On February 17, 2023, the German government deposited its instrument of ratification of the Agreement on a Unified Patent Court (UPCA) with the Council of the European Union. Great news for those seeking harmonization of patent law: The Unified Patent Court (UPC) will open its doors on 1 June of this year. This historic date marks an enormous accomplishment, the story of which started 150 years ago in Vienna when a patent congress was held alongside the large World Exposition in the Austria-Hungarian capital Vienna. After that exhibition, governments became aware of an urgent need to harmonize industrial property laws.
A Bit of History
The first success was the Paris Convention, by which a Union of member states created a priority right for inventors. Although a unified, global patent system and a world patent were the aims from the very beginning, that would only become possible after WWII. The Congress of Europe brought together politicians, government representatives, and members of civil society in The Hague in 1948. This congress resulted in the Council of Europe, and ultimately in economic integration through what is now the European Union. It is the European Union where union law supersedes national law, under which harmonization became possible.
The establishment of the European Patent Office (EPO) in 1973 resulted in a harmonized procedure for the grant of a European patent. Infringement and validity were still a matter of national law of member states. The European patent with unitary effect, in short, the unitary patent, is the result of initiatives between the EPO and the EU, and for which it was necessary to create a single court: the Unified Patent Court. The option will exist for the effect of new European patents to be unitary as of 1 June, but the real accomplishment is in the unification: the Unified Patent Court.
A New European Patent System
The new system introduces the European patent with unitary effect and the new patent court; these elements are often referred to as Unitary Patent (UP) and Unified Patent Court (UPC), respectively. This page contains information on what the UP and the UPC will entail and the effect of the new system on everyday practice.
See this 3-minute video giving an insight into precisely what the UP and UPC are about and their effect on day-to-day practice:
The Unitary Patent (UP)
The UP is an alternative to the existing validation process of a European patent in individual countries. It is, therefore, not a ‘new’ patent but an option to extend the validity of a European patent granted across all participating countries* in a single stroke. Therefore, the process of applying for and granting European patents will remain the same.
What will the UP mean for you?
As soon as the new patent system takes effect, you can opt for registration as a UP instead of registration in individual countries when validating a European patent. This way the patent will be immediately valid in all participating countries and the validation process will be significantly simplified.
- Only one translation will be required, rather than separate translations for individual countries.
- The European Patent Office will annually charge one amount for the maintenance of the UP in the participating countries, meaning that no more annual fees will be owed in individual countries.
- The judicial process will be centralized as the UP automatically falls under the UPC. No opt-out request can therefore be submitted for a UP.
If you sell your UP, this will apply to all participating countries. It is, therefore, impossible to sell a UP on a per-country basis. However, licenses can be granted per country or region.
The Unified Patent Court (UPC)
At present, court cases about infringement and validity are heard by the national courts of the country concerned. The introduction of the European patent court (the UPC) will centralize the judicial process for all participating countries at one European court. This goes for all new and existing European patents that are in force in one or more of the participating countries.
What will the UPC mean for patent holders?
Under the UPC, it will be easier to maintain a European patent, because this can be achieved in all participating countries through one court case. A judgment will directly affect the patent positions in all participating countries. Depending on your situation, this may be advantageous or detrimental compared to the current system. You can opt for (continued) applicability of the current system to your European patent(s). In that case, you must submit what is known as an opt-out request for your current European patent(s), so that nothing will change and the national courts will handle court cases.
Independent action by exclusive license holders
The introduction of the UPC will entail a change for exclusively licensed patents because the holder of an exclusive license will be able to act independently against infringers before the UPC. Since this will apply to all existing European patents, it may also affect your current license agreements. For this reason, you may wish to adjust your license agreement or submit an opt-out request.
Where do we stand now?
The preparation of the new European patent system was finally completed when Germany ratified the UPC Agreement on 17 February 2023. The new system will definitively start on 1 June 2023.
Frequently Asked Questions
Below you find questions with the answers using the arrow.
What is the Unified Patent Court (UPC)?
