The Unitary Patent and Unified Patent Court (UPC) comes into operation today, 1 June 2023, marking the beginning of a new era for patent law in Ireland and throughout Europe.
What is the Unitary Patent and UPC?
24 Member States of the European Union (including Ireland) signed the Unified Patent Court Agreement (UPC Agreement) under which it is possible for patentees to obtain an EU wide patent known as the “Unitary Patent”. Unlike current European patents, the Unitary Patent will not need to be validated at the national level and will not create separate national rights. The Unitary Patent is granted by the European Patent Office following the same procedure as for standard European patents. Once a patent has been granted by the European Patent Office, it is possible to apply for unitary effect in all the countries that signed up to the UPC Agreement. The same patent can be validated in other countries that have not ratified the UPC agreement (or cannot ratify it because they are not EU members) but participate in the European patent system.
The current system of standard European patents and national patents, as well as the international PCT system, are still maintained.
The Unitary Patent will be supported by a new central patent court known as the “Unified Patent Court”. It will resolve disputes arising from Unitary Patents, both as to their validity and infringement.
Structure of the UPC
The UPC will have a Court of First Instance, a Court of Appeal and a Registry. Both the Court of Appeal and Registry will be based in Luxembourg. The Court of First Instance includes (i) a Central Division; and (ii) Local and Regional divisions. The Central Division will have its seat in Paris, with subdivisions in Munich and a third country yet to be decided (it was originally to be in London but not now following Brexit).
Which division hears a dispute will be determined by the relevant patent. For example, Munich will hear cases related to mechanical engineering and the third country (when designated) will hear cases related to chemistry, pharmaceuticals, biotechnology and also human necessities, including medical devices (in the interim, cases for that division will be split between Paris and Munich). Paris will hear all other matters including cases related to electronics, software and physics.
Local Division of the UPC
A Local Division of the Court of First Instance may be established upon the request of a Member State. The establishment of a Local Division is not dependant on the number of patent cases heard in any year by the Member State.
Regional Division of the UPC
A Regional Division may be set up upon request of two or more Member States. The seat and the language of the Regional Division shall be agreed on by the Member States though the Regional Division may hear cases in various locations. For example, Sweden, Estonia, Latvia and Lithuania created a 'Nordic-Baltic Regional Division' with its seat in in Stockholm.
Competence of the Central Division as well as the Local and Regional Divisions
The Central Division will hear actions seeking declarations of non-infringement and revocation. It will also hear cases where the parties agree on the Central Division as the court of choice or where a Member State does not establish a Local or Regional Division.
The Local and Regional Divisions can hear actions including (i) actual or threatened infringement where the infringement has occurred/may occur or where the defendant has its residence or principal place of business; (ii) damages or compensation derived from the provisional protection; and (iii) provisional and protective measures and injunctions.
If an infringement action is taken before the Local or Regional Division and a counterclaim for the revocation of the patent-in-suit is initiated, the Local or Regional Division has the discretion to either (i) hear both the infringement and revocation actions together; (ii) refer the revocation counterclaim to the Central Division and suspend or proceed with the infringement proceedings; or (iii) refer the entire case to the Central Division on the agreement of the parties.
Benefits of the Unitary Patent
The objective for the creation of the Unitary Patent is to promote intellectual property rights and to encourage innovation in Europe especially amongst small and medium-sized enterprises (SMEs). It is envisaged that the new system will give greater access to patent protection for SMEs at European level as it will offer substantial savings on renewal fees as well as make enforcement more affordable.
Opt-out of the UPC
The UPC will have sole jurisdiction over Unitary Patents as well as have shared jurisdiction over European patents validated in contracting Member States. However, a patent owner can choose to opt-out their European patent from the new UPC system and if this is done, it will be removed from the jurisdiction of the new UPC and will continue to be dealt with before national courts. This can be done at any time during the life of the European patent. However, now that the UPC is operation, a patent owner should opt-out their patent if they want to prevent a third party from starting a central revocation action at the UPC.
Ireland and the UPC
As judicial competence in respect of patent disputes will be transferred from the Irish Courts to the UPC, this means that a Constitutional amendment will be required in order for Ireland to participate in the Unitary Patent system and the UPC.
The Irish Government has affirmed its commitment to holding a referendum to enable Ireland to do so. It has also indicated that it will host a Local Division, thereby providing Irish businesses with the ability to litigate in Ireland and create a wider pool of national skills and competencies in intellectual property.