After four decades of discussion and positioning it appears agreement has been reached on a unitary European patent system.  This week the European Parliament agreed draft texts providing for the grant of unitary patents, a language regime for those patents, and a unitary patents Court.  In separate developments, the Advocate General also found that the enhanced cooperation agreement, under which the agreements were made, was not in breach of EU rules.  Although not final, the Advocate General's Opinion is likely to be followed, thus removing the threat of the legal challenge brought by Spain and Italy (who opted not to participate in the unitary patent project).

The agreements pave the way for the EPO to issue Unitary Patents and for those patents to be asserted in a single Court.  The EPO expects to commence issuing unitary patents in 2014, subject to ratification of the agreements by the member countries and subsequent development of rules and procedures.

Unitary Patent

The agreement on the unitary patent, and associated agreement on the language regime, set out the framework for granting patents having unitary effect in the 25 countries participating in the agreement (all EU members other than Italy and Spain).

The EPO will be responsible for the publication, examination, and grant of unitary patents.  The language regime up to grant will remain as it is currently (applications may be filed in English, French, or German, with a translation of the claims into the other two languages being required on grant).  However, on grant it will no longer be necessary to file translations into national languages of member states in which protection is required, thereby giving cost savings.  Should a patent be litigated translations into the language of the opposing party will be required.

Transitional provisions for existing applications and patents are not yet fully defined, but it is likely proprietors will have the option of converting existing patents granted by the EPO into unitary patents (albeit with effect only in countries in which the patent is in force).

The aim of the unitary patent is to allow applicants to secure a single European-wide right, as opposed to the current bundle of European patents.  It is intended that this will reduce the cost of translations and renewals.  Whether this turns out to be correct is open to discussion and, in our opinion, depends on the renewal fee costs which are not yet defined.  A single renewal fee will cover all 25 countries.  If that fee is set at the sum of the current renewal fees in all 25, or even a significant reduction of that figure, it will be very much more than the renewal fees paid by a typical applicant who validates in France, UK, and Germany.  The new system would not save them any translations costs, as none are required in those countries, but would require additional renewal fees.  It could be argued that they would be getting the remaining 22 countries for a bargain price, but this is of no value to a small company with no interest in litigating in Lithuania. It seems unlikely that the system could work financially if the renewal fee was set at the equivalent of three current fees.

Unitary Patent Court

The Unitary Patent Court agreement puts in place a single legal body for the enforcement, and challenge, of European patents.  Judgments of the Court will take effect in all 25 member states.

The 'central division' of the first-instance Court will be headquartered in Paris with subsections located in London and Munich (each section handling different subject matter).  The central division will primarily hear revocation actions as well as actions for declaration of non-infringement. Local and Regional Divisions will be set up in individual member states and primarily deal with infringement cases (and counterclaims for revocation). The Court of Appeal will be located in Luxembourg.

It appears that the CJEU does not form a crucial part of the new judicial system, i.e. the competence of the CJEU is not (significantly) broadened compared to its current competence in patent infringement / invalidity cases. However, the precise functioning of the Courts, and most importantly how the Court will unify procedural and substantive differences between the existing national Courts remains to be seen.

Although the new systems are still some way off, it is not too early to start thinking about how the changes may impact filing, prosecution, and litigation strategies.