The Unitary Patent and the Unified Patent Court

Overview

The European Patent Office (EPO) and the participating countries are in the final stages of establishing the Unitary Patent and the Unified Patent Court (UPC). This represents the biggest change to patent law in Europe for 40 years: it will create a single approach to patent registration and litigation across 25 European Member States with a combined population of over 400 million. All businesses need to make sure they are prepared for the changes that this will entail.

The introduction of a single system will make establishing patent protection across Europe easier and more effective, facilitating the protection of innovations and inventions. It will also make it possible to challenge patents and to obtain rulings preventing the distribution of goods and the use of patented processes across all the participating Member States. Any company operating in Europe for whom the protection and exploitation of intellectual property is an important concern should take the time to inform themselves about the new Unitary Patent system and develop a tailored patent strategy for Europe.

In addition to the existing knowledge and skills that we have developed as Europe's leading Patent Litigation firm, we have created a specialist UPC team to help our clients to navigate the new landscape effectively and to enable them to continue to protect their intellectual property in this new environment.

We believe our position as the only law firm with highly regarded patent experts on the ground in every major jurisdiction where there will be a division of the UPC puts us in a unique position to help you understand how the changes will impact on your existing patent portfolios and review your procedures to ensure you maximise its commercial value. Perhaps even more importantly, we are at home in all UPC divisions and familiar with the "couleur locale" that will make the difference within this court. We can do patent litigation in any language that the UPC will use.

Our unrivalled position as Europe's leading experts in patent law - we have been named Managing IP's European "Firm of the Decade" and for the past 5 years IAM Patent 1000 has identified Bird & Bird as the highest ranked firm internationally, with more patent experts than any other firm – also means we are ideally positioned to advise you in this area.

For any further information, please get in touch with your usual Bird & Bird contact or any member of our UPC team, or follow us @twobirdsIP for breaking news and commentary.

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Latest developments and documents

15 December 2015

19 October 2015

5 October 2015

1 October 2015

10 September 2015

  • First UPC IT workshop held in London

9 September 2015

7 July 2015

11 May 2015

 7 May 2015

  • EPO Select Committee publishes adjusted proposal for renewal fees for European patents with unitary effect

5 May 2015

CJEU rejects the appeals filed by Spain against the Unitary Patent Package.

  • Read our comments on the decision here
  • Read the CJEU press release here

27 February 2015

8th Meeting of the Preparatory Committee Latvian Permanent Representation to the European Union >

26 November 2014

Oral hearing on the 17th Draft of the Rules of Procedure takes place in Trier. Listen to the full recording here >

18 November 2014

Advocate General Yves Bot dismisses Spain's challenges to the UPC and urges other countries to ratify the UPC Agreement. Read the opinion >

6 November 2014

7th meeting of the Preparatory Committee takes place in Brussels >

3 November 2014

The UPC Preparatory Committee publishes the 17th draft of the UPC Rules of Procedure and announces that the Oral Hearing will take place in Trier on 26th  November. Read the 17th draft of the Rules of Procedure >

7 October 2014

Preparatory Committee has announced that the prototype e-filing/case management system is now available to test. People wishing to test it can visit this link >

16 September 2014

Preparatory Committee publishes updated.Roadmap of the UPC Preparatory Committee September 2014 >New Expert Panel announced to advise the Preparatory Committee of the UPC >

13 June 2014

Draft Rules on the  European Patent Litigation Certificate >- proposal by the Legal Working Group of the Preparatory Committee. Explanatory memorandum >Bird & Bird comments on the draft Rules on the European Patent Litigation Certificate > 

06 March 2014

Preparatory Committee announcement >

31 January 2014

16th draft of the rules of procedure (PDF) >Digest (PDF) >

09 January 2013

EU: Unitary Patent Regulation and Unified Patent Court Agreement; An update >

 

Legal documentation

Your questions about the UPC answered

How does it work at the moment?

Patents protect inventions and, therefore, your investments in innovation. Until now, patents in Europe have been managed at national level so, although there is one system to apply for a patent for the whole of Europe, any European Patent needs to be registered at national level after grant. This involves a recurring fee per country. It also only provides protection in the countries where it is actually registered and, in general, actions against infringers need to be brought in the national courts on a country-by-country basis.

