Unitary Patent and Unified Patent Court Rudiments [1]

This summary is intended to be an outline of some basic features of the UP/UPC system due to enter into force on June 1, 2023. Part of this outline is presented as a flowchart in an Appendix. It is meant to serve as a quick reference, or cheat sheet, for some fundamental features of such new system without entering into deep considerations on the Unified Patent Court or extensive financial implications of relying on such system. [2] 
 

Introduction

Before the advent of the Unitary Patent (UP) and Unified Patent Court (UPC) practice, centralized filing and examination under the European Patent Convention (EPC) by the European Patent Office (EPO) of a single European patent application covering up to 44 states has often been pursued. The EPC encompasses all 27 European Union (EU) member states plus some 12 non-EU member states. A patent granted by the EPO defaults to a plurality of national patents through validation in elected jurisdictions. 

Post-grant matters such as validity and infringement of each validated patent are addressed separately in each state, although revocation of the entire bundle is possible if an opposition is filed at the EPO within nine months of grant. The EPO route is available in addition to the filing and prosecution of a patent application in each separate state. 

Whereas validation and enforcement in separate states of a patent granted by the EPO, as well as centralized opposition, will still be available in non-ratified states, a new alternative is offered by the UP and UPC. Basic features are outlined below as per current provisions of the UPC Agreement, and an illustrative flowchart (“the flowchart”) is provided in the Appendix.
 

Some Features of the Unitary Patent and Unified Patent Court

A unitary patent is a granted EPO patent to be singly validated with single patent rights effective in all the states of the UP/UPC system that will enter into force as of June 1, 2023.

Thanks to the EPO’s sunrise provisions, it will be available for any European patent application for which the applicant has not yet approved the text proposed for grant (in response to the communication under Rule 71(3) EPC).

A UP will only ever have effect in the EU member states that have both ratified the UPC Agreement and have taken part in the UP regulation at the time that a specific patent’s unitary status is registered.

As to geographic scope, the UP/UPC system will be available from June 1, 2023, only in ratified states (currently 17 states), where UPC will have exclusive jurisdiction for litigation concerning patents granted by EPO (“UP/UPC territory”). 

Accordingly, the first inquiry in the flowchart focuses on whether the territory of interest is a ratified state. The ratified states are currently Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovenia, and Sweden. If a jurisdiction of interest is not a ratified state, then the UPC Agreement is not applicable. The remaining steps in the flowchart concern inquiries that refer to ratified states. 

Twenty-four of the current EU states are expected to take part, and they are currently at different stages in the ratification process. Of those, Cyprus, Czech Republic, Greece, Hungary, Ireland, Romania, and Slovakia are referred to herein as pre-ratification states because of the stage that they are in. 

Some EU states are not participating, and these are Croatia, Poland, and Spain. They are referred to herein as participation refusal states. They may change their mind in the future.

Non-EU states (United Kingdom, Switzerland, Norway, Albania, Iceland, Liechtenstein Macedonia, Monaco, Montenegro, San Marino, Serbia, and Turkey) may not participate, and they are referred to herein as non-eligible sates.

In sum, the set of non-ratified states is the union of three sets: The set of the pre-ratification states, the set of the participation refusal states, and the set of the non-eligible states. 

In contrast with validation and maintenance, rights must apply to the entire UP/UPC territory at the time of patent grant, so there is no choice of states within the UP/UPC territory. The European patent must have been granted with the same claims in certain states. [3]

If additional states ratify the UPC agreement after a unitary patent is granted, the territorial scope of that unitary patent does not change. Later-granted unitary patents will have greater territorial scope as more states ratify the agreement.

The flowchart sets out how to determine whether a patent, application, or SPC is under the jurisdiction of the UPC.

If the jurisdiction of interest is a ratified state, then the next step in the flowchart is to inquire on whether the matter of interest concerns a time before or after the UPC system becomes effective on June 1, 2023. If such time antecedes the three-month period before such June 1 date, then the UPC Agreement is not applicable, and this situation is not reflected in the flowchart. 

