Unitary Patent and Unified Patent Court
In Europe, the introduction of the “unitary patent system” is imminent. The unitary patent will fundamentally change the patent landscape in Europe.
Basics . Court System. Representation. Opt-out
Here we present the basic principles of the unitary patent system, consisting of the unitary patent and the unified patent court.
This information is intended as an introduction, only, and does not constitute legal advice within the meaning of the German Legal Advice Act. Furthermore, the introduction cannot replace the need to deal with the details of the unitary patent system in individual cases. Here we refer, among others, to the professional publications – also written by members of our firm. Of course, we are also available for individual consultation.
The Basics
At present, the European Patent Office grants European patents for the participating contracting states, which, once granted, break down into a bundle of national patents (“bundle patent”) and are treated as equivalent to a nationally granted patent in the respective contracting state. If a Europe-wide patent infringement occurs within the European internal market, the patent proprietor is, in principle, required to initiate a separate patent infringement action in each individual contracting state. This is associated with correspondingly high legal costs for both the patent owner and the alleged infringer. In addition, substantively different court decisions are still possible, so that a product would be banned in one part of the EU and not in another. This situation was increasingly perceived as unsatisfactory.
Several attempts have been made to resolve this situation, including an initial attempt at the EU level to create an EU Community patent comparable to the EU Community trademark and the EU Community design. However, the corresponding bills were never sufficiently ratified. An important counter-argument was that no parallel EU patent office should be created to the successfully operating European Patent Office, which could impair a desirable Europe-wide harmonization in the patent system.
Therefore, a different approach has now been chosen, involving the European Patent Office. In this context, use was made of the possibility expressly provided for in the European Patent Convention (EPC) applicable in this respect, namely that the European Patent Office may also grant a unitary patent for a group of contracting states (Art. 142 EPC). Since all EU states are also member states of the European Patent Convention, the initial intention was to grant a unitary EU patent for the entire EU by means of the European Patent Office. However, since the EU states Spain and Italy had blocked this initiative, this action was taken forward without Spain and Italy in the framework of the newly created possibility of “enhanced cooperation” in the EU with the other EU states. To this end, on the one hand, the foundations were laid for the “unitary patent” to be granted by the European Patent Office for the contracting states of enhanced cooperation, now referred to as the “European patent with unitary effect” (EU Regulation No. 1257/2012), and an applicable translation regime (EU Regulation No. 1260/2012). Likewise, a common patent court system uniform for the contracting states of this enhanced cooperation (Agreement on a Unified Patent Court) was also agreed upon. Italy, by the way, has since changed its mind and joined the unitary patent system.
The entry into force of the unitary patent now depends on the sufficient ratification of the Agreement on a Unified Patent Court, which will be referred to simply as the “Agreement” in the following. In parallel, the structures for the patent court system are already being prepared and the legal and financial framework is being concretized.
According to the current status, the following states will belong to the Unitary Patent System: Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania. Luxembourg, Malta, the Netherlands, Austria, Portugal and Sweden.
The European patent with unitary effect (“unitary patent”) is a patent granted by the European Patent Office with effect in all member states of the Convention. It has the same effect for all covered states, so that a common uniform court decision can be made for all these states in a single court proceeding. This applies both to the question of whether a patent infringement has occurred and to the question of the extent to which the unitary patent was rightly granted and is legally valid. The scope of protection of the unitary patent is interpreted with respect to a specific alleged infringing act in a single court proceeding and applied to all EU states covered by the unitary patent simultaneously and without national deviations. This confers a single legal title that can be enforced in all EU states covered by the unitary patent (see also EU Regulation No. 1215/2012 “Brussels Ia”).
Until the grant of the European patent with unitary effect (“unitary patent”), the costs for the unitary patent are the same as for a conventional European (bundle) patent. Since no further translations of the patent specification are provided for the unitary patent granted in the language of the proceedings before the European Patent Office, translation costs for meeting national requirements of the relevant contracting states can be saved, if applicable, compared to a conventional European (bundle) patent.
Only for a transitional period of a maximum of 12 years, until sufficiently high quality computer translation facilities are available, a translation of the unitary patent into another language which is an official language of the EU is required, provided that the unitary patent was granted in English. Otherwise, a translation of the application text in English must also be submitted.
The annual renewal fees for the maintenance of the unitary patent, once granted, are to be essentially the same as the renewal fees that would be incurred for the four contracting states for which the European (bundle) patent most frequently takes effect (“is validated”). For example, the annual fees of the unitary patent are currently €35 for the second patent year, €1,175 for the tenth patent year, and €4,855 for the twentieth patent year.
The unitary patent provides the same protection as a previous (bundle) patent granted before the European Patent Office. The only difference is that the unitary patent will be compulsorily litigated before the Unified Patent Court, whereas for a transitional period there is the possibility for previous European (bundle) patents to have an “opt out” registered, i.e. then the national infringement courts would have jurisdiction.
