The European unitary patent: what possible advantages and disadvantages?
Until now, at the European level, patents have been governed by the Munich Convention, which provides for a single, centralized procedure for granting patents entrusted to the European Patent Office (EPO).
While the procedure is uniform in terms of the granting of the patent, the same cannot be said for its protection; the European patent granted must in fact be validated in each State party to the Convention in which protection is sought. It is commonly said that the European patent corresponds to a “bundle” of national patents: in essence, following the grant, the European patent confers on the holder the same rights as would be conferred by a national patent, and all questions concerning the validity and infringement of the patent are referred to the national courts.
This situation is about to change.
European unitary patent
As we all know, the Agreement on the Unified Patent Court will enter into force on 1 June 2023 and at that point the European unitary patent will be effective, which will confer uniform protection in all European states that have chosen to adhere to this new system.
It should be made clear that the European unitary patent will not replace the “traditional” European patent, on the contrary, it will stand alongside the latter by allowing the patent holder to choose which system to join.
As it happens with the “traditional” European patent, the EPO will still be the competent office to grant unitary patent rights; furthermore, the new system has not changed the way the patent is granted. Quite simply, at the end of the grant procedure of the European patent, the patent proprietor will have the option to request unitary effect within one month and will have to do so in the language of the proceedings.
Currently, twenty-five European states have chosen to participate in this system (the big missing country is Spain); only seventeen, however, have ratified the Agreement.
This means that when the system comes into force, uniform protection will only extend to the seventeen ratifying states. The question to be asked is therefore: what will happen next? When other states ratify the Agreement, will the uniform protection automatically extend to them?
Surprising as it may be, the answer is no.
In fact, over time several “generations” of unitary patents will be created with different territorial coverage depending on the number of states ratifying the Agreement. At least in the first instance, therefore, there will not be a truly unitary patent in all the states participating in the system.
Given that this is an alternative system, how can one choose not to join it?
It is already possible to do so. As of 1 March 2023, in fact, the so-called sunrise period began, i.e. a three-month period during which the holders of European patents already granted, holders of European patent applications and holders of supplementary protection certificates granted for a product protected by a European patent may request the exclusion of these from the system and consequently remove them from the jurisdiction of the Unified Patent Court (this is referred to as an opt-out, as provided for in Article 83 of the Agreement). The opt-out can also be exercised during the transitional period (seven years). However, it is a good idea to make this choice during these three months because, if you are involved in a court action before the Unified Court after 1 June, the opt-out will no longer be permitted. If one chooses to opt-out, is one forever excluded from the system? No, it is possible to change your mind and choose to opt-in, but this choice cannot be revoked again.
What concrete advantages will the new system bring?
There are many advantages. First of all, uniform protection will be available in all states that have ratified the Agreement and the EPO will be the only office to which applications will be submitted (not only that, but the EPO will also centrally manage the post-registration phases). In addition, holders of unitary patents will pay a single annual maintenance fee and costs related to the validation phase of the patent will obviously not be paid anymore. In addition, disputes that arise in connection with the unitary patent will be subject to the exclusive jurisdiction of the Unified Patent Court, whose decisions will have effect in all states affected by the unitary effect (this will make it easier for the patent holder to stop ongoing infringement activities in all affected states).
However, the European unitary patent also seems to have certain limitations. First, it has potentially less territorial coverage than the European patent. The new system only involves those EU states that have ratified the Agreement (unlike the EPC, which also includes non-EU states such as, for example, Switzerland and Turkey). It should be added that the new system is, in certain cases, a double-edged sword. On the one hand, uniform application of the law is provided for, but on the other hand, the patent holder may be exposed to a higher risk: if the Unified Patent Court judges a patent invalid, it would be invalid in all states affected by the unitary effect.
So, is it worth joining the new system or not?
There is no straightforward answer to it. It seems compulsory to make an assessment that takes into account the peculiarities of each individual case. For example, the patent at issue and its “strength” must first be considered. But also the procedural position one takes in a possible court action; in fact, as a plaintiff, it might be useful to obtain a single decision for all the territories adhering to the patent system with unitary effects (with obvious savings in time and costs), while as a defendant, on the other hand, it might be useful to defend oneself in different states, and therefore before different judges, thus gaining time, and avoiding that an unfavorable decision would have effect on all the territories of the UPC at the same time, thus preventing the sale of the product considered to be infringing in the 17 countries adhering to the Agreement.
It should also not be forgotten that the system is new and right holders will be “exposed” to it. The tightness and efficiency of the rules will really be put to the test once the system comes into force. Likewise, the case law of the new Court is obviously not known. It has also been pointed out by several parties that the unitary patent provides less flexibility; it will not, for example, be possible to carry out the so-called selective abandonment, which is instead feasible for the “traditional” European patent (the unitary patent will have to be maintained or abandoned in all countries). It will also not be possible to transfer the patent only in certain states.
Conclusions
In conclusion, the unitary patent presents some advantages on the one hand, but also disadvantages on the other, which must be carefully weighed up according to the specific case. In the case of the opt-out, this is the right time to start making initial assessments. For everything else, one will have to wait for the entry into force of this new system to understand its actual scope and operational efficiency.