Demystifying The UPC And The Unitary Patent - Patent

Answers to Some Common Questions

After many years of debate, negotiations and work, the Unified Patent Court (UPC) and the unitary patent system were finally launched on 1 June 2023. In this publication, we demystify confusing terminology and misconceptions by providing answers to common questions on the UPC and the unitary patent system.

1.What is a Unitary Patent?

A 'European patent with unitary effect' (colloquially referred to as a Unitary Patent (UP)) is a European patent (EP) granted by the European Patent Office (EPO) under the rules and procedures of the European Patent Convention (EPC), where after grant and at the patentee's request, the EP goes through a separate post-grant procedure to obtain unitary effect in participating member states and thereby become a UP.

2. What is the procedure for the request for unitary effect for an EP?

The patentee must file a 'request for unitary effect' at the EPO. The request must be filed in writing, in the language of the proceedings, no later than one month after the date of publication of the mention of the grant of the EP in the European Patent Bulletin.

The request for unitary effect must also contain a translation of the EP:

where the language of the proceedings is French or German, a full translation of the specification of the EP into English; or
where the language of the proceedings is English, a full translation of the specification of the EP into any other official language of the EU.

3. Can a national patent become a UP?

There are no circumstances in which a national patent can become a UP.

4. What is the territorial scope of a UP?

From 1 June 2023, a UP initially takes effect in the 17 EU Member States that have ratified the Agreement on a Unified Patent Court (UPCA), enabling them to participate in the unitary patent system. It is anticipated that additional EU member states will ratify the UPCA in the future, making it possible to obtain patent protection through UPs by submitting a single request to the EPO in up to 25 EU Member States.

Current UP participating Member States:

Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovenia and Sweden.

Potential additions as signatories to Regulation (EU) 1257/2012 (implementing enhanced co-operation for the creation of a unitary patent system):

Cyprus, Czech Republic, Greece, Hungary, Ireland, Poland, Romania, and Slovakia.

Member States not participating in enhanced co-operation:

Croatia and Spain.

What is the effect of a UP?

A UP has equal effect in all the participating member states, which means that it may only be limited, transferred, revoked or lapse, in respect of all of the participating member states. A UP may be licensed in respect of the whole or part of the territories of the participating member states.

5. What are the renewal fees of a UP?

UP renewal fees have been set so that they correspond to the combined renewal fees in the four countries where European patents were most often validated in 2015. UP renewal fees over the current average lifetime of an EP (10 years) will be below €5,000, a significant reduction compared to the current approximate level of €29,000 for renewal fees of an EP in all of the participating Member States .

6. Is a UP more cost effective than an EP?

The new unitary patent system potentially provides for an economically advantageous approach to securing patent protection within the UPCA participating Member States by eliminating the requirement for national validation and renewal processes across individual EU countries. Whether a UP is more cost-effective than an EP depends on several factors including:

the number of UPCA participating Member States in which a particular applicant would normally validate an EP; and
the likelihood that the patent owner would pay renewal fees throughout the lifetime of the patent.

Comparison of costs should consider not only renewal fees, but also costs associated with validation and maintenance fees (e.g. translation costs, publication fees, attorney/service provider administrative fees). The EPO has provided informal guidance comparing the overall cost of a UP with the cost associated with the validation and maintenance of a classic EP. Based on their estimates, the overall costs for an EP validated in the four countries where patents are currently most often validated and maintained for 12 years are slightly higher (5%) than the renewal fees for a UP. This saving increases to 8% for patents maintained for 15 years.

8. Can national patents, European patents and Unitary Patents be combined?

The UP offers an additional option for patent protection in Europe, along with national patents (NPs) and classic EPs. Applicants who prefer to seek patent protection in individual EPC contracting states can still file nationally. It also remains possible to validate EPs in one or more EPC contracting states, or you can opt for a UP covering the UPCA participating Member States.

Additionally, a UP can be combined with a classic EP. This means an EP can be registered as a UP while also undergoing valuation in other EPC contracting states whose territories are not covered by the UP. It is not, however, possible to obtain double protection through both a UP and a classic EP (that includes the states covered by the UP).

9. What is the Unified Patent Court (UPC)?

The UPC is a common court for all the member states which are parties to the UPCA. It is a supranational court subject to the same obligations under EU law as any national court of a participating member state.

10. Where is the UPC?

The UPC consists of the Court of First Instance, the Court of Appeal, and the Registry. The Court of First Instance has a decentralised structure with a Central Division and Local Divisions.

The seat of the Central Division is based in Paris, and a section of the Central Division is in Munich. As of 18 June 2023, Milan has been awarded the third seat of the Central Division and is set to commence operations in June 2024. The Court of Appeal is centralised and is situated in Luxembourg. The Registry is located at the Court of Appeal, with sub-registries at every division of the Court of First Instance.

12. Who will judge in the UPC?

A pool of judges has been established which, at the time of writing, include 37 legally qualified judges and 48 technically qualified judges.

