The unitary patent system represents possibly the biggest change to the European patent landscape in decades.
Set out below are some of the most common questions that patent owners have about the new system and what issues they need to consider.
Patent protection in Europe
What are the current options for getting patent protection in Europe?
There are two options that can currently be used to get patent protection in Europe, namely:
(i) filing patent applications directly in a choice of countries throughout Europe (national patents) or;
(ii) filing a European patent application under the European Patent Convention (EPC).
Under the EPC route, a patent applicant files a European patent application at the European Patent Office (EPO) which then prosecutes the application and (hopefully) grants a European patent. There are 38 EPC-contracting countries and, once granted, a European patent may be validated in the patent owner's choice of EPC-contracting countries, where it essentially becomes a bundle of national patents. Each national patent stands and falls independently of the others, and each must be litigated separately in the relevant national court.
Patents which are obtained and validated in a selection of countries via the current EPC system are referred to herein as "traditional"/"traditionally validated" EP patents.
What is the unitary patent system?
The unitary patent system hopes to create a European patent registration and litigation system in which a patent owner can choose to register their granted European patent as a patent having unitary effect (a "unitary patent") across participating member states. In parallel a new court, the Unified Patent Court (UPC), will have competence to hear actions relating to such unitary patents.
The unitary patent will coexist with national patents and also traditionally validated European patents such that patent owners will have the choice whether to use the unitary patent option or use the current options to either file national patents or to validate a bundle of national patents from a granted European patent.
As well as being solely competent to hear cases relating to unitary patents, the UPC will also have joint competence with national courts to hear cases relating to traditional European patents subject to transitional provisions in which a patent owner can choose to opt their traditional European patent (e.g., an EP(DE)) out of the competence of the new UPC.
When will the new unitary patent system start?
The remaining action required to bring the unitary patent system into operation is the deposition of Germany's instrument of ratification of the UPC Agreement (UPCA). The system will go live on the first day of the fourth month following the deposit of this instrument.
Germany is expected to deposit its instrument of ratification at some point in the next few months and the unitary patent system is therefore expected to come into force at some point in early 2023.
It should be noted that the start date may be delayed while the final aspects of the system are put into place. Therefore, please check with us for the most up to date information regarding the start of the system.
How many countries are part of the unitary patent system?
Any country that is an EU Member State may be a participating country within the unitary patent system. Out of the 27 countries within the EU however, Croatia, Spain and Poland are not currently taking part.
As things stand the unitary patent system will commence with 17 of the remaining 24 EU countries, namely: Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, Sweden.
Cyprus, the Czech Republic, Greece, Ireland, Hungary, Romania, Slovakia will join the system as they complete their respective ratification procedures.
Since the UK has left the EU, it is not able to participate in the unitary patent system. Unitary patents will therefore not cover the UK and, in order to obtain protection in the UK, patent owners will need to continue to validate granted European patents in the UK.
What is the sunrise period?
Since January 2022 the unitary patent system has been in a "Provisional Application Period" so that preparatory work to establish the UPC can be completed. As part of this provisional phase there will be a "sunrise period" during which patent owners will be able to lodge a request to opt out traditional European patent applications and granted European patents from the competence of the new Unified Patent Court.
The sunrise period will begin once Germany deposits instrument of ratification of the UPC Agreement and therefore the sunrise period will be a period of 3-4 months prior to the UPC coming into force.
European patents with unitary effect
How can a unitary patent be obtained?
The current procedure for applying for and obtaining a European patent will not change. Upon grant of a European patent the patent owner will have one month to file a request for unitary effect at the EPO. Traditional validations in countries outside the unitary patent system (e.g. in the UK, Switzerland) can be made within 3 months of grant of the European patent.
During the sunrise period the EPO has announced two transitional measures that will apply to European patent applications for which a Rule 71(3) EPC communication has been issued. Firstly, for such patent applications it will be possible to file early requests for unitary effect before the start of the unitary patent system. Secondly, for such patent applications, it will also be possible to delay grant until the unitary patent system has come into force.
