European Union: Unitary Patent System

Nowadays, the protection of a patent can be obtained by using the following routes:

  1. national route, by filing a national patent application directly in the country concerned and according to the national law of the respective country;
  2. international route in one or more concerned countries, by filing a single international application under Patent Cooperation Treaty (PCT)1. Upon opening national phase(s), the international application will be "transformed" into a "bundle" of national applications governed by national laws of the countries (members to PCT), as designated in the international application;
  3. European patent route, whereby the patent protection can be obtained under the European Patent Convention (EPC) in about 40 countries (members to EPC) by filing a single patent application. The patent rights are granted by European Patent Office (EPO)2, but the protective effect of the patent requires its validation3 in each of the designated countries. A granted European patent subject to the completion of validation proceedings is "transformed" into a "bundle" of individual national patents.

A glimpse into the (near?) future reveals a new route for patent protection: the European Patent with Unitary Effect (known as "Unitary Patent"). The Unitary Patent is a hybrid patent right governed by European law, international law, and national laws. Similar to the classic route of the European patent, the Unitary Patent will be granted by EPO under the provisions of the EPC. However, the unitary patent will enjoy uniform protection with the same effect in all European Member States participating in Unitary Patent system.

The Unitary Patent system consists of the following three legal acts:

  • Regulation (EU) no. 1257/2012 implementing enhanced cooperation in the area of the creation of unitary patent protection (Regulation 1257);
  • Council Regulation (EU) no. 1260/2012 implementing enhanced cooperation in the area of the creation of unitary patent protection with regard to the applicable translation arrangements (Regulation 1260);
  • Agreement on a Unified Patent Court (UPCA), which is an intergovernmental agreement establishing a Court common to several Member States, having exclusive competence on civil litigation regarding Unitary Patents, European patents, and supplementary protection certificates of products subject to these patents (the agreement was signed by 25 Member States on 19 February 2013 - Spain, Poland and Croatia are not signatories to the agreement). As well, the Court will have exclusive competence on actions regarding EPO's decisions issued on the grounds of the provisions set forth by Regulation 1257.

Both Regulations 1257 and 1260 entered into force on 20 January 2013, but they will be applicable from the date of UPCA's entry into force, which will be the first day of the fourth month after the accomplishment of the following two requirements (whichever is the latest)4:

  • the deposit of the thirteenth instrument of ratification, including those of Germany, the United Kingdom, and France;
  • the date of entry into force of the amendments to Regulation (EU) No 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters5 concerning its relationship with UPCA.

Two of the main grounds on which the issuance of Regulations 1257 and 1260 is based are:

  • art. 118 of the Treaty on the Functioning of the European Union (TFEU), which allows the European Parliament and Council to establish measures for the creation of European intellectual property rights according to their ordinary legislative procedures, and
  • Council Decision 2011/167/EU of 10 March 2011 authorising enhanced cooperation in the area of the creation of Unitary Patent protection (Council Decision 2011/167) [TFEU provides a mechanism that permits Member States to establish an enhanced cooperation "in one of the areas covered by the Treaties, with the exception of fields of exclusive competence and the common foreign and security policy" (to be noted art. 326-334 of TFEU). Precisely, this so-called "enhanced cooperation" is a procedure that authorises certain Member States to develop specific common tasks by using European Union bodies if the common agreement of all Member States cannot be reached. However, the mechanism of enhanced cooperation should inter alia respect the rights of non-participating Member States, comply with the treaties of European Union, and not impair the internal market].

Currently, almost all European Member States are participating in the Unitary Patent system. However, Spain and Italy challenged the enhanced cooperation on Unitary Patent system with Court of Justice of European Union (CJEU), contesting Council Decision 2011/1676. Their main argument was that the creation of European intellectual property rights referred to in art 118 of TFEU is an aspect related to "the functioning of the internal market", thus falling under exclusive competence of European Union as provided in art 3 (1) (b) of TFEU and therefore ineligible as the subject of the "enhancement cooperation" mechanism. For this reason, Spain and Italy presented the Council as lacking the competence to approve the enhanced cooperation on Unitary Patent. In the end, the CJEU dismissed all of the pleas lodged by Spain and Italy.

Looking at the structure of the Unitary Patent compared to the classic European patent, one can identify, at least from a theoretical perspective, several points in its favour, such as:

  • a unique protection in those twenty-five European Member States that are participating to Unitary Patent system;
  • a lower cost of registration proceedings;
  • a single set of renewal fees;
  • the validation condition is not required under Unitary Patent system;
  • enforcement proceedings will be much simpler and more cost effective. The Unitary Patent will be enforced in a single Court and not in multiple Courts, as is the case under the classic European patent.

On the other side, the Unitary Patent system would appear to be weaker on several points7:

  • the Unitary Patent's effect would be restricted to those Member States that are participating in the enhanced cooperation mechanism and would not cover the entire territory of the internal market of European Union;
  • according to reason no. 10 of Regulation 1215, the compulsory license of the Unitary Patent should be set forth by national laws. Considering that there are 25 different provisions regulating the patent's compulsory license, the unitary effect of the Unitary Patent is impaired;
  • according to art. 7 of Regulation 1215, the Unitary Patent deemed as object of property shall be governed by the national law of the Member State in which the applicant has its residence or main place of business. For applicants without a residence or place of business in a Member State participating in the Unitary Patent system, the national law of the Member State in which EPO has its headquarters shall be applicable (currently, German law). This approach will create different effects for Unitary Patents.

The Unitary Patent System will coexist with both national patents and European patents.

However, the future will decide whether the "invention" of the Unitary Patent will be a "real invention" that enjoys applicability among participating Member States, or will be subject to "revocation".

Footnotes 

1 PCT offers a simplified patent application procedure for 146 countries worldwide;

2 along with Administrative Council, European Patent Office is a body of European Patent Organization-an intergovernmental organisation that was set up on 7 October 1977 on the basis of EPC signed in Munich in 1973;

3 the validation procedure requires the filing of a translation of patent's specifications or at least of patent's claims, in the official language of the concerned country, upon the payment of the official fee within a prescribed period (national laws govern these matters);

4 art 18 of Regulation 1257/2012, art 7 of Regulation 1260/2012 and art 89 of UPCA;

5 Regulation (EU) No 1215/2012 is already in force, but it shall apply from 10 January 2015, with the exception of Articles 75 and 76, which are applicable from 10 January 2014;

6 Cases C-274/11 and C-295/11:

7 These aspects have been made available by a study published by the Max Planck Institute. More information can be found here: http://www.ip.mpg.de/files/pdf2/MPI-IP_Twelve-Reasons_2012-10-17.pdf

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