The UPC Agreement will allow for uniform patent protection in all contracting states 5 min read
Across Europe, eyes are on the horizon for the Unified Patent Court (UPC). After years of trials and tribulations, Austria has finally fully ratified the Protocol on the Provisional Application of the UPC Agreement, effective 19 January 2022. The UPC can now begin its preparatory phase.
The Unitary Patent system established by the UPC Agreement will allow for uniform patent protection in all contracting states. In addition to Unitary Patents, the UPC will also have jurisdiction over existing European Patents, but patent holders have a window of opportunity to opt out of the new system.
Key takeaways
- The UPC Agreement establishes a Unitary Patent system, ie a European Patent with unitary effect, and a single, unified international court (the UPC) deciding on the validity of patent rights, across several European jurisdictions.
- The provisional application period began on 19 January 2022, with the UPC expected to become operational in October 2022.
- Holders of existing European Patents now have an opportunity to opt out of the jurisdiction of the UPC, on a patent-by-patent basis. This window of opportunity closes once an action has been brought before the UPC in relation to the relevant patent.
Unitary Patents system
Like the existing European Patent, the Unitary Patent will be centrally examined at the European Patent Office (EPO). Applicants will have one month from publication to file a 'request for unitary effect'. Once the patent is granted, it will be a unitary intellectual property right with effect in all countries which are participating member states, which can be centrally enforced, but the validity of which can also be centrally challenged, at the UPC.
The UPC will also have jurisdiction over existing (non-unitary) European Patents in UPC member states, unless the patent holder chooses to opt out.
The system is open to accession by any EU Member State. This means that member states of the European Patent system that are outside the EU are excluded. These include some major countries such as the United Kingdom, Switzerland, Turkey and Norway. Further, not all EU member states have signed up to the UPC Agreement. Spain is a high profile non-signatory. Croatia and Poland have also chosen not to participate.
What is the significance of Austria's ratification?
The timetable for the UPC to become operational depends how many, and which, member states ratify the UPC Agreement itself and the Protocol on the Provisional Application of the UPC Agreement (the PAP). Austria's ratification of the PAP brings the PAP into force, which means that the preparatory phase started on 19 January 2022. The UPC is now established as an international organisation. The preparatory phase is estimated to last eight months. Germany is expected to deposit its ratification of the UPC Agreement during the preparatory phase, which will allow the UPC to open for business, probably in October 2022.
The three month period before that date is called the 'sunrise' period. During the 'sunrise' and transitional periods, holders of existing European Patents have the option of opting out of the jurisdiction of the UPC (discussed further below). During a transition period of seven years after the UPC opens for business (which can be extended), the UPC and national courts will share jurisdiction over European Patents.
At the end of the transition period, the UPC will have exclusive jurisdiction over Unitary Patents, as well as those parts of European Patents and those Supplementary Protection Certificates that are in UPC member states (except patents and SPCs that have been opted out, and SPCs based on opted-out patents). For these patents, the UPC's exclusive jurisdiction will include the following types of actions:
- Infringement, defences to infringement and declarations of non-infringement;
- invalidity actions (whether stand-alone or as a crossclaim to infringement); and
- private prior use actions.
What are my options?
For Australian organisations and businesses that have patent protection in Europe, or may consider seeking it in future, the Unitary Patent system offers new options for both existing patents and new applications.
- Applicants for new patents in Europe currently have two options: national patents in each country, or a European Patent, which is centrally examined by the EPO and can be centrally opposed, but once granted is a bundle of individual rights in designated member states, with enforcement and validity challenges in each member state handled by its national courts. The Unitary Patent adds a third option. Patent applicants will need to balance up a number of competing considerations. For example, whether a Unitary Patent will be cheaper or more expensive to maintain than a European Patent will depend on which, and how many, countries are designated. Further, Unitary Patents do not cover some major economies that participate in the European Patent system.
- Holders of existing (non-unitary) European Patents have an opportunity opt out of the jurisdiction of the UPC for their patents, on a patent-by-patent basis during the 'sunrise' and transition periods. Opt-outs can be withdrawn. Once a UPC action has been brought in relation to a patent, however, it will not be possible to opt out of jurisdiction. For this reason, if you intend to opt-out, it is preferable to do it early on during the window. The decision whether to opt out will require balancing a few considerations. For example:
- Some features of the UPC may be attractive to litigators compared to multijurisdictional litigation in different national courts, such as the UPC not requiring validity and infringement issues to be separated ('bifurcation') and (in most cases) proceedings not being stayed pending an opposition at the EPO.
- On the other hand, the 'one-shot' approach of the UPC means that a contested patent can be revoked in all UPC member states at once.
- The introduction of a new, unprecedented court system brings an element of uncertainty, and initially it may be difficult to predict UPC decisions in particular cases.
- The option of litigating in non-UPC countries, such as the UK, will always remain and can form a component of the litigation strategy in either case. For example, at least in the initial period, a quick UK decision may have 'export value' in influencing the decision at the UPC. Procedural differences may also be useful: information uncovered in discovery in the UK may be useful before the UPC, which does not provide for discovery.
For more information on the Unitary Patent system and the UPC, including a map of all the member states, visit the mini-site created by our European colleagues at Linklaters.
Actions you can take now
- Review your filing, prosecution, maintenance and enforcement strategies in Europe to account for the upcoming changes.
- Review the Linklaters UPC Hub for more information about the Unitary Patent system and the UPC, including strategic considerations for patent holders and litigants.
- Consider whether you should opt out of UPC jurisdiction for your existing European Patents and, if so, do it within the first six months after the start of the 'sunrise' period.
- Contact the Allens IP team if you would like to discuss any of these issues.