Overview of the Unitary Patent and the Unified Patent Court · 2017-11-30 · European Patent Office The Unitary Patent is a European patent granted by the EPO under the EPC's rules

Overview of the Unitary Patent and the

Unified Patent Court

Mr. Michael Frohlich , Director Unitary Patent Tokyo, November 2017 European and International Legal Affairs

European Patent Office

Why do we need a Unitary Patent?

What is the Unitary Patent?

How to obtain a Unitary Patent?

What is the territorial scope of a Unitary Patent?

What are the costs of a Unitary Patent?

What are the key benefits of a Unitary Patent?

2

Table of contents Unitary Patent:


The entry into force of the EPC in October 1977 provided Europe with a very successful centralised patent granting procedure.

3

Why do we need a Unitary Patent?

Centralised granting procedure for European patents

…

IT

ESNLBG CH…

European

patent

application

Filing and

formalities

examination

Search report

with preliminary

opinion on

patentability

Grant of

European

patent

Refusal or

withdrawal

of

application

Substantive

examination

Limitation

Revocation

Opposition

proceedings

Appeal

proceedings

UK

FR

DE

No centralized post-grant procedureAfter the grant by the EPO, a Europeanpatent requires validation in each of thedesignated states to retain its protectiveeffect and be enforceable againstinfringers.


Shortcomings of the current system in the post-grant phase, e.g.

the European patent, as a bundle of patents "with national effect", is

subject to national legal regimes as regards:

translation requirements and national renewal fees,

infringements, rights conferred by the patent and limitations,

licensing, transfers and registers.

4

Why do we need a Unitary Patent? (cont’d)


The fragmentation of post-grant procedures results in:

high costs and complexity for users,

patent protection limited to a few countries,

diverging scope of protection according to national law.

5

Why do we need a Unitary Patent


An alternative, simplified and cost-effective route to patent protection,

which does not replace the current routes (classical European or

national patents),

but provides a new, additional option to users.

6

What is the aim of the Unitary Patent?


The Unitary Patent is a European patent granted by the EPO under

the EPC's rules and procedures, to which, upon request of the patent

owner, unitary effect is given for the territory of up to 26 Member

States participating in the Unitary Patent scheme.

The new Unitary Patent replaces the current national validations by a

centralised post-grant (validation) procedure at the EPO.

7

What is the Unitary Patent?


The Unitary Patent provides users with a one stop shop for all

subsequent transactions.

The Unitary Patent provides uniform protection in contrast to the

classical European patent which is subject to diverging national laws.

8

What is the Unitary Patent? (cont'd)


The Unitary Patent will co-exist with national patents and with classical

European patents.

Patent owners will be able to choose between various combinations of a

Unitary Patent, classical European patents, and national patents, e.g.

UP combined with EP:

a Unitary Patent for up to 26 Member States of the European Union

which participate in the Unitary Patent scheme, combined with

a classical European patent taking effect in one or more EPC

Contracting States which do not participate in the scheme

(e.g. Spain, Switzerland, Turkey, Norway, Iceland, etc.).

9

What is the Unitary Patent? (cont'd)

European Patent Office 10

How to obtain a Unitary Patent?

GrantExamination Opposition AppealFiling Search

European Patent with

Unitary Effect

in the territories of up to

26 Member States

Request

by the

patent

proprietor

Same grant procedure as for a classical European Patent


Requirements for the registration are very simple and straightforward.

There are only two substantive requirements.

Unitary effect can only be requested for European patents that were

granted:

in respect of all 26 participating Member States, and

with the same set of claims for all of them.

11

How to obtain a Unitary Patent? (cont'd)


Procedural requirements

Filing of the request:

by the patent owner in writing,

in the language of the proceedings,

within one month following the publication of the mentioning of

the grant.

The request must contain: the number of the European patent

concerned, the particulars of the proprietor(s), and if a representative

has been appointed also the particulars of the latter.

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During a transitional period, a translation of the European Patent has

to be submitted with the request:

Full EN translation if the patent is granted in FR or DE,

full translation into any language of the EU if the patent is granted in

EN,

these translations are for information purposes only and have no

legal effect.

13



The EPO is currently finalising the technical implementation.

The procedure for filing requests for Unitary Patents will be fully

automated.

Electronic forms will be very simple and straightforward to fill in and

are designed in a way to avoid all possible procedural/formal errors.

Non-European users will need a European representative to file the

request.

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Procedure for registering a Unitary Patent is free of charge.

Annual renewal fees have to be paid to the EPO which are equivalent

to the fees currently to be paid for a patent validated in four Member

States.

15

What are the costs of a Unitary Patent?


