Unitary Patent - A Uniform Patent Protection
Patent protection is a critical aspect of an invention. It provides inventors and companies with a legal monopoly over their inventions, preventing others from using, making, or selling them without their permission. However, after a European patent is granted, validating the patent and paying annuities across multiple countries can be a complex and costly process. Also, in case of patent infringement and invalidity proceedings particularly in the European Union (EU), cost of infringement action would be higher considering the different national laws and procedures of the EU states and also the separate attorney fees and possible official fees for each state which will need to be paid. This is where the unitary patent comes in, a new type of patent that aims to simplify and streamline patent protection in the EU.
A Unitary Patent is a single patent that can be applied for and enforced throughout participating EU member states. It is expected to simplify the patent system by providing uniform protection and a centralised enforcement mechanism in all EU member states that are party to the Unitary Patent Regulation.
The idea of a Unitary Patent has been around for over 40 years. In the 1970s, the European Patent Convention was established to create a unified patent system across Europe. However, the lack of a uniform legal framework for enforcing patents across all participating countries meant that the Convention did not fully achieve its intended purpose.1
The EU Unitary Patent
The protection of a European Patent under the standard European patent application extends to all individual states where the patent holder chooses to validate or extend the granted EP patent. Currently, there are 39 states that are members of the European Patent Convention (EPC). This includes not only all 27 EU states but also 12 other states such as Switzerland, Norway, Great Britain, and Turkey.2
However, there is a new and cost and administrative saving system called the Unitary Patent System, which allows up to 25 EU states to participate. So far, 17 states have already ratified the relevant conventions and are actively participating in the Unitary Patent System, while the remaining 8 states can join later by ratification. To obtain a Unitary Patent, the examination and grant of a standard European Patent are prerequisites. The Unitary Patent does not incur additional costs until the patent is granted.
The Unitary Patent System can also be combined with a classical European patent by validating the granted EP patent in non-EU states or EU states that do not participate in the Unitary Patent System such as United Kingdom, Spain, Poland, Croatia etc.
Once the European patent is granted, a corresponding request must be filed to register a Unitary Patent, where a fee will be required. In case if the patent was granted in a language other than English, a translation of the description section into English is necessary, although a machine translation is also acceptable.
Annuity of Unitary Patent
To maintain a Unitary Patent in the Contracting States, only one renewal fee is required to be paid each year. The annual fee for the Unitary Patent is roughly equivalent to the sum of the annual fees for approximately three to five individual participating states.3
For instance, the 10th renewal fee for a Unitary Patent is 1175 Euro compared to the current 10th renewal fee of a German part of a European patent at 350 Euro. The Unitary Patent can only be renewed for all EU states, and it can only be abandoned entirely for all of EU states participating in the system. Hence, it would not be possible to abandon individual participating states as a patent holder can do in case of classic patent.4
However, in case a patent holder wishes to only select one or two countries for validating their patent, opting out of the Unitary System may be beneficial as the cost for paying annuities in one/two countries may be less than the annuity which would be paid under Unitary Patent System over a longer period of time.
Unified Patent Court
In 2012, the European Parliament and the Council adopted two regulations to establish a Unitary Patent system, known as the Unitary Patent Regulation and the Unified Patent Court Agreement. These regulations were designed to simplify the patent system and make it easier for businesses to obtain and enforce patent protection in Europe on a uniform basis.
- The first regulation created a European patent with unitary effect, which meant that the patent would be recognized and enforceable across all EU countries that participate in the enhanced cooperation except for Spain and Croatia. The second regulation established a language regime applicable to the unitary patent to ensure that the patent would be accessible to businesses and individuals across the EU.
- The agreement between EU countries to set up a single and specialized patent jurisdiction called the Unified Patent Court (UPC) was the third component of the patent package.5
The UPC, also referred to as the EU Patent Court, will have exclusive jurisdiction over disputes related to classical European and unitary patents in the participating countries. In the event of a conflict, the court will determine the infringement and validity of the Unitary Patent with effect for all participating states. This is beneficial for patent proprietors who face infringing activities in multiple participating states. However, the unitary approach also comes with the risk of losing the Unitary Patent as a whole and with only one invalidity proceeding.
Moreover, the UPC may also have jurisdiction over existing or future classical European patents that have been validated in at least one of the participating states. A transitional period of at least 7 years (extendable to 14 years) will be in effect from the entry into force of the Unitary Patent, during which the UPC and national courts will have parallel jurisdiction over classical European patents. The plaintiff may choose whether to file an infringement suit or a revocation suit against a European Patent with a competent national court or opt for the unitary option with the UPC.6
During the transitional phase, the proprietor of a classical European Patent or a European patent application may exclude the jurisdiction of the UPC by making an opt-out declaration. The opt-out is effective until the end of the European Patent's protection term, even beyond the transitional period. Additionally, patent proprietors may make the opt-out declaration during the preceding three to four month "sunrise period" before the Unitary Patent system enters into force. The sunrise period is already in effect currently.
