Developments related to the European patent with unitary effect

The European patent with unitary effect will come into force at the end of the year. But concretely, what will be the changes compared to the classic European patent that we know? Before answering that, let's do a little reminder of the current patent system.

I. The Current System for Obtaining a Patent in Europe

Let's assume first that a company A, whose headquarters are in France, wishes to protect a technical innovation of a product P in Europe. Company A wishes to market its product P widely in Europe, in particular, in the 27 states of the European Union (EU), and outside the EU, in the United Kingdom and Switzerland. Currently, two routes exist in Europe for the protection of technical inventions, the National Route and the European Route.

1. National Route

National Route consists of filing a patent application with each national office of the 29 states for which protection is sought. For each state, it is generally necessary:

• To file the application in an official language of the state,
• To pay fees relating to the issuance proceedings,
• To pay each year renewal fees,
• To be represented throughout the duration of the proceedings by a local authorized agent (Patent Attorney, Agent, etc.) when the company's headquarters are not located in the state concerned.

Grant procedure before a national patent office generally comprises the following steps:

Thus, company A will have to bear the costs of translations, the agent fees and the taxes which will very quickly increase with the number of states in which the company seeks protection.

Once the patent has been granted, if company A discovers that one of its competitors, the C company, infringes its patent application by selling a product R in the 29 states in which company A has obtained a protection, company A must bring an action for infringement in each state on the basis of the associated national patent and only for the facts that occurred on the territory of this state. Here again, for each state, company A will have to bear proceeding and personal representative costs.

2. European Route

European Route consists of filing a patent application with a single office, the European Patent Office (EPO). Currently, the European Patent Organization has 38 member states including the United Kingdom, Switzerland and all EU states. As part of the proceedings before the EPO, it is necessary:

• To file a patent application in an official language of the EPO (English, French or German),
• To pay fees relating to the grant proceedings before the EPO only,
• To pay renewal fees each year until the grant before the EPO only,
• To provide a translation of the claims in the two other official languages.

Company A, whose headquarters are in one of the member states of the European Patent Organisation, does not need to be represented, even if it is recommended given the complexity of the proceedings.

While the amount of fees collected by the EPO is generally higher than the one of fees collected by the national offices, the amount remains much lower than the accumulation of these fees. Company A will therefore realize substantial savings compared to the 29 National Routes mentioned above. Hereinafter, some fee examples (in €):

However, these savings are limited to the issuing proceedings. Indeed, once the European patent has been granted, company A will have to validate its European patent in each of the states in which it wishes protection. Thus, depending on the state, it may be requested:

• To provide a translation of the claims and possibly of the description, only a minority of States having waived the translation requirements,
• To pay renewal fees for the years following the issue,
• To be represented throughout the duration of the proceedings by a local authorized agent (Industrial Property Attorney, Agent, etc.) when the headquarters of the company is not in the state concerned.

Grant procedure before the EPO comprises the following steps:

For infringement actions, nothing changes compared to the National Route, company A will have to bring an infringement action in each of the states on the basis of the European patent validated in the state. Company A still has to bear the costs of proceedings and personal representative in each of the states. The European patent is thus considered, not as a single entity, but rather as a bundle of entities whose validity, limitation, revocation, transfer, licensing and infringement are addressed completely independently. Such entities are generally referred to as national parts of the European patent, for example, the French part of the European patent in France, the German part of the European patent in Germany, etc.

These high costs generally deter companies from protecting their inventions in all European states. Thus, on average, European patents are only validated in 4 states.

The European patent with unitary effect aims to further rationalize costs already initiated by the European patent, this time after the patent has been granted, by centralizing the post-grant renewal proceedings as well as the action for infringement.

II. The European Patent with Unitary Effect

2. States part of the Agreements

The European patent with unitary effect aims to establish a common patent jurisdiction for the participating member states. In short, a single court is competent for all states. For a unified jurisdiction to exist, the different states must already have advanced judicial cooperation. Thus, only EU states can be part of the agreements.

At present, all EU states except Croatia, Spain and Poland have signed all of the agreements. To enter into force nationally, these agreements must be ratified first by the member states. To date, 17 out of 24 states have ratified the agreements. The last states should ratify the agreements in the coming months, but some states will probably not join the system until after it comes into force. The map below represents the member states of the European Patent Organization, and among them, highlights the EU member states, the states that have signed the agreements, and the states that have ratified the agreements.

These agreements only concern the post-grant proceedings of the patent, the whole of the European patent grant proceedings, as we know it, remains the same.

