Unitary Patent

On 1 June 2023, the regulations of the Unitary Patent System entered into force and the Unified Patent Court commenced its operation.

What does this mean?

Unitary Patent

In contrast to the current system in which, following a centralized grant procedure, a granted European Patent automatically converts into a bundle of individual national patents upon validation in each country of interest, the new system offers the possibility of uniform validation, i.e. the protection afforded by a European Unitary Patent will extend to all of the 17 member states of the European Union participating in the new system (“participating member states”).

Thus, although there will be no change in the grant procedure, it will be possible to gain patent protection in all 17 of these states without the need to validate the granted patent in each state individually. Such a patent is referred to as “patent with unitary effect” or “Unitary Patent”.

The Unitary Patent offers simultaneous protection in each of the participating member states. These are currently the following countries:

Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovenia, and Sweden.

More states such as Cyprus, Czech Republic, Greece, Hungary, Ireland, Romania, and Slovakia are expected to join in the near future.

The Unitary Patent System offers a centralized procedure in protecting and defending patents across the European Union. Under the new system, one single court, the Unified Patent Court, will be responsible for both infringement and nullity proceedings concerning Unitary Patents. Verdicts of the Unified Patent Court will be enforceable in all participating member states in which the respective patent is in force. This applies to both infringement and nullity actions, i.e. the Unitary Patent can be enforced in a centralized manner, but also revoked.

The procedure leading to the grant of a Unitary Patent will continue to be conducted by the European Patent Office. Thus, there will be no change to the current examination procedure, including the examination of formal requirements upon filing, substantive examination and grant. The possibility of opposition and appeal proceedings before the EPO will also remain unchanged

Following the grant of the patent, the patent proprietor will have the choice of either individually validating the patent in selected countries (i.e. validating the patent via the current route as a “classical” EP-patent) or validation as a Unitary Patent by filing a request for unitary effect, thus gaining protection in all participating member states. Should validation as a Unitary Patent be chosen, payment of only a single annuity for all participating member states will be required and the Unitary Patent will be subject to the exclusive jurisdiction of the Unified Patent Court.

Even where protection via a Unitary Patent is chosen, in order to obtain patent protection in those EPC contracting states that are not (yet) participating members of the new Unitary Patent System, it will remain possible to additionally validate the patent in these states via the classical validation (i.e. national) route.

Advantages

  • Simplified enforceability of the patent across multiple European countries, since an infringement case is brought before the Unified Patent Court as the central authority and the judgment is valid for all participating member states
  • Potential lower renewal fees if protection is desired in many countries
  • Potential lower costs for validation if protection is desired in many countries
  • Administrative matters, such as the registration of a transfer, are greatly simplified

Disadvantages

  • The validity of the Unitary Patent can be challenged centrally, and the patent thus potentially declared invalid in all countries through a single decision of the Unified Patent Court.
  • The successive “dropping” of countries by non-payment of renewal fees is no longer possible. The Unitary Patent can only be maintained or abandoned as a whole.
  • An enhanced cost risk for the proprietor is associated with a central invalidity attack before the UPC relative to that involved in an invalidity action in an individual contracting state, even in the case that the attacked patent is immediately surrendered upon being informed of the invalidity suit.

Opt-in or Opt-out?

The jurisdiction of the Unified Patent Court will not be limited to only Unitary Patents but will also apply to both classical European patents which are granted after the Unitary Patent System has entered into force as well as previously granted (classical) European patents to the extent that they remain in force in one or more participating member states of the Unitary Patent System. As soon as the Unitary Patent System comes into force, it will automatically apply to all granted European patents, i.e., in addition to the various national courts, also the Unified Patent Court will have jurisdiction over infringement and nullity actions concerning granted classical European patents. This will have the advantage for patent proprietors that a potential infringement in more than one country can be dealt with in a single, centralized procedure. However, it will also carry the simultaneous risk that the patent may be declared invalid for all countries through a single invalidity action. In parallel, bringing infringement and invalidity actions before the national courts will remain possible.

The Unitary Patent System will have no effect on patents already granted in terms of territorial extension and the payment of annuities. Even though the patent can be centrally enforced in all countries in which it is in force, the protection provided will not extend to any additional countries. For example, a patent that is in force in Germany and France at the start of the new system, will retain its effect for those countries. However, a verdict obtained through a single decision of the Unified Patent Court in respect of said patent, e.g. in infringement proceedings, could be enforced in both countries.

In order to avoid the Unified Patent Court having jurisdiction over classical European patents (irrespective of whether granted prior or subsequent to the start of the Unitary Patent System), the patent proprietor has the option during an initial transitional period of 7 years (potentially extendible to 14 years) following the commencement of the Unitary Patent System to file a request to opt a patent out of the new system. Once registered, an “opt-out” will normally remain in force for the entire life-time of a European patent, i.e. irrespective of whether the transitional period subsequently expires during the patent term, unless the proprietor actively decides to participate in the new system by opting their patent back in (“opt-in”). Should, for instance, the patent proprietor subsequently wish to enforce their patent in centralized proceedings before the Unified Patent Court, the opt-out request may be withdrawn at any time as long as no proceedings are pending before the national courts.