The Unified Patent Court (UPC) is the new European court for patents created by the UPC Agreement (UPCA). The UPC will have exclusive jurisdiction in respect of European patents and unitary patents. Currently, court cases about the infringement and validity of European patents are heard by the national courts of the countries concerned. The UPC will centralize the judicial process at a single European court for all countries that have ratified the UPCA (the UPC countries). The decision of the UPC is binding in all UPC countries. The UPC also has jurisdiction over all existing and future European patents that are in force in one or more of the UPC countries, except for European patents that have specifically been opted out of the UPC jurisdiction at the request of the patent proprietor(s). Such opted-out European patents will fall under the jurisdiction of the national courts. The UPC will share the competence with respect to European patents (without unitary effect) with the national courts during a transitional period of 7 years. Parties have a choice of forum during this period, and patent holders have the possibility of removing their European patent from the jurisdiction of the UPC (see opting-out).
What is the reason for creating the UPC and the unitary patent system?
The European Commission considers patents a vital element of the Internal Market to achieve growth through innovation and increase the international competitiveness of European business. It considered that the efficiency, affordability, and legal certainty of the patent system should be enhanced. Thereto, a pan-European patent protection and dispute settlement was to be created, based on two pillars: a European Union patent (the unitary patent) and a unified jurisdiction for patent disputes (the UPC).
When will the UPC and the unitary patent system start?
The UPC and the unitary patent system will start with the entry into force of the UPC Agreement. Once Germany has formally deposited its instrument of ratification as the 17th contracting member state to the Agreement, a sunrise period starts, and the UPC will open its doors 3-4 months later. At that same time, the unitary patent system will start.
The UPC is expected to start on 1 June 2023. However, the final date will depend on the readiness of the UPC to open its doors and of future users to comply with the strong authentication requirements to access the Case Management System (CMS) and to sign documents.
What can be done in the sunrise period?
Applicants can request a delay in issuing the decision to grant a European patent in response to a communication under Rule 71(3) EPC, so that the patent will be granted after the new system has come into force. By filing such a request, the unitary effect will be available to the European patent.
An early request for unitary effect may also be filed for European patent applications.
The sunrise period offers patentees a chance to opt out of the UPC before competitors can initiate a central revocation action before the UPC with the associated risk that the European patent is revoked by a single decision in all UPC member states.
Which countries are participating in the UPC and the unitary patent system?
The following UPC countries will participate in the new system when it starts:
Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, The Netherlands, Portugal, Slovenia, and Sweden.
Which countries may ultimately participate in the UPC and the unitary patent system?
Countries that can participate in the UPC Agreement must be EU member states. On 19 February 2013, 24 EU member states signed the Agreement. Of these signatory states, 16 have now ratified the Agreement. Once Germany has deposited the instrument of ratification as the 17th contracting member state, the sunrise period starts, and the UPC will start 3-4 months later. At that same time, also the unitary patent system will start. The UPC-UP system will start with the above-referred 17 UPC countries.
Several signatory states have not (yet) ratified the Agreement. These include Czechia, Ireland, Greece, Cyprus, Hungary, and Slovakia. These may still become UPC countries at a later stage.
The same EU member states (e.g. Spain, and Poland) have not signed the UPC Agreement and are not participating.
Non-EU countries cannot participate, regardless of whether they are participating in the European Patent Convention (EPC) or not. These include the United Kingdom, Norway, Switzerland, and Turkey. Following Brexit, the UK is no longer an EU member state.
What will the UPC mean for patent holders?
For patent proprietors, it will be easier to enforce a European patent because this can be achieved in all UPC countries through a single court case. A UPC judgment will directly affect the patent in all UPC countries. Depending on your situation, this may be advantageous or detrimental compared to the current system wherein national courts decide on patent matters.
During a transitional period of 7 years, you may choose the (continued) applicability of the current national court system for your European patent(s). In that case, you must submit a so-called opt-out request with the UPC for those patents that are to be excluded from the court’s jurisdiction. In that case, nothing will change and court cases will be handled only by the national courts.
How is the UPC organized?
In most contracting member states, a branch of the UPC will be present in the form of at least one Local Division. Local divisions will be present in Vienna, Brussels, Copenhagen, Helsinki, Paris, Düsseldorf, Hamburg, Mannheim, Munich, Milan, Lisbon, Ljubljana, and The Hague.
A Regional Nordic-Baltic Division will be present in Stockholm. This Division will hear cases from Sweden, Estonia, Latvia, and Lithuania while each country will also designate facilities for hearings in their own country.