First Instance

Local Division: Three legally qualified judges (at least one from the host participating member state). A party can request an additional technically qualified judge.
Regional Division: Three legally qualified judges (at least two from the host participating member state). A party can request an additional technically qualified judge.
Central Division: Two legally qualified judges (from different participating member states) and one technically qualified judge, unless the action relates to administrative tasks of the EPO, in which case the court is composed of three legally qualified judges (from different participating member states).
Parties can agree to have a single legally qualified judge at first instance.

Appeals

Court of Appeal: Three legally qualified judges (from different participating member states) and two technically qualified judges, unless the action relates to administrative tasks of the EPO, in which case the court is composed of three legally qualified judges (from different participating member states).

12. What is the UPC's jurisdiction?

The UPC has jurisdiction on civil litigation matters relating to EPs, EP applications, UPs and SPCs (supplementary protection certificates) . However, during the transitional period (initially seven years after the UPC commences), EPs and SPCs may be opted out of the UPC's jurisdiction (see further information below on opting-out).

The UPC has exclusive competence in particular for:

actions for actual or threatened infringement and related defences;
declarations of non-infringement;
actions for provisional and protective measures and injunctions;
revocations/declarations of invalidity; and
counterclaims for revocation/declarations of invalidity.

Disputes relating to patent entitlement and patent licensing are not within the competence of the UPC.

In the early stages of the UPC, we anticipate disputes as to the exact scope of jurisdiction for the UPC versus national courts. The outcome will turn on the specific facts of each case until precedent case law develops sufficiently to provide more certainty.

13. What happens to EPs during and after the UPC transitional period?

There is an initial seven-year transitional period for the UPC, extendable by up to a further seven years. During the transitional period, the UPC has shared jurisdiction with national courts over infringement and revocation actions for EPs that are not opted-out from the UPC. After the end of the transitional period, the UPC will have exclusive jurisdiction over any EPs designated to participating EU member states that are:

(a) granted after the end of the transitional period; or

(b) not opted-out from the UPC's jurisdiction before the end of the transitional period.

As stated in the previous section, jurisdictional issues are not straightforward and should be revisited each time a new matter or issue is considered.

14. Can an EP be opted-out from the UPC's jurisdiction?

A patentee or applicant of an EP that is granted or applied for (as applicable) before the end of the transitional period can opt-out from the UPC's jurisdiction by notifying the UPC Registry, unless an action has already been brought before the UPC in respect of the relevant EP or EP application. The opt-out can be withdrawn subsequently at any time to restore the UPC's jurisdiction, unless an action has already been brought before a national court in respect of that EP.

15. Can a UP be opted-out from the UPC's jurisdiction?

It is not possible to opt-out a UP from the UPC's jurisdiction.

16. Can a national patent be opted-in to the UPC's jurisdiction?

It is not possible to opt-in any national patent, including national patents from UPCA participating member states, into the UPC's jurisdiction.

17. Who has rights of representation before the UPC?

Rights of representation before the UPC are mainly limited to:

Lawyers authorised to practice before a court of a participating member state; and
European patent attorneys entitled to act before the EPO and who have appropriate litigation qualifications. This includes UK-based European patent attorneys with appropriate qualifications.

18. What are some relevant factors when deciding whether to opt-out from the UPC's jurisdiction?

There are various factors to consider in deciding whether to request a UP or whether to opt-out an EP from the UPC's jurisdiction before the end of the transitional period, including:

the likelihood and impact of central revocation. An EP can be centrally revoked if an opposition is filed before the EPO within 9 months of grant. In contrast, a UP or an EP that is subject to the jurisdiction of the UPC are at risk of central revocation throughout their lifetime;
the ability to enforce a single patent and seek provisional measures (e.g. injunctions, seizure of products, and freezing of assets) covering many countries in single proceedings;
the appetite for litigating before a court which has yet to develop precedents, not only as to its rules of procedure and jurisdiction, but also in relation to substantive patent law; and
the cost of litigating before the UPC as contrasted with EPO oppositions and national revocation actions.

19. What is the UK's position in the unitary patent system?

The UK initially signed and ratified the UPCA, but it withdrew its ratification in July 2020. The UK will therefore not participate in the UPC or the unitary patent system.

20. Given that the UK will not participate in the UPC or unitary patent system, is the UPC or UP still relevant to UK businesses?

The UPC and the UP are still relevant to UK businesses, despite the UK not participating in either the UPC or the unitary patent system. UK businesses may:

request that an EP have unitary effect;
consider whether to opt-out EPs from the UPC during the transitional period;
enforce any UPs and EPs that are not opted out from the exclusive jurisdiction of the UPC; and
seek to revoke third-party patents and SPCs that are subject to the exclusive jurisdiction of the UPC.

21. How can Arnold & Porter assist?

Whether it relates to a complex matter, multinational litigation or spurious enforcement action, our IP team, with extensive experience and knowledge of patent litigation in Europe and the USA, is well equipped to help clients navigate the complex matrix of European patent ligation venue selection choices (including the UPC) and to formulate appropriate and proportionate strategies.

This is an updated version of our post from December 2023.

With thanks to Shishu Chen and Tia Archer for their contributions to this BioSlice Blog.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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