Introduction

A new unitary patent right (UP) has been agreed between 25 of the 28 European Union Member States (MSs), which will be enforceable via a new court system: the Unified Patent Court (UPC). The UPC aims to provide an exclusive court for all decisions involving the UP and also, in the longer term, all European patents.

Regulation 1257/2012 establishing the UP is already in force but cannot become effective until the UPC has been established. The UPC was created using an international agreement: the Agreement on a Unified Patent Court (UPCA), made between EU MSs, signed but not yet ratified by sufficient of them to come into effect.

Once the UPCA and the UP are both in force, then any European patent (EP)application coming to grant can be converted into a UP at grant if the applicant choses.

Currently, EPs are applied for centrally, at the European Patent Office (EPO), and then on grant are converted into a bundle of national patent rights, designated to whichever European Patent Convention signatory states have been selected by the applicant. Although there is a central system for opposition before the EPO, post grant infringment and revocation actions must be brought in relation to individual designations and cannot be litigated centrally. This frequently leads to multiple actions across Europe in relation to EPs derived from the same initial application.

The Commission and the European Parliament have sought to resolve the multiplicity of actions based on the same EP, by allowing the new UPC to hear EP litigation as well. However, for a transitional period, the proprietor of an EP may choose to "opt-out" of the UPC system and retain the right to litigate designations separately in national courts. Once this period has passed (after 7 years, although this may be extended to 14 years), all EPs which have not been opted out will be litigated "centrally" using the UPC system. For more on the consequences of opting out or not doing so see here.

It will not be obligatory to apply for UP status on grant of an EP by the EPO, EPs will continue to be granted as now. Once the new regime is in place, it will still be possible (as it is now) to apply for national patents (NPs) instead of EPs (or UPs) by lodging separate applications at each of the national patent offices. These national patents will not be litigated at the UPC and actions relating to them will continue to be heard by national courts. National patents are therefore one way of avoiding the new UPC system if there are strategic reasons for doing so.

Non-EU EPC states (such as Switzerland, Norway and Turkey) were not allowed to take part in the UPCA (only EU MSs could take part) and thus for patent protection in these states and any MSs which have not signed up to the UP or UPCA, the only option for protection will continue to be via an EP (or an NP). See here for more on where UP will have effect.

The UPC structure will have local divisions, regional divisions and a central division. Regional divisions are a form of local division providing a UPC for several MSs at once where the number of patent cases a year is too low to merit individual local divisions. Infringment actions can be brought in a local division but the central division has exclusive jurisdiction to decide applications for declarations of non-infringement and revocation (see here).

The central division has been split between Paris (the main seat of the central division), London and Munich. Each seat of the central division will deal with cases dependent on their content, based on IPC classifications. The London central division will take cases on patents involving human necessities and pharmaceuticals/chemistry including genetic engineering and Metallurgy (International Patent Classification of WIPO sections (A) and (C) - see here). Munich will hear cases involving patents in IPC class F, concerning mechanical engineering. All other patent classifications will fall to be heard before the Paris central division.

The cost of the new UP has yet to be fixed.  It will certainly be cheaper than the current fees if you were to designate all the EU MSs with a current EP application, but is not likely to be as cheap as the average designation which is currently 4 countries. However, avoiding the UPC system by registering national patents instead of European patents is likely to prove more costly.

How to get a UP

The UP has been established via enhanced cooperation under Regulation 1257/2012 of 17 December 2012 implementing enhanced cooperation in the area of unitary patent protection. It is a single patent right in all states that took part in the enhanced procedure.

UPs will be applied for like a standard EP, centrally via the EPO. Once the UPCA is in force any new EP application or EP application that is already in the EPO system can be converted into a UP within a month of grant (the EPO cannot start granting UPs until the UPC system is in place).

Currently the UP would cover 25 of the 28 Member States (excluding Italy, Croatia and Spain who have not taken part in the enhanced cooperation procedure so far).

Although Poland participated in the enhanced cooperation, since Poland has not signed the UPCA, UPs will not be enforceable there. 

