Progress towards an EU-wide patent and court has accelerated in recent months but doubts remain about various aspects of the new system and whether or not it represents a positive change for industry.

Despite the doubts, there is real political momentum behind the changes towards a unified patent system and it appears inevitable that the new system will come to life in the not too distant future. The signatory states to the Agreement on a Unified Patent Court (UPC) have jointly undertaken ". . .to use their best efforts. . .to start promptly with the preparation for the expeditious establishment of the Unified Patent Court" as set out in the declaration annexed to the minutes of the signing of the agreement. Therefore, the signatory states seem bound to take steps now to ensure that the new system is ready if the agreement comes into force.

Indeed, there have been some notable developments in recent months:

  • The European Patent Office (EPO) has made progress with its implementation of the procedure for granting unitary patents. The EPO Select Committee for the unitary patent has prepared a draft set of rules and EPO President Benoit Battistelli announced that the committee will soon make documents such as this available on a dedicated website. A key driver for the EPO is to ensure that the new post-grant procedures are as similar as possible to the existing pre-grant procedures, so that users can benefit from their familiarity with current EPO practice.
  • The Preparatory Committee for the UPC launched its website to coincide with the start of the public consultation for the 15th draft of its rules. The consultation period closed on 1st October 2013 and we understand that comments have been received from a broad spectrum of voices across industry and the legal profession.

In order for the legislation governing the new system to enter into force, 13 states, including the United Kingdom, France and Germany must ratify the court agreement. A number of hurdles remain on a national level before the signatory states will be in a position to ratify. Whilst there were rumours that France would be the first to ratify, after a bill to approve the UPC treaty was presented in its upper parliamentary chamber, Austria recently became the first country to deposit its ratification instrument with the authorities in Brussels. However, the appetite for speedy ratification in other countries is less clear. For example, the time-frame in the UK will be dictated to some extent by wider political factors such as the timing of the next general election (anticipated to be in May 2015). There has been much speculation on the start date for the system but, considering the preparatory work that must still be done and the legal obstacles currently in the way, we expect that the first unitary patents will not be granted until 2016 at the earliest.

Underlying all of this is the second Spanish challenge raised with the CJEU. Spain has attacked the unitary patent regulation and the court agreement arguing that there is no legal basis for the new legislation. Many believe that this second challenge has a reasonable chance of success and this has the potential to delay matters further, with countries likely to be reluctant to ratify an agreement that may ultimately be nullified if Spain succeeds.

Potential users of the new system are awaiting two key decisions: the level of the annual renewal fees for the unitary patent and the level of the fee for opting out of the jurisdiction of the UPC during the transitional period. These two factors could well have the biggest impact on how users approach the system and whether they participate or instead opt out and make use of alternative routes of protecting and enforcing their rights in Europe. Unless the renewal fee is set at a reasonable level, the unitary patent is likely to be financially unattractive to all but the widest of filers. With regard to the opt out, some are taking a cautious approach and proposing to opt out all their existing European patents from day one until it is clear that the UPC is a reliable forum for litigation. However, until the level of the opt out fee is known, it is not possible to make an informed commercial decision on this matter.

We are following developments closely and are on hand to answer any specific questions you may have about how the system can best be used.

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