In the last few months a number of decisions taken by the Court of Justice of the European Union, the Selected Committee of the Administrative Council of the EPO and the a number EU of member states have taken us one step closer to the completion of a system for unitary patent protection in Europe. The Unitary patent will provide patent protection in all participating member states and will be enforced through a newly created Unified Patent Court, UPC.
A Bit of History
In 2012 three pieces of legislation were approved including two EU regulations which set up the unitary patent and associated translation arrangements, and one Agreement to set up the unified patent court. In addition a series of drafts of the Rules and Procedures of the Unified Patent Court have been presented since May 2009.
Italy signed the Agreement but not the regulations, whilst Spain decided to challenge altogether the legality of the two EU regulations. This legal question has now been settled by the Court of Justice, which decided in May 2015 to reject Spain’s challenges, hence removing a significant obstacle to the proposed unitary patent system. In addition, Italy requested two months ago to access the unitary patent package. Together, these advances are likely to speed up the ratification process of the Agreement.
The agreement signed in 2013 by 25 of the 27 EU member states will enter into force once 13 Member States, which must include amongst them Germany, France, and the UK, have ratified it. To date only 7 of the 25 member states have ratified the Agreement, with France being the only one of the “mandatory states” to have ratified the agreement. However, Germany has now announced that it will launch its ratification bill in the second half of 2015 and the UK has indicated that its ratification would be completed in spring 2016.
This means it is possible that the required 13 ratifications could be obtained at some point in 2016. From that date it will take another four months for the unitary patent system to start.
With regards to the Rules and Procedure of the Unified Patent Court, the Preparatory Committee has presented this month its 18th draft and expects to agree on a final set of Rules in October 2015.
What are the risks and opportunities for existing and future EU applicants?
The Unitary patent will be examined by the European Patent Office and processed in the same way up until grant. However the new procedures after grant will do away with the current “validation” system where different countries define their own translation requirements and the end result is a bundle of separate national patents. Instead, no translations will be required (beyond the regular translations of the claims which are required in order to secure the initial grant decision from the EPO). This means that the new system will offer cost savings in those cases where the applicant wishes to obtain protection across a large number of countries. Once the UPC Agreement has entered into force, transitional provisions will apply for a period of at least seven years. During this period, an applicant filing a European patent application at the EPO will have the possibility upon grant by the EPO to choose between i) a Unitary EU Patent by requesting “unitary effect” in the participating EU states or ii) a Non-Unitary EU Patent by validating the EP patent in a number of chosen states. When requesting unitary effect, the applicant may also consider validating in countries which are either non‑EU members (such as Switzerland and Norway) or EU members that do not participate in the unitary patent system (such as Spain and Poland).
A key factor in deciding whether the new system is cost effective as compared with the existing European Patent (so long as it is available) or separate national filings, is the level of the renewal fees. In June 2015, the Select Committee of the Administrative Council of the EPO adopted the so called “Top 4 proposal” for unitary patent renewal fees. In other words the fees covering the territory of the unitary patent member states will correspond to the sum of the renewal fees currently paid in Germany, France, UK and the Netherlands, the four countries in which European patents are most frequently validated.
For applicants seeking protection in a large number of countries, the Unitary Patent offers a rather compelling proposition. However, this needs to be balanced by the possibility of a central attack on the Unitary Patent. Under the current system, a third party can oppose a patent at the EPO during a nine month opposition period. Passed this opposition period, actions against invalidity are brought individually in national courts which means that a patent revoked in one country may still remain valid in another. Under the new system, actions against an EU patent will be heard at the UPC, and possibly revoked all at once in all the participating EU member states. The possibility of a central attack on a valuable patent represent a new and significant risk for the applicant.
For holders of Non-Unitary EU patents, the transitional provisions will also give the possibility for the applicant to Opt-Out of the Unified Patent Court upon payment of a fee (to be announced). This means that offensive actions against the granted patent cannot be brought at the UPC. There will be however no possibility to opt-out of the UPC for a European patent with unitary effect. Once the transitional provisions have passed, actions against infringement or validity will take place at the UPC for member countries taking part in the unitary patent system. At this point the applicant wishing to avoid jurisdiction of the UPC will have to file separate national applications.
Applicants are therefore advised to carefully review their position in view of the strength and size of their portfolio and if in doubt to speak to a Patent Attorney! The exact modality of the Unitary Patent System is still to be agreed on, we will keep our readers updated on this blog post.