The Unitary Patent system in Europe has been a long time coming. Started in December 2012 by regulations approved by the European Parliament, it will finally apply with the entry into force of the Unified Patent Court (UPC) Agreement. This is expected to occur by the end of 2022 or beginning of 2023, depending on the time required to establish the court's operations.
Under current European patent practice, when a European patent is granted, the applicant must select individual countries in which to validate the patent. This requires payment of separate fees to each validation country. Patent enforcement is also country-specific: To prevent infringement in multiple countries, the patent holder must bring an enforcement proceeding in each country.
The Unitary Patent system will change this by establishing:
- the Unitary Patent Right (UPR), which is a single registration that applies in multiple countries with no separate validation requirements; and
- the Unified Patent Court (UPC), in which a patent holder may enforce a patent in multiple European countries in a single proceeding.
The Unitary Patent Right (UPR)
The UPR will allow a patent applicant to cover up to 38 member states with a single registration. The UPR is only available in European Patent Convention (EPC) member states that have ratified the UPC Agreement. The United Kingdom, Norway, Turkey and Switzerland have not ratified the UPC Agreement. Croatia, Spain, and Poland have all indicated an intent to not ratify this agreement and not participate in the UPR. Accordingly, the UPR will likely not extend to the United Kingdom, Norway, Turkey, Switzerland, Croatia, Spain and Poland.
The UPR will build on the current rules for prosecuting patents under the EPC. Therefore, in the near term, nothing will change in the pre-grant phase of patent prosecution. The good news is that the UPR is an additional option for registration and does not replace existing routes to European patent protection or require holders of pending applications to take any immediate action. However, holders of granted patents (or patents that are allowed and expected to be granted soon) must promptly consider their options relating to the UPR. This is because after the European Patent Office issues an intent to grant, the applicant will have one month to request unitary effect and provide the required translations.
A UPR can reduce or increase the costs of European filing, depending on the applicant's filing strategy. Under the Unitary Patent system, applicants must translate the entire specification into a second language (French or German if the proceedings will be in English) at the time of filing. This can substantially increase a patent application's cost. Additionally, patent holders who typically validate their patents in three or fewer European countries will pay higher renewal fees for a UPR, while patent holders who typically validate their patents in five or more countries are likely to reduce renewal costs with a UPR. Also, applicants who wish to manage costs by trimming select annuity payments later in the patent term will be limited to an "all or nothing" option.
The Unified Patent Court (UPC)
The UPC will have exclusive jurisdiction for actions relating to infringement or revocation of UPRs, as well as ordinary European patents that are validated in states that have ratified the UPC Agreement. Unlike the current European patent system, in which each court's decision only has effect in the country where the court sits, decisions of the UPC will have effect in all countries that have ratified the UPC Agreement.
While the UPC can provide substantial efficiencies when enforcing patents in Europe, it also has potential disadvantages. For example, under the current system, revocation of a patent in one European country does not automatically revoke the patent in other countries. However, if a patent is revoked by the UPC, that revocation will have effect in all countries that have ratified the UPC Agreement.
Actions to take in view of the UPR and UPC
The EPC provides a "transitional period" of at least seven years during which applicants may choose to use the current system or opt out of a UPR and/or the UPC. Patent holders and applicants who do not opt out within this timeframe will automatically fall under the jurisdiction of the UPC. Accordingly, patent holders must act quickly if they wish to opt out of the UPC.
We recommend that clients immediately start reviewing their portfolios of European patents and applications in order to assess what options are best for them, and take advantage of preliminary actions to safeguard their interests. In particular, clients should consider the following:
- Issued EP patents: Patents already granted in Europe will not be converted to UPRs. However, holders of patents with a grant date prior to October 1, 2022 could be subject to an adverse proceeding before the UPC unless they opt out before the UPC is up and running. Clients who wish to opt out of the jurisdiction of the UPC, and thus avoid the risk of a multi-country revocation of the patent, should file a request to do so no later than October 1, 2022. The UPC is expected to start accepting optout requests on July 1, 2022.
- Pending EP applications that issue after October 1, 2022: Clients should consider whether a "traditional" European patent or a UPR would be more cost effective. To receive a UPR, applicants must file a request and the required translations within one month after the patent grants. Otherwise, applicants can follow the traditional approach and complete validation in each country within three months after the patent grants. Additionally, while patent holders may opt out of UPC jurisdiction at any time during the transition period, patentees who wish to opt out should quickly do so after the patent grants.
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.