The opt-out will lead to infringement and invalidity proceedings being conducted before the respective competent national courts of the validating state.7
The Unitary Patent System and the UPC provide a streamlined approach to patent protection and dispute resolution across participating states. However, patent proprietors must carefully consider the benefits and risks of opting for unitary protection and jurisdiction under the UPC, particularly during the transitional period.
Benefits of a Unitary Patent8
The Unitary Patent system is expected to bring several benefits to businesses and inventors, including:
- Cost Savings: The cost of obtaining a Unitary Patent is expected to be lower than the cost of obtaining individual national patents i.e. a classic patent in each participating EU member state as in case of multiple countries selected after a classic European patent grant separate validation and annuities would be required to be paid in each state. Therefore, by opting in for the Unitary Patent System businesses will only need to pay a single set of fees to obtain a Unitary Patent and also pay a single annuity fee.
- Simplified Process: The Unitary Patent system will provide a uniform patent protection system across participating EU member states, which will simplify the process of obtaining and enforcing patents in Europe. This will make it easier for businesses to protect their inventions and innovations across multiple countries reducing cost and administrative burden.
- Centralized Enforcement: The Unitary Patent system will have a centralised enforcement mechanism, which will make it easier and more cost-effective for businesses to enforce their patents across EU states participating in the Unitary Patent System.
- Increased Legal Certainty: The Unitary Patent system will provide greater legal certainty for businesses and inventors by providing a uniform set of rules for obtaining and enforcing patents across participating EU member states.
- Increased Competitiveness: The Unitary Patent system is expected to make Europe more competitive by providing a simpler and more cost-effective way for businesses to protect their inventions and innovations in Europe.
- Single Course of Action for Infringement and Damages: A patent holder in case of infringement of their patents can take a single action for infringement and damages against alleged infringers with effects in all the participating states in the Unitary Patent System, thereby saving cost.
Drawbacks of a Unitary Patent9
Despite its many benefits, the Unitary Patent system also has some potential drawbacks, including:
- Limited Participation: The Unitary Patent system will only apply to participating EU member states. This means that businesses will still need to obtain separate national patents in non-participating countries by paying separate validation fees and annuities fees in such countries. Uncertainty: The Unitary Patent system is still relatively new, and its effectiveness and impact on businesses and inventors are not yet fully understood. This could create uncertainty for businesses and inventors who are considering whether to use the Unitary Patent system. Language: The Unitary Patent system will require patents to be filed in English, French, or German. This could create language barriers for businesses and inventors who do not speak one of these languages.
- Centralized Revocation or Patent Invalidation: In case a third party successfully challenges a patent, the patent holder, holds a disadvantage by the risk of suffering a centralized revocation action or an action for declaration of non-infringement, which has effect in all the contracting Member States and therefore, the patent holder can lose their patent rights altogether.
- Abandonment: In case a patent holder would wish to abandon a patent, the abandonment can be done on a whole only for all participating states whereas in a classis patent, the patent holder may abandon the country he wishes to abandon.
Current Status and Upcoming Updates
The Unitary Patent system was expected to come into effect in 2017, but its implementation has been delayed by legal challenges and political disagreements. As of April 2023, the Unitary Patent system has not yet been implemented.
In March 2021, the German Constitutional Court issued a ruling that threw the Unitary Patent system into doubt. The court ruled that the legislation establishing the Unitary Patent system was unconstitutional and required further scrutiny. The ruling was based on concerns that the Unitary Patent system would infringe on the sovereignty of German courts.10
Despite the delays, there have been some recent developments regarding the Unitary Patent system. On 18 January 2022, Austria deposited the instrument of ratification for the Protocol to the Agreement on a Unified Patent Court (UPC) on provisional application, allowing the provisional application period (PAP) to start. 11
In addition, the European Patent Office has begun accepting early request for Unitary Patent applications since January 01, 202312, even though the Unitary Patent system has not yet been implemented. This means that businesses and inventors can apply for Unitary Patents, but they will not be granted until the Unitary Patent system comes into effect.13
The UPC sunrise period started on March 01, 2023. The UPC Agreement's sunrise period is the last phase before it takes effect on June 1st, 2023. Even though cases cannot currently be filed with the Unified Patent Court, a number of significant steps can be made during the sunrise period in order to get the UPC Agreement ready to go into effect on June 1, 2023. The sunrise period is an important opportunity for applicants and patent owners to file opt out requests of the Unitary Patent System for their pending European patent applications or granted European patents.
As Germany ratified the UPC Agreement on a Unified Patent Court on February 17, 2023, the launch date for the Unified Patent Court has finally been established. This was the final ratification required for the unitary patent system to fully go into effect. The Unified Patent Court is expected to start operations on June 01, 2023.
The Unitary Patent system has been designed to provide a uniform patent protection system across participating EU member states, which would simplify the process of obtaining and enforcing patents in Europe. It would also provide cost savings, centralized enforcement, and increased legal certainty for businesses and inventors. The Unitary Patent system is a significant change to the European patent system, and it could provide a simpler and more cost-effective way for businesses and inventors to protect their inventions and innovations in Europe.
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