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THE UNITARY PATENT
This article is part of our series on the Unitary Patent and Unified Patents Court.
Elsewhere, we have outlined the new system and provided information about the new court. Here, we consider the Unitary Patent, how to obtain one and the pros and cons of doing so.
What is the Unitary Patent?
This is a new EU patent right covering up to 24 of the 27 EU member states, currently excluding Poland, Spain and Croatia. It will not cover the states which are covered by patent applications filed at the European Patent Office (EPO) but which are not EU states, including the United Kingdom.
The number of EU states covered by the unitary patent will depend on how many states have ratified the Unified Patent Court Agreement at the time of patent grant. At the time of writing, 16 countries have ratified, with Germany also guaranteed to ratify before the new system starts. As more countries ratify, the geographical coverage provided by the unitary patent will expand.
Any infringement or revocation actions relating to a unitary patent will be heard by the new Unified Patent Court (UPC). A unitary patent will be maintained by annual payment of a single renewal fee. It will be a single object of property, which can only be assigned as a whole. A license can be granted under the patent for all countries or a limited number, or for all aspects of the technology or just some of it.
How do I get one?
Applicants will apply as usual for a European patent at the EPO. The unitary patent will then be obtainable at the end of the usual application procedure, by requesting a “patent with unitary effect”. This will be instead of the current practice of validating in individual European Patent Convention (EPC) contracting states. The unitary patent will therefore co-exist with “classical” European patents in states which do not participate in the unitary patent scheme (non-EU states and any EU country which does not ratify the UPC Agreement). In the absence of a request for unitary effect, a classical European patent will be granted by default, which can then be validated as per current practice in all desired countries (EU and non-EU alike).
Any EP applications pending at the time the agreement takes effect will have the option of being granted as a unitary patent (though it will not be possible to “upgrade” previously granted EP patents). With the new system expected to take effect towards the end of 2022, the EPO will be putting provisions in place soon, to allow current applicants to delay the final steps of the application process. This will enable applicants to choose to obtain a unitary patent instead of using the current validation route.
Do I want one?
The key advantage of the unitary patent is that it can be enforced in all signatory states at once. However, this will also be the case for classical European patents, as these will also come under the automatic jurisdiction of the new UPC unless they are opted out (see here).
When using the unitary patent option, translation costs are reduced to a minimum. A more significant advantage, therefore, will relate to avoidance of validation costs, which can be high if a patent is to be brought into effect in many countries. However, if you normally only validate in a few countries, or in countries with limited translation requirements, savings may be less impressive.
After grant, only a single annuity fee will be payable, rather than one for each validated state as with the current system, so again there may be cost savings depending on how many countries you would otherwise have maintained the patent in. A further advantage is centralised administration, with only one official register to be updated if a licence or assignment is to be recorded.
The main downside is that, as a single unitary patent, protection could be lost for all the relevant EU countries in the event of a single adverse decision (which could come from a court relatively inexperienced in judging patent matters). In relation to renewal fees, as only one fee is due per year for the life of the patent, there is no flexibility to reduce costs by abandoning the patent in some less critical countries, as can be done with a “bundle” of national patents post-grant.
Depending on your business model, the limitations discussed below on how a unitary patent can be assigned may also be a reason to consider carefully whether or not it’s advantageous to select a unitary patent.
If I have a unitary patent, how do I assign it?
As we mentioned above, as a single object of property, a unitary patent can only be assigned as a whole.
In terms of the law of property which applies, a unitary patent will be treated as a national patent of the participating state in which the original applicant/proprietor is resident or has its place of business recorded in the register. This determination is made once according to the original patent applicant, regardless of subsequent assignment to other parties.
But what if the applicant/proprietor is not an entity of or in a participating country, such as the United Kingdom? In that case, the relevant law is German property law. If a different law is preferred, a place of business should be established in that country, or the application filed with a co-operative co-applicant who will subsequently assign their share.
There can be significant differences in property law in different countries. For example, German law differs from UK law in that (for example) a patent may be assigned or licensed by oral agreement; patents are acquired subject to existing licenses irrespective of notice; a sub-licence can survive termination of the head licence; if there is joint ownership, there are divided shares so that either owner can grant non-exclusive licences unilaterally.
If there are multiple applicants/proprietors, the first named owner determines the property law which will apply, or a later named applicant if they are from a UPC member country but the primary applicant is not. So, for example, if a patent is co-owned between a French and a German business, the German business should be listed first if it is preferred that German property law should apply. This should be considered when a PCT application is prepared, since the order in which applicants are named on the PCT Request form will be the order in which they would appear on the unitary patent Register.
Importantly, it should be noted that these issues of relevant property law cannot be avoided simply by declaring in an assignment agreement that the law of a different jurisdiction is to apply.
How can I use the different European application options as part of my wider filing strategy?
It should be remembered that the national validation route will remain for European patent applications after grant, and sometimes this may be a better option than choosing a unitary patent. We have discussed some of the reasons for this above.
It is also worth remembering that national filing routes also remain available. Indeed, this may be more cost effective if patent protection is only required in a few European member states. Importantly, directly filed national patents will never be subject to the centralised Unified Patent Court, therefore avoiding the possibility that all protection could be lost in a single blow.
Therefore, in some cases it may be better to make direct national filings in a few countries of interest, or use a combination of the national and European routes, depending on the type of patent being filed. Preparations for this decision must be made early, since direct national applications via the PCT route are not possible in some countries which require the use of the EPC system (the relevant countries are Belgium, Cyprus, France, Greece, Ireland, Italy, Lithuania, Latvia, Monaco, Malta, the Netherlands and Slovenia). Therefore, if (for example) a direct French application is required, this must be filed at the 12-month convention deadline, at the same time as any PCT application.
After the end of the transitional period, it will no longer be possible to opt out of the UPC jurisdiction for national validations of European patents. So, in due course, if a stand-alone national right is desired, the only way to achieve this will be by direct national filings. Therefore, this decision will become increasingly important as the first years pass from the start of the UPC system.
Applicants can also consider using national validations and unitary patents within a single patent family. For example, a parent application might be granted with narrow scope and a unitary patent obtained. If the UPC subsequently invalidated the patent, the commercial impact might be limited by the narrow scope of the patent. In the meantime, before grant of the parent case, a divisional application might be filed and, if grant can be obtained of claims having broader scope than the parent, the national validation route followed. The resulting “bundle” could be opted out from the jurisdiction of the UPC, to avoid the possibility of centralised revocation for the broader case.
Therefore, there may be flexibility in prosecution and litigation strategies in due course, if required. In such scenarios, care would be needed to avoid problems arising from allegations of double patenting, and the options would have to be assessed on a case-by-case basis.
If you have any questions about the Unitary Patent, please contact us. This article should be taken as guidance only, it is not legal advice.