The Unitary Patent and the Unified Patent Court
One of the questions asked by many clients when filing a European Patent Application is whether the granted European patent allows the patent proprietor to enforce their rights in all EU Member States.
The answer to this is yes, provided that the granted patent is validated separately in each of the Member States following the date of mention of grant in the EPO’s Bulletin. This validation process can be both complex and potentially very costly: validation requirements differ between countries and can lead to high direct and indirect costs, including translation costs, validation fees and associated representation costs. The amount of these costs can be considerable dependent on the number of countries where the patent proprietor wishes to validate the European patent.
A solution to this complex process was proposed: to create a single unitary patent that would cover all EU Member States; and so, the European patent with unitary effect (the Unitary Patent (UP)), as a concept, was born. The UP has been a long time in the making and it is as close now to being a reality as ever before, representing the biggest change to patent law in Europe in over 40 years.
After a European patent is granted, the patent proprietor will have the option to file a single request for what is termed a unitary effect, thereby obtaining a UP which provides uniform patent protection in up to 25 EU Member States. The unitary effect request will remove the need for complex and costly national validation procedures.
For the UP to come into effect, 13 of the 25 EU Member States must ratify the UP, with the proviso that France, Germany and the UK are amongst those 13. Currently, Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Italy, Lithuania, Luxembourg, Latvia, Malta, Netherlands, Portugal, Sweden and the UK have ratified the UP. However, the UP is being held up by a complaint pending before the Constitutional Court in Germany, which must be resolved so that Germany can ratify the UP and the project can move into the next phase, which is the period of provisional application.
Despite this, the technical and operational preparations at the EPO are continuing allowing for the project to move at pace in the event of a positive outcome from the German Constitutional Court. Although there are still some hurdles to overcome to have all 25 of the 26 Member States who have agreed to participate in and signed up to the UP, the future of the UP is looking bright and some predict that it will be reality in latter half of 2019.
From an Irish perspective, if a patent proprietor wishes to request a UP but also wants to include Ireland as a validated country, Ireland would not be covered as the Irish ratification requires a referendum. As such, the patent proprietor would have to validate in Ireland separately by foregoing the UP and validating in each country of interest separately (i.e., a traditional European patent validation).
The advantages of the UP are that the EPO acts as a one-stop-shop, allowing for a simple registration of a Unitary Patent; widespread coverage across multiple countries, a centralised renewal fee system with only one procedure, currency and deadline; all post-grant administration will be handled centrally by the EPO, further reducing costs and the administrative workload; and the remedies available in cases of infringement have been centralised in a Unified Patent Court (UPC).
The disadvantages of the UP are that if a patent proprietor does not usually obtain widespread patent coverage in the EU, then the cost benefit analysis begins to move away from a UP; one cannot selectively let member states lapse during lifetime of patent to reduce renewal costs; the UP does not cover any EPC country that is not a member of the EU (therefore one still needs to validate as before in these countries if desired); and it is not possible to opt-out of the UP. The other potential disadvantage is central litigation at the UPC, which places the granted patent at risk across multiple countries in a single action, rather than individually in national courts. In addition, UPs can only be enforced in the UPC, which may not necessarily be a more cost-effective enforcement mechanism when compared to the national courts.
The Unitary Patent Court
Litigation in multiple EU Member States is expensive, with a risk of diverging decisions and a lack of legal certainty. The UPC Agreement attempts to address these shortcomings with the creation of the Unified Patent Court (UPC), which will have exclusive jurisdiction for litigation relating to UPs and European patents; as well as harmonising the scope and limitations of the rights conferred by a patent. It should be noted that the UPC will not have any competence with regard to national patents. The UPC will be common to the 25 contracting Member States and thus part of their judicial system. The UPC Agreement is not open to states outside of the European Union. Currently, all European Union Member States, except Spain and Poland, have signed the Agreement.
The UPC will be composed of a Court of First Instance, a Court of Appeal and a Registry. The Court of First Instance will be composed of a central division (with its seat in Paris and sections in London and Munich) and several local and regional divisions.
However, the UPC Agreement is currently being held up by the outstanding legal challenge in the German Federal Constitutional Court. There are also differing views as to whether it will actually be possible for the UK to remain part of the UPC system after it leaves the European Union (‘Brexit’). It is this uncertainty with Brexit and the German court case that are delaying the ratification of the Agreement. The nuances of these stumbling blocks are outside the remit of this article and will be discussed in more detail in a further update once Brexit happens.
Despite the struggles that the UPC Agreement has in pushing itself over the line, the advantages of the UPC is that legal certainty will be enhanced for all users; a more efficient and balanced patent litigation system will emerge, to the benefit of both patent proprietors and third parties, with the UPC offering better enforcement of valid patents, with Europe-wide effects of decisions, injunctions and damages; for third parties and the public, the UPC will provide a central revocation action, separate from the EPO’s opposition procedure, at any time during the life of the patent. For patent proprietors, the latter advantage will also be a disadvantage.
It is an exciting time in European Patent Law, with the new moves adding more choices and opportunities for patent proprietors and third parties alike.
Dr. Mark Carmody