If you don’t know your Battistelli from your Balotelli and you think the UPC Arena is the football stadium formally known as the Arnold Schwarzenegger-Stadium in Graz, Austria rather than a new European patents court then you’ve probably been spending more time on your fantasy football league than you have preparing for the Unified Patent Package. Fear not though as IPcopy has you covered with our Unitary Patent 101 blog post!
The most significant changes to patent law in Europe since the European Patent Convention came into force in the late 1970s are currently being considered and it appears that after a few false starts the new regime could come into effect shortly. This article looks at what’s been agreed already, what it means for users of the European patent system and what we should all be looking out for in the near future.
Background and Context
Patents are territorial rights: a German patent covers Germany, a UK patent covers the UK and so on. In order to obtain protection in multiple countries therefore, it is necessary to apply for and prosecute a patent application through to grant in each country in which you wish to secure patent protection. Before 1978, to obtain protection throughout Europe required a patent owner to apply for a number of separate national patents. The procedure in different countries was often different and there was a need to translate the patent document into different languages.
In 1978 however, after many years of discussion, the European Patent Convention (the EPC) came into force. The EPC is a regional patent system in which a single patent application can be filed and be processed through to grant in a single language (one of English, French or German).
The EPC addresses a number of the above issues but does not represent a single “community patent” because shortly after the grant of a European (EP) patent, the patent owner is obliged to choose which European countries he wishes to validate his granted EP patent in. The process of validation therefore creates a bundle of national patents again and furthermore requires, in certain countries, translations of the granted patent to be filed. Enforcement of the bundle of national rights then takes place under national law such that enforcement of a granted EP patent in multiple territories requires multiple court cases to be initiated.
Currently there are 38 countries within the EPC system.
The creation of a community patent has been a long-held desire within the European Union, with efforts to implement such a system stretching back a number of decades. However, the process has always floundered, usually over the differing language requirements of the different countries involved.
So, how has the currently proposed unitary patent system succeeded where past efforts have not?
Within the 38 countries of the EPC are the 28 member states of the European Union. Under European Union law there is a procedure called enhanced cooperation which allows, as a last resort, members of the EU to establish cooperation in an area where an individual state or small group of states do not wish to participate. This procedure has therefore allowed a proportion of the 28 EU member states to agree the unitary patent scheme. The unitary patent – or “European patent with unitary effect” – is a European patent, granted by the European Patent Office (the “EPO”) under the rules and procedures of the EPC, to which, upon request of the patent proprietor, unitary effect is given for the territory of the member states participating in the unitary patent scheme and who have also signed up to an agreement to create a new unified patent court (the number of EU countries that could participate in both schemes is 24 – see the footnote1 for further details).
The unitary patent will co-exist with national patents and with the existing European patent system. In the sections below we take a closer look at what this all means to companies operating and trading in the EU.
Why might I want a unitary patent?
A single unitary patent will provide protection in, potentially, 24 countries of the EU. A patent owner will be able to litigate against an infringer in the new unified patent court (UPC), which will have jurisdiction over all of 24 countries, and powers to grant all the remedies that would be available in the national courts. A single successful infringement action at the UPC could result in an injunction that would have effect in all of those countries, and damages would be awarded in respect of every country in which infringement has occurred. It is potentially a very powerful tool.
The downside of this is that if the unitary patent is revoked, perhaps in response to a validity challenge, it will be revoked in respect of every unitary patent country, so a successful revocation action could see your patent fall in most of Europe.
Another advantage, and one that is pushed by proponents of the system, is, potentially, reduced costs. With a unitary patent, it will ultimately be possible to obtain European patent protection without the need to file any translations (in the short term, one translation will be necessary), and to maintain the patent with payment of a single annual renewal fee. In the current system, obtaining protection in the 24 countries would require a large number of translations, and separate annual renewal fees for every country.
How will this change the patent application process in Europe?
In practical terms the process up to grant will not change. After grant, the patent owner will have a window of time in which to decide what type of protection they would like. Within one month of grant, they may request a unitary patent, which will cover all of the unitary patent countries. Other EPC countries, including non-EU countries, not covered by the unitary patent at that time will need to be covered by validating the European patent in the usual way.
If the patent owner does not want to select a unitary patent, they will have three months to validate the European patent in the EPC countries of their choice, as in the current system.
What about existing patents or pending patent applications?
Ultimately, the UPC will have jurisdiction over all European patents. This will include unitary patents, and it will also include European patents validated in the usual way – including those already granted.
However, any patents already granted, any applications already filed, and any applications filed within an initial seven year transitional period, can be ‘opted out’ of the unified patent court, as long as no action is pending at the unified patent court. Jurisdiction will then be returned to the national courts. The patents could then be opted in again at any point, so long as no action is pending at the national courts. It is important to realise that the default position will be opted in to the new system – so patent owners must actively opt each and every patent out if they wish to avoid the UPC.
A few things we don’t yet know for sure…
Precisely when this new system will come into force. The Agreement that covers the UPC must first be ratified by at least France, Germany, the UK and ten other countries. You might hear late 2015 being thrown around, but this represents the earliest the system could reasonably come into force. Sometime in 2016 or 2017 is probably a more likely timescale for grant of the first Unitary Patent. Whatever the timescale, we will get around three months’ notice before the system is launched.
How much it will cost. The costs of filing and prosecuting a European patent to grant will remain broadly the same as they currently are. However, the renewal fees for a unitary patent and the fees for opting out of the unified patent court if you wish to do so have not yet been set. The renewal fee will be particularly significant in determining how much saving a unitary patent will really offer.
So what do I need to start doing now?
Think about any European patents you already have. By default, these will come under the jurisdiction of the unified patent court on day one unless you opt them out of the system, so start considering the opt-out possibilities now.
Keep in touch with your patent attorney, and make sure they alert you when the new system is about to begin. There will be around three months’ notice that the system is about to go live, which is not a lot of time!
If you have a pending European application and you particularly want a unitary patent, you may wish to ask your patent attorney about ways to delay grant so that, if possible, the patent grants under the new system and a unitary patent is available.
If you licence your patent applications and patents (either licence out or licence in) then speak to your legal advisors to see whether your licence agreements need updating in light of the unitary patent scheme (in particular who has the right to opt out of the UPC).
1Currently the maximum number of EU countries that could fully take part in the unitary patent system is 24. There are three separate legal instruments that cover the scheme and the overlap between the signatories of these three instruments covers 24 EU member states.
The enhanced cooperation process mentioned above has created two regulations, one covering the unitary patent and one covering the translation regime for the unitary patent. All EU member states have signed up to these regulations apart from Spain, Italy and Croatia. The Agreement relating to the UPC has been signed by all EU member states apart from Spain, Poland and Croatia.