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How to Choose Between a Unitary Patent and a Classical European Patent?

General / Dec 03, 2015

Patent applicants will have to decide which patent protection suits their commercial and legal needs, choosing between unitary patents, classical European patents and national patents, each with its own respective advantages/ disadvantages, as well as cost considerations.

Commercial factors
Patent protection is usually sought in at least a product’s main markets and/or manufacturing centres of a competitor. Protection in just a single country is relatively uncommon, because few inventions relate only to a single market, meaning that the number of applications for national patents (other than those serving as priority documents in international patent protection) is relatively low.

Under the current European system most patentees do not maintain European patents in all of Europe, opting instead to select a limited number of important markets, in order to save on renewal fees. Validation of European patents in all EPC states is therefore fairly rare, because of the high costs of renewal, with patent protection in Germany, France, UK, and perhaps a couple of other countries being deemed sufficient in the vast majority of cases.

Unitary patents automatically cover all the major European national markets and may eventually cover a territory corresponding to the whole of the EU single market, so, in choosing between a unitary patent and a European patent, the commercial considerations may be largely secondary to the cost and legal considerations.

Licensing under the unitary patent will the same as under the classical European patent, to the extent that patents can be licensed on a territory-by-territory basis.

Legal factors
In comparison to classical European patents, unitary patents are legally indivisible in as much as they cannot be broken into national components, a feature which may, according to some observers, demonstrate less flexibility for the user. Others argue that such flexibility is unnecessary and outdated in the context of the EU single market of the 21st century.

A considerable difference between European patents and unitary patents will be in respect of their treatment in case of legal disputes: European patents, if opted out, will continue to be adjudicated upon by national courts, whereas disputes on unitary patents can only be heard before the Unified Patent Court (UPC). So, for those fearful of exposing their patent to a decision of a new and untested institution, it may be better to stay with an opted-out European patents.

For European patents an international dispute could be heard simultaneously before several national courts (on the individual national components of the European patent). The different procedures and timelines applied by the different national courts, as well as disparate cost levels, leads sometimes to legal strategies – so-called “forum shopping” – whereby one party may seek a legal advantage over the other.

Irrespective of whether such approaches are good or bad, the UPC should – at least over time – offer a harmonised approach and a single body of case law, with less possibility of exploiting national procedural differences. More importantly, it will make decisions on a European basis, ie central revocation of a patent or damages and awards across Europe, a development likely to streamline, simplify and accelerate patent disputes, a step forward for all parties.

As we have indicated, EU states have set the renewal fees of a unitary patent at a level designed to be highly competitive with a European patent and to ensure a high uptake of the unitary patent. As long as the patent is required for not less than four states then the unitary patent is likely to be a cheaper option than a corresponding European patent.

The unitary patent will nevertheless be more expensive than a three-state European patent, a configuration became more popular in the wake of the 2008 financial crisis. For this group of “borderline” patent users the cost question will be whether to pay a little more and secure patent coverage in the entirety of the EU, or to stay cheap and limit coverage to just the top three national markets instead.

In those relatively rare cases where only two national markets are interesting it is likely that both European patents and unitary patents will be avoided altogether, in favour of national patent applications before national patent offices.

Choosing a unitary patent will also have cost implications in the event that the patent is disputed in legal proceedings. Although the court fees of the UPC are not yet decided they too are likely to be set at a competitive level. In any case the overall costs of a single UPC procedure is likely to be considerably lower than multiple national proceedings under the current system.