In the nearly five years since 25 European Union states signed an intergovernmental agreement to create a Unified Patent Court (UPC), a number of political obstacles have arisen to delay its enactment. Those obstacles are beginning to resolve, however, and it is time to begin thinking about how the Unitary Patent will affect your IP portfolio strategy.
Here are the answers to the most common questions we hear regarding the political and administrative developments concerning the UPC.
When Will the UPC Come into Force?
While Unitary Patent Regulations already are in place in the 25 member states that will be participating in the Unified Patent Court (all the European Union countries except Poland, Croatia and Spain), those regulations apply only from the date that the Unified Patent Court Agreement comes into force. That will take place after a minimum of 13 countries, which must include the three G8 nations of France, Germany, and the United Kingdom, have deposited instruments of ratification. Presently, the governments of 14 countries, including France, have ratified the agreement.
When the United Kingdom held a referendum in 2016 that led to their resolution to separate from the European Union—popularly known as the “Brexit” vote—many feared the country would also choose not to participate in the UPC. Those fears turned out to be unfounded, and it is expected that the UK will be in a position to ratify the agreement as early as February 2018.
Meanwhile, although the German government approved the Unified Patent Court Agreement (UPCA) in March 2017, a complaint currently is pending in its Federal Constitutional Court that is delaying ratification of both the UPCA and the Protocol on Provisional Application. Since Germany is one of the three states without which the UPC cannot operate, it cannot go into force until that complaint is resolved. Still, it is likely that the UPCA will be ratified by Germany toward the latter half of 2018.
When the final ratifications are received, implementation is likely to proceed quickly. The member states hosting UPC divisions already have confirmed their locations and provided premises. The recruitment of judges also has begun.
What Are the Benefits of the UPC?
The Unitary Patent will have clear benefits in terms of both cost effectiveness and enforcement. Currently, patent rights in the EU must be validated and enforced in each individual member state. While there is a European Patent Office that streamlines some aspects of filing classic European patents, the translation requirements are costly to comply with and the performance of multiple national patent validations is time consuming. The Unified Patent system will provide a central authority for validations and will require the translation of patent-related documents into only English, French, and German. For companies with numerous patents in their portfolio, this will represent a considerable reduction in costs and red tape. Compared to the national validation requirements and translation costs associated with the classic European Patent, the Unitary Patent represents something of a one-stop-shop.
The second benefit regards increased legal certainty and a reduction in litigation costs. With the current system, some companies experience the catastrophic cost of parallel litigations in a variety of national courts. The UPC greatly reduces this risk. Moreover, with interpretations of patent law varying from court to court, forum shopping for a favorable jurisdiction is common. With its multinational composition and single Court of Appeal, the UPC is designed to eliminate forum shopping in the participating countries.
With lower translation and litigation costs, the Unified Patent Court clearly will increase licensing and investment opportunities in Europe for companies of all sizes, giving them affordable access to a market of more than 300 million with a single patent right.
A fully automated Unitary Patent online filing system already has been designed and is integrated with the current European Patent Register. The electronic filing tool is simple and straightforward to use, which reduces the risk of procedural errors. There is no cost for the filing, examination, or registration of a Unitary Patent.
Are There Any Drawbacks to the Unitary Patent System?
While the Unitary Patent system is streamlined and cost effective throughout the life of the patent, we are hearing some rumblings of concern in the IP legal community about potential snags when it comes to enforcement. Many in the IP field are concerned at the idea of litigating in the jurisdiction of a new court system with no set precedents. Even though the UPC will draw upon existing national patent case law for precedent, it is natural that some IP owners and attorneys will feel hesitant to be one of the UPC “guinea pigs.” That does not necessarily mean that such fears will be founded.
One issue that might affect your IP portfolio strategy is that of “double protection.” A single invention is not allowed to have both a Unitary Patent and a classic European Patent; the patent owner must decide to opt in to the Unitary Patent system or not. The question of whether double protection by a Unitary Patent and a national patent is possible has been left open in the UPC regulations and is to be decided at a national level. A number of countries are considering allowing double protection but until each nation decides the matter, patent owners will have to carefully strategize to avoid any confusion about jurisdiction should the need for patent litigation arise.
It is also important to remember that the Unitary Patent does not protect your intellectual property in every EU country, and it still will be necessary to file and validate patents separately in the non-participating states to achieve the complete breadth of protection in the European market.
The important thing to remember is that each company’s patent portfolio is different and there will be a range of options on how to proceed with your European patents. The system is changing for the better, but it isn’t one-size-fits-all.
Whatever is in your patent portfolio, don’t wait until the UPC is fully operational to begin planning for the future of your European patents. The time to act is now.
If you have questions about how the new Unified Patent Court may impact your patent portfolio strategy, contact an international patent attorney at Panitch Schwarze Belisario & Nadel at 888-291-5676.