After decades of controversial discussion, European patents with unitary effect can be applied for and infringement as well as nullity actions filed with the Unified Patent Court, the UPC, from June 1, 2023. WR informs you in detail about the development of the UPC's jurisprudence and provides answers to your questions.
The linked presentation shows the coming European "Unitary Patent System" in its legal basis, structures and impact on the enforcement of patents in Europe. In addition to discussing the advantages and disadvantages of the new court system, special attention is paid to the regulation and practical handling of “opt-outs”. An “opt-out” can already ensure during the "sunrise period” that classic European patents do not (also) fall under the jurisdiction of the new Unified Patent Court. Strategic considerations also included in the presentation show decision factors that are relevant for a decision for or against an “opt-out”.
This section provides the most important legal regulations, agreements and rules being relevant for enacting, implementing and executing the new Unitary Patent System. Some of the provisions are not finally agreed and are still in draft version.
The Unitary Patent (UP) is, formally speaking, a “European Patent with unitary effect”. It is not a new type of patent, but rather an advanced stage of the “classic” European Patent (EP). The application phase and the grant procedure are the same as for the EP. All administrative tasks are operated by the European Patent Office as well. Once an EP is granted, the holder may choose to request for unitary effect resulting in a UP. If the holder does not request a unitary effect, the EP validated in the countries of choice will become the classic bundle of national rights.
The Unitary Patent framework is the result of an enhanced cooperation between a great number of European Union (EU) Member States. It is expected that at least 17 EU Member States will take part right from the beginning: Austria, Belgium, Bulgaria, Czech Republic, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxemburg, Malta, the Netherlands, Portugal and Sweden. A further seven EU Member States have signed, but not yet implemented the Agreement in accordance with their respective constitutional requirements. A maximum coverage of all (currently 27) EU Member States can theoretically be reached. However, Croatia, Poland and Spain have not signed the Agreement and are not expected to do so soon.
The Unified Patent Court (UPC) is a new pan-European court set up with the overall aim to de-fragment and unify the European patent system. The UPC has been established through the Unitary Patent framework as well. It comprises a decentralized Court of First Instance with local, regional and central divisions located in certain EU Member States, and a centralized Court of Appeal. The UPC will have exclusive jurisdiction over infringement and validity of both classic European Patents and new Unitary Patents, as well as Supplementary Protection Certificates (SPCs). The territorial jurisdiction has yet to find its limits, since the wording of the respective statutes is not entirely clear. Therefore, the UPC may find itself competent e.g. even for a decision on an infringement of a classic European Patent in Switzerland or Spain.
There are no changes in the application phase. The application is to be filed for a European patent at the European Patent Office and is handled in accordance with the European Patent Convention until the patent is granted.
After the grant of a European Patent, a request for obtaining the unitary effect may be filed within one month from the publication of the mention of the grant in the European Patent Bulletin. This single request effects protection in all of the respective Member States, without the need to further validate the patent. The geographical coverage of a Unitary Patent is limited to those EU Member States that are part of the enhanced cooperation at the time of the request for unitary effect. This means that once a Unitary Patent is registered, its geographic reach will not be extended to those EU Member States that ratify the Agreement later.
A Unitary Patent (UP) as an object of property shall be treated as a national patent of the participating Member State in which the applicant had its (principal) place of business on the date of filing. If there is more than one applicant, this consideration shall apply to the applicants in order of their indication. If no applicant had a place of business or residence in a in a participating Member State, the UP as an object of property is treated according to German law. This rule has a significant effect on the relationship between co-owners: French law allows licensing without the consent of the other co-owners, and German jurisprudence doesn’t. In turn, German law allows a co-owner to assign its rights to a third party without the consent of the other co-owners, whereas French and Belgian law provides for a notification of the other co-owners (which have a pre-emptive right in this regard).
The applicant for a European Patent may choose to not request unitary protection at all and to validate all desired individual European Patent Convention member states (EU members and/or EU non-members) as known from the “classic” validation-based European Patent. Further, an applicant can, in addition to requesting unitary protection, decide to have the patent validated as a “classic” European Patent in all non-participating states, namely (a) in all EU Member States which have not ratified the related regulations and/or (b) in all non-EU-Member-States which cannot participate the Unitary Patent system.
The request for unitary protection does not trigger any fees. Once a Unitary Patent is granted, the proprietor will have to pay annual renewal fees. Those fees have been determined to correspond to the validation of a classic European Patent in four common European Patent Convention and EU Member states. For example: the renewal fee for the 5th year amounts to EUR 315, for the 10th year it is EUR 1,175, for the 15th year it is EUR 2,830, and for the 20th year it is EUR 4,855. Further, translation costs are reduced since translation into only one further language is required.
The Unified Patent Court consists of a decentralized Court of First Instance with local, regional and central divisions located in certain EU Member States, and a centralized Court of Appeal. Local divisions will be established in many Member States to the Agreement. Germany, for example, will set up four local divisions, located in Munich, Duesseldorf, Mannheim and Hamburg. A nordic-baltic regional division will be established in Stockholm. The seat of the central division will be in Paris, with a section located in Munich. The Court of Appeal will have its seat in Luxembourg.
The Unified Patent Court (UPC) has exclusive competence to handle litigation and revocation cases on matters relating to European patents with unitary effect, validated national patents based on a classic European patent and supplementary protection certificates. The competence includes patent infringement cases, actions for declaration of non-infringement, actions for provisional and protective measures and actions (as well as counterclaims) for revocation. For a transitional period of seven (possibly 14) years, national courts are granted an alternative competence for those matters. The UPC has no competence with regard to “true” national patents, i.e. patents not validated based on a European Patent but directly filed with the respective national offices.