EPs will still be available (although after the transitional period they must be litigated in the UPC system – i.e. 7 years, plus a further 7 years if the assessment to be conducted 5 years into the UPCA decides this is appropriate). 

Even if a UP is used, separate EPs will need to be obtained for Norway, Turkey and Switzerland (which are not EU MSs and thus cannot be part of the UPC/UP system) and also for any MSs which have not taken part in the enhanced cooperation procedure (currently Spain, Italy and Croatia) or which have not signed up to the UPCA (currently Spain, Poland and Croatia).

National patents will still be available from national patent offices and will be litigated in national courts.

Unified Patent Court Agreement (UPCA) (including signatories and ratification)

Establishment of the Unified Patent Court (UPC):

The UPC is established via an international agreement: The Agreement on a Unified Patent Court (UPCA), Council of Europe, 11 January 2013. This is an international agreement/treaty between 25 of the 28 Member States of the European Union setting up the Unified Patent Court. The UPCA was not signed by Spain or Poland (or Croatia which has recently joined the EU) – but Italy has signed it, despite not entering into the enhanced cooperation to establish the unitary patent (UP).

For the UPCA to come into force:

  • the UPCA must be signed AND ratified by 13 Member States, including France, Germany and the UK; AND
  • amendments to the Brussels I Regulation to accommodate the UPC must come into effect (now set for 10 Jan 2015).

AND THEN, it will only come into force on the first day of the fourth month after those criteria are met.

Fulfilment of the criteria:

  • Signature: Every EU Member State has signed the agreement except for Croatia, Poland and Spain, so there are sufficient signatories.
  • Summary of Ratifications:
    • Austria ratified on 6 August 2013
    • France ratified on 14 March 2014
    • Sweden ratified on 5 June 2014
    • Belgium ratified on 6 June 2014
    • Denmark ratified on 20 June 2014
  • There need to be 8 more ratifications (including the UK and Germany) for the UPC regime to come into effect.
    • UK – The Intellectual Property Act 2014 provides for a new section 88A to be inserted into the Patents Act 1977 giving the Secretary of State power to make an order, giving effect to the UPCA. This will require a Statutory Instrument which is unlikely to go before Parliament until later this year. Consequently the ratification of the UPC by the UK seems unlikely before May 2015 (post UK elections and the Scottish referendum). UK Government commentary also states that there will be no ratification until the fee system for the UPC is clear and agreed. Since the UK is one of the required ratifying states, the deposit of the ratification instrument may be delayed until all the practical arrangements for the UPC are in place.
    • Germany: The German Federal Minister of Justice announced in March 2014 at a speech to the Federal Association of German Patent Attorneys (link here (in German)) that the German government is planning to introduce draft legislation in the autumn to prepare for the UPC. Germany is therefore unlikely to ratify before the autumn.

Other countries that have shown signs of progress towards ratification are Malta and Ireland 

  1. In Malta, legislation was adopted by the House of Representatives on 21 January 2014 and the instrument of ratification was then expected to be deposited in Brussels but none has been deposited to date.
  2. Ireland will hold a referendum on the UPC but no date has yet been announced.

SwedenLithuaniaLatvia and Estonia have concluded an agreement (see press release 4 March 2014) on a regional division of the UPC, although the last three have yet to ratify. Sufficient ratification, therefore, is not expected before 2015, and, given the above on the UK's ratification; it looks more likely to be late 2015 at the very earliest. 

To follow ratification see the table produced by the Council of Europe.

See also the ratification index produced by the Commission (although not always as up to date as the Council of Europe site). From the ratification index it can be seen which countries have not taken part in the enhanced cooperation procedure to establish the UP (Italy, Croatia and Spain) and which have not signed the UPCA (Spain, Croatia and Poland); Italy signed the UPCA (and Poland supported the enhanced procedure for the UP).

