Currently, European patents are granted by the European Patent Office (EPO) under a centralised procedure. This allows patent protection to be obtained in up to 39 countries, including all EU Member States, plus Switzerland, Turkey, the United Kingdom, and others, through a single application. However, current European patents result in a "bundle" of national patents that must be enforced on a country-by-country basis. Patent infringement across multiple countries results in multijurisdictional parallel litigation, which increases legal costs and may result in delayed proceedings and conflicting decisions.
For the initial 17 EU Member States that ratify the UPC Agreement, the UPC will make it possible to enforce, attack, and defend a patent before a single court.
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The Unitary Patent
A Unitary Patent will also become available as a replacement for part of the "bundle" of national patents resulting from a granted European patent. After a European patent is granted, the patent proprietor will be able to request unitary effect in the participating States. The Unitary Patent can reduce the cost of obtaining and maintaining patent protection across multiple countries.
The Unified Patent Court
The UPC is expected to launch on 1 April 2023, and the initial slate of judges has been appointed. The Court will eventually become the exclusive forum for infringement and validity actions for European patents in relation to the participating States.
The UPC will consist of a court of first instance and a court of appeal. The court of first instance will include a central division, local divisions that are set up in individual Member States, and regional divisions that may be set up jointly by Member States. Central division jurisdiction will be held in Germany or France, depending on the subject matter of the patent. A third jurisdiction was to be held in the United Kingdom until the UK withdrew from the UPC; at the time of going to press, a replacement jurisdiction had not been decided. Rules of Procedure have been prepared specifically for the UPC.
UPC validity and infringement decisions will be binding in all participating States, replacing current parallel national litigation. It will be possible to opt-out European patents and pending European patent applications from the UPC system for an initial period, but it will not be possible to opt-out of being sued in the UPC for infringement.
Litigation in the UPC is expected to proceed quickly, with a final oral hearing on issues of infringement and validity occurring within a year of a proceeding being initiated. With the potential for a single, speedy decision covering multiple jurisdictions, including an injunction across those jurisdictions, the UPC is poised to be an attractive forum for enforcement of European patents.
What and How Will the UPC Decide?
The goal of the UPC is to reduce the cost and complexity associated with enforcing patents in EU Member States, and to generally improve the patent system in Europe to help support European industry. A UPC decision on infringement, validity, injunction, and damages will be enforceable in all participating States.
The UPC will be the exclusive forum for actions relating to Unitary Patents. It will also be competent for traditional European patents, unless the European patent has been proactively opted-out, and for supplementary protection certificates granted for European patents.
Opting Out
The right to opt-out European patents and pending European patent applications from the UPC's jurisdiction will be available for an initial transitional period of seven years, which may extend to 14 years. During this period, infringement and validity actions relating to an opted-out patent will be handled by the national courts, as currently done on a country-by-country basis.
Opting-out would protect a patent from being revoked in a single court action. A key factor to consider, therefore, is whether the risk of centralised revocation outweigh the benefits of the UPC system, taking into account the speed, cost, simplicity, and potential disposition toward patent owners.
In order to be effective, a request to opt-out must be filed before an action concerning the patent is lodged at the UPC. Opt-out requests should be filed before the UPC officially opens.
The UPC provides many opportunities and potential benefits but, as a new court, it remains untested. On that basis, Life Sciences companies should seek advice on developing a cross border strategy, opting out, Unitary Patent filings, research & development and licence agreements, and patent protection and enforcement.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
