The Unitary Patent and the Unified Patent Court ? Be prepared for the new opportunities and risks

Updated on December 6, 2022

Background

After years of uncertainty, the options of a European Patent having “unitary effect” in all participating member states, also called Unitary Patent (UP), and a Unified Patent Court (UPC) are intended to be available as of June 1st, 2023, with a sunrise period starting on March 1st, 2023. These options will be added on top of the traditional system of a bundle of European rights (after grant) falling under the jurisdiction of national courts.

The Unitary Patent and the Unified Patent Court are meant as building blocks supplementing and strengthening the existing centralised European patent granting system. As announced by the President of the EPO (decision dated November 1st, 2022), the EPO will further offer as of January 1st, 2023, and till the start date of the Unitary Patent system, both an early request for unitary effect and a request for delay in issuing the decision to grant a European patent. These two options affect applications for which an intention to grant has been sent after September 1st, 2022.

Companies are thus advised to urgently think of a strategy with respect to these new options. The new system presents indeed new opportunities and new risks. Both Unitary Patents and the UPC will have effect in the European Member States having ratified the Unified Patent Court Agreement (UPCA).

The UPCA

At the time of writing, 17 of the potential 25 countries ratified the UPCA agreement: Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, Sweden. A sunrise period of three months before the entry into force of the UPCA is foreseen for companies to make the necessary preparatory arrangements. This sunrise period is expected to start when Germany will deposit its instrument of ratification of the UPCA (expected on March 1st, 2023). Note that Great Britain (after Brexit), Spain, Poland and Croatia will not participate in the UPCA.

Although the two concepts, Unitary Patent and UPC are interlinked, they do not have the same scope of application.

The Unitary Patent

The option of a Unitary Patent will be available for European Patent applications granted during the sunrise period of the new system and granted after the start of the system. A UP patent will have the same effect in all participating states and a single renewal fee will have to be paid. In other words, this option is a sort of a new validation choice after grant. It will not affect old patents. Choosing or not this new option should be assessed based among others on costs considerations as well as litigation considerations. Indeed, the renewal fees for an UP amount to approximatively the equivalent of the renewal fees for the top three members states (DE, FR, IT) and Unitary patents will be the exclusive competence of the UPC.

The Unified Patent Court

The choice of litigating before the UPC on the other hand concerns all traditional European Patents already granted before and after the sunrise period, as well as all pending and future applications. The introduction of the UPC may thus have a large impact in litigation in Europe.

In details, after a transitional period of 7 years (potentially 14 years), the UPC will have, in all the UPCA member states, the exclusive jurisdiction over all European Patents and European Applications (whether with Unitary Effect or not). In other words, the UPC is expected in time to replace national courts in the UPCA member states for European patents.

Opting-out of the UPC

Yet during the transitional period, an option to opt-out of the competence of the UPC is offered. This step needs to be actively taken. By default, in the absence of any active “opt-out” request, during the transitional period, both national courts and the UPC would be competent for any infringement and/or revocation case brought to them by a plaintiff.

One main difference between litigating before the UPC or before a national court is simply put the geographic scope of the jurisdiction. A revocation before the UPC will act as a central revocation in all UPC member states at once, and the same would apply for an infringement ruling or a preliminary injunction. The UPC brings thus new opportunities but as well new risks that need to be assessed on a case-by-case manner, to decide the best strategy per applicant and/or per application.

Blocking an opt-out, Opting back-in, Blocking an opt-back-in

To make things more complex, the opt-out choice is available as long as no national action has been started. This means a competitor may block an opt-out. To avoid such a situation the decision of opting out (or not) should thus be made before the first day of entry into force of the UPC. Request for opt-out should thus preferably be filed during the sunrise period. Also an opt-out request may be withdrawn one time as long as no national action has been started. Recalling an opt-out would amount to opting back in under the competence of the UPC a competitor may thus also block such an opt-back-in.

Further implications for licensing agreements, property rights

The new system will also affect licensing agreements. New provisions regarding the authority to file an opt-out request, to start proceedings in front of the UPC as well as property law aspects for co-owned patents should be added and/or revised with care.

What actions are needed?

The new system will therefore ask patent holders to rethink their current approaches to validation and litigation in Europe. At Arnold& Siedsma, we can advise how to best navigate these new waters.

Time is of the essence, so make sure your company is ready for the new system.
Reach out to your A&S partner and get advice on how to make the best of your patent portfolio under this new system!
For more information on the Unified patent Court, consult our white paper that you can find on this page.


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