Within three months prior to the UPC system being effective, the opt-out practice is available. When effectively exercised, this action leads to another instance when the UPC Agreement is not applicable. This option, and any other optional steps within the UPC system, may be relevant in assessing contractual terms-related rights and obligations in licenses and other agreements. 

The analytical path in the flow chart determining whether a case is within the jurisdiction of the UPC leads to the inquiry on whether the relevant time is within a transitional period (to last for at least seven years) after the UPC system becomes effective, or through a negative answer to the same question, provided that no opt-out election has been effectively exercised.   

As to the selection of UP status, pre-grant EPO procedure will not change. The UP status can be requested by focusing only on the UP/UPC territory, or by requesting it for the UP/UPC territory and validating in any other EPC state of interest upon grant of a patent by the EPO. The option to select UP status is available once the UP system is effective, as illustrated in the flowchart by the inquiry flow that is generated by an affirmative answer to the question of whether the UPC Agreement is effective. Such option to select UP must be exercised within one month of grant of patent by the EPO (in contrast with the deadline for validation in individual states that is, in most contracting states, three months after the grant date publication).

If notice of intent to grant is currently pending for a European patent application, it is possible to request a delay in the decision to grant under the EPO’s sunrise scheme in order to obtain a unitary patent.

During the transitional period, there will be dual UPC-national court jurisdiction, and the owner may opt out of the UPC’s jurisdiction, unless a UP has been selected or UPC proceedings have been initiated. 

When a UP has been selected or UPC proceedings have been initiated, then no opt-out is possible and the UPC has jurisdiction to decide on the granted patent validity and infringement. This is also the situation after the transitional period, when there will be no opt-out option, even though effectively exercised opt-out options before the end of the transitional period will stand. An example of a UPC proceeding is a revocation filed at the UPC against a non-opted out patent. As indicated in the flowchart, such proceeding places the patent irrevocably within the UPC jurisdiction. Because a patent owner typically will not know in advance when another party will file, for example, a revocation proceeding, it is advisable to have all opt-out filings registered before the end of the three-month sunrise period. 

When neither a UP has been selected nor UPC proceedings have been initiated, then the options of opting out and withdrawing any such opt-out are available as indicated below. Effective exercise of such an opt-out option leads, as shown in the flowchart, to a situation in which the UPC Agreement is not applicable.

Exercising an opt-out option entails no EPO or UPC fee, and it has to be exercised individually for each patent granted by the EPO or application filed at the EPO. Opt-out applications must be made in respect of all EPC states in which the patent was granted or that have been designated in the application, and by all owners of the patent that are owners at the time of filing the opt-out application (an ownership status that might be different from the ownership as recorded at the EPO or national registers). When there is joint ownership, all co-owners must act jointly. A licensee, even an exclusive licensee, may not effectively file an opt-out application. These requirements add another motivation to make certain that assignments or other conveyances of ownership rights are duly executed. An opt-out must be registered to be effective and, if incorrectly filed, it may be found to be invalid. As a result, the patent would still fall under the UPC’s jurisdiction and could be centrally revoked.  

An SPC based on a European patent shall be opted out with that patent.

As long as national proceedings have not started, an opt-out may be withdrawn, but opting out may be exercised only once and if withdrawn, there is no further opportunity to opt out again. Provided that national proceedings have not started, an opt-out that was registered during the sunrise period may be withdrawn during the sunrise period and also during the transitional period, as well as after said period; subject to the same condition, an opt-out registered during the transitional period may be withdrawn at any time. 

As to UPC jurisdiction, and to supplement the statement made at the stage in the flowchart that displays the legend “UPC has jurisdiction to decide on the granted patent validity and infringement,” the UPC will have exclusive jurisdiction for all UP cases.

All patents granted by the EPO will be within the scope of such jurisdiction for the ratified states, including all patents already granted by the EPO, even if validated in some of such states by the traditional path, unless opted out.

