After 40 years of negotiations, a European Unitary Patent system is expected to come into effect within the next two years. It is designed to provide cheaper and more effective patent protection and enforcement, though its advantages may be more suited to some applicants than others. While Unitary Patents offer several advantages, for applicants who only want protection in a few countries they may be more expensive than European or national patents. In addition, there is the risk of central revocation. Looking at two case studies – a life sciences company with a single valuable patent, and a high-tech company with a large portfolio – illustrates some of the factors that will need to be considered when choosing between Unitary, European and national patents and utility models (where available). In some cases, a combination of routes may be most appropriate and applicants may find their strategies develop over time as they gain experience of the new system.
Europe has been working towards a single patent right for approximately 40 years. Ever since the signing of the European Patent Convention in the 1970s, it has been a stated aim of the European Union to establish a single patent right covering much of Europe. We are almost there. The relevant legislation is to be ratified by 13 member states, which must include the UK, France and Germany. It is expected that this will happen in 2016. The aim of the system is for the Unitary Patent and Unified Patent Court (UPC) to cover all member states of the European Union. Initially at least, it will only cover countries actively participating. Nevertheless, for the first time applicants will be able to obtain broad geographical patent coverage for a lower cost compared to the regular European patent system. Furthermore, the UPC will provide a one-stop shop for infringement and revocation proceedings. The stated aim of the UPC is to provide cheaper and more efficient pan-European patent litigation, which may be very appealing; however, will the new system appeal to all?
Unitary Patents will be obtained using the existing European patent application procedure. In fact, European patent applications will be used to obtain either traditional European patents or Unitary Patents. The choice about which route to take will not have to be made until the European patent is granted. As such, the new legislation will extend to European patent applications pending at the time the regulations come into force. Those applicants wishing to obtain protection in a small number of countries may find the new system more expensive than existing options. Moreover, some patent owners will be nervous about the risk of central revocation of key patents, and may also wish to avoid the new court until it has been tested. In particular, it will be possible to revoke a Unitary Patent in a single action before the UPC, making Unitary Patents potentially more vulnerable than traditional European patents and national patents, which must be attacked on a national level. From both a UK and German industry perspective, there are a few key concerns with respect to the Unitary Patent and UPC, including: the cost of obtaining and maintaining the Unitary Patent; the costs before the UPC; the quality of the decisions by the UPC; and the risk of central revocation before the UPC. It is disappointing that at this stage no details of the actual costs associated with the Unitary Patent or the UPC have been provided. It is therefore impossible for a potential user of the system to make an informed decision concerning their future patent strategy in Europe. Despite the lack of information concerning the costs of using the Unitary Patent system, some of the important issues to be considered by a company when deciding whether to use the Unitary Patent system are discussed below based on a couple of hypothetical companies.
A life sciences company has a very valuable European patent application covering their key product; however, it is likely to be 10 years until the product makes it to the market. In the life sciences area, often there are a small number of key patents covering very valuable products, so each patent is potentially very valuable. In such a case, the key question to be considered, with respect to the Unitary Patent system, is whether the European patent application is to be granted as a Unitary Patent or as a regular European patent with the need to be validated in individual European countries to form a bundle of national patents?