The European patent application procedure
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Introduction
On 19 January 2022, following deposition of an instrument of ratification by Austria, the Protocol to the Agreement on a Unified Patent Court (UPCA) on provisional application entered into force. This heralded the coming into effect of the long-discussed European Unitary Patent and the associated Unified Patent Court (UPC). In anticipation of the Unitary Patent System, the European Patent Office has announced two separate transitional measures allowing applicants either (1) to make an early request for unitary effect, or (2) to request a delay in issuing the decision to grant a European Patent. Access to these transitional measures is available now (as of 1 January 2023), and will run until the commencement of operation of the Unitary Patent System, at the time of writing expected to be 1 June 2023.
In this article, we briefly summarise the Unitary Patent and Unified Patent Court, and the timescales for their coming into effect. We then explain the transitional measures and briefly discuss the benefits and disadvantages of a Unitary Patent and issues concerning opt-out of the UPC.
The Unitary Patent and Unified Patent Court
The Unitary Patent will be a single indivisible patent right that has uniform effect in participating European Union Member States. The Unitary Patent will be treated as a single item of intellectual property, transferrable only as a single right and subject to payment of a single annual renewal fee. It will be enforceable as a single right exclusively through the new Unified Patent Court (UPC). The UPC will have jurisdiction for both infringement and revocation actions concerning this new right.
It is important to understand that although Unitary patents will be legal instruments of the European Union which will have effect only in certain countries within the European Union, they will be obtained through the European patent application procedure, which is administered by the European Patent Office, and the European Patent Office is not a European Union body. Thus, Unitary patents will remain inextricably bound to European patents.
The Unitary Patent Court, as well as having exclusive jurisdiction over Unitary Patents, will also have exclusive jurisdiction in respect of classic European patents. In this regard, patent holders should be aware that the possibility to opt out of the jurisdiction of the UPC will exist. A three-month sunrise period prior to the start of the new system is envisaged, during which opt-outs for existing European patents may be registered.
How Unitary Patents will be Obtained
Unitary Patents will be obtained through the existing European patent application procedure (including via the existing Euro-PCT patent application procedure). Those who are familiar with the European patent application procedure will be aware that following grant of a European patent, it is necessary to validate the granted patent in individual European states. The European patent is then treated as a bundle of rights in these individual territories and renewal fees are payable annually in those individual territories instead of the European Patent Office, if the rights are to be kept in force.
Essentially, a Unitary patent will be obtained by registering a Unitary patent at the same time that validation of a granted European patent takes place, although notably the deadline for this request will be one month after the mention of grant, rather than the three month period available for validation. Once a Unitary patent is registered this will replace designation of patent in the EU states participating in the UP system. Notably, there will no requirements for costly translations, nor is there an official fee for this process. For anyone requiring protection in states which are not part of the UP system, for example the UK, Switzerland and Norway, it will remain essential to complete existing validation formalities in these countries. The option for an applicant to obtain protection in any of the member states of the EPO, including those participating in the UP System, by requesting validation individually remains unchanged.
When will Unitary Patents and the UPC Enter into Effect?
The UPCA is now expected to come into effect on 1 June 2023. It will be possible to request a Unitary patent for any European patent granted on or after the date of entry into force of the UPCA.
Which Countries are and are not Participating in the Unitary Patent?
It is not yet clear precisely which countries will be covered by the Unitary Patent on day one. The list should include Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovenia and Sweden who have already deposited instruments of ratification as of 19 January 2022. Spain will not participate at this time and European patent applicants wishing protection in Spain will require to follow the existing validation procedure there.
Countries such as the UK, Norway, Switzerland, Turkey and Iceland, which are members of the European Patent Convention but not members of the European Union cannot participate and the existing validation procedure will be required to obtain protection in these territories.
What are the Transitional Measures implemented by the European Patent Office?
As mentioned above, as of 1 January 2023 the EPO has implemented two separate transitional measures in connection with the start of the UP System. Firstly, if a Rule 71(3) Communication (Intention to Grant) has been issued in respect of a European patent application, it is now possible to file an early request for unitary effect with the European Patent Office.
