A significant change to European patent law is coming into effect soon and companies with European patents, pending applications, or who are considering filing in Europe should take note. Nearly a decade after the enabling EU regulations were passed, the Unitary Patent System and Unified Patent Court are nearly here. As the names suggest, instead of the present country-by-country system, the Unitary Patent System provides for a single patent that is effective in all participating EU member countries. The Unified Patent Court will allow for parties to file a single action to enforce or challenge a patent with rulings that are effective across the participating EU members. These changes introduce a number of financial and strategic considerations for patent holders.
Existing Country-by-Country system:
The countries in Europe each have their own patent systems through which patents can be issued and enforced. Since 1977, applicants have also been able to file a single patent application in the European Patent Office (EPO). The results of the prosecution and decision to grant a patent are accepted by all EU member countries and 11 non-EU members (such as the UK, Norway, and Switzerland). However, after a patent is granted by the EPO the patentee must specifically choose which countries they want the patent to have effect and submit appropriate validation papers, translations, and fees in those countries. Yearly annuities must be paid in each country.
Patent litigation is also on a country-by-country basis. To enforce or challenge a patent in Germany, France, and Italy, for example, three separate actions must be filed. This makes litigation complicated, expensive and can result in inconsistent rulings about infringement and validity in different countries.
The New Unitary Patent system:
Starting soon (likely later this year – more on that below), patent applicants will be able to receive a Unitary Patent from the EPO. A Unitary Patent will be effective in up to 25 participating countries. Only a single yearly renewal fee will be required.
After the grant of a European patent is published by the EPO, the applicant will have the option to convert their European patent into a Unitary Patent that will provide coverage across the ratifying countries. Alternatively, they can remain in the current system and validate the patent in only those countries of interest.
The Unitary Patent renewal fees will be about the same as validating an EPO patent in five countries, making it attractive where more than a few countries are of interest to a patentee. On the other hand, a Unitary Patent is an all-or-nothing prospect and so if some countries are later found to be of less importance they cannot be selectively dropped from later renewals to save fees.
Currently, only 17 countries have ratified the UPC agreement and so initially granted Unitary Patents will extend only to those countries. As additional countries ratify, the geographic scope of later issued Unitary Patents will expand to include these countries. However, the new countries will not be retroactively added to the scope of existing Unitary Patents. Even with a Unitary Patent, to extend protection to EPO countries that are not covered, the patent will still need to be validated in those other countries individually. The table below lists all of the EPO members and shows which have signed the UPC Agreement and which of those have already ratified the agreement. (The UK was initially a participant but withdrew following Brexit.)
For pending EPO patent applications, starting from 3-4 months before the UPC goes into full effect it will be possible to request a delay of the decision to grant the patent so that the granted patent will be eligible for conversion to a unitary patent. Early requests to convert an application to a Unitary Patent can also be submitted.
The Unified Patent Court:
Hand in hand with the Unitary Patent is a Unified Patent Court (UPC). As the name implies, rather than enforcing patents on a country-by-country basis, a common patent court system is being established that will have jurisdiction to address issues such as infringement, validity, and damages. Unlike the country-by-country enforcement system presently in effect, decisions from the UPC will apply to all participating member countries. For example, if a patent is found to be infringed and an injunction is issued, the injunction can be enforced across all of the ratifying countries. Likewise, if a patent is found invalid, that decision will also apply across all of the ratifying countries.
The UPC will have exclusive jurisdiction over issues involving Unified Patents. Its jurisdiction will also apply to non-unitary traditional European patents concurrently with the jurisdiction of the national courts.
Unlike a unitary patent, which must be affirmatively selected at the time of grant, owners of European patents will automatically come under the jurisdiction of the UPC starting when the UPC Agreement comes into force. During a transition period that will last for at least seven years, patent owners can affirmatively opt out of participation in the UPC in which case the patent can only be enforced or challenged in national courts as is presently the case. A patent owner who opts out of the UPC can later decide to opt back in during this transition period.
When will this go into effect?
It will probably be in late 2022. According to the agreement, the UPC will come into effect on the first day of the fourth month after the month in which the last ratification required by the UPCA is deposited. The only required deposit that remains is from Germany. Some estimate that this deposit could be made as early as June, 2022, which would put the start date at October 1, 2022.
What should I do now?
Applicants with pending European applications who want the option of a Unitary Patent can take steps to slow down examination, such as by taking available extensions or requesting a delay of grant when that option becomes available. Current owners of issued European patents should evaluate their portfolios and consider whether or not to opt out of the UPC. Licensing strategies and existing licenses may also need to be adjusted to ensure that they properly account for Unitary Patents and the UPC.
The attorneys at Gottlieb, Rackman, and Reisman are available to help you prepare for these changes.
Table of EPO and UPC Participating Countries.
– EPO Member countries – Patent granted by the EPO can be validated in these countries
– Eligible for UP and UPC – Country is a signatory to the UPC Agreement
– Agreement Ratified – Country has ratified the UPC agreement and will be included in initial unitary patent and unified patent court.
|EPO member||Eligible for UP and UPC||Agreement ratified|