For states that are not part of the agreements, i.e., states outside the EU, but also Croatia, Spain and Poland, the post-grant proceedings also remain the same.

The Request for Unitary Effect

For states part of the agreements, the patentee will be able to request a unitary effect. And this is indeed an option. The patentee can absolutely decide to validate his patent in the states of his choice in the traditional way. For the European patent to have unitary effect:

• The patentee must submit a request before the EPO no later than one month after the publication of the mention of the grant of the European patent,
• The European patent must include the same set of claims for all participating states,
• No withdrawal of designation must have taken place for one of the participating states,
• A translation of the European patent into English must be provided, if the language of the proceedings is French or German,
• A translation of the European patent into another official EU language must be provided, if the language of the proceedings is English,
• Pay the renewal fees before the EPO.

No other formality or tax to be paid is to be expected in the participating states.

Compensation of €500 intended to support translation costs is also granted for any natural person, small or medium enterprise (SME), non profit organisation (NPO), university, public research organisation, which have their residence or headquarters in an EU state, and who has filed their patent application in an official EU language other than German, English or French.

Simplified proceedings are also implemented for the registration of licenses or the transfer of the patent.

Like previously mentioned, the amount of fees collected by the EPO is generally higher than the one of fees collected by the national offices, but this amount is still much lower than the accumulation of these fees. The patentee will therefore make substantial savings regarding taxes and personal representative fees. The EPO considers that selecting the unitary effect becomes interesting from 4 states. Hereinafter, some renewal fee examples (in €):

Let’s go back to the example of company A, what are the options? A first option for company A is "business as usual" and let's continue validating a classic European patent in each state independently. But as we explained previously, this way of proceeding can be very expensive. The second option for company A is to request a unitary effect. Nevertheless, for the United Kingdom and Switzerland which are outside the EU and Croatia, Spain and Poland which are not part of the agreements, it won't be possible to do otherwise than the traditional validation. For the other states, assuming that they have all ended up ratifying the agreements, the proceedings will be unified before the EPO.

The European patent procedure will therefore comprise the following steps:

3. The Unitary Effect

Once the unitary effect is required, the European patent is, unlike the classic European patent, considered for all participating states as a single entity. Thus, the validity, limitation, revocation, transfer can only occur in all participating states. However, it is still possible to grant licenses on a state-by-state basis.

Disputes relating to these patents with unitary effect will fall under the exclusive jurisdiction of the new Unified Patent Court (UPC), which will consist of a court of first instance, a court of appeal and a registry. The UPC will have legally qualified judges and technically qualified judges, the latter often lacking in national jurisdictions. The stated objectives are:

• Limiting litigation expenses,
• Rendering judgement rapidly, first instance and appeal rendered within 2 years, where national proceedings can drag on,
• Delivering unified case law to increase legal certainty.

Here again, substantial savings will be made by the patentee with regard to taxes and personal representative fees.

It should be noted that the UPC will also be competent for the national parts of classic European patents validated in one or more of the participating states. Nevertheless, during a transitional period of 7 years, which may be renewed once, the patentee will be able to opt out from this jurisdiction upon formal request in order to initiate an action before the national courts. This opt-out may be required:

• For classic European patents granted before the entry into force of the agreements,
• For patents filed or granted after the entry into force of the agreements and before the end of the transitional period, provided that no action has already been taken before the UPC.

It is not possible to derogate from the jurisdiction of the UPC for European patents with unitary effect.

The opt-out has to be required before the registry of the UPC at the latest one month before the expiry of the transitional period.

The patentee will be able to withdraw this opt-out at any time provided that no action has already been brought before a national court.

Conclusion

The European patent with unitary effect should come into force at the end of the year. It aims to make patent protection more attractive in the EU. Among the members of the European Patent Organisation, which currently comprises 38 countries, only the 27 EU members are concerned by the system. For the remaining countries, nothing changes compared with the current system. 17 EU countries are, to date, ready for the launch of the European patent with unitary effect, and 7 more countries should join the system quickly. The only EU countries that have so far refused to participate are Cyprus, Spain and Poland. The centralization of administrative formalities before the EPO will significantly reduce administrative and patent agent fees for companies. Disputes will be centralized before the JUB. Trials should not last more than two years, and the economics should once again be business-friendly. The main disadvantage regarding the patentee is that once revoked before the JUB, the European patent is revoked for all EU countries participating in the system. Previously, revocation only applied to the country in which it was pronounced. The remaining question is whether companies will respond favorably.