Paris, Munich, and possibly Milan will house the three Central Divisions. Before Brexit, London was the Central Division’s third seat and would hear cases involving patents in the field of IPC class (A) Human necessities (pharmaceuticals) and (C) Chemistry. These cases will now likely be heard initially in Paris and Munich. In Munich, cases involving patents in the field of IPC class (F) mechanical engineering are heard. The Paris Central Division will hear cases in all other fields of technology. The above are all courts of First Instance. A Court of Appeal will be seated in Luxembourg.
Depending on the legal question, the Courts of First Instance and the Court of Appeal of the UPC will apply
- European Union law (the “Unitary Patent Regulation” Regulation (EU) No. 1257/2012, and the “Translation Regulation” Regulation (EU) No. 1260/2012);
- the Agreement on the Unified Patent Court (UPCA);
- other international agreements applicable to patents and binding on all the Contracting Member States (e.g. TRIPS).
National law will only play a minor role in UPC proceedings.
What law will the UPC apply in infringement cases?
In infringement cases relating to European or unitary patents, the UPC will apply the articles regarding direct infringement (article 25), indirect infringement (article 26), limitations of the effect of a patent (article 27), and exhaustion of rights (article 29) of the UPCA. It is expected that role of the Court of Appeal will be important to clearly define infringement tests for equivalence or indirect infringement to ensure harmonization between UPC member states.
What law will the UPC apply in invalidity cases?
The validity of a patent is resolved by applying the provisions of the EPC. Patentable inventions, novelty, inventive step, and industrial applicability are interpreted in accordance with the EPC. In this respect, not much will change with current practice.
What law will be applicable in cases on aspects of property?
National law will apply to questions on the patent as an object of property, such as security rights, contractual licensing, insolvency proceedings, etc., and questions of prior use and compulsory licenses.
What is the difference between the UPC and national courts?
The UPC will work with short deadlines, and all evidence must be submitted at the earliest possible opportunity (front-loaded system). Therefore, business strategies will require thorough freedom-to operate analyses in view of the UPC.
Clearly, the UPC and national courts have markedly different procedural rules particularly relevant to the speed of the proceedings, and their decisions have different territorial scopes.
The courts will apply national law. However, national laws can be amended in view of harmonization with the UPC Agreement. In Germany and France, new rules on double patenting will come into force, allowing double patent protection for a national patent for the same invention alongside a unitary patent or a traditional European patent as long as the latter is not opted-out. This does not appear to open important new avenues but goes to show that systems will exist side by side, with a strong emphasis on harmonization. In Belgium, the limitations on the rights of patentees such as the research exemption and breeders’ exemption are brought in line with the UPC, so as to avoid different judicial! regimes between patents that are opted-out or opted-in.
Although it is clear that the UPC and national courts have markedly different procedural rules particularly relevant to the speed of the proceedings, and that their decisions have different territorial scopes, there is less certainty about the applicable law when opting out. Moreover, there are various views among experts on whether an opt-out from the UPC’s competence also means an opt-out from the entire UPCA law.
Who has standing to sue before the UPC?
The patent proprietor, the exclusive licensee (unless the licensing agreement provides otherwise and after giving prior notice to the patent proprietor), and the non-exclusive licensee (in so far as expressly permitted by the license agreement and after prior notice to the patent proprietor) are entitled to bring actions before the UPC.
Can an invalidity action be started against my patent when only my licensee takes part in the proceedings?
No. The validity of a patent cannot be contested in a suit for infringement brought by the holder of a license where the patent proprietor does not take part in the proceedings. The defendant in such proceedings for infringement wanting to contest the validity of a patent shall have to bring actions against the actual patent proprietor.
Can my non-exclusive licensee bring actions before the UPC in respect of infringement or validity?
No. Only the holder of an exclusive license is entitled to bring actions before the UPC, provided that the patent proprietor is given prior notice and unless the licensing agreement provides otherwise.
The holder of a non-exclusive license is not entitled to bring actions before the UPC unless expressly permitted by the license agreement and the patent proprietor is given prior notice.
What does ‘opting out’ mean?
Opting out is removing a European patent from the jurisdiction of the UPC. It means that the current system whereby only national courts have jurisdiction is maintained and that the UPC has no competence to hear cases on the opted-out European patent. If you decide that legal disputes on
infringement and validity of your European patent(s) should be heard by national courts instead of the UPC, you must submit an opt-out request for your current European patent(s). Opting out of a unitary patent is not possible.
How do I opt out?
