The European Unitary Patent and Unified Patent Court

Introduction

The European Union is quite shortly to fulfil a long held political ambition by creating its own patent system.

Of course we already have the European Patent Convention and the European Patent Office, enabling a single patent application to be filed and prosecuted in respect of some 38 European countries (a much larger membership that that of the EU itself) but, despite leading to something notionally referred to as a “European Patent”, what the existing process actually gives the patentee is a bundle of individual national patents which have to be separately maintained and (save for some relatively recent and limited developments in relation to cross-border injunctions) separately enforced at a national level.

There are two aspects to the new European system:

the European patent with unitary effect^[1](“unitary patent”) will be a true single patent covering most^[2] of the European Union;
the Unified Patent Court^[3] will provide an entirely new forum for actions relating to European patents with the power to make decisions covering most^[4] of the European Union.

The new system will co-exist with the current one. In future applicants will be able to (a) file individual applications at national European patent offices; (b) make use of the existing European system to obtain national patents and (c) use the unitary patent. Subject to double patenting rules they may choose a combination of all three.

The Unitary Patent

The new system does not provide a new process for filing and prosecution. Instead the unitary patent will simply be

a post-grant option in relation to a European patent application. That is, one makes an application of the familiar type to the European Patent Office and prosecutes it as far as grant just as in the past. The requirements for patentability laid down in the European Patent Convention will continue to apply, as will the EPO’s pre-grant procedural rules. To that extent it seems likely that applicants will experience little change in the familiar European application process.

At the date of European grant, the applicant will have one month to file a request at the EPO for the unitary patent if it chooses to do so. In the early years of the new regime a transitional provision requires a translation of the specification to be filed within the same one month period. Where the specification is in English the translation can be into any official language of the EU. Applicants are forewarned of the grant date and so will have more than one month in which to make the decision and prepare the translation.

The unitary patent is to be optional. The patentee will still be permitted to validate the European patent on a country-by-country basis just as at present, and so obtain a bundle of individual national patents. There is a group of countries that are party to the European Patent Convention but will not be covered by the unitary patent. For protection in those countries national validation will continue to be necessary, so a combination of unitary and national validation will sometimes be appropriate. In those countries covered by a unitary patent one cannot double up cover by additionally validating at a national level^[5].

European applications which are pending now or filed before commencement of the new regime can result in unitary patents provided that:

the European patent when granted has the same claims for all participating member states. It sometimes happens that the European claims are subject to limitation in respect of one or more specific countries in order to sidestep prior art which is relevant only in those countries. Using this strategy prevents the applicant from obtaining a unitary patent;
the case has not gone to grant by the time the unitary patent comes into effect. The question arises of whether one should play for time in current European prosecution to try to obtain the benefit of a unitary patent;
The European patent designates all the countries participating in the unitary patent. For most recently filed cases this will not be an issue but before 1^st April 2009 one could economise by paying designation fees selectively, so for older cases a check is needed that all relevant designations were made. Also it appears highly likely that Malta will participate in the unitary patent. Malta acceded to the EPC on 1^st March 2007. European applications with a filing date before that are thus expected to be ineligible. Croatia acceded to the EPC on 1^st January 2008 and is now an EU member. If it chooses to participate in the unitary patent then the effective cut-off date will move forward. The long delays in EPO prosecution mean that these dates are relevant to a meaningful number of cases.

The unitary patent will apply uniformly throughout the participating states. It will be subject to payment of a single annual renewal fee to the EPO. The amounts of the renewal fees have yet to be announced but are expected to be several times the fees payable to a single European country. As an object of property the unitary patent will be indivisible, capable only of being assigned as a whole, although licences can be geographically limited. If revoked, it will be revoked in respect of all the relevant countries.

The factors affecting the choice between national validation and the unitary patent are complex and not as heavily loaded toward the unitary patent as one might first imagine^[6].

The Unified Patent Court (“UPC”)

Alongside the new patent comes an ambitious plan for an entirely new patent court which is to have jurisdiction to enforce and to revoke European patents in respect of all participating states by means of a single court action, and to make decisions in respect of all the UPC participating countries.

The UPC will have a court of first instance and an appeal court. The first instance court will have seats in numerous countries of the EU comprising:

the Central Division, itself divided into three sections in Paris, London and Munich;
local and regional divisions in those countries that request them. Subject to qualification criteria countries may establish multiple regional divisions.

