The European Unitary Patent and Unified Patent Court (UPC)

Europe is introducing a “Unitary Patent” system which will formally commence on 1 June 2023. The Unitary Patent will be governed by the new Unified Patent Court (UPC) which will have jurisdiction to handle cases of alleged infringement and invalidity.

In simple terms, a Unitary Patent will be a single patent providing monopoly rights in each of the Unitary Patent member states. There are presently 17 member states. This includes Belgium, Bulgaria, Denmark, Estonia, France, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Austria, Portugal, Slovenia, Finland, Sweden and Germany.

In addition to the initial 17 Unitary Patent member states, a further 7 states are in the process of joining. (Cyprus, Czech Republic, Greece, Hungary, Ireland, Romania, Slovakia)

What are the implications for you?

Advantages

A Unitary Patent owner will be able to commence centralised infringement proceedings against an alleged infringer at a single court (UPC) to obtain a judgement that is enforceable in all Unitary Patent member states. This could avoid the need to bring separate cases at multiple national courts.

Cost savings

There will likely be cost savings owing to the centralised renewal fees (depending on the number of European countries where protection is desired), rather than the historic system which requires the payment of individual renewals to each local Patent Office where the European patent is validated. In addition, the validation stage will not be required in unitary patent countries, which may yield further cost savings.

Disadvantages

A Unitary Patent will be vulnerable to centralised revocation attack, meaning that if a third party successfully challenges your Unitary Patent, it could be revoked across all member states of the Unitary Patent. In contrast, at present revocation must be pursued against each national patent separately. In practice, this normally results in an interested third party only attacking in the country (or countries) of specific concern to them, for example based on where they wish to commercialise a competing product. In practice, this means that revocation of the patent would normally only occur in a single country (or a small number of countries) if the validity of the patent was successfully challenged.

 Uncertainty

There is no established case law, and due to the system being completely new and untested, there is likely to be a lot of uncertainly surrounding procedures, costs and times in the short to medium term.

What do you need to do?

Owners of European patents/applications need to decide whether to “opt-out” their European patents/applications from the UPC’s jurisdiction, meaning that they would continue under the current system of having stand-alone patents granted in each European country.

An “opt-out” is a declaration that is filed on behalf of the patent applicant stating that they do not want their European patent/application to be under the jurisdiction of the UPC.

By default all European patents granted by the EPO, and having effect in some or all of the Unitary Patent States, will be subject to the jurisdiction of the UPC.

Should you opt-out?

The most relevant consideration is the risk of full revocation of the patent in all member states of the unitary Patent. Owing to the uncertainly of the new system, and factoring in the risk of full revocation in all member states, it is our initial recommendation that clients should opt-out, at least until the system has been operational for some time, and any teething problems have been resolved.

Opting out requires the submission of a declaration and there will be costs incurred to do so, which may vary depending on factors such as the portfolio size. Please contact us if you would like us to obtain a cost estimate in respect of your European patents.

Opt-out declarations should be submitted before 1 June 2023. We recommend providing any instructions to do so as soon as practical to avoid inevitable bottlenecks in the lead up to that date.

In the absence of your instructions, we will not take any action, and we will not “opt-out” meaning that any pending European applications and granted European patents will become part of the Unitary Patent system.

Whilst we generally recommend opting out, the decision to do so may be case specific. If you would like to discuss how the unitary patent may affect your European patents or patent applications, please contact us.

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