Unitary Patent and The Unified Patent Court

* WEBINAR "Unitary Patent: A reality in 2023"

SAVE THE DATE 1 february 2023 · 16:00h

The forthcoming entry into force of the Unitary Patent is triggering the publication of various articles and opinions in the media on this particular issue.

We will try to explain the basic aspects of the Unitary Patent in an easy and understandable manner.

I) THE UNITARY PATENT OFFERS AN ALTERNATIVE AND DOES NOT REPLACE THE CURRENT EUROPEAN PATENT SYSTEM

Currently, after a European patent application passes an examination phase conducted by the European Patent Office (EPO), the granted patent becomes a bundle of individual national patents. This phase, in which national patents are obtained from a granted European patent, is called validation of a European patent.

The Unitary Patent will offer an alternative for the holders of granted European patents.

Instead of being required to validate the granted European patent in each country of interest and obtain a bundle of national patents, a unitary effect will be available as an option, en bloc, for the Unitary Patent participating countries, without being an obligatory requirement.

II) ENTRY INTO FORCE

The Unitary Patent, which does not replace the current traditional system of validations, will enter into force once Germany deposits a final act of ratification, namely three months after this deposit is made.

Entry into force is expected by June 2023.

III) THE UNITARY PATENT CONCERNS COUNTRIES OF THE EUROPEAN UNION

Let us imagine a European patent that has a unitary effect, which we will refer to as an EP-EU patent.

The 17 countries to be covered by the EP-EU patent are countries that belong to the European Union and have ratified the corresponding agreements. These countries are known as participating states. As of today, these states are:

Germany, France, Italy, the Netherlands, Belgium, Austria, Sweden, Denmark, Portugal, Finland, Lithuania, Estonia, Latvia, Bulgaria, Slovenia, Malta and Luxembourg.

It is envisaged that the number of participating EU countries will increase over time, and that an EP-EU patent will come to cover, in addition to the above-mentioned states and in the not-too-distant future, the following states:

Greece, Hungary, Ireland, the Czech Republic, Slovakia, Romania and Cyprus.

As long as these countries are not participating states, the European patent must be validated in the country or countries of interest in the conventional way for a granted European patent to be effective in any of them, obtaining the respective national patents.

There remain other countries of the European Union that, for the time being, do not show interest in becoming participating states. These countries are:

Spain, Poland and Croatia.

As in the previous case, if these countries are not participating states, for a granted European patent to have effect in any of them, the European patent must be validated in the country or countries of interest in a classical manner, obtaining the respective national patents.

Finally, non-EU countries that may not be participating states, and therefore cannot be covered by an EP-EU patent are:

Great Britain, Switzerland, Turkey, Norway, Iceland, Albania, San Marino, Serbia, Liechtenstein, Monaco, North Macedonia.

For a granted European patent to be effective in any of these countries, the European patent must be validated in the country or countries of interest in the conventional form.

IV) THE UNITARY PATENT IS NOT DIVISIBLE

Let us imagine a European patent that displays a unitary effect, which we will refer to as an EP-EU patent.

A single renewal fee must be paid on a recurring basis to keep the EP-EU patent in force (effective for all the participating countries), and this payment must be made directly to the European Patent Office.

This means that, during the life of an EP-EU patent, it will not be possible to select for which countries a renewal will be attended, whereas in the case of validating the patent individually in several countries, it will be possible to decide, country by country, whether to maintain the protection in force in the country considered by attending or not the associated renewal fees.

Invalidity or infringement actions involving the EP-EU patent will be heard by a new patent court, the Unified Patent Court (UPC), the rulings of which will have effect, en bloc, in all participating countries.

The EP-EU patent must be transferred and licensed en bloc, in other words, with effect for all participating countries. This fact may complicate commercial or business strategies, if they differ significantly among the countries of the 17 states initially covered.

V) PRACTICAL RELEVANCE

Whether or not to go for an EP-EU patent will depend on the circumstances of individual cases.

On the one hand:

• Not all European patent holders have an interest or need for the granted European patent to deploy effects in all participating states. Depending on which states are of interest to us, it could still be more economical to validate the granted European patent only in these participating states, instead of opting for an EP-EU patent covering, in addition to these states, all other participating states.

• Not all holders want to be forced to litigate before the UPC (which will not be based in Spain).

• Not all patent holders are willing to take the risk of a decision adopted by the UPC affecting all participating states en bloc (e.g., a decision stating that the patent is invalid will render the patent ineffective in all participating states).

On the other hand:

• If it is desirable for a granted European patent to be effective in all or most of the participating states, it will be more cost-effective to opt for an EP-EU patent than to validate the granted European patent in each of the states of interest.

• For those patents that are likely to be infringed in several participating states and for which the exclusive rights are expected to be enforced in court, not only the UPC's competence (and handling a single case) can be advantageous, but also the fact that the decision rendered will affect, en bloc, all the participating states; bearing in mind that if the validity of the patent is challenged, a decision of invalidity adopted by the UPC will also affect, en bloc, all the participating states.

VI) WHEN AND HOW IS THE UNITARY EFFECT REQUESTED?

Opting for a unitary effect requires an explicit request to the European Patent Office (EPO), within a period of 1 month from the date of publication of the granted European patent involved.

If no express request for unitary effect is filed within the aforementioned one-month period, the granted European patent may also become effective in any contracting or participating state of the European Patent Convention (which includes the 17 states that would be covered by a Unitary Effect Patent (EP-UE)) via traditional validation of the granted European patent, thus obtaining a national patent.
Regarding patent applications intended to be granted shortly before the entry into force of the patent with unitary effect, the EPO has foreseen measures so that the publication of the grant of such application can be delayed, for this publication to take place after the entry into force of the Unitary Patent. In this way, the holder will be able to opt for an EP-EU patent, with unitary effect in the participating countries, which would not be possible if such publication occurs too early.