Rules governing which division has jurisdiction over any given matter are somewhat complex^[7]and leave appreciable scope for “forum shopping” (selection of the court according to the goals of the party initiating the action). The effect of multiple branches of the court effectively competing for cases, and especially whether this will incentivise the courts to favour the patentee, has been the subject of speculation. Another much discussed theme is “bifurcation” – the possibility of infringement and validity being heard separately, as in current German court procedure – which is possible in certain specific circumstances in the new system.

The substantive law to be applied by the court in relation to infringement is set out in the new agreement and is modelled closely on existing national laws in Europe. The court is required to base its decisions on law from a range of sometimes conflicting sources^[8], making it inevitable that it will develop its own jurisprudence.

Draft rules of procedure for the new court have been circulated. To a US practitioner the procedure will not appear onerous. The substance of the case, and for example of any oral testimony, are to be presented in writing in advance. The aim is that cases should normally come to a final (first instance) hearing within one year. Judges are given tight control over the nature and duration of oral submissions and the goal of completing the final hearing within a single day.

Much remains uncertain and commentators’ views differ widely but from the viewpoint of the patentee intent on litigating, the new court, offering as it does a relatively streamlined procedure and the possibility of a supra-national injunction, has some clear advantages over the existing European regime of national patent enforcement.

Relationship between UPC and national courts – the opt out

The national patent courts of participating EU countries are not abolished by the new agreement. For a transitional period of seven years from inception it will remain possible to bring actions for infringement and revocation of European patents at a national level^[9].The uncertainty involved in using a new court without established jurisprudence, among other factors, may make this option attractive.

Eventually the UPC is to have exclusive jurisdiction in relation not only to the new unitary patent but also to European patents of the existing type (the “bundle” of national patents referred to in the opening paragraph above) and to corresponding supplementary protection certificates (patent term extensions) insofar as they apply to UPC countries.

However during the transitional period the patentee can choose to opt out of the jurisdiction of the UPC^[10]. This has important implications for holders of existing European portfolios and is going to prompt a good deal of attorney/client discussion, particularly since by opting out the patentee can preclude the possibility of the patent succumbing to a “central attack” – a single revocation action at the UPC which, if successful, leads to loss of the patent throughout the UPC territory. Opting out may prove a wise precaution^[11].

Timing

Neither the UPC nor the unitary patent is in force as yet but ratification is ongoing and few now would bet against their introduction. They will enter into force simultaneously. The date is uncertain but is not expected to be before the middle of 2015.

Practical Implications

The advice given to clients about the advantages of the unitary patent and the advisability of making use of it needs to be somewhat circumspect. The attraction of geographically broad coverage without need of multiple national validations and with only a single annual renewal fee must be balanced for example against the vulnerability of the unitary patent to a single revocation action. The UPC has clear advantages for patentees seeking to enforce in multiple European countries but it is not necessary to have a unitary patent in order to make use of the UPC – that option applies to old-style European patents as well.

As always, cost will be a major factor and renewal fees make up the lion’s share of the cost of a typical European patent at present. It will be interesting to see at what level renewal fees for the unitary patent are eventually set and – much current speculation notwithstanding – one cannot determine whether the new system will offer improved value for applicants until those figures are known.

For now, decisions about filing applications in Europe need not and largely of course cannot be postponed. Decisions about post-grant validation under the new regime are not needed as yet and, since the issues involved are not trivial and there are still numerous uncertainties, are probably best postponed.

Contact: Robin Bartle

http://www.aipla.org/committees/committee_pages/Biotechnology/international/Shared%20Documents/International_Buzz_201404b.pdf

[1] Established by Regulation (EU) No. 1257/2012. Translation provisions are dealt with in EU 1260/2012
[2] Italy and Spain are not participating and appear unlikely to. Recent EU entrant Croatia is not yet participating.
[3] Established by Agreement on a Unified Patent Court and Statute doc 16351/12 of 11.01.2013
[4] Spain, Poland and Croatia have not signed. Italy has signed despite being outside the unitary patent
[5] EU1257/2012 Article 4(2)
[6] A future article is intended to set out pros and cons
[7] Doc 16351/12, referred to above, Article 33
[8] Doc 16351/12, referred to above, Article 24
[9] Doc 16351/12, referred to above, Article 83(1)
[10] Doc 16351/12, referred to above, Article 83(3)
[11] This is intended to be the subject of a future article