Decisions to be Made Regarding the EU Unitary Patent and Potentially Opting out of the Unified Patent Court

The Administrative Council of the new European Unified Patent Court stated that the target date for the EU Unitary Patent and Unified Patent Court to come into effect will be on April 1, 2023. However, there is still a possibility that this may be delayed if there are problems with the IT systems used by the Court. At the same time, the Council has issued a list of eminent judges from participating EU countries who will staff the new court. If the April 1 date is correct, a sunrise period will open no later than January 1, 2023. A discussion of the Unitary Patent and the Unified Patent Court can be found in the Education Center on our web-site at: https://ladas.com/education-center/eu-unitary-patent-and-patent-court/

During the sunrise period, steps can be taken on currently pending European patent applications to take advantage of the unitary patent and, if desired, to opt out of the jurisdiction of the Unified Patent Court for previously granted European Patents.

These possibilities require decisions to be taken:

1. Whether to file an opt-out from the Court Agreement for previously granted European Patents that will otherwise become subject to the jurisdiction of the new Unified Court; and
2. Whether to request delaying grant of pending European patent applications so that they can be granted as Unitary Patents.

The Unitary Patent Decision

As discussed in Section 2 of the article: https://ladas.com/education-center/eu-unitary-patent-and-patent-court/, once the Unitary Patent Regulation comes into effect, applicants will have the option of (i) continuing to effect national validations of their European Patents as is done currently, or (ii) having a Unitary Patent granted for those EU countries that have implemented the new system at the time the patent is granted with traditional validation for all other EPC member countries of interest. All EU member countries except Croatia, Poland and Spain are ultimately expected to participate in the new system but initially it will apply only to Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovenia and Sweden.

Factors to be considered in deciding whether to request grant of a Unitary Patent include the following:

1. Cost (this has two elements): a) costs at grant, and b) maintenance

At grant, the EPO will make no charge for handling a request that the patent is granted as a Unitary Patent, but there will be a requirement to file a translation of the granted European Patent into one other language (see Section 3 of the article:  https://ladas.com/education-center/eu-unitary-patent-and-patent-court). This is likely to be considerably cheaper than the cost of validation in all of the participating countries, but more than the costs if one is interested in, say, only Belgium, France, Germany, Luxembourg, and Malta.

Annual maintenance fees will be payable for the unitary patent.  These have been set to approximate the total fees payable for the four most popular validation countries based on the number of European patents kept in force in 2016. There have been suggestions since that time it was expected that the United Kingdom would be covered by a Unitary Patent, but now it will not be, and therefore, fees should be reduced. These suggestions have not been adopted.  Nevertheless, if protection is required in a large number of participating countries, the maintenance fee cost is likely to be considerably less than would be the case if individual national validations were made.  Since the patent will be a unitary one, unlike the situation with individual country validations, it will not be possible to maintain a unitary patent in only some countries. It will, however, be possible to reduce maintenance fees by making the patent subject to licenses of right.

2. Since the patent will be a unitary property right, it will not be possible for there to be different owners in different countries, although the grant of licenses    to  different licensees in different countries is possible;

3. The Unitary Patent will be subject to the exclusive jurisdiction of the Unified Patent Court. The issues that this raises are addressed in the next section.

Deciding whether to Opt Out of the Jurisdiction of the Unified Patent Court

 The Unified Patent Court will have jurisdiction over, inter alia, actions for infringement and revocation over all Unitary Patents and the national validations of all past, present and future patents granted by the EPO unless the owner has opted out. Such an opt-out can be registered by the true proprietor, or if there is more than one proprietor, all of the proprietors (even if they are proprietors of validations in different countries), with the Court Registry during the sunrise period and, unless proceedings have already been started in the Unified Court at any time during a transition period that will last for at least seven years.

Factors to be considered on deciding whether to opt out:

1. The Unified Court will be able to grant remedies that are enforceable in all participating EU countries, which is a potential advantage for patent owners who need protection in a substantial number of participating countries, especially where there may be multiple patents covering a single product so that the risk of revocation of one of them may not be as important as in situations where only one or a few key patents cover the product.
2. The ability of the Unified Court to order revocation of any patent under its jurisdiction at any time during the life of the patent makes all patents subject to its jurisdiction and subject to “central attack”, which is a matter of particular concern where only one or a few key patents cover an important product.
3. After the transition period noted above (which could possibly be extended for a further seven years), use of the Unified Court will be the only way to enforce European Patents in participating EU countries and so it is desirable to build up experience in using the new court. On the other hand, many of the judges staffing the new court will come from countries having little experience with patent trials and may take a while to acquire this.
4. The practical effect of some provisions of the Agreement will not be clear until the Court starts operations. Such provisions include: how the court will apply the doctrine of equivalents; the grant of injunctions and how this will be applied^[1]; and whether the Court will strictly follow the EPO’s problem and solution approach to inventive step or whether it will adopt a different approach similar to that used in Germany.
5. The procedures of the new court are front-loaded in favor of detailed written submissions early in the proceedings, which means that they will probably favor the claimant (plaintiff) who will have more time to prepare its case than the respondent (defendant).
6. Unlike proceedings in Germany, the same court will be able to deal with infringement actions and counterclaims of revocation of the patent alleged to be infringed, which could affect the relative speeds at which injunctions are granted in German national courts and the Unified Court.
7. Unlike proceedings in Germany, the Unified Court will have the power to issue saissie orders to obtain evidence similar to, but having some differences from those available in France and Belgium.
8. German law on double patenting(Art II, § 8) permits co-existence of a German national patent and a patent subject to the jurisdiction of the UPC (i.e. a unitary patent or a non-opted out patent) if they were filed on the same day thereby giving a patent owner the possibility of obtaining two patents and having the choice of which to enforce, and consequently which legal system to use.

[1] Both the Unified Court and the national courts in the EU are subject to application of the EU’s Enforcement Directive that introduces the concept of proportionality into decisions on whether to grant injunctions against infringement.  A recent change in German law has noted this but effectively places the burden on the infringer to show why an injunction should not be granted.  The Unified Court may not interpret the EU directive the same way.