Advantages and disadvantages of obtaining a Unitary Patent in the EU

In December 2011, the member states of the European Union signed an agreement on the creation of a common European Patent System which entered into force only on January 1, 2014.

Almost all EU member states, with the exception of Italy and Spain, have taken part in the common European Patent System.

The proposed regional patenting system was designed to shorten the processing time, reduce the cost of obtaining a European patent compared to the previously existing national order, and simplify the procedure as a whole, since there was no need for translation into the official languages of the participating countries. It should be noted that a European patent is only granted for an invention. Although in many European countries there is such an object of patenting as a utility model, which is not subject to the condition of patentability "inventive step".

To complete the procedure for patenting the invention, it was necessary to validate the patent in each individual country, i.e. provide national patent offices with translations of patent documentation into the corresponding official language (in some countries this is only a formula and an abstract, in some countries the entire package of submitted materials). At the same time, fees for maintaining a European patent in force and other legally significant actions are paid to the national office, and litigation takes place in each of the countries of action chosen by the applicant, taking into account the patent legislation of each selected country and in accordance with the national procedure. The cost of obtaining such a patent is much higher, therefore, the expediency of filing an application for a European patent appears only when there is an interest in commercializing the claimed technical solution in more than three countries.

After a while, on June 1, 2023, the Agreement on the Unified Patent Court (UPC) came into force, which means that a package of European documents establishing the “Unified Patent” and the “Unified Patent Court” will come into force, where such patents can be protected and dispute.

On June 12, 2023, the European Patent Office (EPO) announced that the patent registry contains data on European patents for the first time with a single effect statement following the entry into force of the Uniform Patent System on June 1, 2023.

There is evidence that about 800 such applications have already been submitted, which will be published as they are issued. By the end of May, the EPO had received around 4,500 requests to delay the publication of a European patent grant, allowing these applicants to apply for a single action in June and early July 2023.

The entry into force of the common Patent System for 17 European countries was the most important event in the history of European patents since the signing of the European Patent Convention on October 5, 1973. The unified patent system offers many expected significant improvements for users around the world, including cost reductions, simplified procedures, greater transparency and increased legal certainty. It will create a centralized European patent litigation system and allow claims to be filed at the European level.

Thus, for the first time in many years, a truly patent with a single (unitary) action (effect) has appeared, which will initially be valid in relation to 17 European states and will allow consolidating patent disputes in Europe. After all, the Unified Patent Court also began its work on June 1, 2023.

The original idea was that the UPC Agreement should cover all member states of the European Union, but so far there are three states that have not signed the corresponding Agreement, and these are: Spain, Poland and Croatia, and from the states that have signed the Agreement, some of them still not ratified it. The following states have currently ratified the UPC: Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovenia and Sweden.

For example, the UK first ratified the Agreement, but later changed its mind and withdrew its ratification as part of the termination of the UK's membership in the European Union.

Thus, holders of European patents granted since the entry into force of this Agreement may opt for the UPC with respect to these States (regardless of whether they decide to retain the national parts of the European patent in the Member States of the EU that have not ratified the UPC, for example, Spain and Poland, as well as in member states of the European Patent Convention that are not part of the European Union, such as Switzerland, the United Kingdom and Turkey).

Considering the advantages and disadvantages of the UPC, let’s underline the following advantages:

• The maintenance fee for the Unitary European Patent will be paid simultaneously for all countries in which the invention is protected, and its amount will be financially beneficial for the applicant, as it will approximately equal the fees for maintaining the patent in force in 4 countries of the classical European patent. It will also reduce the risk of patent revocation in the territory of a particular country in case of missing the deadline for paying annual fees.
• In the event of litigation under the common European Patent, the right holder gets the opportunity to centrally protect his rights on the territory of all participating countries simultaneously. It’s financially beneficial for the right holder than if the same rights protection procedure takes place in several countries of the classical European patent separately with the involvement of local representatives.
• In contrast to the classical European patent office work, the office work under the Unified European Patent will be centralized and therefore more convenient and profitable.

But there are also some disadvantages:

• The registration of the single European Patent will be more beneficial for large corporations, which will be interested in using the right to a patent in all participating countries. If the applicant is only interested in a few countries of the European Union, it would be more appropriate to choose the classic European patent procedure.
• Cancellation of a patent obtained through a validation procedure in one of the countries participating in a classic European patent will not entail its cancellation in other countries, while in the case of a Uniform European patent, the termination of a patent in one country will entail its simultaneous cancellation in all other participating countries.
• In the event of litigation under the common European Patent, the court decision applies to all participating countries simultaneously, i.e. if a patent is infringed in one country, then automatically the infringement extends to all participating countries.

Claims filed with the UPC will be dealt with within 12 months, which is much faster than in many national EU patent courts, which can be attributed to both advantages and disadvantages, depending on the situation.

It is worth noting that classical European patents also fell under the jurisdiction of the UPC, unless it was declared that the new judicial system was abandoned. Such a waiver is an opportunity for patent holders to withdraw their European patents from the jurisdiction of the UPC. By default, all existing European patents fall under the jurisdiction of the Unified Patent Court, unless a waiver has been filed. This will apply to all existing patents, including those issued many years ago.

The actions necessary for such an opt-out of the new jurisprudence for classical European patents can be taken from 1 March 2023, but no later than one month before the end of the transitional period, which will begin after the entry into force of the UPC Agreement. The transition period is projected to last at least seven years, but could potentially be extended to 14 years. However, it is not possible to declare a refusal in individual countries.

In order to opt out of the new judiciary, the patent owner or his representative had to file an application for registration of an opt out of the UPC with the European Patent Office. The exception is those cases where a claim has already been filed with the national court of the relevant European countries in respect of these objects.

The decision to abandon the new judicial system depends on many factors. A refusal is appropriate, for example, if the European patent has been validated in a small number of EU countries, or if the countries where the patent has been validated have exceptionally efficient patent litigation. If the likelihood of litigation is negligible, then such a decision can be abandoned.

Let's consider a specific example. A certain European patent is valid today in 12 countries: Austria, Belgium, Germany, Denmark, Italy, Netherlands, Poland, Turkey, Finland, France, Switzerland, UK. For this patent, since it is validated until 2020, obtaining a Uniform European Patent valid for 17 countries that have ratified the UPC is not available.

In this case, the jurisdiction of the UPC will affect only 8 countries: Austria, Belgium, Germany, Denmark, Italy, Netherlands, Finland, France, which have joined the UPC.

Therefore, the fees for maintaining the patent in force will need to be separately paid in the UK, Poland, Turkey and Switzerland, which are not part of the UPC or have not signed the relevant Agreement.

In this situation, it is clear that the applicant must file an application for refusal of the UPC, since in the event of the revocation of the Unitary European Patent, this will entail the revocation of the patent in all participating countries simultaneously, namely in Austria, Belgium, Germany, Denmark, Italy, Netherlands, Finland, France. Also, the amount of the fee for maintaining the single European Patent will be slightly less, since out of 17 countries of the UPC, the patent is validated only in 8 countries, and in case of non-payment of this single fee, the patent may cease to be valid at once in all 8 countries of the UPC.

Summing up the above, the patent holder for each individual European patent must weigh all the pros and cons before deciding which way it is more profitable and convenient for him to go.

Originally published in Patent Lawyer Magazine