What does the Unitary Patent and Unified Patent Court mean for you?
The proposed Unitary Patent (UP) and the Unified Patent Court (UPC) will bring the biggest change in the European patent landscape since 1978. Here D Young & Co LLP summarises what is changing, what it will mean and what as a business owner or manager you should have firmly on your radar.
The proposals to create a new unitary patent system throughout most of the EU have been signed by the intended participating countries, but still need to be ratified by the national governments. There remains a considerable amount of detail (especially in relation to costs and renewal fees) requiring further clarification.
However, there are essentially two main proposals:
1. A Unitary Patent covering most EU states
2. A Unified Patent Court system (intended to apply to existing European patents and, importantly, pending applications as well).
The Unitary Patent (UP)
The catchphrase being used is "A European patent with unitary effect". It is hoped, with time, it will become the preferred option for participating countries. It is important to note that it will not replace national patent systems and will not have effect in non-EU countries of the European Patent Convention (EPC) (such as Switzerland, Norway and Turkey) nor those EU countries which do not want to participate (currently Spain, and possibly Italy and Poland).
The cost of the unitary patent is not yet fully known. Of particular concern is the amount of annual renewal fees (the fee to keep the patent alive) which are to be shared by the participating countries. Clearly this will be a major factor when deciding on your IP strategy.
In theory, such a unitary patent is sensible in furtherance of the single market in the EU, but the practical difficulties are considerable. The fact that not all EU countries are covered and that unitary patent coverage may change as successive states ratify, uncertainties as to filing and renewal costs and the lack of clarity regarding the Unified Patent Court system all mean that most patentees should be very cautious at this early stage.
The Unified Patent Court (UPC)
Unlike other unitary rights (such as the Community Trade Mark (CTM), which is litigated in national courts), the system proposes a unified single court system. This is a substantial change from the existing position, where patents are litigated nationally.
Unfortunately, due to certain political compromises, the proposed system will be complex, with central, regional and local divisions, and significant uncertainties exist in the drafting of the legislation as to whether (for example) infringement and validity will be decided together by the same court and as to what law is relevant to issues such as accessory liability, experimental/research use exemptions and fair, reasonable, and non-discriminatory (FRAND) disputes. There is also likely to be considerable scope for 'forum shopping'.
As noted above, the new court system will automatically apply to existing patents granted by the European Patent Office (EPO) and pending EP applications unless you 'opt out'.
It is too early to provide any definitive advice and you should not make any irreversible decisions on patent strategies. However, you may wish to look at your IP strategy with the following in mind:
• National patent applications remain a viable option for recent filings and for pending Patent Cooperation Treaty (PCT) applications.
• You can opt out of the UPC regime during at least the first seven years, and possibly up to 14 years. It may be advantageous for owners of valuable patents to opt out on the first available day to avoid exposure to centralised revocation. Hence patent owners will have more litigation options available to them than at present whilst limiting potential adversaries' options. You may want to decide soon whether there is any reason not to opt out all of your existing EPs, or at least ensure that all key patents are identified for opting out.
• Consider identifying competitor patents which would be convenient to revoke centrally before the owner opts out.
• For those patentees who designate many states, it may be more cost effective to apply for a UP, and for others it will be necessary to wait to see what the costs are before deciding on a strategy taking into account other factors such as the uncertainty regarding the litigation system.
• The new system is unlikely to come into effect for, at least, two or three years and possibly longer but it is best to be prepared.
More more information, please contact Anthony Albutt Parnter, on:
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