The new Unitary Patent system and its enforcement system, the Unified Patent Court (UPC), commenced in Europe on 1 June 2023.
This insight provides guidance regarding the Unitary Patent and the Unified Patent Court, the decisions that will need to be made in respect of European patent applications and European patents, and the advantages and disadvantages of the Unitary Patent and the Unified Patent Court.
Overview
Once a European patent is granted, it is necessary to validate the patent in each European country in which the applicant wishes that patent to take effect, which in many countries involves the filing of a translation into a relevant language, and then paying annual renewal fees in each of those countries in order to maintain the European patent in force.
The Unitary Patent system now provides a new option to bring a European patent into force in all participating EU countries (17 countries at commencement), with a single form, a single translation into another EU language and no official fee. A single annual renewal fee is then payable for those countries. It will still be possible, however, to use the existing validation and renewals system to bring the European patent into force in all EPC member states individually, i.e. as a bundle of individual and severable national rights, either instead of the Unitary Patent or in addition to it.
The Unified Patent Court is a new court that has exclusive jurisdiction for disputes regarding the infringement and validity of Unitary Patents. The Unified Patent Court also has jurisdiction over all existing European patents (in the 17 participating EU member states) and over all future granted European patents that are validated through pre-existing validation procedures, unless these patents are formally opted out of the Unified Patent Court. The Unified Patent Court will not, however, have any jurisdiction in countries not participating in the Unitary Patent system, such as the United Kingdom.
Participating countries
The Unitary Patent system and the Unified Patent Court currently cover 17 EU countries.
Other EU Member States may join the Unitary Patent system in the future, but the territorial scope of a Unitary Patent will not change after validation.
Spain, Poland, and Croatia have each indicated that they will not join the Unitary Patent system. Similarly, Unitary Patents will not take effect in non-EU contracting states of the EPC, such as the UK and Switzerland.
A summary of the countries that are included in the Unitary Patent system, the countries expected to join the Unitary Patent system in the future, and the countries outside the Unitary Patent system or not expected to join, is set out in the table below.
Unitary Patent
The commencement of the Unitary Patent system does not change the European patent application procedure up to grant. However, once a European patent has been granted, there is a new option to request a Unitary Patent which, if requested, will bring the European patent into force in all participating EU countries (17 countries at commencement) with unitary effect. It is still possible, however, to use the existing validation system to bring the European patent into force in EPC member states individually, i.e. as a bundle of individual and severable national rights.
In order to utilise the Unitary Patent, the proprietor (not a licensee) or the proprietor’s representative must file a formal request for a Unitary Patent in writing. In addition, for the first six years of the Unitary Patent system, at least, it will be a requirement to submit a full translation of the patent specification into one other EU language. The request and the translation must be filed within 1 month of the date of grant of the European patent (the deadline for conventional validation is 3 months from grant). The filing of the request and the translation will create a Unitary Patent – a single patent with unitary effect across all 17 participating EU countries.
The cost of validating in the countries covered by the Unitary Patent will therefore be dependent on the cost of the translation, but it will be significantly less expensive than validating in all 17 participating countries separately. The Unitary Patent will be renewed with a single annual fee, which is approximately equivalent to the current cost of renewing a European patent in Germany, France, the Netherlands and Italy.
Countries not participating in the Unitary Patent at the time of grant (currently the countries in the second and third columns in the table above) will continue to be covered using the existing validation process and will continue to be renewed separately.
The options for validation following grant of a European patent will therefore be conventional validation in individual countries only (including countries participating in the Unitary Patent system), a request for a Unitary Patent only, or a mix of both, e.g. a request for a Unitary Patent and conventional validation in individual countries not covered by the Unitary Patent.
Unitary Patent Court
The Unified Patent Court is a new court that has exclusive jurisdiction for disputes regarding the infringement and validity of Unitary Patents. In addition, the Unified Patent Court has jurisdiction to assess infringement and validity with respect to nationally validated European patents rights in all EU Member States that have ratified the UPC Agreement, initially alongside the relevant national courts and eventually with sole jurisdiction.
The Unified Patent Court therefore enables centralised enforcement for the participating EU countries, which is an advantage. However, it also enables the filing of centralised revocation actions against European patents for those countries.
European patents validated in one or more countries participating in the Unitary Patent system will fall under the jurisdiction of the Unified Patent Court for those countries. However, for a transitional period of seven years, it will be possible to ‘opt out’ of the jurisdiction of the Unified Patent Court, which would prevent centralised revocation actions being filed against your European patents for the countries participating in the Unitary Patent system. This opt-out is reversable, for example if you wish to make use of the Unified Patent Court for enforcement purposes, provided that no proceedings have been initiated before any national court(s).
It is important to note that obtaining a Unitary Patent would mean that you are not able to opt out of the jurisdiction of the Unified Patent Court, which may influence your decision regarding whether to make use of the Unitary Patent system.
