Unitary patent and Unified Patent Court

The European Unitary Patent and Unified Patent Court may be close to implementation. Here, we provide a brief summary of the new system and suggestions for preparation steps to be taken now.

What is it?

The Unitary Patentwill be a new European Union (EU) right covering most member states. It will be a unitary right, with a single annual renewal fee. It will be possible to licence a unitary patent to different parties for different states, but assignment will have to be of the patent as a whole.

Applicants wishing to obtain a unitary patent will file their European application, as usual, at the European Patent Office (EPO). At the point of grant, the applicant will have the option to obtain a unitary patent. Therefore, after the new system starts, when a European patent is granted the applicant will be presented with various options:

  • obtain a unitary patent, covering the countries party to the system at the grant date;
  • obtain a unitary patent for those countries, plus validating the European patent in the existing “classical” way, for countries which are not part of the system;
  • do not obtain a unitary patent, but simply validate the European patent in the existing “classical” way, in as many countries as desired.

A unitary patent and a classical validation patent cannot exist for any country concurrently, so if a unitary patent is obtained, classical validation will not be available for the countries covered by the unitary patent.

The Unified Patent Court (UPC) will be a new court which will be the forum for litigation of the new unitary patent. It will also be the default forum for “classical” European patents, i.e., the bundles of national patents derived from a European patent application. This will include existing classical European patents.


How will the system affect existing European patents?

All existing nationally validated classical European patents (and any associated supplementary protection certificates (SPCs)) will automatically fall under the jurisdiction of the new UPC as of the start date of the new court. Any decision by the UPC that a patent is invalid will therefore be effective for all countries which have ratified the UPC Agreement, so it will be possible for a party to “knock out” a patent in multiple countries, using the centralised UPC process.

For a transitional period of 7 years after the system starts (which may in due course be extended to 14 years), a patentee can choose to opt a classical European patent, including an existing one, out of the UPC system for the life of the patent. If the patentee does nothing, their “bundle” of European validations will remain in the UPC system and will be vulnerable to a central invalidity decision. Opting out is an active step, requiring the filing of an opt-out request.

The opt-out will be available for a classical European patent granted for any application filed before the end of the transitional period.

For a patent which is opted out, only national court actions will be possible. If the patent owner wishes to use the UPC to bring an infringement action, with the possibility of relief across multiple countries, the opt-out may be withdrawn. This is possible provided no national court actions have been commenced whilst opted out, either to enforce or to challenge the patent. Once an opt-out has been withdrawn, it is not possible to opt the patent out again.

The opt-out on existing patents can be filed during a three month “sunrise period” after the UPC Agreement has been ratified by sufficient countries, but before the system takes full effect. Filing an opt-out during this period is advisable, rather than waiting for the system to take effect, since it will be possible for third parties to launch a UPC invalidity attack from the very first moments after the system takes effect. Note that any opt-out is only effective once it appears on the register (not from the date it is requested), so any time lag in the update of the register must be taken into consideration.

The UK is leaving the EU – how does this affect involvement with the system?

At the present time, this is unclear. The Regulation creating the unitary patent is EU law, so unitary patents granted while the UK is in the EU will cover the UK. However, whether they will continue to cover the UK after Brexit is unknown. Until there is some clarity, for applicants to whom patent protection in the UK is important, the unitary patent should not be used. Instead, continuing to use the classical validation route at the point of grant is advisable.

It is also unknown whether the UK will continue to be part of the Unified Patent Court. The UPC is not an EU institution, but an international court established and organised between the signatory countries. Therefore, continued involvement of the UK in the UPC is more foreseeable.

Actions to take now

  • Review your existing portfolio of classical European patents and decide whether they should be opted out

Ideally, opt-outs for existing patents should be filed during the “sunrise period”, before the UPC start date. Otherwise, as mentioned above, it would be possible for a party to start a central invalidity challenge at the UPC, before the patent has been opted out. Once a UPC action has begun, the opt-out is no longer available.

The best way to maintain the status quo, as well as preserving a range of litigation options for the future, is to make use of the opt-out.

  • Do you have an expired patent which has a live supplementary protection certificate (SPC) associated with it?

If it is desired to opt an SPC out of the jurisdiction of the UPC, this would be achieved by opting the patent out, even if the patent itself has already expired.

  • Are you a co-owner of a patent?

If so, you will need to consult with the other co-owners to decide on whether to opt out. An opt-out is only valid if all co-owners have agreed. A record of any such agreement should be kept, in case the validity of the opt-out is challenged by third parties.

  • Do you have licensees?

If so, you should confer with them as to whether a patent should be opted out. If there are multiple licensees for different countries, or for SPCs, it will be preferable to obtain the agreement of all parties, since an opt-out applies to the patent in all countries and to any associated SPCs. Different licensees may have different views as to whether use of the opt-out is desirable.

Licensees have some rights to bring infringement actions in the UPC. It is typical for a party defending against a claim of infringement to counter-claim for invalidity. Therefore, it will be preferable to have agreements in place on how licensees should consult with the patent proprietor and any other licensees before bringing a UPC infringement action. The actions of one licensee could significantly affect the rights of other licensees, since any UPC invalidation decision would apply to allcountries party to the UPC Agreement.

  • Are you a licensee?

If so, you need to consult with the patent owner as to what the opt-out strategy is. Only the proprietor of a patent can file the opt-out request.

In addition, as outlined above, if there are multiple licensees you should work with the proprietor to agree on how parties should consult with one another before bringing any action before the UPC.

  • Third party review

If you have competitors who have patents, you should consider whether to make use of the new, central, UPC system to challenge weak patents which are adversely affecting your freedom to operate. If a patent has not been opted out, you could bring a central invalidity challenge once the UPC has started. You may wish to do this promptly after the start date, to take advantage of any delay by the competitor in opting their patent out.

Conversely, if a competitor has opted out, if you are conducting activity across Europe which might be the subject of a UPC infringement action, you could consider bringing a national invalidity action, thereby preventing the competitor from withdrawing their opt-out and using the UPC to obtain a pan-European injunction.

Finally, even if a patent has been opted out, for the first 9 months after grant it is still possible to file an Opposition at the European Patent Office. For opted out patents, this will remain the only way to centrally challenge the validity of a granted patent.

  • Notification letters

In the UPC, it is possible for a patentee to apply to the court for provisional measures, such as a preliminary injunction or product seizure, to be taken at an early stage in infringement proceedings. It is possible for these to be issued very rapidly, with no warning to a defendant.

However, if a party is concerned that such an application may be made, a “Protective letter” may be filed with the Court Registry. This has the effect that the Court will take the letter into account when deciding whether to order the provisional measures.

For competitor patents which have not been opted out, consideration should be given on whether to file a Protective letter. This requires some preparation, as the letter must contain legal arguments as to why an application for provisional measures should be rejected.

  • Are you an applicant – do you want a unitary patent?

If you are an applicant with a pending European application which is approaching grant and you are interested in obtaining a unitary patent instead of using classical validation, you may wish to take steps to delay progress of your application so that grant occurs after the new system has started. For example, you might use any available extensions or even further processing, before responding to an office action. There are also ways to delay progress even after the EPO has issued the text for which it intends to grant a patent (via the “Rule 71(3) Communication”), but there can be hazards with this. Options should be carefully discussed with your usual attorney.

If you require more information on the factors which should be considered when making these decisions, please ask any of us at Greaves Brewster. We can provide more detailed commentary in specific areas, if required.

This update is for general information and does not constitute legal advice. For further information please contact Rhiannon Turner.