The choice between alternatively competent local divisions of the Unified Patent Court (UPC) lies with the claimant. In the first place, the competence is determined by the type of action. Any stand-alone revocation action or declaratory action for non-infringement will be heard by the central division of the UPC. Infringement actions may be submitted before any local/regional division at the place(s) of infringement. Thus, infringing acts comprising an offer over the Internet will trigger certain forum shopping possibilities. Further, an infringement action initiated after the filing of a revocation action in front of the central division of the UPC will rule out the earlier competence, the case will be joined and heard by the local/regional division chosen as forum for the infringement action by the patent holder.
If an infringement action is brought before a local or regional division and a counterclaim for invalidity of the patent is filed, this division may (a) proceed both the infringement action and the counterclaim for invalidity together, or may (b) alternatively refer the counterclaim for invalidity for decision to the central division (and will possibly suspend the infringement action until a decision on validity is secured), or may (c) refer both claims to the central division (if the parties consent). The general perception is that the courts will proceed according to option (a) for most cases.
The legally competent judges of the Unified Patent Court (UPC) will be nominated out of a pool of experienced national judges in patent matters. When deciding on revocation actions or respective counterclaims targeting validity, all first instance divisions of the UPC comprise or will be complemented by a technically qualified judge. The technically qualified judges belong to a multinational pool of experienced individuals appointed for a specific field of technology. Prerequisites are a university degree and proven expertise in a field of technology as well as proven knowledge of civil law and procedure relevant to patent litigation. The UPC Court of Appeal is staffed with three legally qualified judges and two technically qualified judges.
During a transitional period of seven years after the Unified Patent system enters into force (i.e. presumably starting by the end of 2022 or in the beginning of 2023), the nationally validated classic European Patents and corresponding Supplementary Protection Certificats may be litigated alternatively in front of the Unified Patent Court (UPC) or in front of national courts. During this transitional period, a patent may also be opted-out from the jurisdiction of the UPC, unless an action has already been brought before it. Upon user consultation, the transitional period may be prolonged by another seven years by decision of the Administrative Committee of the UPC.
The language of the Court of First Instance will be (one of) the official language(s) of the EU-Member State(s) hosting a local division or sharing a regional division. The language of proceedings before the central division is the language in which the patent was granted. The Member States hosting a division of the Court of First Instance may additionally designate one or more languages of the European Patent Office. It is therefore expected that several local divisions will be able to offer proceedings in English. The language of proceedings before the Court of Appeal is the language of proceedings before the Court of First Instance.
The following provisional measures (preliminary decisions of summary proceedings) may be ordered by the Unified Patent Court:
The enforcement of such measures may be subject to the provision of security for potential damages suffered by an alleged infringer.
In case of risk of irreparable harm caused to the patent proprietor or risk of evidence being destroyed, the Unified Patent Court may grant, at its own discretion, provisional and protective measures without hearing the defendant. The same applies if evidence is to be preserved or premises are to be inspected.
The grant of a permanent injunction is up to the discretion of the court. Since the national law of most of the participating EU-Member States provides for injunctive relief as a general rule, we expect the Unified Patent Court to apply the injunction order more often than to refuse a respective request.
From the day the Unitary Patent framework enters into force, “classic” European Patents will be subject to the jurisdiction of the Unified Patent Court (UPC). For the duration of a transitional period of seven years, national courts remain alternatively competent to hear cases related to “classic” European Patents. The court system and the venue lies within the choice of the party initiating a court action. The proprietor of a “classic” European Patent may therefore be faced with, for example, a nullity challenge before the central division of the UPC. However, during a transitional period of seven (possibly 14) years, “classic” European Patents may be opted-out from the competence of the UPC. In consequence of an opt-out, only the national courts remain competent to hear cases related to the respective “classic” European Patents. An opt-out will prevent the jurisdiction of the UPC for the whole lifetime of the “classic” European Patent. Once the opt-out is registered, it takes effect for the entire European Patent “bundle”, i.e. for all designated Member States in which this patent has been validated. Please note: the new Unitary Patent is not eligible for an opt-out.
The opt-out may not only be requested after the Unitary Patent framework enters into force (i.e. during the transitional period of seven years after the start), but also during a “sunrise-period”, which begins about three months before the Unitary Patent framework enters into force. An opt-out request duly filed during the “sunrise period” will be effective on the day the Unitary Patent framework enters into force. In consequence, the targeted patent can neither be enforced nor attacked with a revocation action in front of the Unified Patent Court (UPC). An opt-out request duly filed after the entry into force of the Unitary Patent will only be effective if the patent concerned has not been subject to proceedings before the UPC.
A valid request for opt-out can be submitted only by the true legal owner(s) of the classic European patent. It is not decisive who is entered in the European patent register as the “Applicant”. Further, co-owners of European patents or separate owners of national parts of a European patent are required to act unanimously. The request for opt-out will not be examined on legal validity by the registry of the Unified Patent Court (who is the competent entity for recording opt-outs). Any formal deficiency may lead to objections in court proceedings that may not be overcome at this stage anymore.
The opt-out request may be filed as soon as a patent application is published. Opt-out may be requested during the full economic life circle of a patent. Therefore, it is also possible to request an opt-out regarding expired patents (possibly useful to prevent a centralized revocation action in order to avoid damage claims for past infringements).
No. There is no possibility to opt-out a European patent with unitary effect.
The Unitary patent framework provides for a “withdrawal from the opt-out”. This means that the patent proprietor may, at any time during the lifetime of a “classic” European patent, reverse the opt-out and reactivate the competence of the Unitary Patent Court. However, such withdrawal from the opt-out is only possible if the patent concerned has not been subject to proceedings before a national court. The withdrawal from the opt-out waives the right to make use of the exception again for the specific patent.