The UK recently announced it intends to ratify the Agreement on the Unified Patent Court (UPC). The UPC is a specialised patent court with jurisdiction over European unitary Patents (UPs) and European Patents for which one or more EU member states participating in the UPC agreement have been designated. It is expected ratification in Germany will follow and the UPC agreement will come into effect four months after UK/German ratification. The new unitary Patent is a single patent whose territorial scope will extend to countries participating in the UPC Agreement (UPCA) – currently standing at 25, including all EU Member States except Spain, Poland and Croatia. They have signed the UPCA, but its introduction requires ratification by at least 13 member states, including the UK, France and Germany. So far 11 states have ratified the UPCA. Similarly to traditional European patents, unitary Patents will be granted by the European Patent Office (EPO), but differ after being granted. Only a single renewal fee will be due for unitary Patents whereas, for traditional European patents, renewal fees are due in each country in which the European patent is effective. The proposed renewal fees for the unitary Patent covering the 25 participating states correspond to total renewal fees paid for the four countries in which European patents are currently most frequently validated (Germany, France, UK, Netherlands).
The proposed fee scale for the unitary Patent corresponds to a reduction of 78 per cent to the amount payable under the current system for the same 25 member states. Such a reduction in renewal fees is intended to make unitary Patents more attractive for SMEs and universities, research centres and individual inventors. It is intended to reduce or abolish the translation requirements for unitary Patents after a 12-year transitional period.
These benefits for SMEs could, however, come with a higher risk of losing a unitary Patent in validity proceedings. Currently, national authorities or courts of each state designated by a European Patent can decide on infringement and validity. In practice, if a proprietor wants to enforce their patent or a third party considers revocation of a patent, separate actions need to be undertaken in each state. This risks high costs, diverging decisions and lack of legal certainty.
The UPC seeks to address this problem by enabling Europe-wide patent validity and infringement disputes to be resolved in a single forum. This could provide a proprietor with the possibility of seeking enforcement of their patent across many European countries at reduced costs and therefore, make patent enforcement more feasible for SMEs. On the other hand, the UPC can also allow third parties to defend themselves against alleged infringement proceedings at reduced costs. Third parties would have the ability to seek revocation of a patent in a number of states simultaneously, raising the risk of losing a patent in all states in a single action.
In view of the possible opportunities and risks SMEs face when making the decision between pursuing patent protection in Europe via a unitary Patent and via the traditional route, business may choose to proceed with traditional European patents taking effect only in certain states, which can include states not participating in the UPC scheme, such as Spain, Switzerland, Turkey, Norway and Iceland. For these patents it would be possible to avoid the jurisdiction of the UPC.
Similarly, it remains possible to apply for national patents in countries of interest, which will be subject to the jurisdiction of national courts. To balance the risks/rewards, a mix of unitary Patents, traditional European patents and/or national patents may be desirable. Key inventions could be pursued via national or traditional European applications, whereas inventions of lesser commercial importance could be pursued via unitary Patents. It remains important for SMEs to seek professional advice on optimal strategies for seeking protection.
Franziska Luckert is a Chartered (UK) and European Patent Attorney, Marks & Clerk.