October 2013: EU Litigation Update

Update (Europe): Unitary Patent and Unified Patent Court. Back in December 2012, the European Union (EU) adopted two Regulations regarding so-called European patents with unitary effect (Unitary Patent) and respective translation requirements (Regulation (EU) No. 1257/2012 and Council Regulation (EU) No. 1260/2012). The Unitary Patent is a European patent, granted by the European Patent Office (EPO) under the rules and procedures of the European Patent Convention, to which unitary effect is given for the territory of the 25 Member States participating in the Unitary Patent scheme. The Unitary Patent will co-exist with national patents and with classical European patents.

In February 2013, the 25 Member States that opted for enhanced cooperation in the EU completed the legal framework by signing the Agreement on a Unified Patent Court (UPC). This agreement creates a specialized patent court with exclusive jurisdiction for litigation relating to European patents and Unitary Patents. The UPC will comprise a Court of First Instance, a Court of Appeal and a Registry. The Court of First Instance will be composed of a central division (with seat in Paris and two sections in London and Munich) and by several local and regional divisions in the Contracting Member States to the Agreement. The Court of Appeal will be located in Luxembourg.

Different from the current system in Europe with decision on infringement and validity only having national effect, the decisions of the UPC will generally have effect in all participating Member States. This has huge implications for potential Plaintiffs and Defendants: On the one hand, one lawsuit will be enough to obtain injunctive relief in the most relevant European markets. On the other, one lawsuit also suffices to invalidate a Unitary Patent per se. The consequences of the adoption of the UPC are even more drastic if one takes into account that this new European court will also be competent to hear cases on “regular” European patents.

It cannot be stressed often enough: The European patent litigation landscape will soon change significantly!

When Will the Unitary Patent Scheme and the UPC Be Available? In theory, the so-called EU Patent Package could be applicable starting on January 1, 2014. But before this happens, several hurdles must be cleared that make a starting date before 2015 rather unlikely.

The two Regulations creating the Unitary Patent became effective on January 20, 2013. However, these Regulations will only be applicable together with the Agreement on the UPC entering into force as well. Generally speaking, being a contract between sovereign states, the Agreement will have to be ratified by the legislators of the contracting states. Specifically, the Agreement requires ratification of at least 13 Members States, including Germany, France, and the United Kingdom. As of August 2013, none of the Member States had ratified the Agreement. The United Kingdom has already made some of the necessary arrangements to ratify the Agreement by announcing the Intellectual Property Bill, which will enable the implementation of the Agreement. In Germany, the ratification process should commence after the General Election in October 2013.

In addition, the Court of Justice of the European Union (CJEU) will once more have to decide on the admissibility of the European Patent Package. In 2011, Spain and Italy brought a complaint against the EU for the so-called enhanced cooperation of the Member States, which is the legal basis of the two Regulations that form the foundation of the Unitary Patent. Right after the CJEU dismissed the action in early 2013, Spain filed another complaint, this time against one of the Regulations itself. Spain alleges language discrimination since only the official languages of the European Patent Convention—English, German and French—will be official languages in the new European patent litigation framework. At the moment it is not clear when the CJEU will render its decision.

Finally, getting the Unitary Patent and the UPC started will require a huge effort both by the EPO and the Member States. Committees have already started to work on the details of the system. But it will take a tremendous amount of effort to find facilities, staff and—last but not least—experienced judges who will make the new system work.