Advantages & disadvantages of the unitary patent

What are the benefits of a UP?

The UP will provide:

• widespread coverage across multiple countries;
• central administration and renewal;
• limited translation costs and cost-effective renewal fees (when compared to widespread EU coverage obtained via either EPs or national patents); and
• central litigation in the UPC.

What are the potential downsides?

The downsides are the mirror image of the benefits. So, if you do not usually obtain widespread patent coverage in the EU and/or tend to reduce coverage over time by letting patents lapse in markets that prove to be unimportant, then the cost benefit analysis begins to shift away from a UP. The other potential disadvantage is central litigation. Centralised litigation places your patent at risk across multiple countries all in one go. UPs can also only be enforced in the UPC, which may not necessarily be a more cost effective enforcement mechanism as compared to national courts. This will depend on the nature of your business, and whether you need to enforce you patent in multiple jurisdictions at the same time.

When will I be able to get a unitary patent?

Applications filed at the EPO that grant on or after the commencement of the system, which is likely to be some time in December 2017, will potentially be eligible for a UP. The process will be relatively simple – it will be an option chosen within a month of grant at the EPO.

Not all European patent applications will be eligible for UP protection and we would suggest that advice is taken before selecting the option. It will also be essential to remember that validation in non-participating EU member states, and EPC states outside the EU, eg, Switzerland, will still be necessary.

Are there any other issues to be aware of?

Yes. First, for any new applications which may become UPs, thought should be given to the nationality of the applicant. The national law of that applicant, if from the EU, (or the first applicant, if there are co-applicants) will apply to property issues affecting the patent (transfer, licensing, mortgaging, utilisation by co-owners). If the applicant is not EU based, then the law will be German law.

The main issue to think about is utilisation by co-owners, which can be an issue with some EU national laws. We suggest you seek advice on this issue especially if you have co-applicants that include nationals from the EU. Secondly, UP coverage may be limited or even not available for some existing applications. Initially, not all member states who have signed up to the UPC Agreement will have ratified when the system commences. This means that rather than covering all 25 participating member states, early UPs will only cover a smaller number. This will no doubt affect the cost benefit analysis of UP selection in the early days. In addition, some applications may not even be eligible for UP protection. These include applications filed before Malta joined the EPC (01 March 2007).

In all these situations, it will be important to assess the position early and to keep an eye on national validation deadlines in order that alternative coverage nationally is not lost inadvertently. We recommend taking advice on the availability of UP protection generally, and in particular during the early days of the UP and UPC system.

The possible implications of the UK leaving the EU should also be borne in mind. UPs granted before the UK leaves the EU will cease to cover the UK as of the date the UK leaves. We assume that national coverage will be created to cater for this loss of protection, but there are currently no proposals as to if and how this will be done. While the additional cost of a national UK right may be comparably immaterial, the uncertainty may be a factor in your decision to adopt a UP.