The European Patent Convention has 38 member states. International patent disputes tend to be litigated in up to six countries with the European Court of Justice only allowing national courts to decide for more than their own country in very limited situations.


What is the Unitary Patent?

The Unitary Patent is a new type of European Patent, which will cover the 25 EU member states that have signed up for the enhanced cooperation involved. It is not a Community-wide patent because it proved politically impossible to achieve agreement at EU-level. Instead, it was created as a form of enhanced cooperation between states that wanted it. However, since all except Poland and Spain will participate (with Croatia joining at a later stage), it is virtually identical in scope to Community rights, such as the Community Trademark. The prosecution will be exactly the same as for traditional European Patents. Within one month after grant, the applicant can decide to have his patent converted into a Unitary Patent. The patent owner will have to pay a recurring fee to the European Patent Office but does not need to register at national level anymore.


What is the Unified Patent Court?

The UPC is a real novelty: an international court for the enforcement of both traditional European Patents and Unitary Patents. For the 25 participating countries, this new court can decide on infringement and validity for all of those countries for which a traditional European Patent is registered. For the Unitary Patent, the court will decide for all 25 countries that participate in the enhanced cooperation. All EU member states participate, except Poland and Spain (Croatia joining at a later stage).

The court will have a central division with seats in Munich, London and Paris. It will also have local divisions in London, Paris, Düsseldorf, Munich, Mannheim, Hamburg, The Hague, Brussels, Milan, Helsinki, Copenhagen, Dublin and Vienna. There will be a regional division for Sweden and the Baltic states (the Nordic Division). Although not official yet, it seems there will also be a regional division for Hungary, Slovenia and Croatia. Finally, there will probably be a regional division for Romania, Bulgaria, Greece and Cyprus. Some countries however, such as Luxembourg, Portugal and Malta, will refer their patent cases to the central division. The Court of Appeal will be in Luxembourg.

Infringement cases will primarily be in local and regional divisions, including counterclaims for invalidity; independent validity cases will be in the central division. Local and regional divisions may refer validity counterclaims to the central division – the so-called bifurcation – but are not expected to do that regularly. The Rules of Procedure allow for a “couleur locale” per division (i.e. different approaches in the different divisions), but the Court of Appeal may develop and impose best practices over time.

The UPC will primarily apply its own law. The validity of traditional European Patents and Unitary Patents will be governed exclusively by the existing European Patent Convention. The basic criteria for infringement are in the UPC Agreement itself. The procedural law is also in the UPC Agreement and in the Rules of Procedure based on it. There already is a quite comprehensive draft of 382 detailed rules. However, in addition there is a whole body of existing international law that will also apply and if that does not provide a solution, the court will apply national law as indicated by private international law.


When will it start?

With the signing of the UPC Agreement on 19 February 2013 and the publication of the changes to the Brussels I Regulation on 29 May 2014, all documents have been signed, but the UPC Agreement still needs to be ratified by a sufficient number of countries and the system needs to be set up. As of early 2013, the Select Committee of the European Patent Office has been working hard on implementing the Unitary Patent and the Preparatory Committee has also been working hard on setting up the UPC. 

The educational program for UPC judges started in February 2015. A cross-border ICT-system is being developed and will probably be finished by the end of 2015. This will handle the registration of opt-out applications and the case management for the Court. The central registry needs to be set up and facilities for court hearings need to be selected and refurbished. The system is due to go live at the start of 2017, with a sunrise register for opt-outs opening most likely in July 2016.


What will it cost?

Costs and fees

The costs for the Unitary Patent have now been decided,  whereas a final decision on the court fees still needs to be made.

Renewal fees

Unitary Patent renewal fees will be equal to the combined renewal fees of the top 4 countries where a traditional European patent is granted. Over 20 years the sum would be:

  • €35,555 (based on a top 4 of Germany, the UK, France and the Netherlands), as decided by the Select Committee. The only financial disadvantage of a Unitary Patent remains that it cannot be 'pruned'. In other words, you cannot drop countries of validation one by one over time - the Unitary Patent is 'all or nothing'.

