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A new unitary patent and unified patent court

Preparing for change

The Unified Patent Court (UPC) and a new “unitary patent” or “European patent with unitary effect” (UP) are likely to become a reality in the second half of 2022.

The UPC and UP were created through the Agreement on a Unified Patent Court (UPCA), which has now been ratified by 17 EU Member States (R-MS), including Germany who will wait to deposit its instrument of ratification until the UPC is ready to go-live.

The UPC and UP do not cover non-EU European Patent Convention (EPC) countries (e.g., UK, Switzerland, Turkey, Iceland and Norway) and a number of EU MS are not participating (e.g., Spain, Poland and Croatia). Some EU MS are participating but have not started their ratification processes yet (e.g., Ireland).

Who is participating in the UPC?

How will the UPC come into force?

As the UPC is an entirely new court system, there is significant work involved in ensuring that it is ready to accept cases on day-one. To achieve a smooth start, the contracting EU MS have agreed the Protocol on the provisional application of the UPCA (“PAP-Protocol”). The PAP-Protocol allows for the establishment of the legal capacity and organisational capability of the UPC before the entry into force of the UPCA.

With the deposit in January 2022 by Austria of its instrument of ratification for the PAP- Protocol (see here), the UPC’s Provisional Phase has begun. The Provisional Phase allows for the finalisation of secondary legislation and Rules of Procedure, the Court filing system and IT infrastructure, financial budgets, and most importantly, the hiring of the UPC’s staff, including the appointment of approximately 45 legally-qualified judges and 50 technically-qualified judges.

The Provisional Phase is expected to last at least eight months.  Once the UPC Preparatory Committee and R-MS  are confident that the UPC infrastructure is in place, Germany will deposit its ratification of the UPCA. This will start the countdown to the official start of the UPC on the first day of the fourth month after German ratification (“Start Date”).

On the Start Date, the UPCA will come fully into effect and the associated EU Regulations (Regulations (EU) No. 1257/2012 and No. 1260/2012) will apply. The EPO Rules relating to the Unitary Patent Protection will also enter into force.

It is important that patentees allow sufficient time to adjust their patenting strategies and review their EP portfolios to ensure these are aligned to business needs ahead of the launch of the UPC.

Sunrise Periods

The date of deposit of the German ratification is also important for a number of pre-launch “Sunrise” periods associated with the UPC and UP protection.  We expect there to be a three-month sunrise period when patentees can file “opt-outs” for existing EPs, as well as indicating that they wish to designate a UP for European patent applications proceeding to grant.

The Opt-out Sunrise Period

The opt-out sunrise period is expected to start three-months before the UPC Start Date. This allows the proprietor(s) of European patents and patent applications, to take those patents out of the non-exclusive jurisdiction of the UPC. The opt-out can last for the lifetime of the European patent and applies to all of the EP designations that are valid and in-force in the participating UPC countries.

Where a supplementary protection certificate (SPC) has been granted at the date of lodging of the opt-out, then both the European patent and any granted SPC must be opted-out together.  Where an SPC is granted subsequently, the opt-out will take effect automatically on grant of the SPC.

As the opt-out only takes effect from the date entered onto the Opt-Out Register, the Sunrise Period allows patentees to file the opt-out request and correct any discrepancies flagged by the Registry before the Start Date.

What is a UP?

The prosecution of European Patents will continue as before. At grant a European Patent (“EP”) will create a bundle of national rights but a new UP “designation” will become available.

Validating a “UP”, will create a designation with unitary effect across all of the participating EU MS. The EPO will grant the new EP(UP) alongside other EPC national designations under the EPO’s current procedures. The request for a UP must be made within one month of the date of grant.

Based on current ratifications, at launch the initial UP’s coverage will include at least 17 EU MS, including Germany, France, Italy and the Netherlands. If all participating EU MS ratify the UPCA, the EP(UP) will cover 24 EU MS. To obtain coverage of the 38 EPC countries, however, patentees will also need to validate other EPC countries and/or file national rights.

The UP will cover the territories of those EU Member States that have ratified the UPCA (R-MS) at the date of the registration of the unitary effect of the individual patent. Coverage of the EP(UP) will remain fixed throughout its lifetime and will not be extended to EU MS that join the UPC at a later date. The EP(UP) is subject to the exclusive jurisdiction of the UPC and cannot be opted-out.

The Unitary Patent Sunrise Period

In order to encourage early uptake of the UP, the EPO has announced two options that will allow European patent applicants to either delay grant of a patent application to take advantage of designating a UP or to make an early request for an EP(UP). These options are only available from the date that Germany deposits its ratifications and only where the EPO has despatched its Rule 71(3) communication (the intention to grant letter).

