Options to obtain patents in the EU member states participating in the Unitary Patent and UPC
Once the new system establishing the UPC and the Unitary Patent has come into effect, which is most likely from 1 April 2023, patent owners will have the following three options to obtain patent protection in the EU member states that participate in the new system:
- National Patents: Patentees may apply for a national patent, which is granted by the national patent offices.
- “Classic” European patents: Patentees may apply for a European patent (EP) which is granted by the EPO. After grant of the European patent, the patentee may designate this EP to several individual of the participating EU member states.
- European patents with unitary effect (“Unitary Patents”): Patentees may also apply for a European patent, which is granted with “unitary effect” for all (currently 17) participating EU member states. The Unitary Patent is treated as a single patent having unitary effect in all participating Member States.
With respect to these options, national patents and European patents are not mutually exclusive. A patentee may obtain both, a national and a European patent, for the same invention.
To obtain a Unitary Patent, a European patent has to be granted first. To be eligible for registration as a Unitary Patent, this EP has to be granted with the same set of claims for all participating EU member states. To acquire a Unitary Patent, the patentee has to file a “request for unitary effect” with the EPO within one month after the mention of the grant has been published.
In the participating EU member states it is not possible to register the same European patent as Unitary Patent and to designate it in parallel as “classic” European patent to some (or all) of the participating EU member states. So, after the European patent is granted, the patentee has to make a choice, which type of European patent it wishes to acquire for the participating EU member states.
Competences of the UPC and of the national court under the new regime
In addition to the availability of the Unitary Patent, also the UPC will become operational. The UPC will be a newly created court that is a multi-national court of the participating EU member states and which will count as a court of the participating EU member states. However, the UPC will not replace the national courts in patent matter, but it will co-exist with the national courts.
The UPC will not only have competence for all litigations in connection with the new Unitary Patent, but also for litigations concerning the classical European Patents, unless the patent owner filed a declaration to opt-out a specific European patent from the competence of the UPC (so called “opt-out”).
In addition, the national courts will continue to be competent for patent litigations concerning national patents and for European patents that were “opted-out” from the UPC system. Moreover, during a transitional period of seven years (which may be extended to up to 14 years) patent litigations concerning European patents may be still initiated before the national courts, irrespective of whether a European patent has been opted out. It has to be noted, however, that in most cases the national courts will only have jurisdiction for the “national part” of the European patent in their respective country.
This means, the UPC and the national courts will have the following competences under the new system:
What does “opt-out” mean, and how does it work?
The option to "opt-out" from the new UPC system gives patent owners the opportunity to declare, according to Art. 83(3) UPCA, that the UPC shall not have competence for litigations concerning a European patent. If an “opt-out” has been declared for a European patent or application, only the national courts will be competent for patent litigations concerning this patent, even after expiry of the transitional period.
Patent owners will have the opportunity to declare an "opt-out" for a European patent or application for a transitional period of seven years after the entry into force of the UPC system. The transitional period may be extended to up to 14 years. An “opt-out” is only available for European patents, not for Unitary Patents.
There is one important exception: An “opt-out” may no longer be declared after an action concerning a European patent has been initiated before UPC. This means: If the patent owner has initiated an infringement action before the UPC, or if a third party has filed a revocation action against a European patent before the UPC, an “opt-out” is no longer possible for the respective European patent. This is essential with regard to the timing because this means that patent owners should declare an “opt-out” for their existing European patents and applications before the UPC starts operating.
To give patent owners sufficient time to review their patent portfolio and to decide which European patents they would like to opt-out of the UPC system, there will be a “sunrise period” of around three months before the UPC starts its operation, during which patent owners have the possibility to declare an opt-out for a European patent.
To complete the picture, it should be also noted that the decision to “opt-out” is reversible: If no litigation has been brought before a national court regarding an opted-out European Patent, the patent owner can decide to declare a withdrawal of the “opt-out”. This way a European patent is “opted-in” and becomes again subject to the competence of the UPC. This decision is then final and another “opt out” for this specific patent is not possible.
Declare an “opt-out” – or not?
Considering the above, the decision of the patent owner whether to "opt-out" or not, is not only crucial to avoid possible legal and economic risks with regard to the new system, but this decision will also likely directly affect its patent and litigation strategy in all participating EU member states.
