The Unitary Patent Court (UPC) system took another step forward this month, after Italy deposited its instrument of ratification of the UPC agreement on 10 February. A total of 12 countries have now ratified the agreement, namely: Austria, Belgium, Bulgaria, Denmark, Finland, Luxembourg, Malta, the Netherlands, Portugal, Sweden, and France (one of the three mandatory ratifying countries).

The UK government announced plans in November to ratify the agreement and set up a divisional court in London despite fears Brexit would halt negotiations. At present, the UK and Germany are the other two mandatory ratifying countries. Although the timing for the implementation of the court system have slipped somewhat (the process was originally expected to be completed in 2016, if not sooner), the implications of the Unitary Patent right and associated patent court system is rightly on the minds of IP counsel throughout Europe and beyond. Don't worry if you haven't had a chance to fully consider the implications of the new European patent system to your business yet, however. We set out the answers to some frequently asked questions below.

What is the Unitary Patent? The concept behind the Unitary Patent is to provide a mechanism in which a single patent can cover all EU member states and where patents can be enforced across a broad region via a single court action. The Unitary Patent Package is far reaching and also requires a completely new court system, the Unified Patent Court, to be established across the EU. This process is already well underway.

When will the Unitary Patent come into effect? The target date for the introduction of the Unitary Patent was originally early 2014. This was an ambitious deadline given that judges still need to be appointed and trained, court premises still need to be found, and a great many administrative matters still needed to be undertaken before the Unitary Patent and accompanying court system could be put in place. Delays have occurred as expected, and the earliest realistic estimates for its introduction at present are later in 2017.

Will the Unitary Patent replace the existing European Patent (EP) system? No, the EP system, as set out by the European Patent Convention (EPC), will remain in force; instead, patentees will be able to opt for either a Unitary Patent or an EP on grant of a patent by the EPO. Patentees can not choose to file both; however, it will be possible to combine both schemes by taking a Unitary Patent for the participating Member States and a regular EP patent for one or more of the other EPC signatories.

However, ‘classical’ EP patents will fall under the jurisdiction of the new court system, unless the proprietor instructs the EPO to ‘opt-out’ the patent from the new court arrangements (see below).

How will the two European patent systems differ? Unlike the EP patent, the Unitary Patent will not need to be validated or renewed in each individual country post-grant; instead, protection will automatically come into effect in the participating territories once the Unitary Patent has been granted by the EPO. A number of translation requirements will still be in force post-grant in the ‘transition period’ (which is due to last a maximum of 12 years); however, the ultimate aim of the system is to reduce the amount of translation required by facilitating ‘high quality’ machine translations into all official languages at no cost to the applicant. All infringement disputes will be overseen by a single court (the newly formed Unified Patent Court). Unlike the EP, the Unitary Patent will function as a single patent, which has to be maintained, transferred, abandoned or revoked as a whole.

How do you apply for a Unitary Patent? The Unitary Patent will be obtained using the existing EP application procedure with patent applications made to, examined and granted by the EPO. Once the patent is granted, the applicant may choose (until one month after grant) between the ‘regular’ EP patent or a Unitary Patent for the participating Member States. As such the new system will extend to EP applications pending at the time the Unitary Patent system comes into force.

What will the Unified Patent Court do? The Agreement on the Unified Patent Court seeks to eliminate the likelihood of parallel disputes involving the same patent rights in EU Member States. It establishes a single patent court with the power to issue decisions on infringement (including preliminary Injunctions) and validity of existing EP rights and the new Unitary Patent right. Their decisions will be binding across all contracting EU Member States.

Under the proposed Unified Patent Court system, it will be possible to commence a single action for infringement covering all signatory Member States. This will apply to all patents granted by the EPO; in other words, it can be used for patents filed under both the Unitary Patent and EP systems (where the EP has been validated in EPC countries that are part of the Unitary Patent system). The risk, of course, to the patentee would be a single revocation counterclaim, which would apply throughout the Unitary Patent territories.

Do I have to bring my dispute before the Unified Patent Court? For a seven-year transitional period (possibly extendable by another seven years), it will be possible to opt out of the Unified Patent Court for disputes concerning regular EP patents. It will not be possible to do this for Unitary Patents. In other words, if you opt to file a Unitary Patent post-grant, you will be required to use the Unified Patent Court system.

How do I know if the Unitary Patent is right for me? Given the restrictions and uncertainties set out above, companies will need to carefully consider the territories for which they are seeking protection before deciding which route to pursue – and the likely costs. Unlike the present EP system, patentees will not be able to select those jurisdictions for which they seek protection with a Unitary Patent (as it automatically covers all countries), and will be required to pay the cost for having a patent granted and maintained in all countries, even if protection in most of the Member States is not needed.

Applicants requiring reduced geographic coverage may find that traditional EP (or national) patents are likely to offer a more affordable route, whereas larger companies that require protection – and are likely to face infringement actions – throughout the EU may find the new system more efficient. Depending on the discounted rates on offer to small entities, SMEs may take the view that they only need protection in a limited number of markets, in which case it would be more cost-effective to register national patents or an EP with limited validations.

Patent owners will also need to think carefully about whether they want their existing patents to be opted out of the unitary litigation system (the Unified Patent Court). When it comes to litigating, they may find that enforcement in one or two key markets is more cost effective than paying for a Europe-wide action. But, until the fee structure becomes clear, it won’t be possible to make that assessment.

Do I need to do anything now? There is no immediate action that you need to take in regards to your existing and pending patents; however, it would be beneficial to start looking into the system now to understand how it will work, as it is likely to influence your future filing strategies in Europe. It would also be wise to review your patent portfolio to identify those EP patents that have already been granted or are likely to have been granted once the option to 'opt out' of the Unified Patent Court system comes into effect. Novagraaf can help to advise you in this area and will keep you up-to-date with developments as they happen.