Aimed at stimulating business in the single European market, a new European patent package is to provide a Unitary Patent (UP) automatically valid in 25 member states of the European Union (EU) with associated reductions in validation costs, and a single Unified Patent Court system intended to promote legal certainty with reduced litigation costs.

In Brief on the European Unitary Patent

Last week, the European Parliament voted in favour of the Unitary Patent Regulation. The vote further facilitates a Unitary Patent to be granted by the European Patent Office (EPO) valid in 25 out of the 27 EU member states, but not in other states of the European Patent Convention (EPC) which will require separate validation, such as Switzerland and Turkey.

The UP and UPC will run as an alternative or parallel to existing options, at least for transitional periods, and will significantly reduce the cost of obtaining pan-EU patent protection. One concern is the power of an untested Unitary Patent Court (UPC) to issue decisions which will have EU-wide effect. This is both an advantage (to avoid litigation costs in multiple states) and a potential problem (an unfavourable decision has pan-European effect).

The Unitary Patent has been thirty years in the wings: why now?

In June, the European Council resolved the outstanding issue of the patent package, namely the seat of the central division of the court of first instance of a Unified Patent Court. Great diplomacy and pragmatism appears to have been employed in the last few years and months driven in part by pressure from trading partners, and pressure from within the EU to implement a range of strategic packages aimed at increasing prosperity for Europeans. Italy and Spain who disagree with other members concerning the languages for the Unitary Patent were not part of the recent negotiations which were nevertheless able to proceed without these member states under the "enhanced co-operation" provided by the Treaty of Lisbon in 2009. The legality of this side-step is still being decided.

What are the next steps with the Unitary Patent?

A formal agreement embodying the patent package will now be drafted for review by individual EU member states with agreement from a minimum of thirteen member states required to ratify the agreement, including the UK, France and Germany. There is no deadline for this process but there is some optimism given the present impetus and lack of significant obstacles that the agreement may be ratified, and the UP and UPC up and running, by 2014. Thus some existing applications, or their divisional applications, may grant as UPs.

The key features of the Unitary Patent:

Unitary Patent will automatically be valid for participating EU states

The present European Patent (EP) system requires separate validation in all EP states where protection is sought. For the UP route, upon grant by the EPO, a UP will automatically be valid for participating EU states. The EP and national patent systems will continue to run in parallel at least for a transitional period, but it will not be possible to have protection twice in a single state, for example, as an UP and an EP patent.

The Unitary Patent system language translation requirements reduces fees

EP patents are granted with the text in English, French or German with translations of the claims into the other two languages. Under the current system, if validation is sought in up to thirty-eight EPC states, the cost of translations of an EP patent can be vast, even though only claim translations are required in some countries. This is the case even with the significant cost reductions provided by the London Agreement in 2008. Under the UP system there will be a transitional period during which the text is translated into one other of the current three patent languages, English, French and German, after which the claims only will need to be translated into English, French and German. There are provisions for subsidised machine translations into any EU language upon request.

A non-centralised Unitary Patent Court

A non-centralised Unitary Patent Court with Local/Regional Divisions, and a Central Division is to be developed. The Central Division is to be divided between technology-specialisation clusters in Paris, London and Munich, and will have a Court of Appeal in Luxembourg.

The break down of the Central Division

The Central Division is to have jurisdiction over revocation matters and matters where the defendant is not domiciled in the EU. London is to hear biotechnology, chemistry, materials and pharmaceutical related cases, Paris to hear electronics, computer and textiles, and Munich to hear mechanical engineering and administrative actions.

The Local/Regional Divisions

The Local/Regional Divisions in a state/region to have jurisdiction over infringement, and the option over any revocation counter-claim, where the infringement takes place in that state/region or where the defendant has residence or its principle place of business in that state/region.

A uniform and streamlined procedural framework

The UPC is to have a uniform and streamlined procedural framework and, after transitional periods, exclusive jurisdiction over UPs and EPs. The UPC is to have no jurisdiction over national patents or utility models, and no jurisdiction over non-EU patents granted by the EPO, such as those validated in Switzerland and Turkey.

Official fees

The European Commission estimates the official fees for validation of an UP will be approximately 80% less than the fees for validating an EP in all member states of the EU. The official fee for renewal of an UP is expected to equal the cost of renewal in 5 or 6 EU states.