The most significant disadvantage of a European patent being under the jurisdiction of the Unified Patent Court is the risk of having the European patent revoked simultaneously in each of the 17 participating countries following a central decision in the Unified Patent Court, which is a court that has not yet been tested.
In contrast, conventionally validated European patents are litigated in each national court of the EPC validated states, resulting in inter-state differences in validity/ enforcement/ revocation. This means out of court settlements, based on a decision in a first state to conclude litigation, are possible.
Practical considerations
Set out later in this guidance note are advantages and disadvantages of the Unitary Patent system, which will influence your decision regarding whether or not to request a Unitary Patent. It is possible that you may wish to request a Unitary Patent for some patents, but not others. You will need to decide whether you wish to request a Unitary Patent for each European patent that you obtain.
Furthermore, since a request for a Unitary Patent requires a translation into an EU language, it is possible that validating a European patent in a non-participating country, such as Spain, will provide the required translation at no additional cost. Hence, if you are interested in requesting a Unitary Patent for a particular European patent application, we will need to know the nonparticipating countries in which you wish to validate the European patent, using conventional validation, in order to devise an appropriate strategy.
Since a request for a Unitary Patent must be filed within 1 month of the date of grant of the European patent, and a translation of the specification needs to be obtained, we will be requesting your instructions regarding whether to request a Unitary Patent when reporting allowance. If you do wish to request a Unitary Patent, we will also be requesting instructions regarding the nonparticipating countries in which you wish to validate the European patent, using conventional validation, in order to devise an appropriate strategy in good time before the deadline.
Examples of possible validation strategies
1. Validation required in the UK, Spain, France, Germany, can be via:
- validating all individually via the conventional route; or
- UK and Spain validated individually via the conventional route and France and Germany (and the other 15 Member States of the Unitary Patent system) validated via the unitary route.
In this example, a translation of the patent specification will be required to validate the European patent in Spain and this translation can then be used as the translation into an EU language that is required for the Unitary Patent. The cost of the Unitary Patent in this example is therefore the cost of filing the written request only.
The cost of using the Unitary Patent for France and Germany, alongside conventional validation for the UK and Spain, would therefore be approximately the same as if conventional validation were used for all four countries, with the benefit that protection is obtained in 15 additional countries. However, the renewal fee for the Unitary Patent will be more expensive than renewing conventional validations in France and Germany, although considerably less than the renewal fees would be for the 17 countries covered by the Unitary Patent.
2. Validation in the UK, France, Germany, Belgium can be via:
- validating all individually via the conventional route; or
- UK individually via the conventional route and France, Germany and Belgium (and the other 14 Member States of the Unitary Patent system) via the unitary route.
In this example, since no translation is required for any of these countries when using conventional validation, an additional translation of the patent specification will be required for the Unitary Patent. The cost of the Unitary Patent in this example is therefore the cost of filing the written request and the cost of the translation, e.g. into German, French or another EU language.
The cost of using the Unitary Patent for France, Germany and Belgium, alongside conventional validation for the UK, would therefore be more expensive (by the cost of a full translation) than if conventional validation were used for all four countries, but with the benefit that protection is obtained in 14 additional countries.
3. Validation required in the UK, France, Germany, Switzerland, Italy, Austria, Belgium can be via:
- validating all individually via the conventional route; or
- UK and Switzerland validated individually via the conventional route and France, Germany, Italy, Austria, and Belgium (and the other 12 Member States of the Unitary Patent system) validated via the unitary route.
In this example, since no translation is required for the UK or Switzerland when using conventional validation, a translation of the patent specification will be required for the Unitary Patent. The cost of the Unitary Patent in this example is therefore the cost of filing the written request and the cost of the translation, e.g. into German, French or another EU language. Since translations into Italian and German would have been required for Italy and Austria when using conventional validation, the translation costs for the Unitary Patent in this example are less than using conventional validation.
The cost of using the Unitary Patent for France, Germany, Italy, Austria and Belgium, alongside conventional validation for the UK and Switzerland, would be less than if conventional validation were used for all five countries, with the additional benefit that protection is obtained in 12 additional countries. Furthermore, the renewal fee for the Unitary Patent would be less expensive than renewing conventional validations in France, Germany, Italy, Austria and Belgium, and considerably less than the renewal fees would be for the 17 countries covered by the Unitary Patent.
The biggest advantage of the Unitary Patent system is reduced cost for validating in a significant number of participating EU countries, but the actual cost savings will be dependent on the particular countries required. There are also other considerations, including not being able to opt out of the jurisdiction of the UPC and other potential disadvantages.
Advantages of Unitary Patents
Validation costs
The overall cost of validating a European patent with unitary effect is much cheaper than using the conventional route, if validation is required in a significant proportion of the 17 EU Member States that have ratified the UPC Agreement. This is because only one full specification translation is required, at least during an initial 6-year transitional period, with the intention that this requirement will be removed as machine generated translation accuracy improves. This single translation has no legal effect and is for information only.
In contrast, when validating a granted European patent using the “conventional route”, translation costs are incurred and validation fees are payable based on the national law of each contracting state where protection is required.
