On June 1st 2023, the Unified Patent Court Agreement (UPC Agreement or UPCA) comes into force, and accordingly, the Unified Patent Court begins working. This is the beginning of the unified patent system of the European Union. The UPC Agreement is an intra-community agreement of the EU, in which not all Member States participate. So far, it has been signed by 24 countries. The jurisdiction of the Unified Patent Court will be unitary for the territory of all contracting countries that have ratified the UPC Agreement. At present, 17 Member States have done so: Austria, Belgium, Bulgaria, Germany, Denmark, Estonia, Finland, France, Italy, Latvia, Lithuania, Luxembourg, Malta, The Netherlands, Portugal, Slovenia and Sweden. For short, we will refer to these as “UPCA Countries”. Other Member States, such as Czechia, Greece, Hungary, Ireland, Romania, Slovakia and Cyprus, have signed the UPCA and will possibly ratify it in due course. Spain, Poland and Croatia have not signed the UPCA and currently do not appear intent on joining the unified patent system. Together with the Unified Patent Court, from June 1st 2023, in accordance with Regulations EU No. 1257/2012 and EU No. 1260/2012, the Unitary Patent comes into force. The Unitary Patent complements the extant system for validating* of European patents. The Unitary Patent has unitary effect on the territory of the EU Member States which have agreed to participate in the Unitary Patent system (currently the above mentioned 17 UPCA Countries). The Unitary Patent will be issued on the basis of an ordinary European Patent application and there will be no changes the European Patent Office’s practice and procedure when examining and issuing European patents. The Unitary Patent system concerns only what happens after the European patent is issued – the applicant can request the issuance of a Unitary Patent instead of validating the patent in each individual UPCA country. One centralised fee, payable to the European Patent Office, will be due for the maintenance of Unitary Patents. As the UPC Agreement comes into force, holders of already issued European patents must decide if they wish their patents to be included or excluded from the unified system. If included, any disputes would be adjudicated by the Unified Patent Court. If excluded, disputes would be adjudicated by the national courts of the relevant UPCA country. The jurisdiction of the Unified Patent Court will be unitary and will apply to both Unitary Patents, as well as for traditionally validated European patents (which are in force in one or more UPCA country), for any invalidity and/or infringement proceedings. Thus, if the UPC rules that a patent has been infringed, the judgment will be valid for all UPCA countries. Conversely, if the UPC determines that a patent should be invalidated, the patent will lose its validity in all UPCA countries. This system will also apply to traditionally validated European patents, unless their holders opt out from the UPC system. The Advantages and disadvantages of the Unified Patent Court system - should patentholders opt out? Advantages - A patent holder can pursue infringers centrally before the UPC, for infringements in multiple jurisdictions, instead of having to file and oversee proceedings in each individual country. - The UPC will apply identical criteria to cases from different countries and will eventually establish unitary case law. This should provide legal certainty and prevent situations where two courts from different countries arrive at different conclusions for identical situations. - Quick procedure. According to the rules of procedure of the UPC, judgments must be issued within a year. In national courts, infringement cases usually take much longer. - Optimised expenses. While UPC fees are relatively high compared to national proceedings in some member states, if the UPC case replaces litigation in multiple UPCA countries, the single UPC procedure will be more cost-effective. Disadvantages - In the event of a successful invalidation request, the UPC will invalidate the patent for all UPC countries at the same time. - The system is new and unproven and could be unpredictable initially before a sufficient number of cases have been decided. - Expenses can exceed (sometimes significantly) the expenses for national court proceedings for infringements in a single UPCA country. There is a transition period of at least 7 years, during which national courts can still have jurisdiction over traditional European patents, i.e. the patent holder will be able to choose whether to pursue infringers of a traditionally validated patent either in the national courts, or in the UPC. Similarly, third parties will be able to request the invalidity of the patent from the UPC, or via the traditional national route. If a procedure starts (national or UPC), it cannot be changed. E.g., if a third party petitions the UPC for the invalidity of a patent, the patent holder cannot effuse the UPC’s jurisdiction as the procedure has already been initiated. During the 7-year transition period (with the possibility to extend this for another 7 years), the holder of a European patent application under examination, or an already issued and traditionally validated European patent, will have the option to opt-out the application or already issued patent from the jurisdiction of the UPC. This opt-out is possible if no UPC procedure has started in the meantime in relation to the application or patent in question. This means that applications and patents for which an opt-out has been requested, will not fall under the UPC’s jurisdiction and all infringement and invalidity proceedings will be done before the relevant national authorities. The applicant/patent holder can withdraw the opt-out request, rendering the application/patent subject to the UPC’s jurisdiction once again. This option will not be available if national proceedings have already been initiated. Patent holders must take into account a range of considerations in order to decide whether to opt-out of the UPC’s jurisdiction for its traditionally validated European patents and applications.
- To what extent is the patent in question secure? Does it have a wide or narrow scope of protection? Is there a risk of successful challenge to its patentability? In the event of such a risk, it is better for the patent holder to opt out of the UPC, in order to prevent a third party from using the UPC’s convenient unitary jurisdiction to invalidate the patent in all UPCA countries at the same time.
- In how many UPCA countries is it likely for the patent to be infringed? If there will be infringements in multiple UPCA countries, it will likely be more cost-effective to pursue these centrally in the UPC, rather than separately in each UPCA country. Conversely, if the infringement is in only one UPCA country, it may be more cost-effective to pursue it before the national courts.