The Unitary Patent and the Unified Patent Court

HOW IT IMPACTS YOU

How does it affect my business?

There are two changes that could impact your business. Firstly, the creation of the Unified Patent Court (UPC), which is a new court competent to decide on certain actions relating to patents granted by the EPO in the 24 participating Member States (i.e. the EU states excluding Spain, Poland and Croatia). For a transitional period, the UPC will exist alongside the national courts, but in due course it will act as the only court capable of hearing certain post grant actions such as enforcement and invalidity in the participating Member States.

This change means that for the first time there is a centralised legal system handling patent rights across the majority of the EU. This should simplify and reduce costs of enforcing patents, but at the same time allow a centralised revocation that could lead to rights being lost across all participating Member States in a single action. Patent holders will need to evaluate these pros and cons, and decide whether they would like their existing European patents to be part of the new system, or to opt-out and rely on the national courts.

A second change is the introduction of the European patent with unitary effect, or a Unitary Patent. This is a new designation that can be used for any patents granted by the EPO now that the UPC is up and running. The single designation covers all 24 participating Member States with a single renewal fee comparable in cost to about four national renewal fees. The Unitary Patent could lead to substantial cost savings for patent holders, but this new designation would be handled by the UPC and cannot be opted-out at a later date.

Choosing whether to designate the Unitary Patent will be an important decision that should be factored in to the strategy of patent holders as they build portfolios going forward.

What does my business need to do?

The first decision to take is whether to opt existing European patents (with any associated Supplementary Protection Certificates) out of the UPC. For such pre-existing European patents, the opt-out is reversible, but there are limitations on whether an opt-out can be filed or withdrawn.

Going forward, the patent filing strategy should be evaluated in view of the new legal framework that has come into force. There are a number of different options, including:

designating the Unitary Patent,

designating individual European states to be covered by a European patent (as happens under the current system),

and pursuing rights via national patent offices rather than the EPO to avoid a patent ever falling under the jurisdiction of the UPC.

For patent holders, there is a need to take decisions on the existing portfolio, both pending and granted, as well as the filing strategy for building a portfolio going forward.

It is also important to consider whether the new framework impacts the strategy of those having business operations in the EU. For instance, competitors that may have traditionally only validated in a few countries may now choose to obtain a Unitary Patent, which could have an impact on the viability of existing business strategies which avoided the traditional filing and validation states of competitors. Likewise, the new centralised revocation procedure provides an opportunity to remove problematic patent rights across all participating Member States in a single action. The strategies used to evaluate and secure freedom to operate of companies having business operations in the EU will therefore need to be considered within the new legal framework.