The Unitary Patent and the Unified Patent Court

The Unitary Patent System

At present, 17 EU Member States are committed to take part in the unitary patent and the UPC from the beginning on, i.e. Austria (AT), Belgium (BE), Bulgaria (BG), Denmark (DK), Estonia (EE), Finland (FI), France (FR), Germany (DE), Italy (IT), Latvia (LV), Lithuania (LT), Luxembourg (LU), Malta (MT), the Netherlands (NL), Portugal (PT), Slovenia (SI), and Sweden (SE). Further EU Member States are expected to join in the near future. Conversely, countries that are not Member States of the EU are not allowed to participate in the unitary patent and the UPC.

The unitary patent is based on two EU regulations and an international treaty, the UPC-Agreement, which has been concluded between the corresponding EU Member States.

At the same time, the unitary patent is built upon the well-established European patent granted by the EPO. Thus, once the UPC-Agreement comes into force, it will be possible to register a newly granted European patent as a unitary patent – as an alternative to the existing system which requires a national validation of the European patent in each individual country of interest and results in a “bundle” of nationally valid patents. This new option will only come into play once a European patent is granted, whereas the entire filing and examination procedure (as well as any opposition proceedings) at the EPO will remain unchanged.

Under this new system, patent proprietors will be free to choose, within a short period after the grant of a European patent, to either obtain the new unitary patent or to nationally validate the patent in the individual states of interest. This choice pertains only to those EU Member States that participate in the unitary patent. For all other states covered by a European patent (including, for example, the non-EU states Great Britain, Switzerland and Turkey as well as those EU Member States that have not yet joined the unitary patent, such as Spain, Poland and Croatia), the possibility of national validations will remain available without any change, regardless of whether a unitary patent or a conventional European “bundle patent” is chosen. This means that patent proprietors can, for example, register a freshly granted European patent as a unitary patent covering all the participating EU Member States and, in parallel, validate this same European patent in one or more other states that do not participate in the unitary patent (such as Great Britain, Switzerland, Spain and Poland), which results in a unitary patent plus a bundle of national patents.

The introduction of the unitary patent will be accompanied by the establishment of an entirely new pan-European court specialized on patents, the Unified Patent Court, which will have exclusive competence to hear actions relating to unitary patents, including actions for infringement and revocation as well as requests for preliminary injunctions. Importantly, the UPC will not only be competent for unitary patents but also for existing and future European bundle patents in those EU Member States that participate in this new system.

Litigating before the UPC will offer considerable advantages, such as a single centralized infringement procedure resulting in the grant of pan-European injunctions and the reward of pan-European damages, but comes at the risk of centralized revocation of the unitary patent or the European bundle patent in all participating EU Member States.

Prospective Start Date

At present, all legal requirements for the unitary patent and the Unified Patent Court to come into being have been fulfilled, except that Germany still needs to deposit its instrument of ratification of the UPC-Agreement. Although Germany has already ratified the UPC-Agreement, it has deliberately put the last step of depositing its ratification on hold in order to await the completion of all practical preparations which have to be made during the provisional application phase.

Under the Protocol on Provisional Application of the UPC-Agreement, which entered into force on January 19, 2022, certain provisions of the UPC-Agreement have already become provisionally applicable, which marks the birth of the UPC as an international organization with legal personality and allows the final practical preparations to be completed. In particular, the UPC judges will be selected and appointed, the secondary legislation (including the Rules of Procedure of the UPC) will be enacted, a budget must be adopted, the electronic case management system will be finalized, and the physical infrastructure at the different Court divisions will be put into place during this provisional application phase.

The UPC-Agreement will officially enter into force on the 1^st day of the 4^th month after the deposit of Germany’s instrument of ratification, which will give the public a heads-up of at least 3 months (and at most 4 months) before the start of this new system.

This “sunrise period” of 3 to 4 months before the official start of the UPC will be very important for patent proprietors and applicants, as it will be possible to file out-opt requests during this period.

