Q&A

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It is currently expected that the start date will be in late 2022 or early 2023, when both the Court will open and unitary patents may be granted. However, during the 3-4 months immediately preceding that date, there will be three transitional measures:

  • The owner of a European patent may register an “opt-out” (see below).

  • The applicant for a European patent coming to grant shortly before the start date may request that the issue of a decision to grant a European patent is delayed until the start date so they do not miss the opportunity to obtain a unitary patent. They will then have one month from the start date to request unitary effect.

  • The applicant for a European patent may file an early request for unitary effect, so a unitary patent will be granted immediately on the start date. This request may only be made after the applicant has received a “Rule 71(3) EPC-communication” (in which the EPO informs the applicant of the text in which it intends to grant the patent), and the applicant may also need to delay the grant (as above).

The start date depends on how long it takes for the final preparations, including the recruitment of judges, to be completed. This preparatory stage, known as the provisional application period (PAP), started on 19 January 2022 (when Austria deposited its instrument of ratification of the UPC Agreement’s Protocol on Provisional Application, meaning that sufficient countries had consented to the start of the PAP). The UPC Preparatory Committee estimated then that the PAP would last at least 8 months. The actual start date will be the first day of the fourth month after Germany deposits its instrument of ratification of the UPC Agreement. It is understood that Germany intends to do so towards the end of the PAP when there is confidence that the Court will be ready to open at that time.

There are a number of reasons why it is important to prepare for the new regime now:

  • The new system will affect all existing European patents, these automatically coming under the exclusive jurisdiction of the UPC subject to complex transitional arrangements which allow for “opting out”. You need time to consider the full implications for opting your existing European patents out of the UPC, bearing in mind that if you do wish to take this step, it will best be done before the UPC opens (i.e. during the “sunrise period”) and considerable due diligence may be required – see below.

  • You need to consider those patents which you license-in where the licence agreement confers the right to bring enforcement actions and discuss with the proprietor potentially opting those patents out.

  • You need to take the UPC regime into account in drafting new licence and joint venture arrangements.

  • You need to be aware of the possibility – which will be significant – of being sued in the new court by competitors and/or non-practising entities (to whom the UPC may well be more attractive than national EU courts).

  • Any European patents in the application stage now (except pre-March 2007 ones) which come to grant after the system starts can potentially benefit from unitary effect, and there are budgetary and litigation factors to take into account in deciding upon future patent filing strategies. Before the system starts (but after Germany has deposited its instrument of ratification of the UPC Agreement) you may file early requests for applications to have unitary effect and also request that the issue of a decision to grant a European patent is delayed until the start date.

  • You may also wish to reassess EPO opposition filing strategies: whilst the UPC does not cover all EPC countries, central UPC revocation actions may be an alternative and/or additional way to attack competitors’ patents.

  • You may even decide that long term investment decisions (such as where to site R&D and manufacturing facilities) may be influenced by the availability of injunctions having broad geographic effect being granted by any local division of the Court.

As mentioned above, careful thought should be given to whether to opt existing European patents out of the UPC, and indeed any published applications (which can also be opted out). If you decide to do this, it will be possible (and advisable) to do so during the sunrise period expected to begin about three months before the Court opens. The filing is to be done on a per patent (not per patentee) basis, but it will be done electronically. There will be no fee. You should note that all proprietors of the patent, including (if different) all those proprietors of all national parts of a European patent in states which have signed the UPC Agreement must be included in the opt-out. It is not what is on the register (neither EPO nor national registers) which determines who is entitled to opt out, but the “real” proprietor(s). Checking the correct proprietors could involve significant due diligence internally in cases of large patent portfolios. Bristows can provide guidance on the procedure for opting out, as well as advice on the opt-out strategy itself.

A key consideration for many patentees will be budgetary. A unitary patent will cover all those countries which have ratified the UPC Agreement by the date of grant. This will be at least 17. Apart from Germany (which must ratify for the system to start), 16 countries have already ratified, these being Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovenia and Sweden. There will be no validation fee for a unitary patent and only one translation will be required. However, there will be renewal (maintenance) fees, and for patentees who usually validate in fewer than four EPC states unitary protection is likely to be more expensive.

Patentees will, of course, also want to consider the litigation regime applying to unitary patents. These are mandatorily litigated in the UPC, and cannot be opted out. This has upsides and downsides. The main upside is obviously the advantage of central enforcement in a single action. A unitary patent also means it will only ever be subject to the UPC regime, whereas European patents not opted out will be subject to dual UPC/national jurisdiction for a transitional period (of at least 7 years) and susceptible to pre-emptive national actions for revocation which may block the ability of the patentee to use the UPC.. On the downside, some teething problems are possible with the UPC meaning that enforcement may not be as straightforward as hoped. For some time, there will certainly be a good degree of uncertainty both as to procedure and outcome from the Court’s divisions while a body of case law and practice is developed. Further, the flip-side of central enforcement is central revocation, including by proactive actions begun in the UPC central division, meaning that what would otherwise have been a family of EPs may be revoked in one case.