Thus, one of the most significant advantages of a Unitary Patent is the reduced validation costs if validation is required in a significant proportion of the 17 EU Member States that have ratified the UPC Agreement.
Although, if less than 4 participating countries are required, the validation costs are likely to be greater than if conventional validation were used (but with the additional benefit that protection is also obtained in the other participating countries).
Renewal fee costs
European patents validated with unitary effect attract only a single annual renewal fee, payable to the EPO. This fee has been calculated to be equivalent to renewing the patent in approximately four European countries using the conventional route. Therefore, if protection is required in more than four of the 17 Unitary Patent contracting states, a considerable cost saving may be obtained by using the Unitary system.
In contrast, European patents validated conventionally have multiple annual renewal fees, payable to the national patent offices of each contracting state.
Thus, another significant advantage of a Unitary Patent is the reduced renewal costs.
Although, if protection is required in four or fewer contracting states, a Unitary Patent may fail to achieve any renewal cost benefits.
Recordal of assignments and licences
European patents validated with unitary effect have an assignment/ licence recorded centrally at the EPO, resulting in a significant cost saving.
European patents validated conventionally have an assignment/ licence recorded at each of the national patent offices of the validated states (unless said assignments/ licences were recorded at the EPO prior to grant of the patent.
Translation errors
Unitary patents will be enforced based on the patent as granted by the EPO, rather than on a translation of the patent. This means Unitary Patents will have an identical scope of protection across all states party to the Unitary Patent system.
Conventionally validated patents may be enforced using the translated document which can lead to variations between countries in validity/ enforcement, especially if the translation includes any errors.
Disadvantages of Unitary Patents
Risk of central revocation
The most significant disadvantage of validating a European patent with unitary effect is the risk of having the Unitary Patent revoked simultaneously in each of the 17 participating countries following a central decision in a so far untested Unified Patent Court.
In contrast, conventionally validated European patents are litigated in each national court of the validated states, resulting in differences between countries in validity/ enforcement/ revocation. This means out of court settlements, based on a decision in a first country to conclude litigation, are common.
Abandonment
European patents with unitary effect can only be abandoned entirely for all the 17 Unitary Patent contracting states.
In contrast, conventionally validated European patents can be abandoned in one country regardless of any other and this practice is usually undertaken in states of lower commercial interest to curtail renewal fees, which increase towards the end of the patent term.
Assignments and licences
European patents validated with unitary effect can only be assigned as a whole. Nevertheless, it will be possible to licence the Unitary Patent in some countries independently of the others.
In contrast, European patents conventionally validated can be assigned or licenced in each country independently of the other country in which the European patent has been validated.
Validity
European patents validated with unitary effect are valid across all 17 of the participating countries, and if found invalid in any one of these countries, will be revoked in all.
In contrast, European patents validated conventionally are judged individually in each national court in each validated state and so that national court could apply national law and revoke the European patent insofar as it applied to that country. The European patent would continue to be valid in the countries in which it had been validated.
Additional points to consider
Lack of clarity concerning Supplementary Protection Certificates
It is unclear whether it will be possible to obtain a Supplementary Protection Certificate (SPC) on a Unitary Patent. This omission may therefore be a significant reason to validate conventionally for pharma products. However, the European Commission is investigating creating a unitary SPC, which can be obtained in those countries participating in the Unitary Patent system when a European patent is validated with unitary effect.
Unitary Patents as property rights
European patents validated conventionally are subject to the national property law of the state in which the patent has been validated.
Where the national property law of a country participating in the Unitary Patent system is to be applied to the Unitary Patent, the nationality or place of business of the first named applicant/ proprietor will determine which country’s national law is to be applied. Thus, careful consideration needs to be given to the naming of a first applicant where there are a number of applicants.
Unified Patent Court – opt out
It is possible during a transitional period of seven years (which may be extended a further seven years) to request that European patents or European patent applications are opted out of the jurisdiction of the Unified Patent Court. However, it is not possible to opt out Unitary Patents from the Unified Patent Court, which assumes exclusive jurisdiction in relation to the litigation matters for all countries that have ratified the Unified Patent Court Agreement.
Filing an opt-out for an existing European patent means that you will be able to litigate in the national courts of the countries participating in the Unitary Patent system, but not in the Unified Patent Court unless you opt in again.
The concern at this time with the Unified Patent Court is the uncertainty regarding the quality of its decisions and the risk of central revocation, compared to revocation actions having to be brought in separate territories under the jurisdiction of national courts. Since the economic benefits of the Unitary Patent cannot be obtained for existing European patents, and since it is possible to opt back into the jurisdiction of the Unified Patent Court at any time, e.g. before bringing infringement proceedings, there would appear to be no disadvantage to opting out of the jurisdiction of the Unified Patent Court for existing European patents, other than the cost of filing the request.
If you would like to opt out of the jurisdiction of the Unified Patent Court for any existing European patents, please contact us as soon as possible.