VII) THE UNIFIED PATENT COURT (UPC): JURISDICTION NOT ONLY OVER PATENTS WITH UNITARY EFFECT (EP-EU)

As mentioned in section IV), nullity or infringement actions concerning an EP-UE patent will be heard by a new patent court, the Unified Patent Court (UPC), the decisions of which will have effect in all participating countries. The Unified Patent Court (UPC) will have exclusive jurisdiction over patents with unitary effect (EP-EU patents).

However, the UPC will also have jurisdiction over the conventional validations of a European patent granted in any of the participating states, both for future validations and for those that took place even before the entry into force of the Unitary Patent. The UPC will have this competence by default and for a transitional period of at least 7 years.

Consequently, there is a risk that any invalidation decision taken by the UPC on a validation of a European patent in one of the participating states will also affect all other validations that have been made in any other participating state.

Also, a holder of a European patent validation runs the risk of being forced to litigate before the UPC if a third party initiates any action concerning the said validation before the respective national court.

The holder of a European patent validation can avoid these risks by making an express request to exclude the validation from the competence of the UPC. This procedure is called OPT-OUT.

VIII) WHEN AND HOW IS AN OPT-OUT REQUESTED?

In section VII), we pointed out that the Unified Patent Court (UPC) will have jurisdiction, by default and during a transitional period of at least 7 years, over the traditional European patents validations in any of the states participating in the Unitary Patent.
Nonetheless, the holder of a European patent may, upon express request, exclude the European patent validations from the competence of the UPC. This is known as OPT-OUT.

For an OPT-OUT to be effective, it must be filed an express request at the UPC before a revocation action (or any other action) is brought before the UPC against any of the European patent validations of a participating state.

Therefore, a European patent holder who fears that a competitor may attempt to invalidate en bloc all his European patent validations in participating states of the Unitary Patent should be prepared to apply for such an OPT-OUT as soon as possible.

It is therefore envisaged that an OPT-OUT request can be filed even before the entry into force of the Unitary Patent. This is to ensure that the opt-out is registered in the UPC before a third party is entitled to initiate an action at the UPC concerning a European patent validation in a participating state (which will only be possible after the entry into force of the Unitary Patent).

In particular, a so-called "sunrise" period will be opened, which will allow an OPT-OUT request to be filed with the UPC during the three months prior to the entry into force of the Unitary Patent.

There is no maximum term to register an OPT-OUT request with the UPC.

The OPT-OUT status will last as long as the patent remains in force.

IS THE OPT-OUT REVERSIBLE?

Yes, if after an OPT-OUT a patent holder requests the UPC to become the competent court again to hear an action, for example, for infringement or invalidation of a European patent validation in a participating state. This is known as OPT-IN and can be done as long as there are no proceedings pending in the national courts of any participating state in which said European patent has been validated.

IX) WHETHER OR NOT TO OPT FOR A UNITARY EFFECT

There are several factors that must be taken into account when considering whether or not to opt for a unitary effect (opt for an EP-EU patent). Some of these factors are listed below:

GEOGRAPHICAL COVERAGE

If the invention is expected to be practiced or licensed for use in a few of the 17 countries initially covered by the EP-UE patent, it may be worthwhile to conventionally validate the patent in these countries, especially if they are low validation costs’ countries that participate in the London agreement (those who are exempted from a translation into the national language), such as France, Germany and Belgium.
If the invention is expected to be practiced or licensed for use in most of the countries of the 17 states initially covered by the EP-EU patent, it will be of greater interest to opt for an EP-EU patent.

COST

The cost of maintaining the patent is a relevant factor for most holders.

The cost of official fees for the renewal of an EP-EU patent is approximately equivalent to the sum of the costs in official fees that would be incurred for a patent renewal in the four most important countries of the 17 states initially covered.

The renewal of an EP-EU patent, a single act before the European Patent Office (EPO), avoids the resources required to organize the renewal of each individual national patent through its respective national administration.

Throughout the life of an EP-EU patent, it will not be possible to select for which countries a renewal will be attended, whereas in the case of individual country patent validation, it will be possible to decide on a country-by-country basis if one wishes to maintain the protection in the country involved.

LICENSES AND TRANSFERS

The EP-EU patent must be transferred and licensed en bloc, i.e. with effect for all participating countries. This fact may cause complications for commercial or business strategies, if these are very different among the countries of the 17 states initially covered.

THE UPC’S COMPETENCE

The UPC will be a highly qualified tribunal, whose decision-making panel will comprise judges with technical expertise. This is intended to enable quality decisions to be resolved and rendered for matters of high technical complexity.

Higher procedural costs are to be expected, however, compared to the same case heard by a national court, which would be compensated if the same case were to be heard in several courts (that is, in several states of the participating states of the EP-EU patent), albeit under the risk that a decision adopted by the UPC will have effects in all the participating states.

X) SPANISH PATENT APPLICANTS, LIKE APPLICANTS OF ANY OTHER NATIONALITY, MAY OPT FOR A PATENT WITH UNITARY EFFECT

Spanish patent applicants, just like applicants of any other nationality, may opt for unitary effect when a European patent is granted.
The fact that Spain is not a participating state of the Unitary Patent means that, in order for a granted European patent to be effective in Spain, such patent will have to be validated in the conventional form, becoming a national patent, although examined by the European Patent Office (EPO).

As at present, a European patent validated in Spain will not be under the jurisdiction of the Unified Patent Court (UPC). Consequently, disputes concerning this patent will be resolved in the Spanish courts.