UPC Structure – local, regional and central divisions

The UPC will have a Court of First Instance (divided into local, regional and central divisions) and a Court of Appeal (Brussels). Cases will commence in any one of these divisions according to the subject matter and the prescribed division set out in the UPCA and the UPC Rules (see the IPO's diagram illustrating this and more on this under Jurisdiction). The main seat of the central division will be Paris with sections in London and Munich.

The work of the central division will be divided according to the subject matter of the patent in dispute based on IPC classifications: London will deal with patents falling into International Patent Classification of WIPO sections (A) Human necessities (including pharmaceuticals but also foodstuffs, tobacco, clothes, furniture, footwear, some agriculture applications and sports and amusements and much more - see here) and (C) Chemistry (which includes genetic engineering) and Metallurgy - see here. Munich will hear cases involving patents in IPC class F, concerning mechanical engineering. All other patent classifications will fall to be heard before the Paris central division.

Latest on Local and Regional divisions

  • Single local divisions are expected in each of England and Wales, France, Belgium, Italy, the Netherlands and Denmark
  • 4 local divisions are planned in Germany (Düsseldorf, Mannheim, Munich and Hamburg)
  • Scotland's request for its own local division has now been supported by the UK government
  • Ireland - undecided on whether to participate in a regional division or have its own local division
  • Portugal - would prefer to participate in regional divisions to share costs
  • BulgariaGreeceCyprusRumania and Slovenia are planning a regional division
  • Malta and Luxembourg - plan to go direct to the central division for any patent infringement actions
  • SwedenEstoniaLatvia and Lithuania have signed an agreement (4 March 2014) on the establishment of a Nordic-Baltic regional division of the Unified Patent Court which would be located in Stockholm and the language of the proceedings would be English
  • It is thought that Finland is likely to set up its own local division allowing Finnish as a designated language alongside English
  • Denmark plans to use Danish and English as languages of the proceedings in its local division
  • The Belgian local division will operate in Dutch, English, French and German

Mediation, arbitration and training: The official UPC website confirms that a patent mediation and arbitration centre with seats in Ljubljana and Lisbon and a training framework for judges with facilities in Budapest will be established.

Jurisdiction and "opt-out"

Once the UPCA and the UPC come into effect, the court system will have exclusive jurisdiction over UPs and all EPs (unless the latter have been opted out of the system). The UPC also has jurisdiction over supplementary protection certificates (SPCs), unless they have been opted-out or are an SPC originating from an opted out EP (which are automatically deemed to be opted out).

What action goes where?

  • Infringement claims can be brought in local/regional divisions where the infringement occurs
  • Revocation actions must be brought before the central division unless brought as a counterclaim where they can be heard with the infringement action or transferred to the central division by the panel hearing the infringement action
  • The central division also has exclusive jurisdiction over declarations of non-infringement

Opt-out: When, Proprietors, Effect

When: During the first 7 years from the UPCA coming into effect, an opt-out from the UPC is available for EPs (this may be extended to 14 years – following an assessment after 5 years).

Once all the criteria for the UPCA to come into effect have been fulfilled, there are 4 months before it can come into force. During this period it is proposed that there will be a "sunrise" period within which all current EPs and EP applications and SPCs can register an opt-out from the UPC system, before it becomes a reality. However, this has not yet been finally agreed. 

Once the UPCA is in force, proprietors can opt-out EP applications (as well as EPs already granted) and then opt back (withdraw the opt-out) when the EP comes to grant or whenever they decide. UP applications cannot be opted out at any point and are under the exclusive jurisdiction of the UPC.

SPCs for opted out EPs will automatically be opted out. Otherwise SPCs can be opted out separately (but this must be done by the EP proprietor).

Proprietors: Opt-out is for all designations of EP (as is 'opt back' in/withdrawl of opt-out) and thus all proprietors of the EP designations must opt-out together.

Effect: Opt-outs are effective for all designations of an EP. There are concerns about how quickly opt-outs will be able to be registered – the UPC Rules (16th version) try to deal with this by providing registration of opt-out with immediate effect (Rule 5).