The question of whether to make use of the new UPC for your existing EP patent portfolio depends largely on two questions. First, how much confidence is there in the new court? And, second, do proceedings before the UPC make economic sense?
Confidence in the UPC – but case law practice will need to evolve
While the question of trust in the quality of the new court system is primarily subjective, objective considerations can certainly be made.
With regard to the procedural rules and regulations governing the UPC, there are good reasons to be optimistic. The rules of procedure are the result of many years of deliberations and based on experience from multiple jurisdictions. Also – unlike the national procedural laws – they are drafted specifically for patent litigation cases and take into account the special requirements and needs of patent litigation procedures. Further, the proceedings before the UPC follow a strict schedule with tight deadlines (which might be more difficult for the case management of attorneys and patent attorneys), but which will ensure that a first instance judgment is handed down within a predictable period of around 12 to 18 months.
The proceedings before the UPC will be handled by experienced judges, which have recently been appointed, and most of which have several years of experience in patent litigation matters in their home jurisdictions. This will ensure that judgments of the UPC will have a high quality from the very beginning.
A big unknown is, however, which approach the UPC will take with respect to the many legal questions that usually have to be decided in a patent litigation. This includes questions like
- What will be the court’s approach with respect to novelty, inventive step and added subject matter?
- How will the court handle revocation actions? What will be the practice with respect to auxiliary requests?
- What will be the court’s approach regarding claim construction and equivalence in infringement matters?
- What will be the UPC’s approach to take evidence? Will experts play an important role or a less important role?
- How will the UPC determine damages?
- How will the UPC deal with standard essential patents (SEPs) and FRAND licensing, or with questions like exhaustion?
Although a case law of the UPC will evolve over the years, these questions will involve a degree of uncertainty in cases that are brought before the UPC in the first couple of years.
Enforcement strategy and value of the patents
To determine the adequate filing patent portfolio strategy in the participating EU member states, patentees will also have to consider their patent enforcement strategy.
Enforcement of patents in the UPC gives the patentee the benefit that a patent can be enforced throughout all participating EU member states (where the European patent / Unitary Patent is valid) in one single litigation.
The downside of UPC proceedings is however, that a European patent / Unitary Patent may also be invalidated for all participating EU Member states by one single decision. So, particularly valuable patents (“crown jewels”) may be better placed in the “classic” system before the national courts. Also, patentees which prefer to have “multiple shots” for their infringement claims should have a preference for the multiple litigations in the national courts.
Also, if patentees usually enforce their patents against purely domestic infringements taking place in only one or two countries, infringement litigations before the national courts will in most cases be more efficient.
Possible structure of a patent portfolio
For most patentees, it might be advisable to diversify their patent portfolio have an appropriate mix of national patents, Unitary Patents and “classic” European patents in the participating EU member states.
- Unitary Patents and “classic” European patents that the patentee does not “opt-out” are particularly adequate for patents which do not belong to the “crown jewels” of a patentee and where enforcement across multiple EU countries is likely to be necessary.
- An “opt-out” for existing European patents and patent applications should be considered for “crown jewel” patents, for patents which are already enforced by the patentee in national proceedings and for patents which the patentee prefers to enforce on a country-by-country basis.
- If the patentee is insecure whether an existing European patent application falls in the first or the second group, it should consider to file divisional applications and to declare an opt-out only for some of the divisional applications. This way, the patentee keeps the option to proceed on a case-by-case basis either in the UPC or in the national courts, even after the transitional period has expired.
- In the future, parallel national patents should be considered for the most valuable “crown jewel” patents for the time after the transitional period when an “opt-out” is no longer possible.
Overall, a good patent portfolio for the participating EU members states will contain a mixture of Unitary Patents, European patents and national patents. Patentees will have to carefully consider the adequate mixture in view of their enforcement and licensing strategies.
Why Hogan Lovells?
We are one of the very few firms that has patent litigators in virtually all major European jurisdictions who have great experience in working on cross-border litigations in multinational teams. For this reason we are exceptional well positioned to guide you through the challenges and opportunities which come with the new Unitary Patent and the UPC system. We do not only defend, we help you create and grow. We are with you from the initial idea to the global roll out. Whether you operate in a traditional industry such as life sciences, telecommunications, automotive or energy, or are part of a new generation operating at the intersection of these industries, we are the team for you.
Authored by Anna-Katharina Friese-Okoro and Christian Stoll.
