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A new Patents Court for Europe – what you need to do

What’s happening?

You may have heard that there’s a new Patent Court opening its doors in Europe – the “Unified Patent Court”.  I know that intellectual property and EU institutional reorganisations are two of the most dry & tedious subjects on the planet, and that this collision of the two is a boon for insomniacs everywhere, but if you have European patents or European patent applications then you need to decide what to do about it.  Those of you who don’t can switch off now and wait for my next newsletter, you lucky people. 
It's taken a while to get this far. I started working in this profession in 1991, when I was told that although it did stall for a bit in late 1970s, the “Community Patent” had seen a lot of progress recently and could be expected to arrive imminently.  In 2013 the EU was delighted to announce that a final agreement had been reached and that the Court would open just as soon as the physical and administrative arrangements could be made.  We (the UK) kind of threw a spanner into the works in 2016, but all is now set for the grand opening on 1 June 2023. 
In fact, what’s really happening is two related steps.  One is the opening of a new Court – the “Unified Patent Court” – which will change the way patents are enforced and fought over.  The other is what everyone is calling the “Unitary Patent” (strictly, its proper title is the rather-catchy “European patent with unitary effect”, but we’ll be calling the unitary patent), which is a single patent covering all the states that are party to the UPC.  Somewhat confusingly, these are abbreviated to the “UP” and the “UPC”.  Sorry, I mean the “UPC” and the “UP”. 

How will this change stuff?

First, this only affects some countries.  There is a group of EU states that have signed up for the UP/UPC and will be “in” from the start.  There’s a second group who have signed the agreement but have not yet brought it into force, who we can expect to join in at some point.  Then, there’s a third group of EU states who have not signed up, but who are permanently invited to do so.  Finally, there are the states who art part of the European Patent Office but not the EU, who are not currently involved.  I’ve summarised the groups at the end. 
The effect of this change will depend on when the European patent is granted.  In the long term, after all the transitional periods have expired, it will be quite simple.  If you want the EPO to grant a patent in any of the UPC states, you can opt for a “unitary patent” or validate nationally, but patent enforcement and disputes will be handled by the UPC.  That UP will be subject to a single annual renewal fee, payable to the EPO, set at a level of about 4 times the typical European national renewal fee. Enforcement of the unitary patent, or challenges to its validity, will need to be done via the UPC.  For all the non-UPC states, things carry on as before. 
That’s the position from 1 June 2030 onwards, which is when the transitional period is set to end (there is an option to extend it, though…).  Between 1 June 2023 and then, we will have a hybrid system; in respect of the UPC states, you will have a choice.  You’ll be able to opt for a unitary patent, if you want.  If you don’t, you can opt for national patents just as you can now.  Opt for a unitary patent and you will pay the single annual renewal fee to the EPO.  Opt for national patents and you’ll pay a renewal fee to each national office.  You makes your choice and you pays your money. 
Then, there are all the accumulated national patents granted by the EPO up to the end of May 2023, provided they are still in force in a UPC state.  These will remain as national patents, covering the same territorial scope as they do now. 

Do I need to use the Unified Patent Court?

Yes and no. 
For unitary patents, only the UPC can have jurisdiction.  There’s no choice there. 
For national patents granted by the EPO, you have a choice… up to 2030, at least.  The default will be that the UPC has jurisdiction, so if you don’t react then that will be the case.  However, the patentee can “opt out” at any time, provided that no-one has already started a case in the UPC .  Note that this applies both to national patents granted by the EPO after the UPC opens on 1 June 2023, and to national patents granted by the EPO before then.
If you opt out, you can change your mind and opt back in again, if you want.  You won’t then be able to opt that patent out again though.  
For patents granted in 2030* or later, the plan is that all patent litigation in the UPC states will be dealt with by the UPC only.

Should I use the UPC?

A tough one. We have concerns.  As for the substantive patent law that it must follow, it is instructed to base its decisions on EU law, the European Patent Convention, other relevant international agreements, and national law.  The problem here is that EU law doesn’t deal with substantive patent law, the EPC is well-established but only deals with validity, and national law across the various countries disagrees as to the finer details of patent infringement.  So the likely attitude of the UPC to infringement is somewhat vague at the moment.  There is also an issue of enforceability of UPC decisions across the EU.
On the other hand, the UPC does offer a useful opportunity to close down an infringement across all the states that are party to it in one action.  That could well be a useful tool against a wilful infringer.  In addition, if you’re planning to bring a European patent into force across a large number of EU states, the Unitary Patent offers a significant saving in renewal fees. 
Our recommendation – for now – is to opt out wherever possible, and as soon as possible.  We’re wary of a brand new Court with no history, no jurisprudence, no established culture, and a lack of legal certainty.  Bluntly, we’d advise letting others try a few cases there, to see how they get on.  If you opt out straight away then you prevent the decision being made for you by someone else lodging a validity challenge in the UPC, and you can always opt back in later if you decide to enforce the patent and want to use the UPC

What should I do?

Our recommendation is as follows:

For existing European patents granted in respect of UPC states
Opt out, and see how things go.  If you decide to enforce the patent in a UPC state, review the progress & development of the Court up to that point and consider whether to opt back in. 
For European patents granted between 2023 and 2030
If you only want to validate the patent in a few UPC states (4 or fewer?), then go for national patents rather than a unitary patent.  Opt them out immediately. 
If you want or need to validate in a lot of states, you’ll need to balance the additional cost in renewal fees against your level of perceived risk in committing to a new Court.  Note that the balance of cost/risk might change in time, as the nature of the Court becomes more visible.  Do feel free to talk to us about the likely level of costs for each route, we’re expecting this to be a frequent subject of discussion!
For European patents granted after 2030
You won’t have a choice of where disputes and enforcement actions will be heard in UPC states. 

If you have a European patent that we secured for you, or an application that is likely to be granted soon, rest assured that we will be in touch in relation to that specific case to ask for your instructions.  However, if you’d like to talk through the implications of the Court for you or your clients, just get in touch!
Here’s the complete list of states:

Immediate members Expected members  Possibly one day Unknown!
Austria Cyprus Croatia Albania
Belgium Czech Republic Poland Switzerland
Bulgaria Greece Spain United Kingdom
Denmark Hungary   Iceland
Estonia Ireland   Monaco
Finland Romania   Montenegro
France Slovakia   North Macedonia 
Germany     Norway
Italy     Serbia
Latvia     Slovenia
Lithuania     San Marino
Luxembourg     Turkey
Sweden     (Correct as of 2023)

*unless there’s an extension of the transitional period… the agreement allows for a 7 year extension if necessary

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