It is currently expected that the remaining practical preparations for the UPC will be completed between September and December 2022, and that Germany will deposit its ratification of the UPC-Agreement (triggering the start of the sunrise period) shortly afterwards. Based on these assumptions, the sunrise period could start as early as in September 2022, which would result in a prospective start date for the UPC and the unitary patent in January 2023. The precise start dates will only be known once Germany deposits its instrument of ratification.

Most Urgent Preparations

Right now, there are two particularly important points to consider in preparation of the forthcoming establishment of the unitary patent and the Unified Patent Court.

Sunrise period

First, patent proprietors should take an informed decision whether to opt out their European bundle patents from the competence of the UPC. If no action is taken, all existing and future European bundle patents will automatically be subject to the competence of the UPC.

Although many experts are optimistic about the UPC, the main disadvantage of this new system is the risk of central revocation actions (whereby a single action may result in the invalidation of the corresponding European patent in all states participating in the UPC) combined with the current lack of any case law and any experience of how the procedural rules will be applied in practice. In order to avert this risk, patent proprietors might wish to opt out their European bundle patents (or at least their most valuable patents) from the competence of the UPC.

Since central revocation actions against already granted European bundle patents can be filed immediately upon the start of the UPC, and since opt-outs become effective only after they have been registered, it will be important to file any potentially desired opt-out requests in good time before the actual start of the UPC. This will be possible during the “sunrise period” which is expected to commence with the deposit of Germany’s ratification of the UPC-Agreement, i.e. 3 to 4 months before the official start of the UPC. For a summary of relevant factors to be considered when deciding about the filing of opt-outs, please refer to the section “UPC Opt-Outs: Strategic Considerations”.

Delay of prosecution

Second, the owners of pending European patent applications should be aware that they benefit from a new choice in the near future, i.e. the possibility of obtaining a unitary patent. The unitary patent is expected to be highly attractive for some patent proprietors, whereas others may be better served with the existing European bundle patent, depending among other factors on the countries in which patent protection is desired.

Notably, unitary patents will only become available for such European patents that are granted on or after the entry into force of the UPC-Agreement. Applicants must therefore take precautions to delay the grant of a European patent until the official start of the UPC if they wish to benefit from the possibility of obtaining a unitary patent.

UPC Opt-Outs: Procedure

While the Unified Patent Court will have exclusive competence for unitary patents, it will also be competent for conventional European bundle patents, albeit only in those EU Member States that participate in the UPC.

Notably, during a transitional period of 7 years (which might be extended to 14 years), the UPC and the national courts will have a “shared competence” for conventional European bundle patents. This means that proprietors of European bundle patents can choose to enforce such patents either centrally before the UPC or individually before the respective national courts. Adverse parties can likewise choose to attack such bundle patents with revocation actions either centrally before the UPC or before the national courts. After the expiry of the transitional period of 7 (or 14) years, the UPC will gain exclusive competence for European bundle patents in all participating EU Member States.

European bundle patents can, however, be opted out of the competence of the UPC, so that only the national courts but not the UPC will be competent for these patents, which effectively restores the legal situation before the introduction of the UPC. Conversely, such an opt-out is not possible for unitary patents.

An opt-out can only be filed for a European bundle patent as a whole, i.e. for all national parts of the patent as well as any related supplementary protection certificates (SPCs), or for a pending European patent application. In addition, it is required that no action relating to the corresponding patent (or any associated SPC) has been commenced before the UPC yet.

In order to be valid, an opt-out has to be declared in the name of all patent proprietors or all applicants, whereby the “true” proprietors or applicants must be indicated – i.e., those persons who are entitled to be recorded as proprietors/applicants in the respective patent registers, regardless of whether they actually are recorded in the corresponding registers or not. It is therefore important to carefully check the ownership of any patents to be opted out in order to reduce the risk that the validity of an opt-out could later be challenged before the UPC. For patents that are subject to license agreements, it is advisable to verify who is allowed to decide about the filing of an opt-out request.