Remedies (infringement ruling, damages, relief (e.g., seizure, destruction, and recall of infringing products), injunctions, provisional measures (e.g., evidence preservation, site inspections, no-removal orders, seizure, preliminary injunctions and evidence production), and revocation proceedings may apply across the entire UP/UPC territory.    
 

Final Considerations

This blog publication is envisaged to simply provide a basic reference legal counsel that is not admitted to practice before the EPO can readily review in preparation for consultations with expert legal counsel in Europe. For this reason, some relevant items have been succinctly outlined and others have not even been referred to. Matters that have not been addressed include possible future UPC jurisprudence, such as on standing, evidence/discovery, and privilege, as well as other aspects, including geographic distribution of UPC venues, and composition and functionality of UPC panels; scenarios in the legal and financial analyses of the suitability of the UP/UPC system election when available; and double patenting considerations upon expansion of what nowadays is a two-pronged system (patents from direct national filings and from validation of EPO patents) to a three-pronged system, which will include the UP/UPC system for ratified states in addition to the now available two-pronged system. Furthermore, the advent of the UP/UPC system should motivate the review of patent portfolios, of due diligence inquiries, of relevant terms in existing contracts, and the assessment of its impact on future contracts, with the consequent development of appropriate negotiating strategies, matters that are also left outside the limited scope of this publication.

[1] By Jesús Joanós i Timoneda, PhD, JD, Senior Counsel at Ice Miller LLP. This summary has been reviewed by Agathe Michel-de Cazotte (admitted to the Paris and Dusseldorf bar; European patent litigator) and Isobel Barry (European and UK patent attorney; European patent litigator), both Partners at Carpmaels & Ransford LLP, to whom JJiT thanks for their critical review and educational comments.
[2] See details at <https://www.epo.org/law-practice/unitary/upc.html> and also at <https://www.carpmaels.com/upc/>
 and in articles or presentations such as H. Ford and L.A. Will, “Navigating the New EU Unitary Patent System and Unified Patent Court. Strategic Considerations for U.S. Applicants and Patentees” Strafford Live CLE Video Webinar, <https://www.straffordpub.com> (March 31, 2022); F.M. Koenigbauer and T.C. Clare, “The Unitary Court Alarm Bell (and How to Use the Snooze Bar)” at <https://www.icemiller.com/ice-on-fire-insights/publications/the-unitary-patent-court-alarm-bell-(and-how-to-us/> (Feb. 17, 2023), and F. Koenigbauer and T. Kronberger, “5 Considerations in Preparing for EU’s New Patent System” at <https://www.law360.com/articles/1535532> (Sep. 30, 2022).
[3] For historical reasons, these states are the ratified states, the pre-ratification states, and Poland. 
 

APPENDIX

Illustrative flowchart for the UP process (below) (Subject to change as the UPC Agreement is amended)

“START” and “END” in the following flowchart refer only to the logical process presented in the same. The legal analysis that should be applied to each case could require reasoning beyond the stages delineated in the flowchart by the terms “START” and “END.” The fuller narrative version presented in the foregoing sections is to take precedence over any possible ambiguity in the following, much simplified, flowchart presentation.

APPENDIX NOTES

(1) Subject to change: 
Ratified states = Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovenia, and Sweden.
Pre-ratification states = Cyprus, Czech Republic, Greece, Hungary, Ireland, Romania, and Slovakia.
Participation refusal states = Spain, Croatia, and Poland.
Non-eligible states (non-EU EPC states) = United Kingdom, Switzerland, Norway, Albania, Iceland, Liechtenstein, Macedonia, Monaco, Montenegro, San Marino, Serbia, and Turkey. 
Non-ratified states = {pre-ratification states} U {participation refusal states} U {noneligible states}

(2) Subject to change: Seven-year period, that may be prolonged for up to seven additional years.

(3) March 1, 2023, through May 31, 2023. 

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances. The views presented in this publication do not represent the views of any client, including past clients, of Ice Miller LLP, or Carpmaels & Ransford LLP.