The fee level offers very good value for money. It is particularly

attractive for the first 10 years, which is the average life-time for a

European patent with the accumulated fees less than EUR 5000.

A fee reduction of 15% will be granted to patent owners who have

registered with the EPO a statement offering licences of rights.

16

What are the costs of a Unitary Patent? (cont'd)


"Top 4" approach for the renewal fees:

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What are the costs of a Unitary Patent? (cont’d)


Fees can be paid by patent owners directly to the EPO, there is no

need to use a Representative.

Payments can be made:

by bank transfer to a bank account held by the EPO, or

via a debit or deposit account at the EPO.

For more detail see: http://www.epo.org/law-practice/unitary/unitary-

patent.html

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The comparison of costs for the Unitary Patent and the classical

European patent should not only take into account the level of

renewal fees, but also the transactional costs, such as:

attorney fees for validations,

translation costs for validations,

publication fees to be paid to national patent offices and fees for

attorneys or other service providers for maintenance (renewal fee

payments),

which means that a Unitary Patent will be less costly than a European

patent maintained in 4 countries.

For more detail see:

http://www.epo.org/law-practice/unitary/unitary-patent.html19



Simplified and cost-efficient post grant administration:

One-stop shop for renewal fee payments,

One-stop shop for registering post-grant transactions such as

transfers of rights or licenses in the Register for Unitary Patents,

One-stop shop for offering licenses of rights in the Register of

Unitary Patents (resulting in a 15% reduction of the renewal fees).

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What are the key benefits of a Unitary Patent?


Better value for money:

Broader territorial protection in up to 26 Member States,

Uniform protection instead of the current patchwork of national

legislation governing the scope of protection, exceptions and

limitations and available remedies,

Improved protection at the external boarders of the EU against

imports of counterfeit products.

21

What are the key benefits of a Unitary Patent? (cont'd)


Better business opportunities:

More flexibility for trade and investment in the EU Single Market,

Improved access to venture capital for start-ups,

Enhanced opportunities for licensing technology transfers.

22

What are the key benefits of a Unitary Patent? (cont'd)


Unitary effect covers only those participating Member States for

which the UPC Agreement has entered into force ie which have

ratified the UPC Agreement "at the date of registration of unitary

effect“.

In the first years there will be some Member States missing and

consequently there will be different generations of Unitary Patents

with a different territorial coverage, which will be clearly indicated for

each UP in the Register.

There is no automatic extension of the territorial coverage of a given

Unitary Patent to other participating Member States which ratify the

UPC Agreement after the registration of unitary effect by the EPO.

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What is the territorial scope of a Unitary Patent?


Why do we need a Unified Patent Court?

The Unified Patent Court in a nutshell

Structure of the court

Competence

Judges

Language of proceedings

Procedure

Remedies

Appeals

Court fees and recoverable costs

Key benefits of the Unified Patent Court

Opt-out

Implications of the Brexit

Process towards the entry into operation24

Table of contents Unified Patent Court:


Why do we need a Unified Patent Court?

The fragmented litigation system and parallel litigation before different

national courts lead to:

High costs and complexity,

Conflicting decisions of national courts and legal uncertainty,

Long delays in countries which have no specialised patent courts,

Risks for patent holders and third parties.

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The UPC is a supranational court covering 25 Member States with

one action.

It has jurisdiction over Unitary Patents, as well as traditional

European patents (unless opted-out).

And exclusive competence in respect of:

infringements,

validity, and

provisional and protective measures and injunctions.

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The Unified Patent Court in a nutshell


The UPC will employ specialised patent judges – both legally and

technically qualified judges – and will apply its own autonomous

substantive and procedural law.

It has been designed to work in a highly efficient way with tight

deadlines and judgments at first instance to be delivered 1 year after

the start of the action.

27

The Unified Patent Court in a nutshell (cont'd)


Decentralised Court of First Instance with divisions in various

participating Member States insures proximity to the users:

A Central Division located in Paris and sections in London and

Munich,

Local Divisions located in individual participating Member States,

Regional Divisions located in certain Member States where two or

more participating Member States group together. Currently there is

only one Regional Division envisaged between Estonia, Latvia,

Lithuania and Sweden.

Centralised Court of Appeal located in Luxembourg.

28

Structure of the Unified Patent Court


Structure of the UPC (cont'd)

Court of Appeal

Court of First Instance

Mediation and Ljublijana and Lissabon

Arbitration Centre

*Local divisions: AT, BE, DK, FI, FR, IT, NL, UK, + 4 in DE (Düsseldorf, Mannheim,

Munich, Hamburg)

°Regional division in Stockholm created by Estonia, Latvia, Lithuania and Sweden

Luxembourg

(Art. 9 UPCA)

Local Divisions*

[max.4/MS]

Regional

Divisions°

[min. 2 MS]

Central Division

Paris, London,

Munich


Territorial competence covers in principle all

Member States of the European Union with the

exception of Croatia, Poland and Spain who

have not signed the UPC Agreement.