Once opted out, the UPC has no jurisdiction over the EP and the EP must be litigated nationally (under national law). The opt-out is effective for the lifetime of the patent and beyond eg for litigation based on rights now expired or a subsequent SPC. The proprietor is free to opt back in, unless "an action" has already been brought before a national court. Once the opt-out is withdrawn, there is no further opportunity to opt-out.

However, proprietors can opt-out EP applications (as well as EPs already granted) and then opt back in (withdraw the opt-out) if they so decide post grant or if they wish to obtain a UP at grant (for which there is no opt-out option).

Not opting out:

Effect: If a patentee has not opted out of the UPC system its EP will nevertheless be subject to a dual jurisdiction of both the UPC and national courts for the duration of the transitional period (7 years initially):

  • The UPC has jurisdiction for all UPs (no opt-out available) and for EPs (unless opted out) and SPCs (unless opted out or the SPC originates from an opted out EP)
  • During the transitional period, national courts also have jurisdiction in relation to EPs, even if not opted out, in relation to infringement and revocation proceedings (and SPC infringement and invalidity)

Within the transitional period, the patentee can subsequently choose to opt-out of the UPC system as long as proceedings have not already been brought before the UPC. However, once a UPC court is seized of an action, the EP cannot be opted out. Similarly, once a national court is seized of an action in relation to an EP, the proprietor cannot withdraw an opt-out. 

The UPC Rules

Now in their 16th draft, dated 31 January 2014 and published 6th March 2014 - due to be finalised by July 2014. This latest draft is in response to the consultation on the 15th draft (published 31 May 2013). The 16th draft is marked up to show where amendments have been made. This draft will not be subject to further public consultation, although any comments can be submitted at an oral hearing later this year.

A table has also been prepared by the UPC Preparatory Committee containing a digest of the comments received in the consultation and the decisions taken in relation to these and the composition of the new draft – see here.

During 2014 the Preparatory Committee road map set out a timetable of review and hearings on the draft rules leading to their adoption by the Preparatory Committee in July 2014.

The Preparatory Committee suggests that "any comments should be submitted at the oral hearing planned to be held by the Legal Group in the course of this year which will seek input of users on all suggested amendments to the text since the written consultation". This hearing is expected some time in Autumn 2014.

Where will the UP have effect?

There are currently 25 EU Member States which have participated in the enhanced cooperation procedure to establish the unitary patent. However unless these states have also ratified the UPCA then the UP will not be effective in their jurisdictions. Some states have participated in the UP but have not signed the UPCA.  Further some states declined participation in the UP but have signed the UPCA.

See here (and the table produced by the Council of Europe) for a summary of which states have signed up for UP enhanced cooperation and signed/ratified the UPC Agreement (see also our own summary page on this here). Since no non-Member State countries are able to take part in the UPCA the UP will not extend to all the countries in relation to which it is possible to request EP designations (all EPC states). 

EU Member States where the UP will not apply (given the current state of UP participation and UPCA ratification):

  • Spain – has declined involvement in UP or UPC and continues to challenge the use of the enhanced cooperation procedure at the CJEU
  • Poland – participated in enhanced cooperation establishing the UP but has said it will not sign the UPC (for now)
  • Italy  – has yet to participate in enhanced cooperation (UP) but has signed UPCA
  • Croatia – has not agreed to the UP enhanced procedure or signed the UPC Agreement. However Croatia only joined the EU on 1 July 2013 so it may well catch up with these agreements soon. There is no suggestion that it has any particular objections to the UP/UPC system.

The UP will also not apply in EPC member states which are not eligible to be signatories of the UPC Agreement, although they are European Patent Convention signatories and are options for desgination under the EP – Norway, Turkey and  Switzerland .

Late joiners to the EPC – European patents applied for before 2008 (for Croatia) and 2007 (for Malta) which are coming up to grant will not be able to extend to those states as they were not signatories to the EPC when the applications were made. Thus if a UP is requested when such applications come to grant, it will not be possible for it to cover these states even when Croatia has signed the UPCA and participated in the enhanced cooperation for the UP (Malta has signed the UPCA and agreed to the UP enhanced cooperation).

What's happening next?

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