It remains to be seen whether and how the Unified Patent Court will deviate in its ruling practice from the previous practice of, for example, the German courts. This is difficult to estimate, especially since the case law of the German courts is also in flux.
The court system
In the first instance, the court system will consist of several local/regional divisions as well as a central division divided between Munich, London and Paris, with different levels of jurisdiction. Furthermore, the Chambers are also staffed differently with legally qualified (“J”) and technical (“T”) judges.
The following local and regional chambers will be established:
1 The Chamber may decide, in case of filing a counterclaim for nullity, to transfer it or, with the consent of the parties, the whole case to the Central Chamber, but this is expected only in rare cases.
2 The language rules have not yet been finalized, we reflect our best knowledge.
3 a technical judge may be called upon at the request of a party or by decision of the Board. He must be consulted when a counterclaim is filed.
4 2/1 means: two judges from the respective country (or in case of a regional chamber from the respective countries), one judge from another country.
5 If, upon receipt of a negative declaratory judgment action, infringement action is filed within three months before a local or regional board, the negative declaratory judgment action shall be stayed and only the infringement action shall proceed. In rare cases, the Central Chamber may also have jurisdiction over infringement actions.
6 Since the UK will not be part of the unitary patent system, it is very likely that London will be replaced as the seat of the central chamber or that, for a transitional period, the IPC classes will be split from London to Munich or Paris. However, as this has not yet been finalized, London is still listed.
The European Court of Justice (ECJ) is unlikely to play a primary role in this system. Only in areas where there is EU-wide legislative regulation is a role for the ECJ envisaged for referral questions (Enforcement Directive, Biopatent Directive, Supplementary Protection Certificate Regulation, privileging of clinical trials under the Medicines Directive, Competition Directive, Antitrust – “FRAND”). Whether general ECJ jurisdiction arises under the Unitary Patent Regulation or even the TRIPS Agreement has been advanced by some commentators, but seems less likely.
It is important to note that in the case of local chambers in a country where there have been or will be, on average, more than 50 newly filed infringement actions per year before or after the entry into force of the Convention, the respective chamber is composed of two judges originating from that country and one judge from another country, whereas it is the other way round for less than 50 infringement actions per year. Only regional chambers have two “national” judges, regardless of the number of cases. As a result, there will be two judges from the respective country/countries before the Swedish/Baltic regional chamber as well as in France, Italy, the Netherlands and the four German local chambers.
Responsibilities
The Unified Patent Court will have jurisdiction over unitary patents as well as “classical” bundle patents. However, purely national patents are not included. With regard to bundle patents, the jurisdiction of the Unified Patent Court can be blocked within a transitional period by means of an “opt out”. The Unified Patent Court will also exercise jurisdiction over supplementary protection certificates based on bundle patents or, later, unitary patents. However, an “EU-SPC”, i.e. a separate supplementary protection certificate on unitary patents, is not envisaged, even though this has been proposed.
As can be seen from the above table, the Central Chamber is primarily responsible for isolated invalidity actions, while the Local and Regional Chambers are responsible for infringement actions where counterclaims for invalidity are also possible, so it is expected that most proceedings will be heard by the Local and Regional Chambers.
However, the latter may file a possible counterclaim for nullity either by (a) co-negotiate, (b) refer to the central division and suspend or continue the infringement proceedings; or (c) refer the entire case to the Central Chamber with the consent of the parties. Cases under (b) or (c) will probably remain the clear exception, however.
Furthermore, the jurisdiction of local and regional courts is determined by (a) the location of the infringement; or (b) the registered office of the defendant. As a rule, the local or regional chamber before which an action is brought will be freely or almost freely selectable.
Preliminary Injunctions
The Unified Patent Court may issue measures of interim relief, including seizure of evidence and inspections, as well as interim injunctions. There will also be the possibility of filing protective letters to avert such interim measures.
Advantages and disadvantages of the Unified Patent Court compared to the previous national procedures
The advantage of the Unified Patent Court is the possibility to centrally litigate a patent infringement for all relevant countries of a European patent which are also member states of the Agreement. There is also a right to reimbursement of costs before the Unified Patent Court. In the case of infringement in several countries, this means a considerable saving and also the avoidance of different court rulings. However, compared to a purely German procedure, the costs will probably be higher. Compared to German proceedings, one advantage is that infringement and invalidity are examined simultaneously, so that the currently glaring difference in the duration of proceedings between the Federal Patent Court and the infringement courts in Germany, the so-called “injunction gap”, does not occur. This means increased legal certainty for all parties involved.
Representation
In order to appear as a party in proceedings before the Unified Patent Court, representation by an attorney is required. Lawyers who are admitted to practice before a court of a contracting member state are entitled to represent the company. In addition, the parties may be represented by patent attorneys who are admitted to practice before the European Patent Office and who have also obtained a qualification to practice before the Unified Patent Court. Patent attorneys who are not authorized to represent before the Unified Patent Court shall be allowed to speak in accordance with the Rules of Procedure.