However, when the UPC comes into operation

not all Member States will have ratified the

Agreement. It is expected that Slovakia,

Czechia, Cyprus and Ireland will be missing

when the UPC will come into operation in 2018.

30

Competence


The UPC has normally exclusive jurisdiction for litigation in respect of

European patents, i.e. not only in respect of Unitary Patents but also

in respect of European bundle patents and Supplementary Protection

Certificates for medical products (SPC) based on such patents.

However, during a transitional period of 7 years actions concerning

European patents can still be brought before national courts on a

case by case basis, at the choice of a plaintiff.

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Competence (cont'd)


In addition during this period European patents can be opted-out from

the jurisdiction of the UPC (more detail will be provided later on in the

presentation).

The national courts of the Contracting Member States remain

competent for national patents and European patents during the

transitional period and for European patents which are opted-out.

32

Competence (cont'd)


Exclusive jurisdiction includes:

actions for actual or threatened infringements and related defences,

including counterclaims concerning licences,

actions for declarations of non-infringement,

actions for provisional and protective measures and injunctions,

actions for revocation and for declaration of invalidity,

33

Competence (cont'd)


Eligibility criteria:

Highest standards of competence,

Proven experience in the field of patent litigation (can be acquired

by training).

34

Judges


Legally and technically qualified judges:

Legally qualified judges shall possess the qualifications required for

appointment to judicial office in a Member State,

Technically qualified judges shall have a university degree and

proven expertise in a field of technology. They shall also have

proven knowledge of civil law and procedure relevant in patent

litigation.

Appointed for a term of six years, with possibility of re-appointment.

35

Judges (cont'd)


Composition of the panels of divisions of the Court of First Instance

and the Court of Appeal:

Any panel shall have a multinational composition and shall be

chaired by a legally qualified judge,

At the Court of First Instance panels will sit in a composition of 3 or

4 judges as a rule.

36

Judges (cont'd)


Upon request of a party or on its own initiative, any panel of a Local

Division or a Regional Division shall request the allocation of a

technically qualified judge.

Panels of the Central Division sit in a composition of two legally

qualified judges of different nationality and a technically qualified

judge.

At the Court of Appeal panels sit in a composition of 5 judges

(3 legally and 2 technical qualified).

37

Judges (cont'd)


Language of proceedings at the Local and Regional Divisions is:

the official language of the Member State hosting the division,

the respective Member State may allow the use of additional

languages, in particular English (in practice all divisions will work in

English at least in addition to the national language),

with the agreement of the division, the parties may choose the

language of the granted patent. If the division disagrees, the parties

may request that the case be referred to the Central Division.

At the Central Division the language of the proceedings is the

language of the granted patent.

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Language of proceedings


Parties have to be represented in all proceedings before the UPC.

Representation may be undertaken:

by lawyers entitled to act before a court of a Member State, or

by European Patent Attorneys having appropriate qualifications,

such as a European Patent Litigation Certificate.

39

Representation


Main features:

Staged procedure

Written phase predominant

Tight deadlines, very active case management

Order to preserve evidence available

Preliminary injunction available.

40

Procedure


Structure of the proceedings

Judge-RapporteurSingle-judge/

Panel

Judge-

Rapporteur

Decision on the merits

Decision on

damages

Judge-

Rapporteur &

Single-judge/

Panel

Estimated duration from filing to judgment: one year

At any stage of the proceedings, Court to examine possibilities of a settlement

(may propose that the parties make use of the Mediation and Arbitration Centre)

Written

ProcedureInterim

Procedure

Oral

Procedure

DamagesWritten, Interim,

Oral Procedure

Costs


Permanent injunctions:

The UPC has the discretion not to grant a permanent junction if

considering the circumstances of the case, an injunction would be

disproportionate,

The principle of proportionality is a guiding principle under the EU

law (in particular the EU Directive on the Enforcement of Intellectual

Property Rights).

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Remedies


Preliminary Injunctions

The UPC may order provisional measures including preliminary

injunctions:

if there is a sufficient degree of certainty that the applicant is entitled to

the claim,

taking into account also the potential harm to either party, and the

urgency of the action.

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Remedies (cont'd)


Basic outline:

All final decisions and orders of the Court of First Instance are

subject to appeal,

Procedural orders can also be appealed,

Any party may appeal if it is adversely affected.

