With the adoption of two important regulations by the European Parliament and the EU Council and the signature of the Agreement on a Unified Patent Court (UPC Agreement) by 25 EU member states, a single patent system for Europe will soon be reality. This could be as early as January 2014, although late 2014 seems to be a more realistic estimate. The new system not only brings the new Unitary Patent, but also has important implications for existing traditional European Patents.
Recent developments
Since the update by our colleague Paul Clarkson in the November 2012 issue1, important further steps were taken towards implementation of a single patent system for Europe. In December 2012, the European Parliament and the EU Council adopted the Unitary Patent regulation2 and the translation regulation3 and in February and March 2013, 25 EU member states signed the Agreement on a Unified Patent Court (UPC Agreement). Four months after 13 member states including the United Kingdom, Germany and France have ratified the UPC Agreement, this agreement will enter into force. From that moment, the new unitary patent system will be reality. In theory this could be as early as 1 January 2014, but few expect the starting date to be before late 2014.
The Unitary Patent in a nutshell
The Unitary Patent will be a European Patent with unitary effect. It will be a single right giving uniform protection and having the same effect in all countries that ratified the UPC Agreement (participating member states). Limitation, transfer, revocation or lapse can only occur in respect of all participating member states at the same time.
A new court, the Unified Patent Court (UPC), will have exclusive jurisdiction over disputes related to Unitary Patents. This means that any disputes on infringement, validity or damages, will be brought before the UPC. A decision of the UPC on for example validity has direct effect for all participating member states. The same is true for decisions of the UPC on infringement: an injunction or a declaration of non-infringement has effect in all participating member states.
A single annual renewal fee will be due for the Unitary Patent, payable to the European Patent Office (EPO). The exact amounts of the annual renewal fees are not yet known, but it is expected that the renewal fee for a Unitary Patent will be comparable to the renewal fees for four to six national patents. Renewal fees will be progressive throughout the term of the patent protection.
It is the final goal that, once machine translations of high quality are available, no translations of Unitary Patents will be required. During a transitional period of at least six years, however, the full text of the Unitary Patent should be available in English and one other official language of the Union. After the initial six years, and every two years thereafter, an evaluation of the availability of high-quality machine translations into all the official languages of the Union will be made and if appropriate, the transitional period will be terminated. In any event the transitional period will lapse after twelve years. Translations may still be required in the event of a dispute relating to e.g. infringement.
The grant procedure for the Unitary Patent is governed by the European Patent Convention and conducted by the European Patent Office in Munich or The Hague. In fact the procedure up to grant does not change and is identical for a regular European bundle Patent and a Unitary Patent. Once a patent is granted, the patentee can select a Unitary Patent, a traditional European bundle Patent or a combination of both (see below). If a Unitary Patent is desired, a request for conversion needs to be filed within one month of the date of publication of the grant of the European Patent. The unitary effect of a granted European Patent will be registered in a new Unitary Patent Register to be kept by the EPO.
All in all, the new system will be more consistent and probably less costly than the existing European bundle Patent. A potential drawback for patent proprietors is, however, that a Unitary Patent can be invalidated in a single action with effect for all participating member states. What is less known is that the same drawback will also exist for traditional European Patents without the concomitant advantages of the new system, unless patent proprietors timely opt out from the new system.
The Unified Patent Court
The new court will comprise a Court of First Instance and a Court of Appeal. The Court of First Instance will have central divisions in Paris, Munich and London4 and local or regional divisions in countries that wish to set up such divisions. The Court of Appeal will have its seat in Luxembourg. Many practical arrangements for the court, such as governance and budgetary arrangements, training arrangements for judges and facilities will have to be prepared in the coming year by the preparatory committee, which has been recently established under the chairmanship of Paul van Beukering from the Dutch Ministry of Economic Affairs. The rules of procedure of the court are in an almost finalised stage.
