Businesses throughout the world holding or planning patents in Europe should familiarize themselves with the new Unitary Patent and Unified Patent Court and – depending on patent protection strategy -- may want to take action in coming months to opt certain patents out of the new centralized system.

The Unified Patent Court, set to take effect June 1, will lead a centralized European patent system, holding jurisdiction over infringement actions in all participating European Union countries, as well as issuing a Unitary Patent with universal effect in those countries. So far, 17 countries have ratified participation in the unified patent system.

This new system will allow patent holders and filers to pay one smaller annual fee for protection across all participating countries and enable enforcement actions and revocations to occur in one central court, should the litigated matter occur in a participating country. Under the current European Patent system, a patent action may need to be litigated in multiple countries, with great expense, including translation services, and may result in different decisions, spawning lack of legal clarity.

However, uncertainty around how the court will rule on patent matters and the fact decisions will apply in all participating countries may cause some patent holders to maintain participation in the current system.

Businesses must be aware how the new system affects existing, pending and future patents to develop a patent protection strategy, and of a sunrise period opening March 1 that will allow patent holders and seekers to opt out of the new system before it takes effect in June.

Patents: Existing, Pending and Future

The Unitary Patent will apply only in participating countries. So far, Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovenia, and Sweden have ratified their participation. Eight other countries have indicated they will join in coming months.

It is important to note, the patent only applies to countries participating at the time it is granted. It is possible one Unitary Patent may apply in 17 countries, while another may apply in 25 countries.

Several countries – such as United Kingdom, Spain, Switzerland, Turkey and Croatia -- will maintain operation under the existing European Patent Office and require national validation of patents.

Here’s a breakdown on what you need to know about patents under the new system:

Pending patents: Holders of pending European Office Patents can request early Unitary Patent validation or request a delay in approval until the new court goes into effect and then seek a Unitary Patent. Otherwise, once “classic” patents are granted by the European Patent Office, the patents are not eligible for conversion.

Future patents: Patent seekers can choose a Unitary Patent for countries participating in the Unified Patent Court and/or go the traditional route and with the European Patent Office and get validation from individual countries. To get a Unitary Permit, one must first get a European Permit and then apply within one month of its approval. Once elected, the Unitary Patent cannot be unelected.

After a 7-year transition period, litigation based on either a European Patent or Unitary Patent will occur in a single court if infringement occurs in one of the countries participating in the Unified Patent Court, unless the patent holder opts out (more information below) before the end of the transition period.

Existing patents: Any existing patents issued by the European Patent Office are not eligible for conversion to the Unitary Patents. In countries not participating in the new system, litigation will take place in national courts. If a patent exists in one of the participating countries, patent litigation can take place in either the Unified Patent Court or the national courts. This is only the case for a designated “transition period” of seven years. After that, the UPC will have exclusive jurisdiction in participating countries, unless a patent holder has opted their patent out of the new system.

Opting Out

Patent holders who do not want existing patents to fall under jurisdiction of the Unified Patent Court must take action to opt out within the 7-year transition period. Failure to opt out means actions concerning existing patents will be litigated in the new court.
A three-month sunrise period starts March 1, providing a period of time for holders of tradition patents to opt out of the jurisdiction of the Unified Patent Court and ensure their patent status the day the UPC goes into effect, June 1, and have no risk of being litigated before the Unified Patent Court.

Those who do not opt out during the Sunrise Period can still opt out in the 7-year transition period. Only traditionally validated European Patents can be opted-out; Unitary Patents cannot be opted out. Also, no one can opt out if litigation has commenced; thus, the benefit of opting out in the sunrise period.

Notably, opt-outs can be withdrawn before the end of the transition period. This allows patent holders to study how the Unified Patent Court is deciding cases and determine whether they want to litigate under the current system or the Unified Patent Court.

Those choosing to opt-out, especially during the Sunrise Period starting March 1, may want to start the process now because meeting opt-out filing requirements could be time consuming.