A significant change to European patent law is coming this summer. On June 1, 2023, nearly a decade after the enabling European Union (EU) regulations were passed, the European Unified Patent Court and Unitary Patent System will come into effect. As the names suggest, instead of the present country-by-country system for deciding patent issues, the Unified Patent Court (UPC) will allow parties to file a single action to enforce or challenge a patent and the rulings by the UPC will be effective across all of the 17 participating countries. (Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovenia, and Sweden). Similarly, the Unitary Patent (UP) provides for a single patent that is effective across these 17 countries.
These changes introduce a number of strategic and financial considerations for holders of European patent and pending applications. A summary of the UPC and UP is below. As always, the attorneys at GR&R are available to answer your questions. Please feel free to contact info@grr.com if you have any questions or would like to discuss these options and related strategies in more detail.
The 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 17 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 an 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. While this allows for strategic enforcement, it can also make litigation complicated, and expensive, and result in inconsistent rulings about infringement and validity in different countries.
Unified Patent Court:
The UPC is a common patent court system that has jurisdiction to address patent issues such as infringement, validity, and damages in all of the 17 EU countries that are participating. Its decisions will apply across these countries. Thus, if a patent is found to be infringed and an injunction is issued, the injunction can be enforced in every participating country. Likewise, if a patent is found invalid, that decision will also apply across all of these countries.
For all EU member countries, European patents will automatically come under the jurisdiction of the UPC on July 1, 2023. During a seven-year transition period, patent disputes can be litigated in either the UPC or the national courts of the EU member countries.
Starting on March 1, 2023, a patent owner can opt their patent(s) 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. Owners of pending patent applications can also opt out of participation in the UPC in advance.
The opt-out provision remains available during the seven-year transition period. However, an opt-out cannot be done if the patent has already been involved in an action before the UPC. Accordingly, if there is a concern of being forced into a UPC action by a party seeking to invalidate the patent, an opt-out should be done as soon as possible.
A patent owner who opts out of the UPC can later decide to opt back in if they want to bring a UPC action. This option is not available if the patent has already been involved in a national action in one of the member countries.
For the EPO member countries that are not participating in the UPC, the existing country-by-country enforcement provision will remain in place.
Unitary Patent:
Hand in hand with the UPC is a European Unitary Patent (UP). Instead of the country-by-country validation, a Unitary Patent will provide coverage across all 17 participating EU countries. When a grant of a European patent is published by the European Patent Office, the applicant will have a one-month window to convert their European patent into a Unitary Patent. For pending patent applications nearing grant, a request can be submitted to postpone publication of the notice of grant so that the granted patent will be eligible for conversion to a unitary patent. A unitary patent is automatically subject to the UPC without an option to opt-out.
Depending on the countries of interest, a European Unitary Patent may be more cost-effective than validating in individual countries. Over time, a Unitary Patent costs about the same as maintaining four separate national patents. The UP becomes more cost-effective as the number of countries at issue increases. One downside, however, is that maintaining a UP patent is an all-or-nothing option. If patent protection in some EU countries is no longer of interest, costs cannot be reduced by selectively dropping them, an option that is available patents validated country-by-country.
Participating and Non-Participating EPO Countries:
The following 17 countries will be included in the initial Unitary Patent and Unified Patent Court system:
Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovenia, and Sweden
The remaining EPO members are not currently participating. These countries are listed below. The countries listed in Italics [where?] are eligible for the UPC and UP and might join this program in the future:
Albania, Croatia, Cyprus, Czech Republic, Greece, Hungary, Iceland, Ireland, Liechtenstein, Monaco, North Macedonia, Norway, Poland, Romania, San Marino, Serbia, Slovakia, Spain, Switzerland, Turkey, and the United Kingdom.
For countries that are not part of the UPC/UP system, national validation of a patent is still on a country-by-country basis even if the patent owner has a Unified Patent. Likewise, these countries are outside the jurisdiction of the UPC and so disputes will still need to be brought on a country-by-country basis.
If you have any questions about the UPC or UP and please contact info@grr.com.