European Unitary Patent Transitional Measures

European Unitary Patent Transitional Measures


On 19 January 2022, the Protocol to the Agreement on a Unified Patent Court (UPCA) entered into force, following deposition of an instrument of ratification by Austria. This began a period of provisional application of the Protocol, after which the long-discussed European Unitary patent and the associated Unified Patent Court (UPC) should finally come into effect. The European Patent Office has announced two transitional measures to allow applicants to (1) make an early request for unitary effect or (2) request a delay in issuing the decision to grant a European patent. Holders of European patents should also be aware of a deadline that will apply to the possibility of opting existing patents out of the jurisdiction of the UPC.

In this article, we briefly summarise the Unitary patent and Unified Patent Court, and the timescale for their coming into effect, before explaining the transitional measures and briefly discussing the benefits and disadvantages of a Unitary patent and the issues concerning opt-out of the UPC.

The Unitary Patent and Unified Patent Court

The Unitary Patent will be a single indivisible patent right that has uniform effect in participating European Union member states. It will be treated as a single item of intellectual property, transferrable only as a single right and subject to payment of a single annual renewal fee. It will be enforceable as a single right through the new Unified Patent Court (UPC). The UPC will have jurisdiction for both infringement and revocation actions concerning this new right.

It is important to understand that although Unitary patents will be legal instruments of the European Union which will have effect only in certain countries within the European Union, they will be obtained through the European patent application procedure, which is administered by the European Patent Office, and the European Patent Office is not a European Union body. Thus, Unitary patents will remain inextricably bound to European patents.

How Unitary Patents will be Obtained

Unitary patents will be obtained through the existing European patent application procedure (including the existing Euro-PCT patent application procedure). Those who are familiar with the European patent application procedure will be aware that when a European patent is granted, it is necessary to validate the granted patent in individual European states. The European patent is then treated as a bundle of rights in these individual territories and renewal fees are payable annually in those individual territories instead of the European Patent Office, if the rights are to be kept in force. The European Patent Office implements a central opposition procedure and limitation procedure but, otherwise, these existing national rights are administrated by individual national Patent Offices.

Essentially, a Unitary patent will be obtained by registering a Unitary patent at the same time that validation of a granted European patent takes place, although notably the deadline for this request will be one month after the mention of grant, rather than the three month period available for validation. If a Unitary patent is registered this will replace designation of the various participating EU states. Notably, there will no requirements for costly translations, nor is there an official fee for this process. It will remain essential to complete existing validation formalities in countries which are not participating at the outset, such as Spain, and various non-EU countries, notably the UK, Switzerland and Norway. It is not essential to request a Unitary patent to obtain protection in the participating states; an applicant may instead request validation in some or all of these states in precisely the way they do at the present time.

When will Unitary Patents and the UPC Enter into Effect?

The UPCA will come into effect four months from the deposition of an instrument of ratification by Germany, which is expected to take place in around the middle of 2022. Accordingly, the UPCA is expected to come into force in the second half of 2022. It will be possible to request a Unitary patent for any European patent granted on or after the date of entry into force of the UPCA.

Which Countries are and are not Participating in the Unitary Patent?

It is not yet clear precisely which countries will be covered by the Unitary Patent on day one. The list should include Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovenia and Sweden who have already deposited instruments of ratification as of 19 January 2022. Spain will not participate at this time and European patent applicants wishing protection in Spain will require to follow the existing validation procedure there.

Countries such as the UK, Norway, Switzerland, Turkey and Iceland, which are members of the European Patent Convention but not members of the European Union cannot participate and the existing validation procedure will be required to obtain protection in these territories.

What are the Transitional Measures implemented by the European Patent Office?

Two transitional measures are being implemented. Firstly, it will be possible to file an early request for unitary effect with the European Patent Office. This option will be available from the date when Germany deposits its instrument of ratification of the UPCA. Unitary effect will only be registered once the Unitary Patent system has commenced and any objections or refusal of registration will only take place at that time. To use this procedure it will be necessary that an Intention to Grant letter (formally a Rule 71(3) EPC communication) has already issued. This measure will be helpful to applicants who are keen to have a Unitary Patent at as early a date as possible, perhaps because they wish to enforce it.