Unitary Patent or classical EP-patent?

When deciding which validation system to choose, the “classical” system with its national validations or the “new” system with is unitary validation, a number of factors may be of relevance.

Costs

From a financial perspective, the Unitary Patent is especially attractive if protection is sought in many countries for a long period of time. Therefore, if it is desired that the patent provide protection in more than 4 or 5 of the participating member states, the Unitary Patent may be an attractive option in terms of validation and maintenance costs. In order to provide you with an idea of the expected costs associated with the validation and maintenance of a Unitary Patent compared to the costs for individual “classical” validation, we draw your attention to our COST CALCULATOR which you will find on our homepage.

Licences

A patent may be declared invalid by the UPC for all countries in a single procedure. As such, if any licences to the patented invention have been granted, selecting a classical EP-patent and opting it out of the Unitary Patent System may be advisable such to avoid the risk of losing the patent in a centralized attack.

Enforceability

If potential infringers exist in more than one country, the Unitary Patent may be an attractive option.

Strength and importance of the patent

For important patents, such as

  • basic patents with a long lifetime,
  • patents covering products which are available across all of Europe,
  • patents which cover products which contribute significantly to the turnover of the company,
  • patents which cover products which have a high profit margin,
  • patents which cover important products and bear a high risk of being attacked in a nullity proceeding,
  • patents with questionable or low validity,

opting such patents out of the Unitary Patent System may prove most prudent in order to protect pivotal IP rights from being declared invalid for all participating states through a single invalidity action.

Patents which have already successfully survived opposition or appeal proceedings before the EPO will probably be less likely to be successfully challenged again, although it should also be stressed that the approaches and practices adopted by the Unified Patent Court will only become known (and thus more easily predictable) once a body of corresponding case law has been established.

Further Rights

Under the new system, it will be possible to hold parallel IP rights in some of the participating member states. In these countries, a parallel national patent may exist in addition to the Unitary Patent. For these countries, which include Germany, an individually adapted application strategy might therefore be considered in order to obtain the best possible protection.

Preparatory Measures

The start of the new system will be preceded by a so-called “sunrise period”. During this period it will be possible for applicants/proprietors who do not wish their application/patent to fall under the jurisdiction of the UPC to file a request to opt their application/patent out of the new system ( a so-called “opt-out request”). Also during this period, transitional measures introduced by the European Patent Office (EPO) will become available to support applicants wishing to obtain a Unitary Patent as early as possible once the new system is in force. This sunrise period is anticipated to commence on 01 January 2023.

In anticipation of the start of the Unitary Patent System, some preparatory steps should be taken:

Opt-out or not?

The choice of whether to opt existing patents out or not mainly depends on the importance of the respective patent and the products that it protects. In order to decide for which patents opting out is advisable, the patent portfolio should be reviewed.

The following points should, in particular, be considered:

  • if there is more than one proprietor, an opt-out can only be requested collectively, so agreement needs to be sought beforehand
  • the patent should be properly assigned to its proprietor and it ensured that the correct current proprietor is recorded in the respective patent registers such to avoid any problems when opting out

When deciding whether to opt-out, it should also be noted that patents which have been opted out may later be opted “back” in as long as no proceedings are pending before one of the national courts.

Special Services of the European Patent Office

The European Patent Office (EPO) will offer two special transitional measures to support users seeking to gain unitary protection as soon as the new system enters into force. These measures will be available once the sunrise period (see above) begins.

  • Early request for unitary effect.
    The first transitional measure will enable applicants to already file early requests for unitary effect before the start of the Unitary Patent System. This will allow the EPO to register unitary effect immediately upon commencement of the new system, provided that all corresponding requirements are met. Early requests for unitary effect may be filed for European patent applications in respect of which the European Patent Office has communicated its intention to grant a patent, i.e. for which a communication under Rule 71(3) EPC has been issued.
  • Request for a delay in issuing the decision to grant patent
    The second transitional measure will provide the possibility for applicants to request a delay in the issuance by the EPO of the decision to grant a European patent. This possibility will be available for applications in respect of which the Communication under Rule 71(3) EPC has been issued but for which the text intended for grant has not yet been approved. This will allow a patent that would otherwise have been granted before the start of the new system (and thus would have missed the opportunity to be validated as a Unitary Patent) to have its grant delayed so that it will then become eligible to be validated as a Unitary Patent when the new system enters into force.

 

If it is already known that the new Unitary Patent System is of interest for a pending patent application for which a Communication under Rule 71(3) EPC has been issued, this should already be noted now in order to ensure that one of the transitional measures offered by the EPO is used, if required.