Since the inception of the European patent system back in the 1970s there has been a certain amount of discontent. The establishment of a central granting body, the European Patent Office (EPO), was a great accomplishment, but still resulted in individual national rights enforceable in each member state of the European Patent Convention. Enforcement required a patent owner to seek remedies for infringement in each member state where the acts occurred. The situation was, and still is, complex and far from the unified European right that was hoped for.
So it is with some interest that we have seen the latest proposals unfold for a new European wide patent right. The European patent with unitary effect (unitary patent) will be achieved by three separate agreements: a regulation creating unitary patent protection, a regulation setting out the language arrangements needed to implement it, and an international agreement setting up the new Unified Patent Court (the UPC) to enforce it. Together these agreements make up the unitary patent package.
The package is not without issues. The unitary patent regulation is only open to member states of the European Union, which excludes non EU members of the European Patent Convention such as Switzerland, Norway and Turkey. In addition, Spain and Italy are not currently taking part in the unitary patent agreement. However, it may well represent the best compromise that can be achieved at this point in time, perhaps paving the way for a truly European wide unitary right in the future.
Commentators will, no doubt, be poring over the details for the coming months, but below we start by highlighting some of the key aspects of the unitary patent package. Further details can be found by following the links in each of the headings below, or by asking your contact at Reddie & Grose LLP.
The Unitary Patent
The EPO will continue to grant patents as it has done for the last three decades but, on the request of the patent proprietor, unitary effect will be given for the territory of the 25 participating member states. The resulting unitary patent will provide uniform protection, meaning that it can only be enforced, transferred, revoked, lapsed or limited in respect of all participating member states. Unitary effect can be requested within one month of grant of any European patent.
The unitary patent will coexist with national patents and current European patents. The possibility of patent protection through the current European patent system (with non-unitary effect) will remain, at least for now, for all contracting states of the European Patent Convention – both those participating and those not participating in the unitary patent.
Annual renewal fees for unitary patents will be collected by the EPO. The level of the fees have yet to be set, but the applicable regulation stipulates that the renewal fees will be equivalent to the level of the renewal fees paid for the average geographical coverage of current European patents.
In order to establish the unitary patent system, there is a need to balance the reasonable expectations of member states against the requirement for a “simple and cost-effective” procedure. Member states that do not share a language with one of the three official languages of the EPO (English, French and German) would ideally like to see unitary patents granted in their own language, but the need for multiple translations does not lend itself to a cost effective system.
To make the patent specification of unitary patents freely available, the intention is to rely on high quality machine translations. These will eventually allow third parties to look up unitary patents online, and read the specification in a language of their choosing. However, until such machine translations are routinely available, a patentee requesting that a granted European patent have unitary effect will also have to provide a translation of the patent specification into a further European Union language. In cases of infringement or dispute, the patentee will need to provide a translation to the alleged infringer or the Court.
The requirement for the patentee to provide the additional translation will only apply during a transitional period that commences when the new patent system enters into force, and is limited to a maximum duration of 12 years. Once this period has expired, further translations will only be necessary in the case of disputes with third parties.
The Unified Patent Court
The latest draft of the Agreement on a Unified Patent Court, dated 11th January 2013, gives the Court jurisdiction not only over the new unitary patents, but also over the “non-unitary” European patents which are currently granted by the EPO. Of course, rulings by the UPC with respect to the “non-unitary” European patents will only apply in respect of the EU member states that are party to the agreement which, again, excludes non EU members of the European Patent Convention.
The UPC will include a Court of First Instance and a Court of Appeal. The Court of First Instance will comprise a central division along with local and regional divisions scattered throughout the participating member states, whereas the Court of Appeal will be located solely in Luxembourg. The central division of the Court of First Instance, which is likely to deal with the bulk of cases, will be situated in Paris, with branches in London and Munich. Each of the locations will deal with different subject matter: London will deal with cases relating to chemistry, Munich will deal with mechanical engineering, and Paris will deal with the physics and electrical cases.
In general, the local and regional divisions of the Court of First Instance will decide on infringement related issues of European patents with unitary effect and “non-unitary” European patents, whereas the central division will decide on revocation related issues. Matters of infringement can be heard by a local or regional division of the participating member state in which the infringement occurred, or in which at least one of the defendants has its residence or place of business. If the infringer does not have a place of business in a participating member state then infringement matters are heard where the infringing act occurred, or, alternatively, they may be heard before the central division.
For cases in which an action for infringement is accompanied by a counterclaim for revocation by the alleged infringer, the local/regional divisions have the choice of hearing the infringement action and passing the revocation action to the central division (so called “bifurcation” – as happens in Germany), or hear both actions together (as happens in the UK and the majority of other EU states). We expect to see a great deal of discussion on strategies to best utilise the new system.
With so many different divisions, in many different member states, the issue of which language will be used for court proceedings becomes somewhat cumbersome. In general, cases before the central division will be heard in the language in which the patent was granted, whereas the language of proceedings before the local or regional divisions will be the official European Union language of the participating member state. Cases heard in the local division of the UK will be litigated in English, cases in Germany in German and cases in Greece in Greek, for example. Appeal cases will then be heard in the same language as that used in the Court of First Instance. There are a number of exceptions to the above, and more information can be found by following the links below.
Transitional Provisions & Entry Into Force
Holders of unitary patents will have no choice but to use the UPC system. However, for “non-unitary” European patents a transitional period of seven years after the date of entry into force of the agreement is provided, which may be extended by a further seven years. The transitional period allows actions for infringement or revocation in relation to “non-unitary” European patents to be heard before the various national courts, as is currently the case. Those wishing to opt-out must register their desire during the transitional period.
The Agreement on the UPC will be open for signing on 19th February 2013. Once the agreement has been signed, it will need to be ratified by at least thirteen EU states, which must include the UK, France and Germany, before it can come into force. This process is by no means straight-forward: rumblings of discontent with the proposed system have been heard in some countries, while a handful of countries may require a popular vote, the outcome of which is difficult to predict.
If all goes smoothly, the unitary patent package will come into force on 1st January 2014. If ratification is delayed the date becomes the first day of the fourth month after completion of the ratification of the Court Agreement, or the same period after entry into force of the amendments to Regulation (EU) No 1215/2012 relating to jurisdiction and enforcement of judgements, whichever is later.
This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking before any action in reliance on it.