The second transitional measure is the introduction of a request to delay the decision to grant a European patent. This option will become available from the date when Germany deposits its instrument of ratification. If the option is taken up and the necessary form is filed then the decision to grant will be delayed until the UPCA is in force, ensuring that the applicant can take up the option of registering a Unitary Patent. This measure will be helpful to applicants who are near the end of the European patent application procedure who wish to obtain a Unitary Patent.

What are the Benefits of a Unitary Patent?

This all leads naturally to the question as to who will want to obtain a Unitary patent and who will not. We will publish more detailed guidance in due course but, for now, we set out here a brief list of relevant issues.

Validation Costs

The cost of registering a Unitary patent will be low relative to the cost of validating a European patent in a significant number of the participating states as there is a simple central procedure, no official fee and no translation costs.

1. Renewal Costs

The cost of renewing a Unitary patent starts off at a conspicuously low level, with official fees of only EUR 35, EUR 105 and EUR 145 for years 2, 3 and 4, although official fees then increase substantially (reaching EUR 4855 in the 20th year). An analysis of the cost of a Unitary Patent by the European Patent Office suggests that actual renewal costs, including attorney fees, are expected to be about the same as the total cost of paying renewal fees in the four countries where European patents are most often validated. Thus, renewal costs will be higher than would be the case if the patent was validated in only France and Germany, of the participating UPC countries, but much cheaper than the cost of paying renewal fees in all participating countries.

2. Inflexibility of Renewals

Renewal fees increase throughout the life of granted European patents and it is common for proprietors of patents to at some point stop paying renewal fees for some countries, as annual fees become large. That option is not present with a Unitary patent. The Unitary patent is either renewed annually, giving continued protection in all countries, or abandoned whereupon protection is lost for all countries.

3. Inflexibility of Assignments

A Unitary patent is a single indivisible right and so it cannot be assigned to different parties for different countries. There is more flexibility with licensing.

4. Centralised Enforcement

A Unitary patent may be enforced for all of the countries which it covers through a single infringement action before the UPC. By and large, it is expected that this will be less expensive than conducting infringement actions in several EU countries but more expensive than conducting an infringement action in a single EU country.

5. Centralised Revocation

A Unitary patent is vulnerable to a central revocation procedure in which third parties may challenge its validity. Thus, the proprietor risks losing their rights in all of the participating countries via a single legal procedure. Note that the existing European patent opposition procedure remains unchanged.

About the UPC Opt-out

The Unified Patent Court will have jurisdiction not only over the new Unitary patent, but also in respect of European patents, including existing European patents, in participating countries. For the first 7 years of the UPC (potentially to be extended to 14 years), it will be possible for the proprietors of new and existing European patents to opt out their patents from the jurisdiction of the UPC, provided that no action is pending before the UPC. It is thought that many European patent holders will decide to opt out of the UPC. It will be possible to cancel the opt-out at a later stage. Thus, the proprietor of a European patent could consider initially opting their patent out so that third parties cannot file revocation actions through the UPC bearing in mind that they can cancel the opt-out if they later wish to use the UPC to file an infringement action.

It may come as a surprise to some patent proprietors that the UPC will immediately have jurisdiction over pre-existing European patents and, importantly, there will be a three month sunrise period up to the date when the UPCA comes into force during which it will be possible to opt out pre-existing patents to avoid the UPC ever having jurisdiction. We will advise our clients for whom we are European patent representatives when the sunrise period begins.

The dawn of the Unitary Patent and UPC represents an important and long-awaited development for the European patent system. However, it does only add to existing procedures and the existing European Patent Convention and application procedure remains unaffected. As the United Kingdom is not a member of the European Union and cannot participate, many patent proprietors will find that registering a Unitary Patent is not sufficient for their purposes and that they also wish to validate their granted European patents at least in the UK and, from time to time, to participate in national litigation in the UK or elsewhere as before.

If you have any questions about the Unitary Patent or Unified Patent Court please ask Alistair Hindle, Robert Gregory, Chris Cottingham or your usual contact at Hindles.

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