1. Early request for unitary effect

The EPO’s first transitional measure will enable applicants to file early requests for unitary effect, together with the requirements for the registration of unitary effect, at least three months before the start of the UPC. When the UPC comes into force, the EPO will register the UP from the Start Date.

The timing of filing the request will be important because if an early request for unitary effect is filed before Germany deposits its instrument of ratification of the UPCA and/or if a Rule 71(3) communication has not been despatched, it will not be treated as a valid request for unitary effect.

2. Request for a delay in issuing the decisions to grant a European patent

The EPO’s second transitional measure will allow applicants to request a delay in issuing the decision to grant of a European patent after a Rule 71(3) communication is issued and before approving the text intended for grant. The EPO will delay the mention of the grant of the European patent so that it is published in the European Patent Bulletin on or immediately after the UPC Start Date. The patentee then has a one-month deadline to file a request for unitary patent protection, together with the requirements for the registration of unitary effect.

This measure ensures that applicants do not miss the opportunity to obtain a UP but allows them to defer the decision about making the request until after the UPC Start Date.

What is the Unified Patent Court?

The UPC is a new common patents court with exclusive jurisdiction in respect of litigation (validity and infringement) for all EP(UPs) and non-exclusive jurisdiction over EPs validated in R-MS.

For those patents (and related SPCs) subject to its jurisdiction, the UPC will have jurisdiction over:

  • Infringement & related defences and licences
  • Declarations of non-infringement
  • Protective Measures / Injunctions
  • Damages
  • Revocation and counterclaims for revocation
  • Compensation for licence of right

 

This means that the UPC can grant powerful pan-UPC injunctions, but equally can revoke the patents centrally across the R-MS and grant pan-UPC declarations of non-infringement. The UPC Rules envisage a judgment on the merits being provided within 1 year of a claim being issued.

The Court is made up of a network of local, regional and central patents courts that will be located across multiple locations within the R-MS territories. The Court will have a new set of rules and procedures that take features and tools of the existing EPC national patents courts. Most courts have indicated that English will be one of the possible languages and central division will use the language of the patent.

The UPC Central Divisions (currently Paris and Munich) will deal with revocation and declarations of non-infringement proceedings. Local/regional courts will deal with infringement, including preliminary injunctions. Arbitration will also be available within the UPC. The Court of Appeal will be in Luxembourg and the courts will be able to make referrals to the Court of Justice of the European Union.

The procedure will be front-loaded and there will be emphasis on written rather than oral advocacy. Injunctions, seizures, disclosure, expert evidence and cross-examination can be ordered by the Court. Potential infringers can lodge protective letters. There will be short interim hearings leading up to 1-2 day trials and a decision within 6 weeks of a final hearing.

There will be costs shifting, with the loser paying the winning party’s costs but recovery of costs will be capped relative to the value of the claim.

All EPs, including EP(UPs), will remain subject to the same 9-month, post-grant opposition procedures. The existing EPO opposition rules continue to apply. Ongoing oppositions will have no effect on an opt-out from the UPC. It is expected that opposition proceedings will run in parallel with UPC proceedings but the UPC does have discretion to stay proceedings where a rapid decision is expected from the EPO.

How do I opt-out of the UPC?

When the UPC comes into force, all existing and future European patents that are granted and validated in R-MS territories will become subject to the jurisdiction of the court.

Patentees who don’t want their EP bundle of national rights in R-MS territories to be subject to the UPC, will need to “opt-out”. Applications for EPs can also be opted-out. In addition to the three-month Sunrise period, the opt-out will be available for EPs in R-MS in the first 7 years (likely to be extended to 14 years) and will last for the life of the patent.

In 2017, the UPC Preparatory Committee decided that there would be no official fee for opting-out. We do however anticipate that there will be costs associated with ensuring that opt-outs are validly entered onto the UPC Register.

Only the patent proprietor (or registered representative) can file an opt-out application. This is a substantive test – it is not simply the person recorded on the patent register – the patent proprietor is the person entitled to be registered as proprietor. If there is more than one proprietor (e.g., the patent is co-owned or the national patents have been assigned to different companies), all of the proprietors must apply for the opt-out together. If any SPCs have been granted, in additional to all proprietors of the patent and all holders of SPCs must file the opt-out.

