Unitary Patents Arrive in Europe

This article, written by attorney Jonathan Whitcomb and paralegal Karen Stevens, was originally published by the NH Bar News and can be found here (page 24).

Many US inventors seek patent protection both inside and outside the United States. In 2022, over 193,000 patent applications were filed at the European Patent Office (EPO). Over the past five years about 25% of EPO applications originated from a US inventor or applicant.[1] This year, certain European countries implemented significant changes affecting where a European patent may be protected and how and where patent disputes are addressed.

The EPO began over 50 years ago, originally with 16 countries signing the European Patent Convention (EPC). The EPO is an autonomous legal system that reviews patent applications, and where appropriate, grants European patents.[2] In practice however, there is no such thing as a “European patent,” because a granted European patent does not give a patentee coverage in all EPC contracting states. After grant, the patentee selects enforcement on a country-by-country basis via “validation:” paying individual fees to each country, providing translations and/or Powers of Authority and other formalities. The accumulated validation costs often lead patentees to only seek validation in a small number of EPC member states.

On June 1, 2023, the Agreement on a Unified Patent Court (UPCA) came into force. The primary changes brought about by the UPCA to the European patent landscape are that 1) the UPCA creates a Unitary Patent (UP), which provides a single, indivisible right across the European Union (EU) member states that have signed onto the UPCA, and 2) the UPCA creates a Unitary Patent Court (UPC), a central court system that will address patent disputes across the member states. Unlike the outgoing system where a European patent could be thought of as a collection of national patents enforced in national courts, applicants can now request the EPO issue a granted European patent as a Unitary Patent. When selecting a UP, patentees have a single, indivisible patent in a number of European countries.

However, not all European countries are party to the UPCA, and not all parties to the UPCA have completely signed onto the Unitary Patent system. As of this writing, a Unitary Patent presently covers 17 of the 27 EU countries: 7 EU countries have signed but not ratified the UPCA[3], and 3 EU countries (Spain, Poland, and Croatia) have not signed the UPCA at all. (The UK, not part of the EU, is a party to the EPC.) Under the new Unitary Patent system, a patentee may want both a UP (covering the UPCA member states), as well as a “classic” European patent (validated in any number of the countries that are not party to the UPCA).

By default, disputes concerning any granted European patent that is validated in any of the UPCA contracting states are now decided in the UPC, even patents that were granted before June 1, 2023. The UPC has jurisdiction over both Unitary Patents and all “classic” European patents; they may be enforced and attacked in one central system. A decision made in the UPC is enforceable in all of the UPCA contracting states.

During a transition period (currently until May 31, 2030) holders of classic European patents may opt out of the UPC on a patent by patent basis. By opting out, patents will only be subject to the national courts of the countries in which they are validated (as before). Issued patents that are not opted out of the UPC can be challenged or enforced both in the UPC and in the national courts during the transition period. After the transition period, the UPC will have exclusive jurisdiction over all European patent rights (UPs or classic European patents) in the UPCA contracting states, with the exception of classic European patents that were properly opted out during the transition period.

While classic European patents are now effectively subject to dual jurisdiction, the UPC has exclusive jurisdiction over UPs. After the EPO has granted a patent, if the patentee selects a Unitary patent, the UPC will handle any dispute arising in the countries that ratified the UPCA as of the date the European patent was granted. Once a patentee has selected a Unitary Patent there is no way to opt out of the UPC for that patent.

Moving forward, patentees may wish to review their existing European IP portfolios and decide whether to  opt out of the UPC’s jurisdiction (on a patent-by-patent basis) and remain under the jurisdiction of the individual validated states. The opt out decision is reversible: the patentee may opt back in during the transition if they wish to utilize the Unitary Patent Court[4].

Naturally, some may be wary of litigating their patent in the fledgling UPC. Advantageously, the UPC system offers a simpler and potentially less expensive avenue for asserting patent rights in multiple European countries with a single consolidated litigation. On the other hand, since the UPC is new and untested, procedures may be unfamiliar and outcomes less predictable. Further, under the UPC it may be easier and less expensive for an adversary to mount a single challenge that could weaken or destroy a patent in all the contracting UPCA countries.

Despite its initial complexity and non-universal implementation, ideally the UP/UPC will simplify the existing European patent systems, paving the way for a streamlined, widespread, and reliable experience.

[1] https://www.epo.org/about-us/annual-reports-statistics/statistics/2022/statistics/patent-applications.html

[2] https://www.epo.org/about-us/timeline.html

[3] The EU countries that have signed but not ratified the UPCA may ratify it at any time, and a UP will cover all countries that have ratified the UPCA at the time the UP is requested.

[4] You can only opt out, and opt back in, one time.