Since an opt-out only becomes effective once it is recorded by the Registry of the UPC, it is advisable to file an opt-out – if desired – in good time before the grant of a European patent or, in the case of already granted patents, during the sunrise period before the official start of the UPC. The filing of an opt-out will only be possible during a 7-year transitional period (which might be extended to 14 years). However, once an opt-out has been registered, it will remain effective throughout the lifetime of the patent (and any related SPCs) even after the expiry of the transitional period.

In principle, an opt-out can also be withdrawn, so that the corresponding European bundle patent (including any related SPCs) is again subject to the competence of the UPC. Such a withdrawal of an opt-out, however, is possible only if no action relating to the patent has been commenced before a national court yet. Moreover, the withdrawal of an opt-out is final, i.e. it will not be possible to file a second opt-out for the same bundle patent.

UPC Opt-Outs: Strategic Considerations

Whether or not any particular European bundle patent (including any related SPCs) should be opted out from the competence of the Unified Patent Court is highly dependent on the circumstances of the specific case. The following non-exhaustive list summarizes factors that may be considered when deciding whether to request an opt-out:

• The value of the patent: If you prefer to avoid the risk of a central revocation action before the UPC as well as the risk arising from the lack of any case law and the lack of practical experience with this entirely new court, it would be safest to initially opt out your patents. Typically, the more valuable a patent is, the more important it will be to shield such a patent from any potential risks. It is therefore expected that many proprietors will choose to opt out their most valuable patents.
• The strength of the patent: Some patents are “stronger” than others, i.e. easier to defend in case their validity is challenged. It would seem fair to assume that a particularly strong patent should be defendable even before a new and untested court. The above-discussed risks arising from a centralized revocation procedure as well as the lack of case law and practical experience with the UPC should therefore be less pertinent for strong patents. Conversely, “weak” patents which are considered to be potentially vulnerable to revocation actions should rather be protected from the risk of central revocation before the UPC by filing an opt-out.
• The relevance of pan-European enforcement: If you expect that a patent might be enforced against infringers operating in multiple EU Member States which participate in the UPC, the advantage of a single centralized procedure before the UPC with the possibility of obtaining pan-European injunctions and damages could be particularly attractive. The filing of an opt-out for such a patent would pose the risk that third parties could initiate proceedings before a national court and thereby “lock” the patent in the national court system (because an opt-out can no longer be withdrawn once an action before a national court has been commenced).
• Prior national litigation: While an opt-out registered for a European bundle patent can subsequently be withdrawn by the patent proprietor, this is no longer possible if an action has already been brought before a national court. In this regard, it is not entirely clear whether only such actions that are commenced (or still pending) before a national court after the official start of the UPC are to be considered, or whether actions before national courts preceding the entry into force of the UPC likewise prevent the withdrawal of an opt-out. Therefore, it might be impossible to later withdraw an opt-out declared for a European bundle patent that has already been the subject of an action before a national court before the start of the UPC. If you intend to make use of the centralized enforcement procedure before the UPC, it might be safest to avoid the filing of an opt-out for any patent that has already undergone prior national litigation in any EU Member State participating in the UPC.
• Possible implications for national patents in the same patent family: Some of the EU Member States that participate in the UPC, such as Germany, have amended their national laws governing the prohibition of double patenting (or “double protection”) between European patents and national patents, so that stricter rules apply if an opt-out is filed. Therefore, in case there are any parallel national patents (or a national priority application) in EU Member States participating in the UPC, the possible implications of filing an opt-out for such national patents should be considered beforehand.
• Costs: The filing of opt-out requests requires active steps to be taken, typically via a European patent attorney, which entails costs. These costs may be modest but could nevertheless accumulate, e.g., if large patent portfolios are opted out, if the recordal of the correct proprietors is to be scrutinized (e.g., for particularly valuable patents), or if SPCs are involved. Such costs can be reduced or avoided if European bundle patents are left under the competence of the UPC or if only the most valuable patents within a large portfolio are opted out.

While the different factors listed above may generally be considered when deciding whether to opt out European bundle patents (and any associated SPCs), we would be pleased to provide comprehensive advice tailored to your specific situation upon request.