What's the cost of a unitary patent?
There is no official fee for requesting unitary effect. The costs associated with filing and prosecuting a European patent application will not change.
For unitary patents there will be new, annual, renewal fee and, during a period of 6-12 years from the start of the system, a translation requirement.
What will the renewal fees for a unitary patent be?
Under current arrangements, renewal fees at the EPO need to be paid from the third year after filing. After grant, renewal fees are paid to the national patent offices where the granted EP patent has been validated.
For unitary patents the EPO will levy renewal fees that are broadly equivalent to the renewal fees that would be payable in the top four validating states (Germany, France, the UK and the Netherlands, the so-called "True Top 4" scheme). Given that it can take a European patent around 5 years to get to grant patent owners will actually be paying a mixture of fees (EPO maintenance fees up to around year 5 and then unitary patent fees thereafter).
The actual renewal fee levels for unitary patents can be found here and are set out below.
Unitary patent renewal fees
(Renewal fee to be paid to EPO)
Patent owners considering using the unitary patent system should assess their likely renewal fee costs carefully with their representatives. Although savings may be available for patentees that traditionally validate in a lot of countries, the situation is less clear cut for those that either validate in a handful of countries only or who practice portfolio management by pruning nationally validated patents from their portfolio.
What are the translation requirements for a unitary patent?
From the start of the unitary patent system there will be a transitional period of at least 6 years (and possibly 12 years) during which time it will be necessary to file a translation of the complete specification of the European patent.
If the European patent application was filed in French or German then the translation will need to be into English.
If the European patent application was filed in English then the translation can be in any official language of the EU (including those EU Member States that are not taking part in the unitary patent system).
Will it be possible to convert a unitary patent into a bundle of EP patents?
No. Once a unitary patent has been selected it will not be possible to convert into a traditional bundle of nationally validated EP patents. This will have an impact for anyone wishing to trim their patent portfolio over time in order to reduce renewal costs.
Will it be possible to request a unitary patent and validate a European patent in respect of the same countries?
No. In respect of the countries taking part in the unitary patent system, there will be a choice between either a unitary patent or traditional validation of the granted patent in some or all of those countries. It will not be possible to hedge your bets by choosing both options in respect of the same invention.
Note: although it will not be possible to request a unitary patent and request a traditional European patent in respect of the same countries, it will be possible for a granted patent to be validated as a unitary patent (in respect of the 17-24 EU Member States taking part in the system) and also a bundle of nationally validated patents in respect of any EPC contracting state that is not part of the unitary patent system. For example, a granted EP patent could be validated as: an EP(UP) covering 17-24 EU countries plus an EP(UK), EP(ES), EP(CH) etc.
If a request for unitary effect is filed on a parent European patent, does the same request need to be filed on a divisional patent?
No. The parent and divisional patents are treated separately. Upon grant, the parent could request unitary effect and the divisional patent could be traditionally validated (or vice versa).
The Opt-out process
What is the Opt-out process?
When the unitary patent system comes into effect there will be a transitional period of at least 7 years (and possibly 14 years) during which the UPC will have joint competence (with national courts) over traditionally validated European patents. During this transitional period therefore cases in respect of traditionally validated EP patents may be brought in either the UPC or the national courts.
Once the transitional period is over the UPC will have sole competence to hear cases in respect of traditionally validated EP patents.
During the transitional period, patent owners will be able to opt-out traditionally validated European patents (and pending European patent applications) from the competence of the Unified Patent Court. It will subsequently be possible to withdraw such an opt-out.
European patents with unitary effect cannot be opted out from the competence of the UPC.
It will only be possible to register an opt-out if an action has not been brought before the UPC. Similarly, it will only be possible to withdraw an opt-out as long as proceedings have not started in a national court.
Opt-out requests can be made while a European patent application is still pending.
