The new Unified Patent Court (“UPC”) system of the European Patent Organization (“EPO”) begins June 1, 2023.
Presently, after a patent is granted by the EPO, the patent owner must validate individually in desired European Patent Convention member countries for the European patent to have effect in those countries. These national patents are enforced and defended under the jurisdiction of each individual country.
Going forward, for European patents granted after June 1, 2023, the patent owner will still be able to validate, maintain, and litigate patents in individual European Patent Convention member countries, as in the past. Alternatively, though, within one month of the European patent grant, patent owners will have the option to obtain a Unitary Patent and participate in the Unitary Patent Court system.
Further, on June 1, 2023, all pre-existing European patents automatically will be enrolled in the UPC system unless the patent owner specifically opts out of the UPC system. Patent owners may opt out of the UPC system at any time during a seven-year transitional period. Further, an opt-out may be withdrawn at a later date. Please keep in mind, though, that a patent owner can only opt-out a patent once and can only withdraw the opt-out for that patent once.
A Unitary Patent will be effective in all European Union (“EU”) Member States that have elected to participate in the UPC system. Further, Unitary Patents will be enforceable for all European Union Member States under the singular jurisdiction of the Unitary Patent Court. The Unitary Patent Court will have singular jurisdiction over patent infringement and validity claims.
Currently, 17 European Union Members States are participating in the UPC, including Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, and Sweden. Seven additional European Union Members States have signed the Agreement on the Unified Patent Court (UPCA) but have yet to ratify the agreement. These seven Member States, which include Cyprus, Czech Republic, Greece, Hungary, Ireland, Romania, and Slovakia, may ratify the agreement at any time.
How should a patent owner decide whether to 1) Choose between national validation and the Unitary Patent; and 2) Choose whether to opt out of the UPC?
When deciding between a Unitary Patent and validating strictly according to the traditional system, cost differences can be a significant consideration. Evaluating which route is more cost effective for patent validation and maintenance can be easy or difficult to determine. Generally, depending on the number of countries and the particular countries where patent protection is desired, validating and maintaining patents under the traditional system is less expensive when protection is desired in less than about four EU Member States, and a Unitary Patent is less expensive when protection is desired in more than about four EU Member States. The cost of validation and maintenance under the traditional system varies significantly by country, so the particular countries where protection is desired can significantly affect the price to validate under the traditional system. The cost for a Unitary Patent, on the other hand, is fixed, and for the single fee of a Unitary Patent, protection automatically extends to all European Union Members States that participate in the UPC.
Both when deciding between traditional validation and the Unitary Patent and when deciding whether to opt out of the Unitary Patent Court, a patent owner should consider the differences between enforcing and defending a patent in multiple national jurisdictions under the traditional system and enforcing and defending the patent in the singular Unitary Patent Court. In the former, the costs can be greater to maintain multiple proceedings in different jurisdictions, with potentially different results in different countries. These greater costs can also deter challenges to the patent, though, and/or make it more difficult to invalidate the patent everywhere. On the other hand, costs can be less to litigate over a patent in the singular jurisdiction of the UPC and positive results extend to all EP Member States. Negative results also extend to all EP Member States, however, and the cost for a third party to challenge a patent owner’s patent in all Member States is easier and less expensive.
Opting existing European patents out of the UPC is a good defensive strategy that carries a relatively low cost. There are no government fees to opt out, so there is only the administrative cost of requesting the opt-out. Because of the relative ease for a third party to centrally attack and invalidate a Unitary Patent, as discussed above, a patent owner should strongly consider opting out of the UPC for any patent that covers important technology, and/or in cases where there is a realistic chance a third party would seek to invalidate the patent. Further, as long as no national infringement or revocation proceedings have been brought with respect to a patent that has been opted-out of the UPC, the patent owner can revoke the opt-out and file an infringement action in the Unified Patent Court at any time. The Unitary Patent Court offers a less expensive and more efficient way to enforce a European patent across all Member States’ jurisdictions.
|
|
Traditional National Validation |
Unitary Patent |
|
Validation and maintenance |
Usually less expensive when desire protection in less than four countries. Increasingly more expensive with validation in increasing number of countries |
Flat fee for protection in all Member States - Usually less expensive when desire protection in more than four countries |
|
Defending patent |
More expensive to defend in multiple individual Member States, but also less risk (or reward) and more expensive/difficult for a third party to bring multiple actions |
Less expensive to defend a single action, but greater risk (or reward) to defend in single UPC, and less expensive/easier for a third party to bring singular action |
|
Enforcing patent |
More expensive to enforce a patent across multiple jurisdictions, less risk/reward |
Less expensive to enforce a patent in single jurisdictions, greater risk/reward |
|
Court behavior |
Established case law and precedent for each court |
Unknown how new court will handle and rule on issues, but resolution of enforcement may be faster and recoverable costs may be higher. |