The Unified Patent Court – A Summary

What is the Unified Patent Court?

The Unitary Patent system is the first truly pan-territorial patent system in the EU.  Unlike a conventional European Patent which splits into a ‘bundle’ of national patents on grant, the Unitary Patent will cover only EU states that have signed up to the new system as one trans-national right.  Therefore, if the Unitary Patent is revoked, it will cease to have effect in those states only.  Since the Unitary Patent is not a national right but a trans-national right, then who will preside over its enforcement and pass judgement on its validity?  It cannot be any national court as the decision of any given national court cannot have extra-territorial effect.  It cannot be the European Patent Office as it is not equipped to deal with major revocation actions nor is it competent to pronounce on matters of infringement.  The answer is a brand new court drawing on legal expertise from across the participating EU states namely the Unified Patent Court (UPC).

Where is the UPC?

The UPC is split into Central Divisions which are in Munich and Paris and Local Divisions in Austria, Belgium, Denmark, Finland, Italy, the Netherlands, Portugal and Slovenia, with a Nordic-Baltic Division as well as further Local Divisions in Germany and France. Notably, there are no UPC courts in the UK due to Brexit and the UK falling outside the EU.

Who sits on the UPC?

A total of 85 judges (34 legally qualified and 51 technically qualified) drawn from across the participating EU states have been appointed to date led by Mr Klaus Grabinski (DE) as the President of the Court of Appeal and Ms Florence Butin (FR) as President of the Court of First Instance.

What Decisions can the UPC Make?

The competence of the UPC is set out in Article 32 of the Agreement on a Unified Patent Court (UPCA) and includes most of the competencies of a national court but some competencies such as contractual disputes relating to licensing or entitlement are not within the purview of the UPC.  The UPC has jurisdiction over not only the new Unitary Patents but, for an initial transitional period of seven years, also conventional European Patents (EP) to the extent that they cover a state that has signed up to the UPC system, have not been ‘opted-out’ of the UPC, and provided that no proceedings have been brought in a national court.  For those states not party to the UPC, national courts will preside exclusively, such as for EP-UK patents.  Similarly, for opted-out EPs, the national courts will preside.

When can I opt out of the UPC?

You can opt-out of the UPC for a transitional period of seven years and before any action has been taken by a third party in the UPC.  If you ‘opt-out’ of the UPC then the relevant national court will have jurisdiction.  It is very important to note that the request to ‘opt-out’ must be made by the correct entity i.e. the current owner or co-owners of the patent.  Therefore, if the patent has been assigned to a party other than the original applicant then the records showing the chain of title must be available.  If you choose to designate your European Patent as a Unitary Patent, then you have no choice; all Unitary Patents fall under the exclusive competence of the UPC.  For your conventional European Patents, if you do nothing then either a national court or the UPC will take control depending on the forum in which any action is first taken.

Can I opt back in to the UPC once I have opted out?

Yes, it is possible to withdraw the ‘opt-out’ and restore the jurisdiction of the UPC. But you will not be able to ‘opt-out’ again; the withdrawal of the ‘opt-out’ if final.  Also, you will not be able to withdraw the ‘opt-out’ if your patent is the subject of proceedings before a national court.

How much does it cost to use the UPC?

There are both fixed and value-based fees. For infringement actions having a value of up to €500,000 there is a flat-fee of €11,000. For infringement actions having a value of greater than €500,000 there is a sliding scale with a maximum cost of €325,000. And for revocation actions there is a fixed fee of €20,000.  There is no value-based scale of costs for revocation actions.

Should I use the UPC?

As to whether to use the UPC or remain with the national courts, the decision rests on the fact that the judgements of the UPC whether they be related to infringement or revocation have pan-territorial effect in contrast to the conventional state-by state litigation process currently operating in Europe.  Therefore, the decision must be taken after consideration of all of the relevant factors relating to the significance of a given patent to your business and whether you are likely to be bringing an action for infringement or defending a revocation action.  Note that for EPC contracting states who are not party to the UPC e.g. the UK and Spain, litigation will take place in the relevant national court as before.

Where you know of competitor patents affecting commercialisation of your product, a centralised revocation action at the UPC would be much more cost-effective than multiple revocation actions at national courts.  However, if the competitor has opted-out of the UPC before you file the revocation action, it will not be possible to use the UPC.  Conversely, if you have a patent covering a commercially important product, then you may wish to opt-out in order to ensure that any revocation action brought by a third party must take place in individual national courts.

Can I still oppose a Unitary European patent at the EPO?

Opposition at the EPO of a competitor’s European granted patent will not be affected even if it is granted as a Unitary Patent.  The key difference is that oppositions must be filed within nine months of grant of the European Patent. And successful revocation will affect all designated states which may include states which are not party to the Unitary Patents system e.g. Spain and the UK.  In contrast, there is no deadline by which an action must be filed at the UPC. But its decisions will only affect states party to the Unitary Patent system.  Further, unlike the opposition procedure, the UPC can deal with actions for infringement.

Timelines

The UPC is predicted to become operational on 1 April 2023. With a three month ‘sunrise period’ commencing on 1 January 2023 when the ‘opt-outs’ may begin to be submitted.  This commencement date is subject to confirmation as it is predicated on ratification of the UPCA by Germany which is expected to happen in December 2022.  A detailed summary of the timelines may be found here.

 

For specific and detailed advice, please do not hesitate to contact an attorney at Avidity IP.