The second transitional measure is the introduction of a request to delay the decision to grant a European patent after dispatch of a Rule 71(3) Communication and until a response to Rule 71(3) Communication is filed. The effect of this request is to delay the decision to grant until the UPCA is in force, ensuring that the applicant has the possibility to take up the option of registering a Unitary Patent. This measure will be helpful to applicants who are near the end of the European patent application procedure and who wish to obtain a Unitary Patent.
What are the Benefits of a Unitary Patent?
This all leads naturally to the question as to who will want to obtain a Unitary patent and who will not. We will publish more detailed guidance in due course but, for now, we set out here a brief list of relevant issues.
1. Validation Costs
Registering a Unitary Patent involves a central procedure, which will usually be straightforward, and no official fee. Although a full translation of the specification of the patent into a language of the European Union is required, the cost of registering a Unitary Patent will accordingly be low relative to the cost of validating a European Patent in a significant number of the participating states.
2. Renewal Costs
The cost of renewing a Unitary Patent starts off at a conspicuously low level, with official fees of only EUR 35, EUR 105 and EUR 145 for years 2, 3 and 4, although official fees then increase substantially (reaching EUR 4855 in the 20th year). An analysis of the cost of a Unitary Patent by the European Patent Office suggests that actual renewal costs, including attorney fees, are expected to be about the same as the total cost of paying renewal fees in the four countries where European patents are most often validated. Thus, renewal costs will be higher than would be the case if the patent was validated in only France and Germany, of the participating UPC countries, but much cheaper than the cost of paying renewal fees in all participating countries.
3. Inflexibility of Renewals
Renewal fees increase throughout the life of a granted European Patent and it is common for the proprietor of a patent at some point to stop paying renewal fees for some countries, as annual fees become large. That option is not present with a Unitary Patent. The Unitary Patent is either renewed annually, giving continued protection in all countries, or abandoned whereupon protection is lost for all UP countries.
4. Inflexibility of Assignments
A Unitary patent is a single indivisible right and so it cannot be assigned to different parties for different countries. There is more flexibility with licensing.
5. Centralised Enforcement
A Unitary Patent may be enforced for all of the countries which it covers through a single infringement action before the UPC. By and large, it is expected that this will be less expensive than conducting infringement actions in several EU countries but more expensive than conducting an infringement action in a single EU country
6. Centralised Revocation
A Unitary Patent is vulnerable to a central revocation procedure in which third parties may challenge its validity. Thus, the proprietor risks losing their rights in all of the participating UP countries via a single legal procedure. Note that the existing European patent opposition procedure, whereby the validity of a granted European Patent may be (centrally) challenged, remains unchanged.
About the UPC Opt-out
The Unified Patent Court will have jurisdiction not only over the new Unitary Patent, but also in respect of European patents, including existing European patents, in participating countries. For the first 7 years of the UPC (potentially extendible to 14 years) it will be possible for the proprietors of new and existing European patents to opt their patents out of the jurisdiction of the UPC (provided that no action is pending before the UPC). It is expected that many European patent holders will decide to opt out of the UPC. It will be possible to cancel the opt-out at a later stage. Thus, the proprietor of a European Patent could consider initially opting their patent out so that a third party cannot file a revocation action through the UPC, bearing in mind that the opt-out can be cancelled if the proprietor later wishes to use the UPC to file an infringement action.
It may come as a surprise to some patent proprietors that the UPC will immediately have jurisdiction over pre-existing European Patents. It is important to recognise that there will be a three-month sunrise period up to the date when the UPCA comes into force, during which it will be possible to opt out pre-existing patents to avoid the UPC having jurisdiction. This sunrise period is currently scheduled to start on 1 March 2023. We will advise our clients when the sunrise period begins.
The dawn of the Unitary Patent and UPC represents an important and long-awaited development for the European patent system. However, this development only adds options to existing procedures. The existing European Patent Convention and the associated patent application procedure remain unaffected. As the United Kingdom is not a member of the European Union and cannot participate in the UP system, many patent proprietors will find that registering a Unitary Patent is not sufficient for their purposes and that they also wish to validate their granted European patents at least in the UK and, from time to time, to participate in national litigation in the UK or elsewhere as before.
If you have any questions about the Unitary Patent or Unified Patent Court please ask Alistair Hindle, Robert Gregory, Chris Cottingham or your usual contact at Hindles.