It will also be possible to register an opt-out request during the sunrise period before the unitary patent system goes live. Any opt-out request registered during this time will be processed as soon as the unitary patent system becomes operational.
What are the costs of the opt-out?
There is no official fee for opting out a traditionally validated European patent or a European patent application. Similarly, there is no official fee for withdrawing such an opt-out. Opt-outs are effective for all designated states within the unitary patent scheme.
Who can register an opt-out?
Patent proprietors can opt-out EP applications and EP patents. Where there are multiple proprietors then all proprietors need to agree to the opt-out. Licensees do not get the right to opt-out a patent from UPC competence.
Pros and Cons
What are the pros and cons of the unitary patent system?
For unitary patent owners, the unitary patent system may offer some reduction in renewal fees and/or translation fees, depending on the number of countries in which they would usually validate a European patent. The unitary patent however will not allow validated patents to be dropped throughout the lifetime of the patent. Currently it is possible to drop patents in some validated states in order to manage annual renewal costs but with a unitary patent there will be a binary choice between maintaining the patent and dropping it. Careful consideration should therefore be given when choosing the unitary patent option.
For court users, the UPC offers the possibility of obtaining a single pan-European decision across the participating member states of the unitary patent system. There may therefore be reduced enforcement costs for claimants and reduced costs of defending an action for defendants. On the flip side however patent owners risk losing their unitary patents (or non opted-out European patents) across multiple countries via a single action. Defendants also risk being on the receiving end of an injunction that is effective across many EU Member States.
Since the UPC is a new court everything will, by definition, be new for some time and the court will be untested.
There are therefore a number of factors to consider when looking at whether to obtain unitary patents, whether to use the UPC or not and whether to opt-out traditional EP patents (and patent applications) from the competence of the UPC.
Will revocation actions in the UPC replace EPO Oppositions?
No, revocation actions within the UPC will co-exist with the existing EPO opposition procedure.
If a traditionally validated European patent remains within the competence of the UPC (i.e. no opt-out is filed) then there is the possibility that this patent could be centrally attacked and revoked at any time. Effectively, the UPC will, for non-opted out patents, provide another opportunity to attack a patent after the EPO Opposition period has expired.
For patent owners concerned about competitors trying to clear a path through their patents this may be a further factor to consider when deciding whether to opt-out existing European patents from the competence of the UPC.
Other factors and preparing for the Unitary Patent System
What is your opt-out strategy?
For a given patent owner, an opt-out strategy may require some consideration. For example, will all existing EP patents and patent applications be opted-out? Will the decision whether to opt-out be on a case by case basis? Will divisional applications be filed in respect of some EP patent applications to allow both unitary patents to be requested and also a traditional bundle of EP patents to be validated?
Since opt-out requests can only be filed by the proprietor(s) of a European patent, patent owners may want to check that the European patent register accurately reflects the true proprietor(s). Additionally, where a European patent has multiple owners the opt-out strategy needs to be agreed between all interested parties.
What is the impact of the UPC on licence agreements?
Under Article 47 UPCA, an exclusive licensee can enforce a patent without the owner's permission (unless the licence says otherwise). Non-exclusive licensees on the other hand cannot bring an action without the owner's permission (unless provided for in the licence agreement). Both patent owners and licensees should therefore review their licence agreements now to make sure they say what everyone wants.
As referenced above, since it is the patent proprietor that gets to choose whether a European patent application or traditionally validated European patent is opted out from the competence of the Unified Patent Court (see Article 83 UPCA), licensees with a strong opinion on the issue of opting out should ensure that their licences reflect this.
What is the impact of having joint applicants on a unitary patent?
For unitary patents in joint names, who is named first on the patent application will determine which national law applies to the patent as an item of property. If, for instance, a German applicant appears first in the list of applicants, then German property law would apply (no permission required for a joint applicant to sell their share of the patent) whereas if a UK applicant is named first then the UK Patents Act will apply (permission required for a joint applicant to sell their share of the patent).
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.