News from Abroad: Parliament Approves EU Unitary Patent Package - December 17, 2012

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European Union (EU) FlagA unitary patent package covering 25 member states of the EU (Italy & Spain are not currently taking part) may finally be realised after approval of a new EU patent regime by the EU parliament.  In three separate voting sessions relating to a European unitary patent, a language regime and a unified patent court, Members of the European parliament (MEPs) approved the "EU patent package".

Long time in the making

Negotiations relating to agreement on a European unitary patent system have been on going for over 40 years with many false dawns including the rejection, by the ECJ, of a previous intergovernmental agreement proposal for a single European patent court.

The previous proposal was rejected by the ECJ who ruled that such a proposal was illegal under the EU Treaty and that only a unified patent system setup within the EU legislative framework would be legal.  The current package is by way of EU regulation for a unitary patent with the court system the result of intergovernmental agreement albeit with EU Commission support and blessing.  The package was achieved by way of the so-called "enhanced co-operation" procedure allowing a sub-set of member states to proceed with a project without the other member states under certain conditions.

On 29th June 2012 the European council agreed on the package but this was still to be approved by the European parliament.  The European parliament has now approved the unitary patent, the unitary patents court and an appropriate language regime.

Protection conferred by Unitary Patent

The unitary patent will provide automatic unitary patent protection in all 25 participating member states (Spain and Italy are not included) in a move said to be directed at cutting costs for EU companies and, hence, boosting competitiveness.  Of course, unitary patents and their enforcement via the unified court is available for non-EU applicants as well and it remains to be seen whether or not competitiveness of EU companies is boosted by the new arrangements.

Court Structure

The court will comprise a court of first instance, which in turn comprises local or regional divisions and a central division, and a court of appeal.

Each contracting state will have a local division but there will be a regional division if a common division is preferred.  The central division of the court of first instance will be based in Paris but with sub-divisions in London (dealing with Pharmaceutical, Chemical and Human Necessities subject-matter, IPC A & C) and Munich (dealing with Mechanical subject-matter, IPC F).  Paris will conduct proceedings relating to all other subject-matter.  The central division will have exclusive jurisdiction over revocation actions which are brought separately from infringement actions.

The unified patents court will have jurisdiction over all unitary patents established under the regulation.  Following a transitional period of 7 years, the unified patents court will have jurisdiction over all EP patents designating an EU member state a part of the unitary package.  The transitional period may be extended following a review of the workings of the new arrangements.  During the transitional period it is possible for a European patent to be "opted out" of the unified system, and indeed "opted in" if previously opted out.  However, requests to exercise an option must be received by the registry of the unified court prior to expiry of the transitional period.  In due course, patentees should give consideration as to which of their European patents they wish to be in or out of the system and make arrangements accordingly.

Local and regional divisions can choose whether or not to hear infringement and validity actions together, or to adopt a so-called bifurcated system in which validity is heard separately from the infringement action.  In a bifurcated system, the validity issues will be heard by way of a revocation action brought separately in the relevant central division.  If an infringement action is started after a revocation action has been brought in the central division then the revocation action may be moved to the court having conduct of the infringement proceedings.

The unified patents court will not have jurisdiction over national patents or national utility models.

How to obtain a Unitary Patent

Any applicant will be able to apply to the EPO for an EU unitary patent valid in all of the 25 member states taking part.  Applications are to be filed in English, French or German but can be made in another language if a translation is provided.  Patents will be made available in English, French and German.

Disputes

In case of a dispute, the patentee will have to provide a full translation of the patent in question in an official language of the member state in which the alleged infringement took place or the alleged infringer is domiciled.  Damages are likely to take into account that prior to being provided with a translation the alleged infringer may have acted in good faith and did not have reasonable grounds to know they were infringing the patent.  Whilst the jurisdictional issues are complex, they generally follow the Brussels regulation, and a general rule of thumb is that an infringement action can be brought before the court (local, regional or central) of the member state in which the infringement took place or where the defendant has their place of business within the EU.  Apparently, at the option of the plaintiff, non-EU defendants may be sued in the relevant central division.

Cost

Within the language regime, provisions have been made for translation costs to be reimbursed for EU-based SMEs, non-profit organisations, universities and public research organisations.  Renewal fees are also to be set at a level which takes into account the special needs of smaller organisations.

The cost of filing a unitary patent is not yet clear but is likely to be the same as validating in five or six countries under the current EPO regime.

Comment

The unitary patent will provide protection in 25 member states for the cost of a single patent application and a translation into two other languages.  Whilst this is beneficial to those organisations that validate in many member states, the benefit to organisations that validate in only two or three is not clear and this may be the case for many SMEs.

However, the EU parliament does appear to be taking steps to reduce costs for smaller organisations such as SMEs and non-profit organisations.  That said, until the cost of renewal or other official fees are released for the unitary patent, it is still not clear how SMEs and non-profit organisations are going to benefit.

Applicants should be asking themselves if the unitary benefits of the system outweigh the risk throughout its life of losing single European patent coverage by central revocation compared to the flexibility and partitioned risk of revocation through seeking national patents.

This report comes from European Patent Attorneys at WP Thompson & Co., 55 Drury Lane, London UK.  Further details and commentary can be obtained from Gill Smaggasgale, a partner at the firm.