Chances and Risks of the New European Unitary Patentand New Unified Patent Court – Part 1

(I) Introduction and Overview

Introduction

June 1, 2023 marks the beginning of a new era in European patent law: the new European Unitary Patent system entered into force, consisting of the Unitary Patent (UP) and the Unified Patent Court (UPC). 50 years after the introduction of the European Patent Convention and millions of European patents filed, this may be the most prominent change in European patent practice. The Unitary Patent adds as a third pillar to the classical European patents and the national patents. The Unified Patent Court will have an influence on both the unitary patent and the classical European patents as a modern and efficient litigation system.

What will be new, what will remain? As the patent landscape in Europe becomes more complex, other relevant questions arise: what strategic decisions need to be made? How should patent applicants and owners adapt their practice, and what impact can be expected when flanking business in Europe by patent-protected innovation? This article is intended to provide guidance in answering such and other questions and, where appropriate, to draw a comparison with the established German/European litigation regime.

Key points of the new Unified Patent (UP) and Unified Patent Court (UPC) system

Type of protection

With the introduction of the new legal framework, the patent applicant at the European level (i.e. besides the national patents) has the possibility to choose between

(a) the new European patent with unitary effect (“unitary patent” / UP) in the territories of all participating EU member states which have ratified the Unified Patent Court Agreement (UPCA), and

(b) as before, the “classical” European patent, which is a bundle patent and, after grant of the patent, is divided into national parts for the ultimately desired validated countries. If additional protection is sought for individual countries not covered by the unitary patent according to (a) (e.g. the non-EU countries Great Britain or Switzerland), a mixture of (a) and (b) need to be chosen.

The option to choose will be exercised at the time of grant, within a period of 1 month after the publication of the grant. Until grant, the procedure before the European Patent Office is the same, independent of the later choice of the type of protection. This means that the formal, procedural, and substantive requirements are the same, regardless of whether a unitary patent or a classically validated patent is concerned.

Currently, the EU member states shown in the map of Fig. 1 and listed below are covered by the new European patent with unitary effect:

Germany, France, Italy, Austria, Portugal, Netherlands, Belgium, Luxembourg, Austria, Slovenia, Denmark, Sweden, Finland, Estonia, Latvia, Lithuania and Bulgaria

The map on the right shows the respective status of the EU states, depending on whether the UPCA is effective for them (dark blue), whether they have signed the Convention signed but not yet ratified the ratified the treaty (medium blue), or have not signed the treaty (light blue).

It remains to be seen whether the remaining EU member states which have signed but not yet ratified will do so and will ratify the UPCA, and whether Spain, Poland and Croatia, which have so far not acceded to the UPC, will change their position in the future in order to ultimately help the European Unitary Patent system achieve a full EU-wide unitary regime.

Interaction between EPO/EPC and UP/UPC

Up to the grant stage of a European Patent Application, everything remains the same as before. In particular, the European Patent Office (EPO) will remain competent for search and examination. Only at the grant stage the Applicant can choose between a classical validation or a UP, or a mixture of both (UP and validation in countries not party to the UPCA). Opposition before the EPO will remain to exist, no matter whether a UP and/or classical validated EP patent is involved.

The newly introduced Unified Patent Court (UPC) is a common court of the participating EU Member States and contracting states of the UPCA. An important difference to the type of protection is that the UPC has jurisdiction not only over unitary patents but also over classical European patents which have been validated in one or more states, provided that the classical EP patent is not opted out (as discussed later) and the validated country is also an UPCA state. The most significant change for litigation practice is that a decision of the UPC has uniform effect in all participating EU member states.

If the patent applicant chooses the UP as the type of protection at the time of grant, the UPC is mandatory in the participating EU countries. For classical European patents, however, the patent proprietor has the possibility during a 7-year transitional period to exclude the applicability of the UPC by a so-called “opt-out” request; then the old system of national litigation rules remains applicable.

Table 1 summarizes the tasks and competences between EPO and UPC

* the UPC has competence also for classical validated EP patent, unless opted out

Table 2 lists pros and cons for choosing either UP or validation of the EP patent in individual countries. The patent owner’s decision for the one or the other system includes a weighing of pros and cons depending on the individual case.

Further positive or critical effects will become apparent below when details of the new system and factors to opt into or out of the new law will be discussed.

Procedural law in the new Unified Patent Court (UPC)

The rules of procedure of the Unified Patent Court are similar to the basic structures and procedures of German court proceedings. However, there are special features in the UPC which should be taken care of:

• The German bifurcated procedure, in which different courts decide on infringement (patent litigation chambers of the competent civil courts) on the one hand and on validity (Federal Patent Court) on the other, does not exist in this strictly separate form. The UPC is basically competent for both proceedings. However, alternatively a local chamber in the infringement action, if a defendant raises a counterclaim against validity, may optionally refer this point to the then competent central chamber.
• The action for revocation of the patent in the UPC area can also be filed if opposition/appeal proceedings before the EPO are still pending; in the current German law, this is not permitted for classical European patents.
• Between the written procedure and the oral proceedings, a so-called intermediate procedure is optionally inserted, in which the rapporteur (the judge working on the case) is to clarify all relevant points, questions and evidence and make preparations for the final oral proceedings. The rapporteur may also hold an interim hearing in this interim procedure, usually by telephone or video conference. This interim procedure will go deeper and become more substantial than a mere first hearing under German procedural law.
• The interim hearing and the oral proceedings (including the examination of witnesses) will be recorded.
• Testimony as admissible evidence requires a written statement and, by order of the court or at the request of the party offering the testimony, an oral examination of the witness.
• The final decision will usually be announced already at the end of the final hearing; the written statement of reasons for the decision shall be set forth by the court within 6 weeks after the hearing.
• Decisions and orders of the court shall be published; under certain circumstances, pleadings and evidence may also be publicly available upon reasoned request.
• The procedure before the UPC is scheduled to proceed quickly; per instance a decision is to be expected within 12-14 months – much faster than national proceedings and EPO oppositions.
• To enable such quick proceedings, the parties’ timelines are correspondingly short: response due dates of only 3 months (re infringement) or 2 months (re nullity) require fast and diligent parties’ preparations of their facts and arguments.
• Besides these main proceedings, effective preliminary injunctions (PIs) are possible. As defence options, potential defendants may take precautionary measures by filing protective letters – which may deal with non-infringement and invalidity arguments – in advance of any potential PI; the protective letter is communicated to the Patent Proprietor not before a PI is filed. While protective letters are also allowed in Germany, this is not the case in national practices of some other countries.
• English as court language is generally permitted in UPC proceedings, including the German local and central divisions.

Thus, it is clear that while the patent landscape and litigation in Europe will be made more complex by the new European Unitary Patent and the new Unified Patent Court, these instruments effectively open up additional means and ways of a centralized, effective and relatively inexpensive system for obtaining and enforcing rights. However, achieving the strategic goals will require more than ever good preparation and attention to the peculiarities and tight time regime in the new litigation law.

Further to Part 2: (II) Strategic Considerations of using the new EU Court, or Opting out

Further to Part 3: (III) Comparison of Opposition Proceedings at the EPO and Nullity Proceedings at the UPC