The Unitary Patent System and Unified Patent Court (UPC) are on the horizon in Europe and will bring about one of the most significant changes in European patent law in 40 years. Expected to come into force in 2017, the UPC will be effective for existing and future European patents and applications, so patentees need to be thinking about what to do to prepare.

Morag Macdonald, partner at Bird & Bird in the UK sat down with Inside Counsel to discuss the Unitary Patent costs, filing strategies, UPC costs, and the ins and outs of opting out.

“The Unitary Patent System and UPC are on the horizon in Europe because the relevant treaty and European legislation are all in place and the preparatory work is well under way to create the Unitary Patent with a Court that can handle disputes relating to it affectingover 400 million consumers in 25 separate European countries,” explained Macdonald.

This will bring about one of the most significant changes in European patent law in 40 years. While you can apply for a European patent through the European Patent Office any dispute – normally about infringement of the patent – it has to be carried out separately in the Courts of each of the countries where there is a problem. “This means that when you are enforcing a European Patent it is complex and costly as it will involve litigating before the Courts in a minimum of two and sometimes five or six different countries in Europe often at the same time,” she said.

However, the UPC will change all of that since it will give the patentees the additional option of suing infringers in just none Court with one procedure and no multiplication of costs. Infringement actions will be cheaper, quicker and less complex than the existing multiple national proceedings and will lead to remedy awards where infringement is found to have occurred including an injunction that will apply across 25 countries and damages awards in respect of all infringements occurring in all 25 countries with a population totalling 417 million.

In 2017, when the UPC comes into force the Unitary Patent will come into existence at the same time so that patentees will either be able to have traditional European patents granted to them covering four or five countries or they will be able to ask for any of their patents about to grant in the European Patent Office to have "unitary effect" which means it will cover 25 countries at once – at the same cost as a traditional European patent designating just four countries. As soon as the UPC starts it will hear all patent disputes in relation to both European and Unitary Patents except for traditional European Patents where the patentee has made a specific application to opt them to of the UPC system.

According to Macdonald, patentees need to decide whether they want to opt their current existing European Patents out of the UPC system otherwise disputes in relation to those patents will be dealt with by the UPC and not the national courts. Licensors and licensees need to review their licenses where they cover European Patents and agree on what is to be done about opting out those patents or not. Additionally, patentees need to update their filing strategies to decide when and why they will seek unitary effect for any of their patent applications.

“Companies who think they may get involved in patent disputes or potential disputes in Europe in the next three years need to get up to speed with the pros and cons of the new system so as to make sure they have maximum strategic advantage,” she said. 

Registration and renewal fees for the Unitary Patent are the same as for a European Patent designating the UK, Germany, France and Italy. But, you cannot drop country designations and therefore decrease renewal fees on the way you can for a traditional European Patent, according to MacDonald. Further, it is possible to seek to have a mixture of Unitary Patents and European Patents in the same family by for example seeking unitary effect for a parent application but keeping one or two divisional as European Patents.

“One of the things that is often suggested is that there will be no more forum shopping with the advent of the UPC,” she said. “Since the UPC is a single Court with multiple divisions spread across about eight countries at present, strictly speaking this is true.” 

However, this does not mean that there will not be "tribunal shopping.” Each tribunal is made up of a panel of three judges and depending on the existing experience with patent litigation in the country where a division is located will have only one or two of those judges of the nationality of the country where the division is located. Meanwhile each of the tribunals has wide discretion as to which procedures to adopt within the rules of the Court and it has been recognized that each tribunal will have its own "local color" as a result.

Macdonald said, “This is therefore going to be of key importance when developing a litigation strategy for the UPC.”

*First published by "Inside Counsel" on 12 April 2016