Unified patent system for Europe

After almost 50 years of development, the Unitary Patent and the Unified Patent Court will be launched in the European Union in 2022. Future innovation protection for inventions will therefore be more uniform and cost-effective. However, the new regulations are also associated with risks for companies.

The new system is expected to be launched in the second half of 2022. The road to this point has been long and rocky: it was only in July 2021 that the German Federal Constitutional Court finally paved the way for ratification of the law and rejected two urgent applications against the Unified Patent Court. The path to a unitary patent system began in 1975 with the so-called Community Patent Convention, which did not enter into force due to a lack of ratification. The second attempt in 1989 to create a Community patent also failed.
In 2000, the EU Commission proposed a regulation on the Community patent with significantly reduced translation costs by focusing on the three official languages German, English and French. This attempt also failed due to opposition from Spain and Italy.
The EU Treaty of Lisbon in 2009 introduced the instrument of "enhanced cooperation" between the participating member states, meaning that unanimity of the member states was no longer required. In 2012, the EU Parliament adopted two regulations on the creation of a unitary patent system and the Unified Patent Court (UPC), which entered into force when the thirteenth instrument of ratification was deposited and will apply when the UPC Agreement enters into force after Germany has also deposited its instrument of ratification.
During the national ratification processes, the tension increased once again, as a successful first constitutional complaint against the Bundestag's decision of March 10, 2017 halted the ratification process in Germany.
Brexit, which had been discussed since 2013 and occurred in 2020, also hampered the process. With the withdrawal of the UK as a third country from the patent system, the path has finally been cleared. On September 27, 2021, Germany signed the protocol on the provisional application of the Unified Patent Court.

"With the new patent system, the EU member states have developed a modern patent system for SMEs and industry."

Unitary patent for EU member states reduces costs
The current system at the European Patent  Office (EPO) is based on a central examination system. If a European patent (bundle patent) is granted after this has been completed, it must be validated in the contracting states in order to be able to develop its protection nationally as a bundle patent. For this purpose, parts or the entire patent must be translated into the national language or English in various countries at considerable cost. In addition, there are national representative fees and, in some cases, official fees.
The unitary patent, on the other hand, must be fully translated into English within the first six years if the text version is in French or German. If it is in English, it must be translated into another official language of the European Union.
With effect for all participating EU member states, the new system now allows a request for "unitary effect" to be filed with the EPO within a specific time limit following the grant of the patent under the established central examination procedure.
The "unitary effect" of the new unitary patent avoids the previous fragmented protection in countries of the European Union, as all EU member states except Spain and Croatia want to implement the system. In addition, the administrative and cost burden for all parties involved will be significantly reduced.
The entire administration of the Unitary Patent will be bundled at the EPO and the fees will correspond to the sum of the annual fees of the four countries in which the most patents were validated in 2015. Remember, the UK was one of these four countries to leave the EU. However, to date, around 50% of patents granted have been validated in Germany, France and the UK, for which no translation had to be submitted. Looking at the renewal fees in isolation, the cost advantage of the Unitary Patent for the above example has therefore melted away as a result of Brexit.
However, the major advantage of the Unitary Patent is the territorial, uniform extension of protection of the granted patent to up to 24 participating EU member states. Until ratification in all member states, there will be different generations of unitary patents with an extension of protection in the member states with a deposited instrument of ratification. Currently, around 16 member states, including France, Italy, the Netherlands, Germany and Denmark, have initiated or completed the ratification process. A further eight EU member states are expected to follow.
In all other contracting states of the European Patent Convention, the granted European patent can still be validated nationally. Alternatively, a patent applicant can take the purely national route by applying for a national patent and thereby also ensuring a purely national jurisdiction.

Unified Patent Court ensures uniform jurisdiction for all proceedings
The Unified Patent Court (UPC) will have jurisdiction for actions for infringement of unitary patents, granted European patents and future granted European patents and unitary patents as well as supplementary protection certificates (SPCs). This ensures uniform jurisdiction even for nationally validated European patents (bundle patent) and the unitary patent.
However, the parallel jurisdiction of national courts for nationally validated European patents will continue to exist for a transitional period of seven years. This must be notified to the registry of the Unified Patent Court by means of an "opt-out" declaration before the end of the transitional period and before an action is filed with the Unified Patent Court.
Future innovation protection of inventions will thus be possible in a more uniform and cost-effective manner and can be enforced at the Unified Patent Court in a single procedure.

Central destruction of patents possible
In future, however, an action for revocation can also centrally destroy the Unitary Patent and nationally validated European patents, provided that no opt-out has been declared for the nationally validated patents. Invalidity actions can also be brought without having to file an opposition with the EPO first. A particularly critical aspect is the possibility of a nullity action before the Unified Patent Court despite parallel opposition proceedings.
A very careful strategy must therefore be developed for each patent portfolio to determine for which patents the "opt-out" option before the Unified Patent Court will be used. From a cost perspective, it is to be expected that the German infringement proceedings will be significantly cheaper than proceedings before a Unified Patent Court.
With the new patent system, the participating EU member states have developed a modern patent system for SMEs and industry that is fit for the challenges of the coming decade of innovation.

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