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The Ins and Outs of the European Unitary Patent and Unified Patent Court

A new Unified Patent Court (UPC) system and Unitary Patent option will come into effect in Europe on June 1, 2023. Currently, under the traditional or “classic” European patent system, when a European Patent Application is granted by the European Patent Office (EPO), the resulting European patent must be validated and maintained in individual countries which are part of the European Patent Convention (EPC) to have effect in such individual countries. Additionally, enforcement and validation (after a limited EPO Opposition period) is generally handled on an individual country basis. With the start of the new Unitary Patent and UPC system, options for more generalized patent protection and enforcement will become available across at least those European Union (EU) Member States which have elected to participate in the new system. We work with various European firms and agents to help our clients protect their inventions in Europe through the classic European patent system and the new Unitary Patent/UPC system. There are significant advantages and disadvantages for both patentees and potential patent challengers under each of the classic and new Unitary Patent/UPC options. Below is a discussion of the differences between the options.

What is a Unitary Patent?

A Unitary Patent will provide patent protection in Europe in all EU Member States which have elected to participate in the new system without requiring individual national validation in those countries. To obtain a Unitary Patent, a European patent application is filed and prosecuted under the EPC using the same process currently available. That is, the pre-grant examination phase will remain the same. After a European patent is granted, however, the patent owner can request unitary effect to obtain a Unitary Patent covering the participating EU Member States.

There are currently 17 EU Members States initially participating in the Unitary Patent: Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, and Sweden. Seven additional EU Member States have signed the Agreement of the Unitary Patent Court (UPCA), but at present, these seven countries have not ratified the UPCA. These countries are Cyprus, Czech Republic, Greece, Hungary, Ireland, Romania, and Slovakia. The Unitary Patent may be available in these countries in the future if they ratify the UPCA.

What is the Unified Patent Court (UPC)?

The UPC is a new international court system that will have jurisdiction over all Unitary Patents and European patents validated in individual participating countries to handle infringement and validity claims. Currently, each national court determines infringement and validity claims of European patents validated in its respective country. This leads to challenges when a patent owner desires to enforce its rights in multiple countries; the patent owner is required to litigate the patent at issue in each country, creating significant expenses, logistical difficulties, and a potential for inconsistent decisions. The UPC, on the other hand, will provide a single enforcement system for litigation in participating countries.

The UPC will include a Court of First Instance, a Court of Appeal, and a Registry. The Court of Appeals will be located in Luxembourg while the Court of First Instance will have a central division and several additional local and regional divisions. The UPC will begin its operations on June 1, 2023.
All Unitary Patents will fall under the jurisdiction of the UPC. Unless a patent owner opts-out (as described below), all existing national validation European patents and Supplementary Protection Certificates in participating countries will also fall under the jurisdiction of the UPC.

Are there any actions I need to take now in view of the UPCA entering into force on June 1, 2023?

There are certain transitional measures currently available in view of the upcoming availability of the Unitary Patent and operation of the UPC.

Opting-out of the UPC: Patent owners can opt-out of having their individual national validation European patents and patent applications fall under the jurisdiction of the UPC at any time during a seven-year transitional period. By opting out, the patent owner’s European patent applications and patents will remain only under the jurisdiction of the national courts when the UPCA enters into force on June 1, 2023. To ensure that there is no possibility of the UPC having jurisdiction over a European patent, a patent owner will be able to opt-out during the three-month Sunrise Period, which began on March 1, 2023. A patent owner can only file an opt-out request once and can only withdraw an opt-out request once. If an opt-out request is filed, it needs to be filed for all participating EU Member States. Some considerations for opting out, or not, are as follows

Considerations for Opting-Out
Considerations for not Opting-Out

Prevents the revocation of national rights in each of the participating EU Member States with a single action of the UPC.

A European patent can be enforced in all participating EU Member States with one single action.

Litigation costs may be lower if litigation in only one or two EU Member States is desired.

Litigation costs may be lower if litigation in more than two EU Member States is desired.

The body of case law of the national courts is known and more predictable.

Resolution of enforcement may be faster and recoverable costs may be higher.

If legal proceedings are initiated in the UPC, the option to opt-out of a European patent is no longer available.

Avoids the administrative cost of the opt-out process

Transitional Measures to obtain a Unitary Patent: If an applicant for a European patent application wishes to pursue a Unitary Patent and has received a Communication under Rule 71(3), which indicates the EPO intends to grant the European patent application, the applicant may either:

  • file a request to delay the grant of a European patent so that a Unitary Patent can be obtained when the UPCA takes effect; or
  • file an early request for unitary effect so that a Unitary Patent will be registered when the UPCA takes effect

If the applicant has already approved the application text proposed for grant, these options are not available.

Are there cost benefits to requesting unitary effect instead of validating a patent in individual EU Member States?

Presently, when a classic European patent application is examined and granted by the EPO, the European patent must be validated and maintained in each country leading to significant expenses in validation fees, translation costs, and maintenance fees. With a Unitary Patent, only one renewal fee is paid. Here is a breakdown of the expected costs associated with a Unitary Patent compared to a classic European patent:

  • Pre-Grant Costs: Since the procedure for filing and prosecuting a European patent application under the EPC is the same, the pre-grant costs will remain the same.
  • Translation Costs: During a transitional period of at least six years, the patent specification (including the claims) of a Unitary Patent must be available in English and one other official EU language. Under the classic European patent validation process, each country has its own translation requirement. Since some countries only require the claims to be translated into French and German and the Unitary Patent process requires the entire specification to be translated into another language, the translation costs for a Unitary Patent may be higher.
  • Renewal Fees Post-Grant: Cost savings increase as the number of countries in which a classic European patent would have been validated increases. The annual renewal fees for maintaining a Unitary Patent are expected to be lower than a European patent validated and maintained in four or more EU Member states participating in the UPC, especially during the early years. For example, the total cost of the annual renewal fee is currently set to be less than 5,000 EUR over the first ten years. Additionally, the patent owner may have lower administrative costs compared to maintaining a classic European patent validated in several countries since only one fee is due having one currency and deadline.
Are there any additional advantages and disadvantages of a Unitary Patent?

There are certainly advantages and disadvantages of a Unitary Patent and each must be balanced in considering whether a Unitary Patent is the best option. Some key considerations are summarized in the table below:

Advantages
Disadvantages

Unified Protection

A Unitary Patent will cover all participating Member States. Currently there are 17 Member States, with seven additional Member States expected to join in the future.

Not all countries which are part of the EPC are participating and thus a Unitary Patent may not include certain desired countries (e.g., UK, Turkey, Spain, Poland, Croatia).

Renewal Fees

A single renewal fee will reduce administrative overhead and potentially provide significant cost savings.

Cost savings are not incurred unless an applicant planned to validate the patent in at least four participating EU Member States. Renewal fees cannot be dropped in individual jurisdictions, which can lead to higher costs over time.

Central Litigation Forum

All Unitary Patents must be litigated in the UPC, which is a central litigation forum. This can lower litigation costs if enforcement along multiple jurisdictions is desired and improve the speed of reaching a resolution. For example, patent owners may receive a range of pan-EU remedies from receiving damages to preliminary injunctions and freezing orders.

A Unitary Patent can be challenged in the UPC which is a central litigation forum. This means the remedies of the UPC may cause a loss of rights of a Unitary Patent, which effects rights in all participating EU member states.

We are here to help.

Please contact a member of the Intellectual Property group if you have any questions or wish to discuss how you can best utilize the new EU Unitary Patent and UPC system.

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