Knut Sverre Skurdal Andresen
Partner
Oslo
Newsletter
by Knut Sverre Skurdal Andresen, Jenny Nondal og Paal-André Storesund
Published:
The Unitary Patent (UP) and Unified Patent Court (UPC) came into force in Europe on 1 June 2023. The UP and UPC are intended to supplement and strengthen the existing centralized European patent granting system, enabling a proprietor of a European patent to receive patent protection in up to 25 EU member states and potentially stop costly parallel litigation. Even though there are several benefits that come with the implementation of the UP and UPC, there are also certain risks that should be addressed by proprietors of patents, sooner rather than later. In this article, we will provide a summary of the now in force UP and UPC and look closer at the option to opt-out from the exclusive competence of the UPC.
A proprietor of a European patent may file a request for a UP, pursuant to which protections under that patent which apply nationally will equally be applied across all of the jurisdictions which have entered into the Agreement on a Unified Patent Court (UPCA. Today, it will be possible to receive protection in the seventeen contracting states that already have signed and ratified the UPCA. In addition, there are seven EU member states that have signed the UPCA but not yet ratified it. The remaining three EU member states that have yet not signed the UPCA may still agree to sign it at any time.
There are several good reasons why a proprietor may want to file a request for a UP. First of all, it allows the proprietor to enforce their patent in all the contracting states by the means of a single decision. Secondly, it is cost-efficient as the proprietor of the patent will not have to validate their European patent in several countries, as all of the protections and limitations will automatically apply across all contracting states. Moreover, the proprietor will only need to pay a single annual renewal fee for the UP, instead of several renewal fees, in different countries to different national authorities.
However, even though there are benefits, these do not come without a risk. Since the UP applies to all contracting states, a judgment rendering the UP invalid will render the patent invalid in all the contracting states. As of today, this means the proprietor of the patent will lose the patent protection of the invention in all seventeen countries. Such a decision will be handed down by the UPC as the UPC holds the exclusive competence for proceedings dealing with UP. As we investigate in more detail below, the requirement to have proceedings carried out in the UPC may constitute a risk.
For the seventeen EU member states that have signed the UPCA, the UPC shall settle disputes relating to European patents and European patents with unitary effect, being a court common to all member states party to the UPCA. The UPC shall comprise a Court of First Instance, a Court of Appeal and a Registry, the latter fulfilling administrative and procedural tasks for the courts. The proceedings before the UPC shall consist of a written, an interim and an oral procedure, in accordance with the Rules of Procedure (RoP).
The UPC will have competence in respect of:
The UPC will be the exclusive court for settlement of disputes relating to a UP. For European patents validated in any of the contracting states there will be a transitional period, allowing the proprietor of the European patent to opt out from the exclusive competence of the UPC. This raises the question as to whether a proprietor of a European patent should opt out. The answer is not necessarily obvious.
For a transitional period of at least seven years from 1 June 2023, an action for infringement or for revocation of a European patent validated in any of the contracting states, or an action for infringement or for declaration of invalidity of an SPC issued for a product protected by a European patent validated in any of the contracting states, may still be brought before national courts or other competent national authorities. A proprietor of, or an applicant for, a European patent granted or applied for prior to the end of the transitional period, as well as a holder of a SPC issued for a product protected by a European patent, shall have the right to opt out from the exclusive competence of the UPC. Where the proprietor elects to opt out, the UPC will have no jurisdiction concerning any litigation related to their specific application, patent or SPC.
It is not possible to opt out if there is already an action that has been brought before the UPC. It is therefore important that proprietors of European patents decide on whether to file an opt-out or not. The opt-out will last for the patent's lifetime unless the proprietor of the patent decides to withdraw their opt-out. Such withdrawal may be done at any time unless an action has already been brought before a national court. There are in particular two features of the UPC which proprietors considering whether to opt out should consider.
Short timeframe
A key purpose of the UPC is to provide a system delivering proceedings that are organised in a swift and cost-effective manner. Based on the RoP, the proceedings shall be conducted in a way which will normally allow the final oral hearing on the issues of infringement and validity to take place within one year of commencement . This year will include a three month deadline for the respondent to serve a statement of defence following the initial statement of claim. This is, compared to national patent law proceedings, rather tight timeframe.
Whilst the short timeframe might be efficient and advantageous for proprietors, equally they may present challenges as patent proceedings often require extensive documentation/disclosure, preparatory and judicial work. Parties without a legal in-house department and/or sufficient capacity may find the short deadlines to be very demanding, especially in cases where the counterpart is well-prepared and has plenty of resources. There is therefore a risk that the short timeframe may have a negative impact on the result of the proceedings, particularly if the party has not prepared for the proceedings in advance.
Unpredictability
The UPC system is brand new and involves new procedures for the settlement of disputes. There will always be an inherent risk in the unpredictability of new procedures, especially if the party involved is not well prepared for, inter alia, the short deadlines and efficiency of the proceedings.
There are both benefits and risks with the new UP and UPC. It will therefore be important for proprietors of European patents to perform a case-by-case assessment of each patent and the potential benefits of applying for a UP. The same goes for whether proprietors should file an opt-out, which may be essential to avoid being forced to settle a valuable patent dispute using unfamiliar and untested procedures.
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