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Overview: the Unified Patent Court and Unitary Patent

General / Dec 09, 2015

Europe is in the process of implementing the most radical changes to the patent system since the European Patent Convention (EPC) came into effect in 1977. By the end of 2016 Europe will introduce the long awaited unitary patent for participating EU states and establish a new European court dedicated to patent disputes.

EU mapThe EPC created a centralised patent application procedure, in which the European Patent Office (EPO) examined and granted patents for contracting states (all EU member states and a number of additional countries, such as Switzerland, Turkey and Norway. Under the EPC system the patent applicant doesn’t obtain a single patent covering Europe, but a “bundle” of individual national patents. Once granted by the EPO the individual patents are administered by national patent offices and disputes on the granted patents are handled exclusively by national courts.

The EPC has been extremely successful, but it has nevertheless been considered by users to be inadequate for the Europe’s single market in the global economy of the 21st century, as well as being expensive. Various attempts have been made to introduce a new type of patent, which would be valid in the whole territory of the EU (as opposed to a bundle of national patents) and introduce a new patent court for Europe which would adjudicate on patent infringement and invalidity actions and other disputes.

In 2013 agreement was reached by the governments of 25 EU member states on a package of reforms of the patent system. The agreement establishing the new patent court is currently being ratified by national parliaments, a process which is likely to be completed by mid-2016, and national authorities are taking steps to ensure that the court will be operational in 2017.

There reform package consists of three linked elements, which will become operational at the same time:

i. The introduction into Europe of a unitary patent
ii. Language arrangements for the unitary patent
iii. A treaty creating a Unified Patent Court (UPC)

The agreement requires ratification by at least 13 EU member states, which must include the UK, France and Germany. See the ratification progress here.

The Unitary Patent

The unitary patent – properly called “a European patent with unitary effect” – is a new type of patent which is being introduced in Europe for EU member states. It will differ from a “classical” European patent in that a unitary patent will be a single legal instrument, valid in participating EU member countries which cannot be split into national components, meaning that all decisions and transactions on a unitary patent (amendment, validation, revocation, transfer, etc) can only occur simultaneously for all the relevant countries.

The process for obtaining a unitary patent will be the same as the current process for obtaining an “old style” European patent (ie equivalent to a bundle of national rights) under the EPC, except that at the grant stage the patent applicant will select the type of selection sought: either an “old style” European Patent (ie a bundle of national rights) or a European patent with unitary effect. There are pro’s and con’s to each option and the applicant must decide whether to choose a unitary patent or a classical European patent. It will still be possible to obtain classical European patents.

Unitary patent renewal fees were set at a level designed to be highly competitive with the European patent maintained in just a few selected states: it was agreed in July 2015 that the renewal fee for a unitary patent would be pegged at a level slightly less than the sum total of the fees currently paid for a European patent covering 4 countries. So, for the same price as a European patent renewal in four countries under the current system, the owner of a unitary patent will be able to maintain its patent in an area covering all participating EU states (ie 28 countries if all EU countries eventually ratify).

The UPC

The Unified Patent Court (UPC) will be a court common to those EU member states which have ratified the UPC Agreement, an international treaty signed by most EU member states in 2013. The creation of this supranational institution will mean that, for the first time in Europe, not only will the application procedure for patents be centralised (at the EPO), but also post-grant disputes will also be handled centrally. The UPC will hear disputes relating to unitary patents and, if not opted out by the patent owner, on classical European patents, as well as to SPCs related to those patents. It will have competence to decide on cases of patent infringement and patent validity, as well as applications for injunctions and damages, and other disputes.

The new court will consist of a Court of First Instance and a Court of Appeal, as well as a registry, an arbitration centre and a training centre.

Diagram of UPC

The Court of First Instance will be divided into several divisions. There will be local and regional divisions across Europe (possibly about 16 of them) including one in London. The Court of First Instance will also have a so-called “central division” which will be split between Paris, London and Munich. The Court of Appeal will be located in Luxembourg. The UPC will have its own international judiciary of legal and technical judges who will sit in multinational judicial panels of generally 3 or 4 judges (or 5 judges at appeal level). Judges and litigants will follow the UPC’s Rules of Procedure and, despite its geographical spread, the UPC is expected to develop a harmonised body of case law.

The UPC is to be a unified institution, potentially for the whole of the EU, and will have its own single comprehensive set of procedural rules (Rules of Procedure) which will govern the way cases are run in all the UPC’s divisions across Europe. The aim is to provide a harmonised approach to patent litigation across the UPC area, a fundamental aim of the UPC. The initial part of the proceedings will be written, and the rules foresee a number of steps for the parties to follow, according to a specified timeline. After the closure of written proceedings, preparations for the oral hearing(s) will begin and the proceedings will culminate in a hearing, lasting usually only one day. The rules aim for completion of proceedings within one year of the start of the action.

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