On December 11, 2012, the European Parliament approved a set of three proposals to create (1) a “unitary” patent valid across 25 EU member states, (2) a simplified language regime for EU patents, and (3) a unified patent court for hearing infringement disputes. This agreement comes after more than 30 years of negotiation. Although many details are unclear and much could change during implementation of the agreement, proponents of the new system believe it will bring about a reduction in administrative costs of obtaining an EU patent. Further, the agreement must still receive certain ratifications in order to go into effect (the earliest date being January 1, 2014).

Unitary Patent

According to the current proposal, applications for a unitary EU patent will be examined by the European Patent Office (EPO) in Munich, which also will be responsible for maintaining the register of unitary patents and collecting annual renewal fees. Once granted, the unitary patent will provide automatic protection in 25 of the EU’s 27 member states (excluding Spain and Italy). The one-step application process for a unitary patent would eliminate the need to seek separate validation in each and every country where protection is sought and could result in significant cost savings to applicants depending on the number of designated EU countries.

Provided this proposal goes into effect, any applicant from any country will be allowed to apply for a unitary EU patent, beginning on January 1, 2014 or the date the agreement on a Unified Patent Court (UPC) enters into force, whichever is later.

Fewer Translations

According to the current proposal, unitary patent applications, including the specification, must be submitted in English, French, or German. Applications in any other language must be accompanied by a translation into one of those three languages. After the unitary patent is granted, no further translations will be required. In addition, reimbursement for the cost of translating the application into any of the three official languages will be available for EU-based small- and medium-sized enterprises, non-profit organizations, universities, and public research organizations.

Unified Patent Court

According to the current proposal, a specialized UPC will have exclusive jurisdiction over infringement and validity questions involving unitary EU patents, including actions against the decisions of the EPO in refusing a patent. First instance actions will be heard by specialized patent judges in UPC’s first instance court, seated in Paris, with specialized divisions in London for chemical cases and in Munich for mechanical cases. All appeals will be heard in the UPC’s court of appeals in Luxembourg.

Provided this proposal goes into effect, a UPC will enter into force on the later of January 1, 2014 or when 13 contracting states (which must include the United Kingdom, France, and Germany) ratify it. Thus, the United Kingdom, France, and Germany have effective veto power on the change.

Proponents of the change applaud it as a necessary streamlining of the overly complex and costly patent system in Europe, giving a needed boost to Europe’s technology SMEs and in turn the struggling European economy. Critics question the wisdom of allowing the European Court of Justice to rule on substantial patent law issues, and whether enough qualified judges will be found for trial courts, given that the vast majority of patent litigation in Europe currently takes place in Germany, England, and France. Careful study and continued monitoring of the implementation and ratification process will reveal the extent to which this new law delivers the benefits touted by its proponents or falls victim to the weaknesses identified by critics.

For additional information, see http://tinyurl.com/chptorn.