No. The rules state that actions can be commenced taking into account where defendants are domiciled and where infringing acts take place. In the case of groups of companies, often many different subsidiaries may be involved in alleged infringing activities, and infringement may be widespread. The first instance organisation of the UPC is complex with multiple local and possibly regional divisions, and there are likely to be over a dozen potential venues in which most actions may be commenced, with the choice lying with the patentee. Hence, you might potentially be sued in almost any division of the UPC, but whichever division is used, its decisions have the same pan-European effect.

Sometimes, but not always. The usual rule is that the case will be heard in a local language of local and regional divisions, and in the case of the central division in the language of the patent. The claimant will have initial control as to which language accepted by the division the proceedings are commenced in (subject potentially to an application from the defendant or the Court itself deciding to the contrary). Most (and possibly all) divisions will offer English as an option, and the use of English is likely to dominate for practical reasons, most notably because every judicial panel in the UPC will include different nationalities and the most likely common language between these judges may well be English.

If your licence allows this, then yes you can sue. This is so even if the licence is non-exclusive. The patentee will then have a choice as to whether to join in the proceedings or not.

Yes. It is open to a claimant to conduct a saisie anywhere in the UPC territory and then decide if it wants to sue. Hence you should be aware of this possibility if you have aggressive competitors.

It is right that the UPC will have wide powers to grant preliminary injunctions. Those applications made without notice should be rare, but you can try to prevent this happening to you by filing a “Protective Letter” with the UPC Registry in Luxembourg (as is currently possible in Germany using a Schutzschrift). This procedure effectively asks the Court to inform you of any applications for injunctions to enable you to make representations to the Court before it grants any relief. Again, this is something to consider before the UPC comes into operation.

No. The two jurisdictions are parallel and complementary, and the start of the UPC will have no effect on existing oppositions or ones to be started in the future. However, it is possible to foresee oppositions becoming somewhat less common in the long term as the UPC will eventually be able to revoke patents designating most important territories and is not subject to the 9 month post-grant opposition window at the EPO.

Following both the UK government’s confirmation in February 2020 that it would not be participating in the unitary patent and UPC system and the decision of the German Federal Constitutional Court (Bundesverfassungsgericht - BVerfG) in March 2020 that the legislation enabling Germany to participate had not been passed by sufficient members of the Bundestag, the future of the system was looking uncertain. However, Germany and the other participating countries have decided they would like to go ahead without the UK.

The view of the Preparatory Committee is that the UK’s withdrawal does not make it necessary to amend the UPC Agreement (UPCA). Under article 89, the UPCA cannot come into force until it has been ratified by the three member states in which the highest number of European patents had effect in 2012. This would have been Germany, France and the UK. However, the Preparatory Committee consider that the UK’s withdrawal was unforeseeable when the UPCA was signed, and this should not prevent it coming into force for the remaining parties. It also considers there is no need to amend article seven regarding London being a section of the Court’s central division, and the UPCA can be interpreted that the central division would comprise, at least temporarily, only Paris and Munich.

A new German bill to enable Germany to ratify the UPCA and its Protocol on Provisional Application (PPA) entered the German parliamentary procedure in September 2020 and was this time passed by the requisite two thirds of members of the Bundestag. It was then approved unanimously by the Bundesrat on 18 December, leaving the following steps to be completed for the act to be promulgated: counter-signature by the Federal Government, signature by the Federal President and publication in the Federal Law Gazette (Bundesgesetzblatt). However, shortly after the Bundesrat’s approval, two constitutional complaints (one by the previous complainant) were filed in the BVerfG against the draft legislation. This was not entirely unexpected as the previous constitutional complaint succeeded on one ground and other grounds were not ruled on, and also there had been indications that new complaints may be filed.

It remains to be seen what effect the complaints in the BVerfG will have on the UPC project, but there will be at least a short delay. At least one of the complaints included an application for an interim injunction to prevent the German ratification of the UPCA and the BVerfG asked the President to refrain from signing the law while it considers the application, which he agreed to do. If the BVerfG does not promptly dismiss the cases and if it is likely to take, as before, a considerable time to decide them with a corresponding delay to the UPC project, it is possible that the political will to persevere with the project will not remain.

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