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IP Cases & Commentary – Details

07 May 2013

The Unitary Patent and the Unified Patent Court in Europe

The Unitary Patent and the Unified Patent Court in Europe

The proposed unitary patent (UP) and the Unified Patent Court (UPC) will bring the biggest change in the patent landscape Europe has seen since at least 1978. Here we summarise the proposals and provide guidance on possible filing strategies.

The proposals to create a new 'unitary' patent system throughout most of the EU have been signed by the intended participating countries, but still need to be ratified by the national governments. There remains a considerable amount of detail (especially in relation to costs and renewal fees) requiring further clarification.

It is important to appreciate that there are two principal proposals:

  1. To create a unitary patent covering most EU states.
  2. The Unified Patent Court system (which is closely linked but intended to apply to existing European patents and pending applications as well).

We have been closely monitoring these developments to ensure that our clients remain abreast of any significant changes, and will continue to do so.

The unitary patent (UP)

The intention is that it will be a 'European patent with unitary effect' that will, in time, become the preferred option for those countries that participate. Whilst it will remain possible to select a 'bundle' of European patents, selecting a unitary patent replaces such a bundle with a single patent for participating states. It will not replace national patent systems and will not have effect in non EU countries of the European Patent Convention (EPC) (such as Switzerland, Norway and Turkey) nor those EU countries which do not want to participate (currently Spain, and possibly Italy and Poland).

The cost of the unitary patent is not yet fully known. Whilst prosecution costs are likely to be similar to other European patent (EP) applications, it is expected that renewal fees will be equivalent to between 6 and 8 current renewal fees, as these will be shared among all national offices within the system. As a result the lifetime cost of a unitary patent that would have previously validated just in GB, FR and DE may increase by more than 50%, whereas for applicants who regularly file in most or all EP states, the lifetime costs may be much less. However, it would not be possible to renew only selected countries within the UP (as is currently the case with an EP).

In theory, such a unitary patent is sensible in furtherance of the single market in the EU, but the practical difficulties are considerable. The fact that not all EU countries are covered and that unitary patent coverage may change as successive states ratify, uncertainties as to filing and renewal costs and the lack of clarity regarding the Unified Patent Court system all mean that most patentees should be very cautious at this early stage.

The Unified Patent Court (UPC)

Unlike other unitary rights (such as the Community Trade Mark (CTM), which is litigated in national courts), the system proposes a unified single court system with a standardised set of procedures, relief and substantive patent law. This is a substantial change from the existing position, where patents are litigated nationally. It should bring cost savings and less risk of inconsistent decisions.

However, due to certain political compromises, the proposed court system will be complex with central, regional and local divisions, and significant uncertainties exist in the drafting of the legislation as to whether (for example) infringement and validity will be decided together by the same court and as to what law is relevant to issues such as accessory liability, experimental/research use exemptions and fair, reasonable, and non-discriminatory (FRAND) disputes.

There is also likely to be considerable scope for forum shopping between the different divisions which, with pan EU injunctions and pan EU revocations being available, raises significant issues.

The court procedures are not yet finalised and the establishment, staffing and funding of the new court system is not agreed. Indeed the basis of both the unitary patent and the Unified Patent Court is still the subject of an objection by Spain to the Court of Justice of the European Union(CJEU) as to its legality under EU law (although that is felt unlikely to succeed).

It is important to note that current EPs and pending EP applications are intended to come within the new court system automatically unless they are 'opted out' under Article 83 of the UPC Agreement. Article 83 is complicated (see our advice, below) and somewhat unclear in its scope, but it is intended that an opt out can be for the whole life of the existing EP or a pending application (so long as it is granted within the transitional period).

By opting out, enforcement of existing EPs would effectively be on a country by country basis (albeit with some possibility of cross-border preliminary injunctions in appropriate cases in accordance with the CJEU's decision in Solvay v Honeywell). Revocation of patents would still be on an individual country basis.

Again, the watchword for patentees must be caution, not least as the consequences of revocation of a patent throughout most of the EU or a finding of non-infringement could be very significant to patentees. Whilst there are fewer precautions that possible defendants can take in the short-term, the success of the system may well depend on the extent the unitary patent is actually used and no doubt patentees will bear in mind, when considering their options, that they could be alleged infringers as well.

Our advice

Our view is that it is too early to provide any definitive advice and clients should not make any irreversible decisions as to their European filing strategies. However, we offer the following insights, whether you are a patent owner, licensee or potential infringer:

  • The ability to file national patent applications remains a viable option, particularly for recent filings and for current PCT applications.
  • Similarly it is still possible to validate EP applications in states such as DE, FR and GB.
  • Article 83(3) of the UPC Agreement provides that patentees with EP patent bundles may opt out of the UPC regime during at least the first 7 years, and possibly up to 14 years, and Article 84(4) allows for an opt back in provision. There are currently no rules about how one opts out or in or whether a fee is payable but, subject to this, it may be advantageous for owners of valuable patents to opt out on the first available day. This will ensure that a valuable patent is not exposed to the possibility of central revocation whilst at the same time being able to opt back in again (unless national proceedings have been started) in order to sue in the UPC at a later date should this become desirable. Hence patent owners will have more litigation options available to them than at present by taking such an approach, whilst limiting potential adversaries' options. This being so, as a patent owner, you may want to decide soon whether there is any reason not to opt out all your existing EP's, or at least ensure that all important patents are identified for opting out.
  • A related issue is to identify any competitor patents which would be convenient to revoke centrally before the owner opts out.
  • For those patentees who designate many states, it may be more cost effective to apply for a UP, and for others it will be necessary to wait to see what the costs are before deciding on a strategy taking into account other factors such as the uncertainty regarding the litigation system.
  • Finally, the new system (and particularly the new court system) is unlikely to come into effect for, at least, two or three years and quite possibly longer. In that period, a number of issues will hopefully become clearer.

Contact us for more information

If you would like to discuss what steps you need to take in preparation for this new regime and what patent filing strategies you should have in place, please do get in touch. In the meantime, we will provide regular updates to ensure you are kept informed.

For more information please contact our UP experts at: up@dyoung.com.

UP & UPC webinar Autumn 2013

Key speakers from D Young & Co will discuss the latest UP and UPC developments at an Autumn UP Webinar.  To register your interest please email registrations@dyoung.com.

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