European patent practice will change when the European Unitary Patent (UP) and Unified Patent Court (UPC) enter into force on June 1, 2023. The new system will impact both pending European applications and granted European patents.
Here are a few tips patent holders and applicants should consider under the new European system to provide themselves optimal flexibility while also minimizing risk:
- For issued EP patents and EP applications that will issue before June 1, 2023, we suggest opting out of the UPC jurisdiction to avoid the risk of patent revocation in multiple countries in the event of unfavorable litigation of the EP patent.
- For pending EP applications that will issue after June 1, 2023, we suggest opting out of the UPC jurisdiction and applying for a “traditional” EP patent.
Patent owners and applicants may begin to take action to opt out during a sunrise period that starts March 1, 2023. Opting out requires the submission of a declaration from the true owner of the patent – i.e., not a licensee. If patent ownership changed after issuance, the registration at the European Patent Office should be updated prior to opting out.
If no action is taken, the EP patent property will automatically fall within the jurisdiction of the UPC.
Notably, an existing traditional European patent cannot be converted to a UP. Only European patents that grant after June 1, 2023 are eligible for UP status.
About the Unitary Patent (UP)
A UP (also known as a European patent with unitary effect) will provide a single patent right covering all the Member States that have ratified the UPC agreement at the time of patent grant. Currently, the UPC Jurisdictioncomprises the following 17 countries that have ratified the UPC agreement: Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, Sweden.
There are 10 other countries within the EU that could potentially ratify the agreement as well – Croatia, Cyprus, Czech Republic, Greece, Hungary, Ireland, Poland, Romania, Slovakia and Spain. To date, most of these countries are expected to eventually ratify. Croatia, Poland and Spain have indicated that they do not intend to ratify. Notably, non-EU countries in Europe (e.g., United Kingdom, Norway, Turkey, Switzerland) are ineligible to join the UPC jurisdiction and will never be encompassed by a UP.
If a patent owner opts out of the UPC, it is possible to withdraw that action and opt back in to take advantage of the central enforcement of the UPC at a later date.
UP Advantages
- Cost savings: Obtain patent protection in multiple countries for a single fee and yearly annuity that is roughly equivalent to the fees and annuities due when validating in four EP countries.
- Large geographical reach: A UP will provide patent protection in at least 17 countries.
- Central enforcement: Infringement actions are handled by the UPC rather than national courts in individual countries.
UP Risks
- Revocation of a UP applies throughout the entire UPC jurisdiction, not just one country. Thus, if a third party in one country initiates a revocation proceeding and is successful, the UP will have no effect anywhere.
- The UPC is a new and untested court, for which no caselaw currently exists. It is difficult to predict if it will be favorable or unfavorable to patent owners.
- The annuity fee must be paid in full each year, even if the patent owner is no longer interested in certain countries within the UPC jurisdiction; and non-payment of the annuity fee will cause the patent rights to lapse throughout the entire UPC jurisdiction.
Recommended Action
We recommend that clients immediately review their portfolios of European patents and applications in order to safeguard their interests. In particular, we advise clients to contact their attorneys to let them know what action they would like to take (i.e., opt out or accept UPC jurisdiction).
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