The opt-out is only effective from the date of entry on to the Register. The UPC Registry must check that the requirements for an opt-out have been complied with and is expected to query applications for an opt-out where proprietorship is not clear. When the application is accepted, the opt-out will be entered onto the Register. The Register will be searchable and maintained by the Registry.

The three-month Sunrise Period before the launch of the UPC will be important to allow proprietors of granted EPs to ensure that any opt-out applications are entered onto the Register. The EPO will manage opt-outs during the Sunrise Period.

An application for opt-out is ineffective if proceedings have been issued at the UPC before the date of entry in the Register. The UPC Rules provide a mechanism for patentees who consider that a patent has been opted-out to make a preliminary objection to proceedings being initiated in the UPC.

So long as there are no national proceedings issued relating to the patent, patentees can withdraw the opt-out at any point. There are no official fees for withdrawing the opt-out.

Quick facts

Quick facts about the UP & UPC.

What is the UPC?

The Unified Patent Court or UPC, is a new patents court for all EU Member States that have ratified the UPC Agreement (R-MS). The aim of the UPC is to provide a harmonised system of patent litigation across all R-MS. The UPC will have exclusive jurisdiction for patent litigation (validity and infringement) relating to the new Unitary Patent and non-exclusive jurisdiction for all granted and future EPs that are validated in R-MS. Litigants will be able to bring a single action against patents subject to the UPC’s jurisdiction and obtain a binding judgment that is binding across all R-MS. See above for more information.

What is a UP?

A Unitary Patent or UP is a new multi-territory designation that will be available on launch of the UPC. Validating a UP will create a designation with unitary effect across off the EU Member States that have ratified the UPC Agreement at the date of grant. At present at UP will cover 17 EU MS, including Germany, France, Italy and The Netherlands but if more countries ratify the UPC Agreement, this could rise to 24 EU MS. Irrespective of the number of EU territories covered by the EP(UP), there will be a single renewal fee, payable to the EPO. EP(UPs) will be subject to the exclusive jurisdiction of the UPC. See above for more information.

How do I get a UP?

To be eligible for UP validation, the EP application must grant with the same set of claims for all the R-MS and all 24 UPC EU MS must be designated. The request for unitary effect and required translation must be made within one month of grant of the EP. The one-month deadline is non-extendable. Refusals of a request by the EPO for grant of a UP can be appealed to the UPC.

How much does a UP cost?

In 2017, the renewal fees were set as equivalent to the renewal fees of the 'Top4' states in which EPs were currently validated. We are waiting for the UPC Preparatory Committee to confirm the fees for launch in 2022.

For patentees who validate widely across EU MS, this could represent a significant saving. This needs to be balanced against no ability to taper and reduce renewal fees at a later date. Further, new requirements for a full translation must be included in the cost calculation.

What are the language requirements for requesting a UP?

Applicants must provide a full translation in English of the patent, if prosecuted in German or French. If prosecuted in English, then applicants must provide a full translation in the official language any Member State. If issuing legal proceedings, Defendants can ask for full translation to Defendant's language.

How much will it cost to litigate in the UPC?

Litigation in the UPC should cost less than litigating a patent across a number of national courts. In 2017, the Court fees for infringement proceedings and Preliminary Injunctions were set at €11k plus a value-based cost (€2.5 - €325k). Revocation actions fees were set at €20k. There will also be a value-based cap on recoverable costs up to €1.5m for an action worth > €50m.

Who are the UPC Judges?

Many of the existing and some retired patent judges from the R-MS will sit on the UPC legal panels alongside technical judges (these could be patent attorneys, or lawyers or other experts) and new judges are being trained.

Can I opt-out of the UPC?

Yes, because the UPC represents a significant change in the patent landscape for Europe, there will be a transitional period of at least 7 years (likely to be extended to 14 years) where patentees can apply to opt-out EPs validated in EU Member States that have ratified the UPC Agreement. The opt-out status for EPs will be searchable on an Opt-Out Register. A three-month Sunrise Period to apply for an opt-out is expected to be offered by the EPO ahead of launch of the UPC. See above for more information.

Who can opt-out?

Only the patent proprietor(s) or their registered representative can file an application to opt-out. The patent proprietor is the person or persons entitled to be registered as proprietor. This is not necessarily the proprietor as shown on the patent register and patentees should carefully examine the ownership of any patent that they wish to opt-out to ensure the request is valid. See above for more information.

Can HGF assist me with navigating my way through the UP and UPC systems?

Yes, our European patent and patent litigation teams means we can continue to provide strategic advice on prosecution, litigation and licensing throughout the lifetime of the UP and UPC.

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