Major changes to the way European patents are dealt with are coming. These changes affect granted European patents as well as new applications.

A new type of European patent, commonly referred to as the “Unitary Patent” (“UP”), will soon be available. The Unitary Patent will allow a single patent to have effect in every participating European country, without the need to “validate” the patent in individual countries, as is currently required to give effect to a “classical” European patent.

Along with the Unitary Patent, a new Unified Patent Court (“UPC”) will be set up to hear cases relating to Unitary Patents.

Timing of Implementation of the UP and UPC

The UP and UPC are expected to come into force in late 2022 or early 2023.

Unified Patent Court affects existing European Patents

The UPC will be the only court with jurisdiction to hear Unitary Patent cases. The UPC will also be available for cases relating to existing “classical” European patents during a transitional period of at least 7 years. Such a case may be initiated by the patent owner (e.g. to sue for patent infringement), but could also be initiated by a competitor (e.g. an application for revocation).

Once any action is taken in the UPC in relation to a patent, that patent is irrevocably committed to the jurisdiction of the UPC, even if this is contrary to the patent owner’s wishes.

A UPC ruling will have effect in the territory of every “Member State” which has ratified the UPC Agreement. All European Union states except Croatia, Poland and Spain are Member States, although not all have ratified the agreement yet.

With the UK withdrawing from the EU (so-called “Brexit”), the UK will not be part of the agreement.

Opt-out possible

It will be possible for the owner of a classical European patent to “opt out” of the UPC’s jurisdiction over the patent provided no action has been filed with the UPC (by the patentee or a competitor) beforehand.

To ensure that patentees have a chance to determine whether or not their existing patents fall within the UPC, a three month “sunrise” period will be available before the UPC commences, during with patentees can opt out of the UPC system.

If no opt-out is registered during this sunrise period, it is possible that a competitor could apply to the Unitary Patent Court to have an existing European patent revoked. If successful, this would have the effect of revoking the patent in every Member State which has ratified the agreement.

It is possible to withdraw an opt-out (i.e. to opt back in to the UPC) during the transitional period, provided no action has been taken before a national patent court (either by the patentee or a competitor).

There are several reasons why it might be desirable to opt out of the UPC as soon as this becomes possible:

• The patent may be too important to the patentee to risk central revocation;
• Licensees may be uncomfortable with the risk of central revocation;
• The patent may not be strong, leaving it more vulnerable to central revocation; and
• Uncertainty over the approach the UPC will take to infringement and validity.

However, reasons for not opting out include:

• Litigation may be faster before the UPC than in some countries, and may be delayed if an opt-out needs to be withdrawn before action before the UPC can be taken; and
• The option to opt back in to the UPC will be lost if a competitor files an action in a national court while the patent is opted-out.

Conclusion

Owners of European patents need to consider whether to opt-out of the new Unified Patent Court. If no action is taken to opt out, the patent may be vulnerable to central revocation when the new system comes into force. The patentee will no longer have the option of opting out of the Unified Patent Court if a competitor files an action in that court.

Please get in touch with us if you wish to discuss the new European patent system. We will contact clients with European patents when the implementation date of the UPC is confirmed to discuss the best strategy for their business.