Special rules apply to the “opt-out”.
This applies to all local and regional courts as well as to the central chamber. Our firm will be able to represent you before the Unified Patent Court in all proceedings.
No, employment with the party alone is not sufficient for representation. A representative always needs a power of representation as an attorney or as a representative before the European Patent Office qualified for the Unified Patent Court. However, whether employed in-house counsel or patent attorneys may thus appear before the Unified Patent Court has not been fully clarified, although this is widely assumed. Our firm will be able to represent you before the Unified Patent Court in all proceedings.
European patent attorneys who have an additional qualification may act as sole representatives before the Unified Patent Court. Therefore, you do not necessarily need to consult a lawyer. Our firm will be able to represent you before the Unified Patent Court in all proceedings.
No, a single representative is sufficient by law. This person may be a lawyer or a patent attorney. Nevertheless, conducting proceedings before the Unified Patent Court with the assistance of a lawyer and a patent attorney together may be advisable, especially in complex and technically demanding cases. Our office has a long-established network of excellent law firms specializing in the field of intellectual property.
Before the Unified Patent Court, the principle of reimbursement of costs exists, i.e. the loser has to bear the attorney’s fees of the winner. Both attorney’s fees and patent attorney’s fees can be claimed. However, before the Unified Patent Court, in addition to the possibility of the court apportioning the costs – as is also known from German proceedings – there is also the possibility that the court may consider excessive costs of the winning party to be only partially recoverable. There is a kind of “cost cap” depending on the value in dispute, but this is set relatively high and is only intended as an absolute upper limit. It remains to be seen whether and how the Unified Patent Court will deal with the reimbursement of costs.
Opt-out policy
For a previous EP (bundle) patent, i.e. a patent granted under the EPC, which does not have unitary effect due to Regulation (EU) No. 1257/2012, i.e. is not a unitary patent, there is parallel jurisdiction of the unitary patent court and the national courts during a transitional period. Furthermore, the IP right holder of such an EP (bundle) patent has been granted the possibility during this period to exclude the exclusive jurisdiction of the EPC (Unified Patent Court for the settlement of patent disputes for the European Community with unitary effect) for the EP patent (opt-out).
For the unitary patent (European patent with unitary effect – a patent granted under the EPC which has unitary effect due to Regulation (EU) No 1257/2012), the opt-out rule does not apply.
The declaration (opt-out) must be made to the registry of the EPC (Unified Patent Court) and is entered in the court’s register. It can be withdrawn again (opt-in). The “opt-out” declaration will be possible electronically and there will be no official fees.
It should be noted that the jurisdiction of the Unified Patent Court is not limited to patents granted after the entry into force of the Agreement. Rather, it also covers previously granted European patents with effect for the states in which the Convention has entered into force. Thus, upon entry into force of the Agreement, the patent proprietor will have to review his entire portfolio of European patents to determine whether or not he wishes to exclude the jurisdiction of the Unified Patent Court.
Furthermore, it is important to note that an “opt-out” is no longer possible once an action has been filed before the Unified Patent Court concerning this patent. This means that a third party can nullify an opt-out by filing an invalidity action before the Unified Patent Court. On the other hand, if the patent owner – or a licensee authorized to do so – files an infringement action before the Unified Patent Court, no opt-out can be declared afterwards. An application for a preliminary injunction before the Unified Patent Court, on the other hand, does not suspend the “opt-out” declaration, since this does not constitute legal proceedings.
It is current opinion (Preparatory Committee) that the opt-out declaration applies to the infringement and invalidity actions referred to in Art. 83(1) UPCA, i.e. to all actions within the jurisdiction of the EPC under Art. 32 UPCA. In the view of the Preparatory Committee, an opt-out should exclude the EPC’s jurisdiction even after the end of the transitional period for the remaining term of the patent.
Declaration deadline
The transitional period (Article 83 UPCA) during which an opt-out can be declared is seven years (more precisely: six years and eleven months) and can be extended up to 14 years. Opt-out and opt-in are subject to the condition that no action has yet been filed with the court having jurisdiction up to the respective declaration.
Before the unitary patent system enters into force, there is a so-called “protocol phase” during which the necessary preparatory acts (e.g. appointment of judges) are carried out. At this protocol stage, an “opt-out” can then already be registered before the Unified Patent Court.
Patent owners should thus consider, especially with regard to older EP patents, whether the opt-out declaration will be made early with or shortly before the entry into force of the UPCA. Thus, the jurisdiction of the Unified Patent Court for EP patents can first be excluded. This can be done under the assumption that this declaration can be reversed if one day the advantages resulting from the uniform enforcement of the patent before the EPC for all EPC states are to be used
However, the same exclusion applies to an “opt-in” as to an “opt-out”, i.e. if a third party has brought an action for annulment or a negative declaratory judgment before a national court, an “opt-in” is no longer possible.
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