Set to open on June 1, 2023, the new Unified Patent Court (UPC) will revolutionize patent enforcement across 17 participating European Union (EU) Member States. The UPC will have exclusive jurisdiction over the new European patents with unitary effect (unitary patents), as well as new and existing national patents obtained through validation of a European patent in participating countries. Companies that hold European patents or conduct business in Europe should prepare for the new system by understanding the UPC's implications and opportunities.
IN DEPTH
The UPC will provide streamlined enforcement of patents by issuing infringement and validity decisions, and will provide remedies such as injunctions and damages. Its enforcement will be effective across all participating countries.
Impact: The UPC may reduce the need for parallel national court cases, decreasing costs and complexity and avoiding the possibility of conflicting decisions from different national courts. The UPC aims to provide speedy decisions, with oral hearings within one year of filing an action and a written decision within six weeks of the hearing.
The UPC also provides exciting new opportunities for challenging patents. Currently, a European patent can only be opposed at the European Patent Office (EPO) within nine months of grant. Revocation at the UPC is not subject to that time limit or precluded by a previous EPO opposition.
Impact: Parties can launch an action at the UPC to revoke a European patent that can no longer be opposed at the EPO or that was unsuccessfully opposed at the EPO.
The UPC will have a central division with locations in Paris and Munich, and several local and regional divisions to hear cases at first instance. The UPC's court of appeal will be located in Luxembourg, and a patent arbitration and mediation center will be shared by Lisbon and Ljubljana. The Court of Justice of the European Union also may be requested to give preliminary rulings on questions of EU law.
Impact: Cases will be decided by a panel of judges from different countries. Judges may be legally qualified, technically qualified, or both.
Owners of existing European patents or pending applications can "opt out" of the UPC's jurisdiction, but the opt-out will only be effective for a transitional period of up to seven years (with possible extension of up to 14 years). Unitary patents and patents that are already the subject of an action before the UPC cannot be opted out.
When deciding whether to opt out, patent owners should consider how to weigh the benefits of the simplified enforcement procedure against the risk of centralized revocation. For example, patents that are extremely valuable or that seem vulnerable to challenge by a competitor may benefit from opting out. It will be possible to reverse an opt-out during the transition period, but not if the patent is enforced or attacked in national court. If a patent owner reverses an opt-out for a patent, that patent may not be opted out again.
Impact: Parties that wish to opt out should consider filing a request before the UPC opens. Opt-out requests can be filed during the "sunrise period" due to start on March 1, 2023.
Next Steps:
- Review your patent portfolio and decide whether to opt out any patents or patent applications, keeping in mind the imminent sunrise period.
- Consider the centralized enforcement possibilities provided by the UPC.
- Assess potential infringement threats from competitors and consider challenging their patents at the UPC.
To start preparing, visit McDermott's UPC Resource Center.
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.
