How will my European patent application be affected by these changes?
For patents which grant on or after 1 June 2023, it will be possible to secure unitary patent protection in certain European Union (EU) countries (provided the filing date is on or after 1 March 2007 and provided the claim scope is the same in each state which would be covered by the unitary patent).
From 1 June 2023, as default, the Unified Patent Court (UPC) will have jurisdiction over national patents derived from European patents by validation in countries affected by the legislative changes, unless those patents have been opted out. During a transitional period (at least 7 years), national courts will also have jurisdiction over those patents.
What is the unitary patent? What is the UPC? What countries are affected?
A unitary patent is a single patent which will have effect in several countries which are members of the European Patent Convention (EPC) and the EU. Countries covered by a unitary patent will include France and Germany, but countries which will not covered include the UK, Switzerland and Spain.
Find out more about the unitary patent here.
The Unified Patent Court is a new international court for patent litigation.
Find out more about the UPC here.
Read our The unitary patent and the Unified Patent Court: All systems are go article here.
What are the pros and cons of unitary patent protection?
A unitary patent is a single, indivisible right. So, whilst it is enforceable as one patent, crucially, it is also revokable as one patent. In addition, it must have the same scope in all of the countries in which it has effect.
As mentioned above, not all EPC member states will be covered by the unitary patent, for example, the UK, Switzerland and Spain.
A unitary patent will be litigated in a single procedure at the UPC. This could be an advantage or disadvantage, depending on circumstances. Unitary patents cannot be opted out.
A unitary patent provides the potential for cost saving. In broad terms, looking at translation requirements at the validation stage and renewal fees, the cost saving is likely to kick in for patentees seeking patent protection in at least about 4 countries covered by the unitary patent.
Payment of a single renewal fee for a unitary patent is potentially advantageous. The single renewal fee reduces the administrative burden but inadvertent non-payment of this one fee would result in lapse of the patent in every country covered by the unitary patent. Further, a “pruning” strategy– whereby the patent could be allowed to lapse in countries of less commercial importance and renewed only in commercially more important countries as annual renewal fees increase – can be employed for validated patents but is impossible for a unitary patent.
Depending on the countries of commercial interest, requesting unitary effect may reduce the translations burden. However, under the transitional provisions, a request for unitary effect must be accompanied by a full translation of the specification and the time limit is only one month from grant, i.e. shorter timeframe than if proceeding via validation. In contrast, any translations for validations are due within three months from grant. Translations requirements for validation vary by country and some countries have partially or entirely waived translations requirements in accordance with the London Agreement.
In terms of ownership, a unitary patent cannot be partially assigned to have different owners for different countries covered by the unitary patent. However, it can be licensed in respect of the whole or part of the territories covered by the patent.
What are the advantages and disadvantages of using the Unified Patent Court (UPC)?
A key advantage of using the UPC is central enforcement. However, this advantage needs to be weighed up against the risk of central revocation.
Parallel national litigation in multiple jurisdictions, which could result in conflicting decisions, might be avoided by using a single litigation at the UPC. Avoidance of parallel national litigations also presents the potential for cost saving. However, the cost of litigation in each country varies, so the cost comparison will depend on which country (or countries) are of commercial interest.
Litigation at the UPC is intended to be rapid. This could be an advantage if reaching fast resolution is a priority. Alternatively, this could be viewed as a disadvantage due to the associated demanding deadlines.
The UPC is a new, untested court and, consequently, there is no established body of case law on which to rely for guidance on the likely stance the court may take on various points of law. One of the main concerns relating to the UPC, at least for a while, is essentially fear of the unknown. However, parties involved in litigation at the UPC have the opportunity to participate in shaping the case law for this new court. [SW1]
What if I choose not to request unitary effect?
National patents can still be obtained via the traditional validation route in any EPC member states if unitary patent protection is not requested.
What if I choose to obtain national patents via validation?
Existing European patents and European patents which are granted after legislative changes come into force will both automatically fall under the jurisdiction of the UPC. Therefore, as default, the UPC will have jurisdiction over national patents derived from European patents by validation in countries affected by the legislative changes unless those patents have been opted out.
During a transitional period (at least 7 years), national courts will also have jurisdiction over those patents.
Therefore, during the transitional period, litigation could be commenced either at the UPC or on a national basis.
Find out more about which countries fall under the jurisdiction of the UPC here.
Find out more about the UPC here.
Find out more about opting out here.
Can I opt out my pending European application from the Unified Patent Court (UPC)?
Yes.
