The Unitary Patent and the Unified Patent Court: what is all the fuss about?

The Unitary Patent

There are clearly considerable benefits for many organisations large and small in obtaining pan-European intellectual property rights, as proved by the continued success of the EU Trade Mark and Community Design systems. Currently, although a centralised patent prosecution route has been available since the late 1970s, the resulting granted patent must still be validated in individual European Patent Convention (EPC) contracting or extension states. This is an administratively time-consuming process not just at the grant stage but on an on-going basis as annual renewal fees must be paid to each national patent office where the patent is validated. It has also led to a highly geographically fragmented landscape of patent rights within Europe with most patents being validated in just a few key European states, leaving no rights in those countries where the patent is not validated.

The Unitary Patent (UP) is currently the promised “golden bullet” to end this divisive situation as its territory will span all member states of the European Union who have signed the Unified Patent Court (UPC) Agreement (the “UPCA”) although Spain is a notable exception at this point. The prosecution route for Unitary Patents is still via the European Patent Office, but after UPCA comes into force, it will be possible, and for EPO prosecuted patents eventually mandatory post the transition period, to obtain and maintain patent protection via a Unitary Patent for up to currently 25 EU member states (should they all ratify the UPCA) in a simple administrative process with just one annual renewal fee. The existing and entirely separate prosecution and enforcement routes for national patents across Europe will remain unaffected by this and continue to provide a strategic alternative.

So what is all the fuss about?

Whilst the UP annual renewal fee is effectively about the same as those charged by the most popular top four patent offices to validate a European Patent (EP), often EPs are validated in around three or so states, or even in in just one or two, and protection often drops to just one state after a few years to manage renewal costs. So will SMEs really want to pay more? There may be an arguable benefit if pursuing opportunities for licensing unitary patent rights in some or all of the states within its territory, but will this really encourage innovation? Or stifle it? What about BREXIT? If the UPC needs to ask for guidance on the interpretation of EU law regarding the Unitary Patent regulations, the appeal route eventually leads to the Court of Justice of the European Union.

Can any of the above be reconciled post BREXIT with the UK leaving the EU if the UK is within the territory of the Unitary Patent? The consensus seems to be that UK may end up, just like other EPC contracting states which are not part of the EU, continuing to require national validation of any granted EPs. However, many think it is still perfectly viable for the UK to participate in the UPC, should it ever come into force, and there is great enthusiasm for the UK to participate in many pro-UPC camps.

Finally, the last hurdle the UPCA currently faces is the pending court case before the German courts as to whether the participation of Germany in the UPCA and UP is unconstitutional. The German Bar Association Deutscher Anwaltverein announced earlier this year that in their opinion, the complaint is inadmissible as the complaint is based on an argument that the implementation of the UPC contravenes EU law, whereas EPs have already been held by the CJEU to sit outside EU law. The case is due to be heard this summer. If the German complaint is found inadmissible it is possible that the UPC may finally come into force, by the end of 2018.