In May 2015, the following additional proposals on costs were published:

  • Opt-out fee: €80 per patent;
  • Withdrawal of opt-out fee: €80 per patent;
  • Court fees: Basic infringement actions will cost €11,000, plus a sliding scale value-based fee of €0 - €220,000. Revocation actions will cost €20,000 (fixed fee).
  • Unitary designation: There will be no fee for a unitary designation.
Is the system mandatory?

The Unified Patent Court will be the only venue to litigate Unitary Patents, but for the first seven years it will be optional for litigating traditional European Patents, with a possibility to extend that transition period for another seven years.


What are the advantages of the new system over the existing one?

Patent litigation: US vs Europe

Historically, the US has been perceived as a highly attractive location for patent litigation for obvious economic and business reasons, given that one patent decision can instantly provide you with access to one of the largest consumer markets in the world.

However, with a new patent system set to cover 25 European Member States and a consumer base  of over 400 million, the Unitary Patent offers an attractive new alternative for global companies. In addition to covering a larger population base, infringement proceedings will be considerably faster and cheaper than in the US. UPC infringement proceedings are likely to be cheaper than equivalent US proceedings because at the UPC there will be:

  1. No or only limited documentary discovery
  2. No or very limited oral testimony at trial and
  3. Shorter hearings. In contrast to the US, there will be no jury trials under the Unitary Patent system (only specialist judges will be responsible for hearing trials at the UPC) and in most cases the losing party will be ordered to pay at least a proportion of the winning party's legal costs.
  4. Full proceedings on the merits in first instance will be concluded approximately 1 year.

Do I need expert counsel?

Every lawyer who is authorised to litigate in a national court can also litigate in the Unified Patent Court, as well as European Patent Attorneys who have obtained a special litigation certificate, so that provides a wide choice throughout Europe. However, this system adds a new dimension to patent enforcement that requires developing elaborate strategies. There are new options for forum shopping among divisions of the Unified Patent Court and national courts. Procedural practices and substantive case law need to be developed. That calls for true in-depth knowledge and involvement in all relevant countries. We believe our position as the only law firm with highly regarded patent experts on the ground in every major jurisdiction where there will be a division of the UPC puts us in a unique position to help you. Our unrivalled position as Europe's leading experts in patent law – we are ranked in the top tier for IP across all the major directories and this year we were awarded Managing IP's "Law Firm of the Decade"– means we are ideally positioned to advise you in this area.


What do I need to do now?

Although the new system has not yet entered into effect, the drafting of the rules is almost complete, with the final 18th draft due to be published later this year. This means that patentees can and should start developing a strategy now. This should include.

  • Drafting and filing divisionals: since 1st April 2014, divisionals can again be filed up to grant. This allows for having both a Unitary Patent and a traditional European patent for almost the same technology. Patentees should evaluate their pending applications to enhance future enforcement options. A Unitary Patent can only be obtained once the system goes live, so an application that is intended for unitary effect should be kept pending until that moment, whereas traditional patents can of course be granted at any time (but divisionals should be split off prior to such grant where appropriate).
  • The PCT national route will probably be reopened in the countries where it is currently blocked, so this should also be considered.
  • Patentees may want to exclude some patents from UPC jurisdiction by filing an opt-out, which prevents a central attack on validity. There will be a sunrise period – the sunrise opt-out register will most likely open in July 2016. Evaluation of existing portfolios before the sunrise starts will be required. This is not a simple task, especially for large portfolios. It requires developing a strategy, which may differ per sector and even per company and a subsequent portfolio evaluation, with special attention for crown jewels. Bird & Bird can work closely with clients in providing the necessary support based on in-depth knowledge of both the new system, industry sector’s and the client’s business.
  • Licensees may want patentees to opt out, but existing licences will contain no such provisions. Licensees who want to prevent a central attack should look at this now and discuss with their licensors.
  • Exclusive licensees will obtain the authority to enforce a patent without consent from the patentee, unless provided otherwise in the licence. Patentees should therefore check their existing exclusive licence agreements.
  • On the other hand, non-exclusive licensees will not have this option unless provided in the licence, so they should also check their licences.
  • If you are on the defensive side, the language of litigation may be a local language, but may often be changed to the language of the patent. This should be taken into consideration when choosing the language for a patent application
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