To opt out of your European patent from the jurisdiction of the UPC, you must file an opt-out request with the UPC. The opt-out request can only be made on behalf of all proprietors. Your UPC representative may file such a request for you. In that case, only national courts have jurisdiction. The possibility of filing an opt-out will become available during the sunrise period, that is, before the start of the UPC.
The requests for opting out will have to be made for each European patent individually. So you can choose to have some of your European patent rights opted out from the UPC and others falling under UPC jurisdiction.
The possibility for filing an opt-out also exists for pending European patent applications. Once the patent is granted, the patent can be validated in individual countries in which you seek patent protection without registering as a unitary patent.
For new patent applications (applications still in their priority year or applications that have yet to be filed) you could consider filing national applications in the European countries of interest instead of filing a European patent application. Whether this is interesting from a cost perspective or a legal perspective, will depend on the situation.
What is the fee for an opt out?
There will be no official fee to opt out or opt in.
When can I file the request to opt out my European patent?
This is not possible yet. The opt-out request can be filed in the sunrise period before the entry into force of the UPC Agreement, or at any time during the lifetime of the patent, provided that no national court proceedings have started against that patent, and only in a transitional period of 7 years (extendible to 14 years) from the start of the UPC.
What happens if I don’t opt out?
Upon entry into force of the UPC Agreement, the UPC will have exclusive jurisdictional authority in respect of all suits on infringement or validity of unitary patents as well as all nationally validated European patents and SPCs in states that have ratified the UPCA. However, during a transitional period of 7 years, an action for infringement or revocation/invalidity of a European patent or SPC may still be brought before a national court (Art. 83 UPCA). During the transitional period, bath courts, therefore, share competence, meaning that parties have a choice of forum and may have their case heard and determined before either of these courts. It is also during this transitional period that proprietors of a European patent or SPC may opt out of the exclusive competence of the UPC. In that case, the national courts have exclusive competence. Hence, during the transitional period, patent proprietors will have the choice of whether to sue an infringer in a national court or before the UPC. Conversely, a third party may initiate revocation proceedings for the patent before the UPC and a national court.
What happens if I file an opt out later?
The opt out may be filed at any time during the patent’s lifetime, but only during the transitional period of 7 years (extendible to 14 years). Should you consider an opt-out, it is important to note that an opt-out is no longer possible if an action has been filed by a third party in respect of your European patent before the UPC. Likewise, withdrawing an opt-out (to get back in with the UPC) is no longer possible if an action has been filed before a national court concerning an opted out EP patent.
Therefore, should a competitor file an invalidity action with the UPC on the first day of operation of the new court, you will no longer be able to opt out.
After opting out, is there a possibility to opt in again, so I can sue infringers before the UPC?
Yes, withdrawing the opt-out is possible. This is also referred to as opting-in. However, once your patent is opted-in after an opt-out, it is impossible to opt out again.
Can I opt out for some UPC states, but nor for others?
No. An opt out can only be made in respect of all UPC countries for which the European patent has been granted or which have been designated in the application.
Can I opt out when not all proprietors are recorded in the registers?
Yes. But when filing the request for opt out, a declaration of proprietorship must be produced in such a case, indicating that the person filing the opt-out is the proprietor or applicant or is entitled to be registered as proprietor or applicant under the law of each Contracting Member State, and is therefore entitled to file the opt out.
What happens if my opted out European patent application is granted, and I file a request for unitary effect?
In that case, your earlier opt out is deemed withdrawn. The Registrar will enter a withdrawal of the opt-out in the register.
I opted out, and court proceedings before a national court have been concluded. Can I withdraw my opt out and start an action before the UPC?
No. If an action has been started before a national court in respect of a patent or application before the registration of a withdrawal of the opt-out, the withdrawal is ineffective in respect of that patent or application, irrespective of whether the action is pending or has been concluded. Hence, opting in
is no langer possible.
Will my unitary patent be extended to new EU countries that ratify the UPC?
No. The territory of your unitary patent is set at the time the request for the unitary effect of your newly granted European patent is registered with the EPO. Your unitary patent will be enforceable in the countries that have ratified the UPCA at that moment. The territorial coverage of a unitary patent will stay the same for its entire lifetime, irrespective of any subsequent ratifications of the UPC Agreement after the date of registration of unitary effect by the EPO. Hence, there will be no extension of the territorial coverage to other Member States which ratify the UPC Agreement after that date.
Text courtesy V.O. Patents and Trademarks.
Illustration made by Dall-E