Will there really be a Unitary Patent & Unified Patent System?

The European Patent Office (EPO) opened for business in 1978.  At that time it was also proposed to provide for a unitary Community patent.  After many false starts, and after many different proposals, it is suddenly looking likely that there will be a Unitary Patent.  The European Commission has suggested that the system could commence in early 2014.  There is also a proposal for a Unified Patent Court, which will be a pan-European Court, to deal with validity and infringement of European patents throughout Europe. 
 
European Patents
 
The European patent is nothing to do with the European Union.  It was provided by a treaty (the European Patent Convention “EPC”) signed up to by the contracting states and currently has 38 countries as full members.  Thus, the EPC has more members than the 27 states who currently make up the European Union.  States of the EPC outside of the EU include Albania, Croatia, Switzerland and Turkey.
 
Under the European patent system a single patent application in French, German or English is filed and prosecuted at the EPO.  When granted the resulting patent is, in fact, a number of national patents.  In each country in which the national patent comes into effect, annual renewal fees become payable to the national Patent Office.  Furthermore, any disputes about the patent have to be dealt with individually in the courts of each country.  Such disputes might be about licensing issues, about the ownership of the patent, or about infringement and validity of the patent.
 
When a European patent application is filed the applicant designates all EPC member countries.  On grant, the patentee has to take appropriate action in each country in which the patent is to be brought into effect or validated.  In many countries it is required that either the whole, or part, of the patent specification has to be translated into the national language at grant, with consequent expense.  In view of this most patentees only validate their European patent in a few countries.  It is unusual for a granted European patent to be brought into effect in more than, say, five to seven countries.
 
The Unitary Patent
 
The initial Community Patent Convention (“CPC”) had similar provisions to the EPC but required that every one of the Community countries be designated.  On grant, the resultant patent had effect across the entire Community but countries could require, and did, that a translation of the full text into their official language be prepared and filed.  Not surprisingly, industry throughout Europe was not supportive of the idea in view of the huge translation costs they would incur at grant.
 
In 2011 a proposal for a European Unitary Patent having effect across the whole of the EU was approved by the European Commission.  It differs from the CPC in several ways.  The most significant difference is that no country can require the patentee to provide a translation of the patent into their national language.  Translation into English where the European case is in French or German can be required, but the Commission expects that machine translations will be sufficient.  The Unitary Patent proposal has been presented to the member states on an “enhanced cooperation” basis so that each country can decide whether or not to sign up.  Currently Italy and Spain are not taking part.  Unless the situation changes, the unitary patent will only take effect in 25 of the 27 EU countries.
 
The new Unitary Patent will be administered entirely by the EPO.  An applicant will file and prosecute a European patent application in the EPO as at present.  At grant the patentee could choose a Unitary Patent which would extend to all the countries of the EU who had joined the new system.  The process of validation at grant for the Unitary Patent will remain with the EPO who will also remain responsible for the Unitary Patent after grant and will collect renewal fees.  The patentee can also validate the patent in countries outside of the EU in the usual manner.
 
Currently there is no cost information available as to the fees that might be charged by the EPO for a Unitary Patent at the grant phase and for subsequent renewals.  It is therefore difficult to assess how many applicants will want to have a Unitary Patent given that the patentee will still be able to choose to validate the European patent in a number of individual EU countries as at present.
 
The Unified Patent Court
 
A Unitary Patent needs a court in which these new patents can be enforced and challenged. Hence there is a parallel proposal for a Unified Patent Court (“UPC”).
 
The new court will have a “Central Division” with headquarters in Paris, and offices in London and Munich.  The Court of Appeal of the UPC will be in Luxembourg.  The Central Division will have exclusive jurisdiction over challenges to the validity of a patent.  Infringement actions can be brought before the Central Division or before Regional and Local Divisions which may be set up by individual countries, or groups of countries.
 
The scope of the UPC and the transition
 
The UPC proposal gives the UPC exclusive jurisdiction not just over matters relating to Unitary Patents.  It will also have jurisdiction over Supplementary Protection Certificates (“SPCs”), European patents already granted which are still in force when the proposal comes into effect, and all current and future pending European patent applications.  For a transitional period of seven years patentees can opt out and choose to use national courts rather than the UPC for their disputes relating to traditional European patents. 
 
It is likely that patentees will be advised to file an opt-out of the UPC when their European patent is granted.  Industry is unlikely to want to risk having to litigate in the UPC whilst it is new and unproven. 
 
Languages
 
The Court of Appeal in Luxembourg, and local divisions of the court of first instance, can choose the language in which to hear the case.  This raises the possibility that two courts might hear the same case in different languages.  It is also possible for infringement and validity of the same patent to be heard by different courts and in different languages.  It is difficult to know how this might work given that the exact use of precise language is at the heart of a well drafted patent specification.
 
In Germany, infringement cases are heard in different courts to cases involving the validity of a patent.  This makes it easy for a patentee to get an injunction as it opens the way for a patentee to argue for a broad interpretation of a claim to “catch” an infringement.  Subsequently the patentee might argue for a much narrower interpretation of the same claim in order to show the claim to be valid.  Under the UPC, such bifurcation will be an option, and is, perhaps, likely to remain in use in local divisions in Germany.  Injunctions issued by a local division, or the central division, will be extremely valuable as they will be pan-European. 
 
Practical Implications
 
For a while now, some UK based businesses have routinely filed British national patent applications, alongside their European applications, to ensure that they will never need to use the UPC for infringement and other disputes arising in the UK.  All applicants could avoid the UPC by reverting to filing national patent applications in Europe rather that using the EPO.  At least for the transitional period, businesses can avoid the new court by continuing to validate their European patent in the few EU countries of real interest and then filing an opt-out.  Business needs certainty and whilst the high standard and speed of access of the English courts, for example, is known, the standards and speed of the UPC, however formatted, is a total unknown.   
 

Jacqueline Needle, a partner of Beck Greener, has wide experience of advising companies, from both this country and overseas, in the procurement and use of IP.  She has managed extensive patent portfolios, and has had the conduct of litigation in many countries. 
 
Jacqueline is an experienced writer and editor and, as well as making contributions to various books on IP matters, she has written for journals, magazines and the UK national press. 
 
Jacqueline has an Honours degree in Electrical and Electronic Engineering awarded by the University of Leeds, and an LL.M in Advanced Litigation from Nottingham Law School.
 
Jacqueline Needle can be contacted by phone on +44 (0) 20 7693 5600 or alternatively via email at jneedle@beckgreener.com