The unified patent court (UPC) is coming and will allow the enforcement of patents across several European jurisdictions in a single court proceeding. This sophisticated new system requires some updates to the strategies of all companies with innovative activities operating in Europe. Indeed, the reform will deeply impact all areas of patent law.
It was announced on Friday 17 February 2023 that Germany has deposited its ratification of the UPC Agreement. This has started the formal countdown to the start of the sunrise period on 1 March 2023 and to the opening of the unified patent court (UPC) on 1 June 2023. The accompanying unitary patent system will also come into effect on 1 June 2023. This will have a number of consequences for applicants who have, and who are pursuing, European patents.
Once the new legislation enters into force, a transitional period of at least 7 years will begin.
The UPC agreement will apply to unitary patents and European patent applications pending at the date of entry into force of the agreement, and also to European patents which have not lapsed at the date of entry into force of the agreement, (i.e., existing live European patents).
EPO contracting states party to the UPC agreement
Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, and Sweden.
EPO contracting states not party to the UPC agreement
Albania, Croatia, Cyprus, Czech Republic, Greece, Hungary, Ireland, Iceland, Liechtenstein, Monaco, North Macedonia, Norway, Poland, Romania, San Marino, Serbia, Slovakia, Spain, Switzerland, Turkey and United Kingdom.
A granted European patent will fall within the jurisdiction of the unified patent court unless the European patent is opted out.
The opt-out of the jurisdiction of the UPC is effective for the whole patent lifetime. An opt-out can be withdrawn (subject to certain criteria), but no further opt-out is then possible. Whilst there is no official fee for opting out, each European patent must individually be opted out.
All users of the European Patent system and, particularly, holders of existing European patents should prepare for the new system by ensuring that they:
REVIEW all agreements that might impact the decision to opt out or not
- Where there are joint owners of a European patent, the joint owners must all agree (i.e., must act in common) to exercise any opt-out. Therefore, patent holders should review patent portfolios to identify patents that are jointly owned and discussions should take place on jointly owned patents in order to reach such agreement.
- Patent holders should review license terms for contractual obligations that may require the proprietor to consult the licensee about the decision to opt-out or not. Particular care should be taken for partially exclusively-licensed patents (e.g., where the patent is subject to separate exclusive licenses per territory).
REVIEW potential litigation strategies
- Going forward, litigation strategies may strategically combine national and UPC proceedings. To assist with considering the options, some strategic considerations around the decision to opt-out can be found in our publication here and on our CMS UPC information website pages here.
REACT and decide whether to opt out a granted European patent
- The safest time to opt out an existing European patent is before the new legislation comes into force, during the sunrise period (starting on 1 March 2023). This is because an action may be filed in respect of a European patent that hasn’t been opted out of the system before the UPC from the first day that the UPC agreement enters into force (i.e., from 1 June 2023). An opt-out can be declared at any time during the sunrise period or transitional period. However, an opt-out is no longer possible if an action has been filed in respect of the relevant European patent before the UPC. In such a case, the UPC retains exclusive jurisdiction for the participating member states for the entire term of the relevant patent.
REACT by adapting patenting strategies
- In addition to the considerations surrounding opt-out of existing EP patents, the new legislation provides the option of obtaining a unitary patent covering all participating EU states as a single patent. Patent owners may consider combined portfolios of:
- European patents within the jurisdiction of the UPC (including all unitary patents);
- European patents opted out of the jurisdiction of the UPC; and
- parallel national patents that will be outside the jurisdiction the UPC.
REACT and monitor competitor activities
- It will be possible to monitor competitor activities and patenting strategies in response to the new legislation via the publicly available information from the EPO Register and national patent office databases.
REACT by considering and preparing for any potential litigation
- For European patents kept within the jurisdiction of the UPC, patent holders should consider and prepare for any potential litigation in view of the front-loaded and time pressured nature of the proceedings.
RECORD the correct name on the opt-out form
- The opt-out form that must be filed in order to request an opt-out requires confirmation of:
- the name and address of the proprietor of the European patent; and
- the validated states where the patent is in force for which the named proprietor is the owner e.g., ‘All’ or ‘DE, FR’.
- The form also requires a declaration to be made that the proprietor entered on the form is the person entitled to be registered as proprietor and therefore entitled to exercise the opt-out. The Registry will take as default that the person shown in each national patent register for the respective validated states is entitled to be registered. If the opt out is filed for any validated state in the name of a person not entitled to do so, it will be ineffective.
- All patent owners should conduct an audit of the correct proprietor name and action should be taken to record the correct name on the opt-out form.
RECORD any updates on the national patent registers
- If there has been any assignment (or change of name) such that the national patent registers are not up to date, consideration should be given as to whether to record any updates on the national patent registers so that they ultimately match the proprietor named on the opt-out form.
CMS Established Pan-European Perspective and Expertise
The CMS UK patent team is ranked in Legal 500 Tier 1 ‘PATMA’ and the respective technical areas are also ranked in Legal 500 Tier 1 for ‘Life Sciences and Healthcare’ and Legal 500 Tier 1 for ‘IT and Telecoms’.
CMS is somewhat unique in Europe in having specialist patent litigators in the UK, France, and Germany, as well as a team of European Patent Office (EPO) patent attorneys. These teams have a proven track record of successful collaborations and CMS therefore is very well placed, despite the uncertainties of the new UPC system, to share in-house knowledge of national court infringement and validity proceedings, as well as validity in EPO opposition proceedings, across the pan-European team. By pooling and drawing on the teams’ collective experiences, CMS is committed to delivering a pan-European perspective and expertise in devising patent strategies combining the new system with national systems and harmonising legal proceedings between the UPC’s jurisdictions.
Please do feel free to reach out.