Parties may be represented before the Unified Patent Court either by authorised lawyers or by European Patent Attorneys having an appropriate litigation certificate. For patent proprietors this has the advantage of working with the same attorney both before the EPO and the Unified Patent Court, which may help in reducing the costs associated with litigation.
UPC jurisdiction over traditional European Patents
The new court will have exclusive jurisdiction over Unitary Patents. It is important to note that once the new system is in force, this same Unified Patent Court will also have jurisdiction for existing and future traditional European bundle Patents. For European bundle Patents the jurisdiction of the UPC is non-exclusive for a transitional period of seven years5, thereafter it will become exclusive. During the transitional period, actions related to European Patents can still be brought before national patent courts. Jurisdiction of the UPC over traditional European bundle Patents implies that these patents too can be invalidated in a single action with effect for all participating member states or that a declaration of (non)infringement can be obtained in a single action with effect for all participating member states. It goes without saying that a decision of the UPC will have further significant implications for European Patents validated for those states not party to the Unitary Patent regulation.
Opting out
Patent proprietors of existing or future European bundle Patents have, however, the possibility to opt out from the jurisdiction of the UPC. The opt-out has to be registered before expiry of the seven-year transitional period5, and continues throughout the life span of the patent. Once such opt-out is registered, a third party cannot start proceedings against the patent before the UPC. The patent proprietor has the possibility to "opt in" again at any time, for example in case he wishes to start centralised proceedings against an alleged infringer. Should a third party in the meantime have started proceedings before a national court, then "opting in" is not possible anymore.
Opting out can be done at any time during the lifetime of the patent (application), as long as the transitional period has not expired yet, and unless someone has started proceedings before the UPC relating to the European Patent. Patent owners of existing European Patents wishing to avoid a centralised procedure before the new court should seriously consider opting out as soon as the new system is in place. For companies or individuals that wish to start a procedure to revoke an existing European Patent, it makes sense to initiate an action before the UPC as soon as possible after the system is alive, in order to pre-empt the patent owner from opting out.
Choices to be made
Once the new system is in place, applicants for a European Patent will have new choices to make. Upon the grant of their patent, applicants can choose for a traditional European Patent validated in countries of choice or for a European Patent with unitary effect (Unitary Patent), optionally in combination with a traditional European Patent for countries that are not participating in the unitary patent system.6 It will likely be possible to choose for a Unitary Patent and file a divisional with a slightly different scope for which the traditional European route will be chosen or vice versa.
Already now, proprietors of traditional European Patents should consider whether they wish to make use of the opt-out possibility.
What will be the better choice will depend on a number of factors including the (yet unknown) costs for a Unitary Patent, the number of countries wherein protection is desired, the strength of the patent and the cost-effectiveness of the new Unified Court system. There is no straightforward "one size fits all" strategy: which option is the best will vary from case to case. It goes without saying that the advisors of Nederlandsch Octrooibureau are closely following the developments regarding the new system and can help you in making the relevant strategic choices.
Footnotes
1 Paul Clarkson: Keeping your precious eggs safe in the unitary patent basket, European IP Update, November 2012, p. 4-6.
2 Regulation (EU) No. 1257/2012 of the European Parliament and Council of 17 December 2012 implementing enhanced cooperation in the area of the creation of unitary patent protection.
3 Regulation (EU) No. 1260/2012 of the European Parliament and Council of 17 December 2012 implementing enhanced cooperation in the area of the creation of unitary patent protection with regard to the applicable translation arrangements.
4 London: cases involving chemistry, pharmaceuticals, metallurgy and human necessities (IPC sections A and C). Munich: cases involving mechanical engineering (IPC section F). Paris: cases involving physics, electronics, computer sciences, paper and textiles (IPC classes B, D, E, G and H).
5 The transitional period is extendible to 14 years and maybe even to 21 years.
6 EPC Contracting states that are not a member of the EU such as for example Switzerland, Turkey and Norway or EU member states not participating in the unitary patent system such as Italy and Spain.
Originally published in European IP Update, May 2013.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
