Unitary Patent Package: What to Expect?

The ‘unitary patent package’ comprising the Unitary Patent (UP) and the Unified Patent Court (UPC) is expected to become a reality by early 2023. The implementation of this package will offer users a cost-effective option for broader patent protection and a more efficient dispute settlement mechanism across the participating EU countries. The system is meant to eliminate the complex and costly national validation procedures and legal uncertainties that plague the European patent litigation arena.

Background

On January 18, 2022, Austria deposited its instrument of ratification of the Protocol on Provisional Application of the Unified Patent Court (UPC) Agreement, becoming the thirteenth EU member state to do so and therefore triggering the Protocol’s entry into force.

This marked the start of the Provisional Application Period (PAP) and the birth of the UPC as an international organization. During the PAP, parts of the UPC Agreement and the UPC Statute will be applied provisionally, and the structural, organizational and financial functioning of the UPC will be prepared. Once the contracting states are confident that the Court is functional, Germany will deposit its instrument of ratification of the UPC Agreement, which will then enter into force on the first day of the fourth month after this date. This is expected to happen in early 2023.

Unitary Patent

The Unitary Patent will be a patent valid in all EU member states except Croatia, Poland and Spain which have not ratified the UPC Agreement. The unitary effect will be available to European patents granted by the European Patent Office (EPO) – European patent holders will be able to file, free of charge, a “request for unitary effect” with the EPO in order to obtain a UP.

While the EPO examines European patent applications centrally, a “classical” European patent is a bundle of national patents which must be validated and maintained separately in each country, which is a complex and expensive process. All post-grant administration for UPs, on the other hand, will be handled by the EPO – there will be one single renewal procedure, meaning only one renewal fee and one deadline.

UPs will co-exist with national patents and “classical“ European patents, and applicants and right holders will be able to choose the system of protection. Because UPs will not be valid in Croatia, Poland and Spain, and because patent strategies depend on different factors, it is likely that many right holders will keep a mixed portfolio of unitary, European and national patents.

Unified Patent Court

Currently national courts rule in cases of dispute relating to European patents since they are treated as national patents. Patent holders wishing to enforce their patents, as well as parties wishing to challenge existing patents, must initiate legal proceedings in each country separately, leading to multiple court disputes relating to the same patent in different EU member states. The establishment of the Unified Patent Court aims to remedy this lack of a single, integrated and specialized jurisdiction for patent disputes across the EU.

Once the UPC Agreement enters into force and a seven-year transitional period passes (which may be extended by additional seven years), the Unified Patent Court will have exclusive competence for the settlement of patent infringement and validity disputes in respect of both the UPs and the “classic” European patents. The national courts will no longer be competent for such disputes and patent holders will no longer need to litigate in numerous countries. The UPC’s decisions will apply across all participating states, which is expected to prevent contradictory court decisions regarding the same issues. Besides making patent litigation more accessible, it is also expected that patent law across the EU will eventually become harmonized.

The UPC will comprise a Court of First Instance, a Court of Appeal and a Registry. The central divisions of the Court of First Instance will be in Paris and Munich, while the participating countries will be able to set up a number of local and regional divisions. The Court of Appeal and a Registry of the UPC will be based in Luxembourg.

National courts will remain competent for actions that do not come within the exclusive competence of the UPC, e.g. cases relating to compulsory licensing.

Transitional Period

During the transitional period, which will start on the date of entry into force of the UPC Agreement, “classical“ European patent applicants and holders will be able to choose whether to initiate infringement and revocation actions before the UPC or before the national courts. The possibility to opt out of the UPC’s jurisdiction is available for any European patent granted, and any European patent application filed, before the end of the transitional period.

While the UPC will at first have parallel competence with national courts, the centralization of this jurisdiction after the transitional period is expected to simplify patent litigation and harmonize patent legislation across the EU. It remains to be seen how these numerous novelties will be implemented in practice.

By: Nada Milović and Predrag Anokić

For more information, please contact Nada Milović or Predrag Anokić at our Serbia office.