For what now seems like decades, the member states of the European Union have been debating the concept of a single patent to cover the whole of the European Union with a single court to hear cases. Now, with political momentum, and in the context of European legislative debate extraordinary speed, there is the imminent arrival of a new system that will fundamentally alter the European patent landscape. It is indeed a brave new world which departs from the system of national rights and national enforcement to the long sought after one of a single patent covering the whole of the European Union and a single court with pan-European effect.
On December 17, 2012, twenty-five member states (all bar Italy and Spain) adopted the Unitary Patent and Language Regulations to establish the unitary patent. This is a single patent, effective in all member states of the European Union (with the exception of Italy and Spain).
On February 19, 2013, twenty-four member states signed the Agreement on the Unified Patent Court to establish the single, central court. Bulgaria then signed on March 5. Italy signed this agreement, but Poland did not. Spain, as with the unitary patent, sits on the outside. This establishes the single court which will hear litigation on unitary patents, and patents granted under the current European patent system.
The next step is ratification of each agreement by the legislatures of each member state. At least thirteen member states need to ratify the agreements for them to become effective, and these must include the United Kingdom, France and Germany as each of these states has a veto. In the United Kingdom at least, ratification will be preceded by further debate as to the assessment of the agreement on the economy, and it is currently not anticipated that the United Kingdom will ratify before mid-2014. There is some way to go, and the current, optimistic, prognosis of the first unitary patent application by early 2014 looks just that, optimistic.
The Unitary Patent
The unitary patent is a single patent to cover the whole of the European Union, apart from Italy and Spain. Rather than the current system of applying either for a national patent or a European patent which devolves into a bundle of national rights, you will be able to apply for a single patent to cover the European Union. Applications will be through the existing European Patent Office. The existing European patent system will remain alongside the unitary patent. In effect, applicants will apply for a European patent and will designate the unitary patent rather than individual countries. During a transitional period of 12 years, translations of applications filed in German and French into English, and translations of applications filed in English into one other official language of a member state, will be required. After this, no translations. The option of filing for national patents in individual countries remains.
The Unified Patents Court (UPC)
There will be a new court, the Unified Patent Court: a single, centralised court system which will decide on all new unitary patents and, to the extent patentees do not opt-out (there is a seven-year opt out period), existing European patents as well. This is a laudable and welcome development and addresses the current situation where there can be wide differences in interpretation between the different courts of the member states. One patent, one court, one judgment, pan-EU effect (apart from Spain and Poland) is the new mantra.
The UPC structure remains complicated, with a court of appeal (Luxembourg), central divisions (London (bio/pharma), Munich (engineering) and Paris (the rest), local divisions (for example, in the UK, France, Germany) and regional divisions (for example, in the Benelux, Scandinavia, Baltic States). Local and regional divisions remain to be established.
Discussion and Considerations
Enforcement is in the local or regional division in which the infringement occurs or where the defendant resides. If there is no local or regional division, it is in the central division relevant to the subject matter of the patent.
However, revocation and declaratory actions must be brought in the central division. A local or regional division can also transfer a revocation counterclaim in infringement proceedings to the central division (but keep the infringement case). An infringement counterclaim to a revocation or declaratory action stays in the central division.
Enforcement against a non-EU domiciled defendant, or a Spanish or Polish domiciled defendant is in the central division, as are cases against defendants domiciled or where infringing acts take place in a country with no local or regional division. This activity opens the door back to forum shopping. Many cases will give a range of options of where to sue. Infringing acts are rarely confined to one country, and there may be multiple defendants involved. Plaintiffs will readily be able to seek out perceived plaintiff friendly jurisdictions. The court of appeal and, potentially, the Court of Justice of the European Union, will be binding but it will take some time for cases to go through the appeal stage and for a body of case law to develop.
The result of a successful case, though, is truly beneficial to a patentee. No more learned and theoretical discussions about whether or not a court will grant a pan-European injunction. With a successful infringement action on a unitary patent, the whole of the European Union is covered.
Cases before local divisions are in the local language. So an infringement claim in a local division in Milan is in Italian. Cases before a regional division are in the language of one of the countries making up the regional division. So an infringement claim in a regional division in, for example, a Baltic regional division could be in Lithuanian, Estonian or Latvian. Cases before the central division are in the language of the patent in suit. 75% are in English. So, there could be proceedings in two different languages. Infringement proceedings in the local division in Milan in Italian, revocation proceedings in English in the central division in Munich. The court of appeal follows the language of the lower court.
One of the main aims of the unified patent system was to reduce the cost of both prosecution and litigation for patent users. For prosecution, it is projected that the likely costs of obtaining a unitary patent will be €5,0001 (although, during the transitional period the costs could be up to €6,500), as compared to current estimated cost of patent protection in all 27 countries of €36,000. The stated aim is to benefit SMEs, and this is the driver behind the reduced costs.
There is though no numerical indication yet of fees and costs for the Unified Patents Court. The current proposed procedure is a hybrid of common law and civil law systems. This means detailed paper-based arguments and witness evidence, court-appointed experts, technical judges and no automatic right to cross examination.
The benefits for harmonisation of procedure, practice and interpretation are clear. The European Union was established as a single market, and so to have a single patent covering the European Union is consistent with that aim, and the European Patent Office is the sensible place for prosecution to take place. Obtaining a single European patent will be similar to the current system, but without the validation and the translation issues at the end. The court structure too will provide a clear body of European patent law ensuring consistency of interpretation. In terms of result, the benefits are incalculable. A successful infringement action equals a pan-European injunction. A successful revocation action opens up the whole market of the European Union.