A single European patent has been an ambition of the EU for over 40 years, but has never reached fruition due to disagreements, relating primarily to language provisions, between the member states.

However, at the end of 2010 use of the EU’s ‘enhanced cooperation’ procedure was authorised, which allowed plans for the unitary patent to go ahead without the participation of all member states – notably without Italy and Spain, the main opponents of previous proposals.

After a number of further false starts, it seems that agreement on the unitary system has finally been reached and in December 2012, the European Parliament and European Council approved a "unitary patent package" which will establish:

  1. a European unitary patent (and accompanying translation regime); and
  2. a unified European patent court to decide European patent litigation.

The treaty establishing the Unified Patent Court is due to be signed on 19 February 2013, which will start the ratification process and set the timetable for the whole package to enter into force.

The package will not come into force until the UK, France and Germany, plus at least ten other signatory states have ratified the treaty, and in any event no earlier than 1 January 2014.

The main features of the Unitary Patent and the Unified Patent Court are set out below. For more details, please visit our website, or ask your usual Mewburn contact.

THE UNITARY PATENT

Currently, patent protection can be obtained in Europe either by:

  1. applying for a patent in each individual European country to get one or more national patents; or
  2. applying for a European patent at the European Patent Office (EPO) under the European Patent Convention (EPC).

However, a European patent granted by the EPO then splits into several national patents, one in each designated state. The patent must be ‘validated’ in each state where patent protection is wanted, and the patent in each country must then be maintained and enforced separately.

This ‘validation’ procedure usually requires translation of at least some of the patent into the language of each country in which protection is wanted. The translation costs can be very high, depending on the number of countries wanted and the length of the patent application.

The unitary patent will provide a third option. The unitary patent will provide a single patent, covering 25 of the 27 EU member states (the "participating member states"). An applicant for a European patent will be able to choose, at grant, whether the European patent should have ‘unitary effect’ for the 25 participating states, or whether they want to validate separately in some or all of them separately.

Validation of the European patent in the other EPC states (Italy, Spain, and the non-EU countries) will still proceed as before.

LANGUAGE REGIME

It is proposed that, eventually, the unitary patent will automatically be available in all of the languages of the participating member states, by machine translation, so there will be no burden on the applicant to translate the whole text (as for all European patents; however, it will still be necessary to translate the claims into the other two official EPO languages).

The EPO has been working extensively with Google to improve the quality of machine translations - however, it is recognised that machine translations are not yet fit for purpose.

Therefore, until such time as machine translations reach an acceptable standard, a unitary patent granted by the EPO will need to be translated into one other language.

For European patent applications granted in English, the patent will need to be translated into the language of any one of the other participating EU member states. For European patent applications granted in French or German, the patent will need to be translated into English.

These provisions will last for a transitional period of no more than 12 years.

RENEWAL FEES

The renewal fees for European unitary patents have not been set, but will "reflect the size of the market covered by the [unitary] patent and be similar to the level of the national renewal fees for an average European patent taking effect in the in the participating member states".

The single renewal fee due for each unitary patent is therefore likely to be the cost of several national renewal fees.

This means that, while the renewal fee is likely to be relatively cheap (compared to the current system) for patent owners who currently elect a large number of countries after grant of a European patent application, it may be significantly more expensive for patent owners who are generally only interested in a small number of countries, (e.g. UK, France and Germany).

So, on this basis, a unitary patent is likely to be less attractive to patent owners who want protection in only a small number of EU countries.

THE UNIFIED PATENT COURT (UPC)

The Unified Patent Court will provide a centralised European patent litigation forum. As a result, it is hoped that costly multi-jurisdiction litigation will be avoided – at present European patents must be litigated separately in each designated state where they have been validated.

The Unified Court will be formed of a Court of First Instance, composed of a central division and local/regional courts, and a Court of Appeal in Luxembourg. Referrals from the Court of Appeal will in principle be heard by the Court of Justice of the European Union (CJEU), although it is hoped that this will be a rare occurrence, because substantive patent law in Europe is well established.

The Central Division will be based in London (for Life Sciences and Chemistry subject matter), Paris (for Physics and Materials subject matter) and Munich (for Mechanical and Engineering subject matter).

In addition to the Central Division courts, there will be a number of local and/or regional courts, based in the participating member states.

JURISDICTION

Unsurprisingly, the new unitary patents will fall under the jurisdiction of the unified patent court system.