Choosing Unitary Patents or National Validation

For any European patents granted on or after the start of the UPC, proprietors will have to choose to either obtain a unitary patent or to validate the European patent individually in each state of interest (among those EU Member States that participate in the unitary patent). These two possibilities are mutually exclusive, i.e. it is not possible to simultaneously validate the same European patent both as a unitary patent and as a bundle of national patents in the same countries. In all other states that do not participate in the unitary patent, however, the national validation procedure remains available regardless of whether a unitary patent is chosen.

A unitary patent can be obtained by filing a formal request with the EPO within a non-extendable time limit of 1 month from the grant of the European patent. Importantly, it will be necessary to file a complete translation of the granted European patent together with the request to obtain a unitary patent within this 1‑month time limit. If the patent is granted in English, the translation can be filed in any of the 23 other official languages of the European Union (such as French, German, Italian, Spanish etc.). Conversely, if the patent is granted in French or German, a complete translation into English is required.

In some cases, a complete translation may already be available, e.g., because the granted European patent is to be validated in Spain (which requires the filing of a complete Spanish translation) or because a parallel patent or a priority application in a suitable language exists. Yet, since the 1-month deadline for filing the complete translation of the granted European patent together with the request to obtain a unitary patent is very short, it is advisable to coordinate the preparation of the required translation in good time.

According to Article 6 of Regulation (EU) No. 1260/2012 which governs the translation arrangements for unitary patents, the aforementioned complete translation will be published but shall have no legal effect and shall be for information purposes only. After a transitional period of 6 years (which may be extended until up to 12 years), it will no longer be necessary to file a complete translation in order to obtain a unitary patent.

Importantly, if you wish to benefit from the possibility of obtaining a unitary patent on the basis of any currently pending European patent application, it will be necessary to delay the grant of a patent until the UPC actually starts. This can be achieved, e.g., by requesting minor clerical amendments in response to an “intention to grant” communication under Rule 71(3) EPC. Once Germany deposits its instrument of ratification of the UPC-Agreement, it will also be possible to file a formal request with the EPO to delay the issuance of the grant decision.

While the choice between registering a granted European patent as a unitary patent and nationally validating it in the individual states of interest may be guided by a number of case-specific considerations, the following general factors can be taken into account when making this decision:

• The competence of the UPC: A unitary patent is always subject to the exclusive competence of the UPC and can never be opted out. Therefore, in case you prefer to make use of the national courts in those EU Member States that participate in the UPC, it will be necessary to nationally validate the European patent and potentially file an opt-out. Conversely, if you wish to avoid any competence of the national courts, it may instead be considered to obtain a unitary patent.
• The value and the strength of the patent: The same considerations relating to the value and the strength of a patent, which have been addressed in the context of deciding whether to opt out a European bundle patent (see the section “UPC Opt-Outs: Strategic Considerations”), analogously apply to the choice between a unitary patent (which is subject to the exclusive competence of the UPC) and a nationally validated European bundle patent (which can be opted out from the competence of the UPC). In short, the risk of central revocation proceedings before the UPC and the initial lack of case law and practical experience with this new court may speak against the choice of a unitary patent for high-value cases, whereas this risk may be less relevant for particularly “strong” patents (which are expected to be easily defensible in potential revocation proceedings).
• The desired territorial coverage and the associated costs: Simply put, if you wish to obtain patent protection in a great number of EU Member States participating in the UPC, the choice of a unitary patent is typically much more cost-effective than the national validation in each individual state of interest. Conversely, if patent protection is only desired in a few states participating in the UPC, such as Germany and France which do not require the filing of any translations for national validation, it may be more cost-effective to choose national validation, particularly if a complete translation of the granted European patent is not readily available. Besides the validation and translation costs, the annuities over the lifetime of the patent likewise differ for unitary patents and nationally validated patents. We can provide a detailed cost comparison for the registration of a unitary patent and the national validation in individual states for any specific case upon request.

Additional case-specific considerations may also come into play when choosing between unitary patents and nationally validated European bundle patents. We would be pleased to provide you with strategic advice for your specific cases.