A single European Patent

On 11 December 2012, the European parliament voted in favour of the proposed Unitary Patent and Unified Patent Court, which will provide a system for obtaining unitary pan-European patents and a single court through which they can be enforced.

All EC member states except Spain and Italy intend to participate and, if the system receives the required ratifications, it could come into effect from 1 January 2014.

The vote in December marks a significant step forward.  However, the system is not without flaws and a number of concerns have be raised, particularly in relation to the Unified Patent Court.

The Unitary Patent
When the Unitary Patent system comes into effect, applications will continue to be filed at and examined by the European Patent Office (EPO).  It therefore seems likely that the pre-grant process and costs will remain much as they are now.

However, at grant, the applicant will be able to choose whether to bring the patent into force as a Unitary Patent or as separate national patents.  In either case, the patent may also be brought into force in states that are not members of the Unitary Patent (e.g. Spain, Italy, Norway, Switzerland).

If an application is brought into force as a Unitary Patent, this will only require translation of the patent into English or, if the application was filed in English, another official language.  This could save significant translational costs compared with the current system, where many countries require translation of the claims or the entire granted patent into their national language. 

In order to maintain a Unitary Patent, only a single annual renewal fee will be payable, rather than separate fees for each state.  The single fees are expected to be significantly less than paying separate fees in all 25 member states.

It is therefore believed that the Unitary Patent will provide a relatively straightforward and cost-effective system for companies interested in obtaining patent protection across most of the EC.

The Unified Patent Court
The Unified Patent Court will have exclusive jurisdiction for all cases related to the enforcement of Unitary Patents.  The Court will be formed of Local, Regional and Central Divisions.

It is hoped that by providing a single Unified Patent Court for enforcing patents across all states, this will provide a more efficient and cost-effective system as patents will not need to be enforced separately in each state.  However, on the downside, litigation costs in the Unified Patent Court could be significantly higher than they are currently in the national courts, particularly where translation into a local language is required.

A further downside to centralised litigation is that a single decision could declare a patent invalid across all member states.  This will make Unitary Patents much more vulnerable than a bundle of separate national rights, each of which would have to be attacked separately.

Another concern is that the proposed system allows for courts to hear issues of infringement and validity separately.  This could make Europe much more attractive to so-called patent "trolls" who could sue a company for infringement of a patent in a country such as Germany, where infringement and validity are heard separately.  Then, even if the patent is invalid, if the company is found to infringe the patent it could be prevented from selling the infringing product across all member states until validity is considered, which could be up to a year or more later.  The loss of earnings during that time could be considerable.

In addition, from 2014, any European patents granted as individual national patents may also be litigated centrally and could be enforced or revoked across all states by a single court.  Whilst the option of such a simplified procedure will have certain advantages, it will also make any patents granted by the EPO more vulnerable.  Furthermore, from 2021, the Unified Patent Court will have exclusive jurisdiction for all patents granted by the EPO. 

A further source of complication, uncertainty and increased costs is the requirement that, in certain circumstances, various national laws and languages will need to be used.  For example, if a UK company is sued for infringement of an English language Unitary Patent in Greece, by a US patentee, the language of proceedings will be Greek and the applicable national law is German.  In another example, if a UK company sues for infringement of an English language Unitary Patent in Greece, the language of proceedings is Greek and the applicable national law is English. 

A company who is not interested in obtaining European-wide protection could still get around these pitfalls by obtaining separate national patents via the national offices.

In summary, whilst there will be many cost and efficiency advantages to the new system, the potential issues post-grant mean that companies should think carefully and seek professional advice before deciding which form of European patent protection will be best for them.   

Catherine Noronha, Associate
First published in Director of Finance, January 2013