However, "traditional" European patents (i.e. EPO-derived national patents) as well as Supplementary Protection Certificates (SPCs) in the participating member states will also fall under the jurisdiction of the UPC.

The owners of such European patents and SPCs can ‘opt-out’ from the UPC jurisdiction, during the first 7 years (with a possible extension to 14 years on review).

Eventually, however, it is intended that all European patents, SPCs and unitary patents will fall under the jurisdiction of the UPC.

Decisions of the UPC will have effect across all 25 participating member states.

TYPES OF ACTION

The UPC agreement contains detailed provisions about where (i.e. in which division of the Court) different types of litigation can be carried out.

Actions seeking revocation or a declaration of non-infringement must in general be brought before the Central Division of the UPC.

Infringement actions, on the other hand, should be brought before the competent local or regional division. The competent local division may be the local division in the country where the infringement occurred, or the local division in the country where the alleged infringer has its residence or principal place of business. If the alleged infringer does not have a residence or place of business in any of the participating countries, however, an infringement action can also be brought in the Central Division.

A counterclaim for revocation may be initiated when an infringement action is brought before the local or regional division. Similarly, a counterclaim for infringement could be initiated, in a local or regional division, when a revocation action is already pending at the Central Division.

In these scenarios, the local or regional division can choose to hear both parts of the case, or to transfer the whole action (revocation and infringement) to the Central Division. Alternatively, they can choose to ‘bifurcate’ the case, with the revocation action being transferred to the Central Division and the infringement action proceeding in the local division, or possibly being stayed pending the outcome of the revocation action.

SUBSTANTIVE PROVISIONS

Importantly, the Agreement creating the Unified Patent Court defines the protection conferred by a European patent, including the new Unitary Patent, by setting out the various acts which constitute an infringement of the patent, if done without the patent proprietor’s permission. The provisions are similar to those already present in the national laws of the contracting states (including the UK). Limited ‘prior use’ rights are also provided for, by reference to corresponding national laws.

The Agreement also allows for ‘exhaustion’ of patent rights in products placed on the market by the patent proprietor, or with their consent, within the EU.

CONCLUSIONS

The EU patent package may well be of benefit to many large companies that would like wide protection in Europe. For companies who normally gain protection in only a few European countries, however, the extra coverage of the unitary patent may not justify the extra cost associated with the unitary patent. The level of renewal fees, which has yet to be set, is likely to have a large influence on whether or not to opt for the unitary patent.

In principle, within the next 10-15 years the litigation of all European patents in the 25 participating EU member states will be done in the Unified Patent Court. The Rules of Procedure for the new Court are still in the process of being drafted and many questions about how the system will work in practice remain unanswered.

As mentioned above, the package will not come into force until thirteen participating states (to include the UK, France and Germany) have ratified the treaty into their national law and in any event no earlier than 1 January 2014.

Although the EU Commission has stated that it expects ratification to be achieved by 1 November 2013, allowing the first unitary patents to be issued by April 2014 (with the Unified Patent Court also being set up by this date), it remains to be seen whether ratification can actually be achieved that quickly.

In some countries, commentators have indicated that the ratification process (for example, Poland) may not be straightforward due to continued resistance from parts of their government. Also, some countries may face a legal or constitutional requirement to ratify the Agreement by public referendum, which could delay the process and also make the outcome much less predictable.

It is notable that ratifications in the field of patent law have not proceeded particularly smoothly in the past. The Community Patent Convention (CPC) – the original attempt to create a unitary EU patent - was signed in 1975 by all EU member states (of which there were then only nine) but never entered into force because it was not ratified by enough countries. A revised CPC was then signed in 1989, by all twelve member states, but was only ratified by seven. Finally, the London Agreement (dispensing with translation requirements for European patents) did not come into force until 2008 (mandatory ratifications by France, Germany and the United Kingdom were needed), despite having been concluded in 2000.

In addition, it is thought that the establishment of the court infrastructure (such as the court buildings, judge appointment and training, IT systems) will take several years. Therefore, it is perhaps questionable whether the UPC will be able to begin operating as soon as the first unitary patents are granted, as the EU Commission suggests.

A further uncertainty surrounds the position of Italy and Spain. These countries refused to sign up to the Unitary Patent Package and have actually challenged its legality under EU law. The CJEU has yet to deliver its decision on this, although the preliminary (and non-binding) opinion of the Advocate General was that their case had no merit. Should they lose their challenge, Italy and Spain are in principle free to sign up to the Unitary Patent Package at any time, and it is thought by many that they will do so eventually.