UK generic manufacturer is unable to export to Japan because Japan has a patent for the relevant drug that was denied in the UK due to an accidental disclosure during the grace period, which country is at a disadvantage? In cross-border trade terms, it is the UK generic drugs industry, because its international market has been limited. But Japanese generics gain the advantage of greater access to the UK market.

Another example with more practically significance than the grace period revolves around patent extensions. The UK and the US both have forms of patent extensions for unreasonable delay in granting a patent, or due to delays in securing marketing approval; these are not in the CPTPP. Will extensions be raised by the UK in negotiations, or the UK even be required to remove its own supplementary protection certificates? The answer to the latter question is "no", because parties to the CPTPP can have greater levels of protection than required by the CPTPP. But the effect of a 12-month grace period pales in comparison to the effect of patent extensions. 

Possible solutions

Competitive relationships and disadvantages between countries are nuanced and depend upon the relative strengths and priorities of domestic industries, among other factors. These matters can be negotiated and traded off against others. The provision of minimum standards of protection must be viewed in this light.

There are other potential compromises. One might be to allow for the 12-month period to apply to applications for national GB patents only, rather than UK European patents granted by the European Patent Office, if this can be reconciled with the EPC. This would mean that the UK would not be the only EPC country to have a different grace period. The UK might also commit to trying to lead reform of the EPC to introduce a 12-month grace period as soon as possible.

The UK is in the early stages of negotiation of the CPTPP, so it will be some time before we discover the answer to this problem. However, with a great deal of trade and geo-political strategy at stake, this issue is very unlikely to be a deal breaker.

Find out more

To discuss the issues raised in this article in more detail, please reach out to Paul England via the details above. For more on this topic, order a copy of Patent Enforcement in the UK and Trans-Pacific Countries, a new guide edited by Paul which is essential reading for private practitioners, in-house lawyers and other professionals with responsibility for intellectual property who are interested in the Trans-Pacific region.