The Unified Patent Court will open for business towards the end of 2022 or sometime early in 2023 and when it does it will revolutionize the way in which patents are litigated in Europe.
When the Court comes into existence, it will provide a new forum for enforcing European patents granted by the European Patent Office and in force in Germany, France, Italy, Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, Latvia, Luxembourg, Lithuania, Malta, the Netherlands, Portugal, Slovenia, and Sweden in a single court action. Further European member states are expected to ratify the agreement in the coming months. It will also provide a forum for enforcing unitary patents covering all the above jurisdictions which the European Patent Office will start to grant as soon as the court opens.
The Unified Patent Court will be an optional court for enforcing existing and future national patents derived from European patents granted by the European Patent Office having effect in the participating member states. Patentees will continue to have the choice of using national courts to enforce such patent rights on a country-by-country basis as they do now. But with the opening of the new court, this choice will be supplemented by the option of enforcing patent rights in multiple states in a single court action within the new court.
The new court is likely to be an attractive venue for such enforcement actions. The rules of procedure for the new court have been written by a group of expert patent judges and patent litigators and have been drawn up with a view to combine the most attractive features of existing European litigation systems of different states. Enforcement is likely to be rapid, with decisions at first instance occurring around 14 months after the initiation of a court action. The court will not require extensive discovery and disclosure of documents as is prevalent in US patent litigation and therefore the costs of enforcement are likely to be a fraction of the cost of US enforcement. At the same time, the market covered by a unitary patent will potentially be around three-quarters of the size of the US market. Hence the new court will be a significant new rival forum for settling international patent disputes.
Although, patent proprietors will be able to enforce patent rights across multiple jurisdictions in a single court action in the new court, at the same time subjecting existing patent rights to the jurisdiction of the new court also exposes patent proprietors to the risk of losing patent rights in multiple jurisdictions in a single revocation action. Because of this potential risk, patentees have been provided with the option of opting "traditional" European patents out of the jurisdiction of the Unified Patent Court during a transitional period. In general, an opt-out can be withdrawn at a later date so a proprietor can, if they wish, enforce the patent in the new court later on. Rather, filing an opt-out prevents a third-party from pre-emptively bringing a revocation action in the new court. Hence it is important for patent owners to review their patent portfolios now to decide which, if any, patents they would like to opt-out of the jurisdiction of the Unified Patent Court and file any opt-out requests with the court as soon as possible.
Patent owners will also need to decide upon their strategy as to whether or not they will obtain the new unitary patents, which the European Patent Office will start to grant when the Unified Patent Court opens. These unitary patents will be a unitary patent right which extends across all of the participating member states. The new unitary patent will provide a significantly cheaper way of obtaining broad patent protection across Europe. The costs and formalities involved in acquiring and maintaining protection will be similar to the costs for obtaining protection, in say, the United Kingdom, Germany, France, or Italy under the current traditional European patent system, but they will cover a market which is a third larger. However, unitary patents come with a significant caveat. The new Unified Patent Court will have exclusive jurisdiction over unitary patents, in other words there is no opting out. As such all such unitary patents will be subject to the risk of a central revocation action throughout their lifetime resulting in possible loss of patent protection across a broad geographic scope in a single revocation action. In deciding upon their strategies, patent owners will have to weigh up whether this risk outweighs the benefits of broader, cheaper protection provided by unitary patents.
Originally printed in The Lot Network Quarterly Newsletter in June 2022.
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