Insights | February 4, 2022

The Unified Patent Court ─ where do we stand now?

It is possible that the Unified Patent Court will be established as early as next year. We therefore strongly recommend that patentees with classic European patents and supplementary protection certificate (SPC) holders commence the decision-making process on their opt-out and opt-in strategies as soon as practicable during the coming months. This is to allow sufficient time for the notification of any opt-outs during the "sunrise period" in order to avoid the situation in which a third party gains the upper hand in making that decision on behalf of the patentee and/or SPC holder. Below, we have summarized in more detail the key aspects of the UPC and the unitary patent.

Expected timeframe for entry into force

The recent ratification by Austria of the Protocol on Provisional Application of the UPC Agreement has led the European Patent System one significant step closer to the establishment of the Unified Patent Court. The final and decisive step will be that Germany deposits its legal instrument ratifying the UPC Agreement, which will then trigger the entry into force of the UPC Agreement and the European patent with unitary effect, by which time the UPC should be fully functional.

It is expected that Germany will act as a gatekeeper and wait until the Unified Patent Court  administration is up and running, the judges are appointed, and the IT system is functioning before depositing the instrument. The new regime is expected to enter into force towards the beginning of 2023, based on current information.

Structure of the UPC

The UPC is composed of three divisions that form the first instance. These are the local, regional and central divisions. As for the second instance, there will be a Court of Appeal (situated in Luxembourg). In addition, given that the EU will gain competence in patent law by virtue of the UPC Agreement, the Court of Justice of the European Union (CJEU) will be a supplementary court for preliminary rulings.

The local and regional divisions are by and large identical: each UPC member state may host either its own local division or join forces with other UPC member states to establish regional divisions. For example, a local division is envisaged in Finland (Helsinki). In addition, a Nordic-Baltic regional division is contemplated in Sweden (Stockholm). Based on current information, central divisions will be established in Paris and Munich.

The UK has withdrawn from the UPC Agreement as a result of Brexit, which means that the previous plan for a central division in London is no longer feasible. Italy has coveted the establishment of the third central division in Milan, and it remains to be seen whether this materializes.

The unitary patent and enforcement under the UPC Agreement

The unitary patent will be a new form of European patent, which, when granted by the European Patent Office (EPO), will enter into force automatically in each UPC member state.  There will be no need for the separate validation of the unitary patent. In essence, the unitary patent will be a single patent, as opposed to a bundle of national patents that is the classic European patent. Moreover, the Unified Patent Court will be a forum for the centralized enforcement of unitary patents, classic European patents and SPCs. National patents ─ whether applied individually or under the Patent Cooperation Treaty ─ will not fall under the jurisdiction of the UPC or be governed by the UPC Agreement.

By virtue of the UPC Agreement, decisions and orders of the UPC will be enforceable in every UPC member state, subject to the national laws regarding the enforcement procedure. Actions may be brought at either local or regional divisions, or central divisions, depending on the type of action in question and depending on various other circumstances, such as where infringement has occurred or where the defendant has its residence or principal place of business.

For example, local and regional divisions primarily hold jurisdiction over actions for actual or threatened infringement of unitary patents, classic European patents and SPCs as well as respective remedies, such as interim relief, injunctions, compensation and damages. On the other hand, the central division primarily holds jurisdiction over declarations of non-infringement of unitary patents, classic European patents and SPCs as well as actions for revocation and declarations of invalidity of the same.

Language of UPC proceedings

The general rule is that the language of proceedings at the UPC will be the official language or one of the official languages of the UPC member states hosting the relevant division. However, the UPC member states may also designate one of the official languages of the EPO, which are French, German and English. In addition, the parties may agree on the use of the language in which the unitary patent or classic European patent was granted, subject to approval by the competent panel.

The language of proceedings at the central division is the language in which the unitary patent or classic European patent was granted. While the Court of Appeal by default follows the language of the proceedings at the first instance, the parties may agree on the use of the language in which the unitary patent or classic European patent was granted.

Opt-out for classic European patents and SPCs

A critical point to be emphasized is that classic European patents and SPCs will also fall under the jurisdiction of the UPC and be governed by the UPC Agreement, unless the patentee opts out. The UPC Agreement provides a transitional period of seven years, by the end of which the patentee and/or SPC holder must opt out at the very latest, if the patentee and/or SPC holder intends to do so. However, if a third party brings action against a classic European patent and/or SPC before the Unified Patent Court, anytime during the transitional period, the patentee and/or SPC holder loses the option of opting out.

There will be a grace period (“sunrise period”) for opting out classic European patents and SPCs, which begins three months before the date on which the UPC becomes fully operational. The sunrise period will be critical for the patentee and/or SPC holder to exercise the opt-out option for those classic European patents and SPCs that the patentee and/or SPC holder wishes to opt out of the new regime. We strongly recommend allocating a sufficient amount of time for considering and planning opt-out and opt-in strategies, as well as for the relevant practical arrangements.

Roschier will be organizing a webinar on the Unified Patent Court. We will provide more details about this event and how to register in due course.