However, looking to the future, from 1 month before the end of the transitional period (which will last for at least 7 years) it will no longer be possible to opt out European patent applications or non-unitary European patents from the jurisdiction of the UPC.
Find out more about opting out here.
Would it be better to opt out of the Unified Patent Court (UPC)?
Note that unitary patents will fall under the jurisdiction of the UPC and cannot be opted out.
Traditional non-unitary patents (and pending European applications) can be opted out of the UPC from the start of the sunrise period (commencing on 1 March 2023) until 1 month before the end of the transitional period (which will last for at least 7 years).
Whether or not to opt out is a decision to be made on a case-by-case basis, bearing in mind the advantages and disadvantages outlined above.
Find out more about the UPC here.
Find out more about opting out here.
Advice and issues to consider (pending European patent application)
We would advise our Australian and New Zealand clients holding pending European patent applications to prepare for the arrival of the unitary patent and the UPC now.
Regarding unitary patent protection:
If you have a pending European patent application which is close to grant and you want to secure unitary patent protection, we suggest taking steps to delay grant of the patent until the legislation comes into force. Otherwise, if the patent is granted before the legislation comes into force, unitary patent protection will not be an option.
Review those countries which are important to you and your competitors and consider whether a unitary patent will afford protection in some or all of those markets. Remember that a unitary patent will not cover all EPC countries; validation of the European patent will be necessary to secure protection in other EPC countries, such as the UK, which will not be covered by a unitary patent. In terms of basic costs, unless you are interested in at least about 4 countries which would be covered by a unitary patent, it may be more cost effective to go down the traditional validation route.
If you intend to have different owners for different countries, or different scope in different countries, unitary patent protection is not for you. Unitary patent protection is also unsuitable if you want to avoid the UPC.
Regarding unitary patent protection and the UPC:
Evaluate the strength of your patent application. For instance, are you aware of prior art in another jurisdiction which could be used by a third party in a potential central revocation action after grant?
Also evaluate the importance of each patent application and identify key patent applications in your portfolio. One possible approach would be to validate and opt out your key patents/applications only, allowing less important patents/applications to automatically fall under the jurisdiction of the UPC. Another consideration is whether to keep only patents/applications with a strong presumption of validity under the jurisdiction of the UPC whilst opting out others.
Weigh up the advantage of central enforcement (unitary patent and/or UPC) against the risk of central revocation (consider traditional validation and opting out of the UPC).
We recommend weighing up relevant commercial factors in Europe; for example, are profits skewed in favour of one or two jurisdictions, or are they spread across Europe? Where are the competitors active and do they have a home base in Europe?
The UPC is an untested court. Would you prefer to take a “wait and see” approach, validating your patent after grant and opting out of the UPC so that you can observe how UPC case law evolves and possibly opt back in later? Or do you prefer to embrace the UPC, affording the opportunity participate in shaping case law at the UPC in the event of litigation?
Litigation at the UPC is intended to be rapid. This could helpful if reaching fast resolution is a priority. Alternatively, this could be problematic if the associated demanding deadlines would be difficult to meet.
Review the ownership of your patent application. A request to opt out must originate from the entitled proprietor, in order to avoid an invalid opt out. In some circumstances, the registered proprietor may not be the same as the entitled proprietor. Co-owners must opt-out together so consent may need to be sought.
Also check any licence agreements and liaise with any licensees as appropriate.
Consider now whether or not you want to opt out your European patent application from the UPC. Since opt out is on a case-by-case basis you can choose to opt out all, some, or none of your cases.
If you decide you want to opt out, we strongly recommend opting out your patent application before grant. This avoids the risk of a third-party taking action against your patent as soon as the patent is granted, after which opt out would not be possible due to the pending court action.
Want to know more?
Register for our webinar
Join Senior Associate, Dr. Serena White as she outlines throughout the webinar:
- What the law changes are and what they mean for Australian and New Zealand businesses and individuals with European patents and patent applications;
- The advantages and disadvantages;
- The benefits and risks; and
- What Australian and New Zealand businesses and individuals need to do to prepare.
Discover more about the unitary patent and UPC here.
We welcome queries from our Australian and New Zealand clients regarding the unitary patent and the UPC. We would be happy to discuss what these changes mean for you and assist you with managing your IP portfolio in view of the changes.
Disclaimer
This article is intended to provide general advice. Deciding if unitary patent protection is the right choice and whether or not to opt out a European patent or patent application from the UPC are commercial decisions which will depend on the specific circumstances.