Statement of appeal against a final decision has to be filed within two

months and the statement of grounds of appeal within four months of

its notification.

44

Appeals


An appeal may be based on points of law and points of fact.

New facts and evidence may only be introduced where the

submission thereof could not reasonably have been expected

during first instance proceedings.

An appeal has no suspensive effect unless the Court of Appeal

decides otherwise on a party's request.

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Appeals (cont'd)


Costs for litigation at the UPC consist of:

Court fees,

Own attorney fees.

Costs are recoverable by the winning party:

if you win you benefit from a recovery of costs up to a certain ceiling

(the judges have the discretion to raise or lower the ceiling),

if you loose you have to pay your own costs + the opponent's costs

(up to the ceiling).

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Court fees and recoverable costs


The Rules on court fees essentially distinguish between two types of

actions and two types of applications:

for infringement actions and actions for declaration of non-

infringement there is a basic fixed court fee (€ 11 000) + a sliding

scale value-based fee for high value cases,

revocation actions and preliminary injunctions are subject to a fixed

fee only (€ 20 000 and € 11 000 respectively).

Small companies and micro-entities can claim a reduction of 60% of

the fees provided certain criteria are met.

47

Court fees and recoverable costs (cont'd)


The ceilings for recoverable costs are based on the value of the case.

The maximum ceiling for recoverable costs for cases worth of more

than 50 million EURO has been fixed at 2 million EURO.

Upon request, the UPC has the discretion to lower the ceiling if the

amount of recoverable costs of representation to be awarded to the

successful party threatens the economic existence of the requesting

party, especially if the latter is a small entity, such as an SME.

48

Court fees and recoverable costs (cont'd)



One action and one judgement cover up to 25 EU Member States,

No risk of parallel lawsuits in different Member States with resulting

costs and complexity,

No risk of contradictory judgements on validly and infringement of

the patent and of legal uncertainty,

No divergence of the scope of the patent protection and its

limitations because of harmonized Rules in the UPC Agreement .

49

Key benefits of the Unified Patent Court



Highly experienced and specialized judges,

Involvement of technical judges qualified in the field of technology

concerned,

Specially developed Rules of Procedure designed to deliver speedy

and high quality judgements within one year.

. 50

Key benefits of the Unified Patent Court (cont’d)


Better business opportunities:

Enhanced opportunities for licensing,

More flexibility for trade and investment in the EU Single Market.

. 51

Key benefits of the Unified Patent Court (cont’d)


The possibility to opt-out patents from the jurisdiction of the UPC only

applies to classical European bundle patents and not to Unitary

Patents. For Unitary Patents the UPC has exclusive jurisdiction from

the beginning.

The declaration to opt-out is to be submitted to the Registry of the

Court and is entered into the Register of the UPC.

52

Opt-out


The declaration may also be withdrawn (opt-in).

Opt-outs can only be filed as long as no action has been brought yet at

the UPC.

Opt-ins are possible only as long as no action has been brought before

a national court.

Opt-outs can be registered already before the entry into force of the

UPC Agreement and the start of operations of the UPC during a

so-called "sun-rise" period, which is likely to start 3 months before the

entry into operation of the UPC.

53

Opt-out (cont'd)


Opt-outs and opt-ins are free of charge.

There is no need to have a professional representative.

However, the person filing the opt-out will need to authenticate his/her

identity electronically.

54

Opt-out (cont'd)


The implications of Brexit

There are no immediate implications for the participation of the UK

either in the UPC or the Unitary Patent.

Even though the UK has officially notified the EU that it intends to

leave the EU, the UK will remain an EU Member State for at least 2

years and can participate without problem in both systems.

The question is only what will happen once the UK leaves the EU:

Will the UK have to or want to leave the UPC or the Unitary Patent,

once it leaves the EU?

55


There have been legal doubts expressed as to whether the UK can

continue to participate in the UPC post Brexit. These doubts are

based on an opinion from the Court of Justice of the EU from 2011

(opinion 01/09).

At the time this opinion was widely interpreted as excluding non-EU

Member States from the UPC although there was never any detailed

analysis and no detailed discussion.

56

The implications of Brexit


Recent opinions of legal experts based on a more detailed analysis

have come to the conclusion that the participation of the UK in the

UPC post Brexit would legally be possible.

There are some legal arrangements/amendments to the UPCA to be

made which are not difficult if there is a political will. Whether there is

such a political will may become clearer once the Brexit negotiations

are more advanced.

57

The implications of Brexit (cont'd)


If the UK has to or wants to leave the UPC and/or the Unitary Patent

post Brexit this will not lead to legal uncertainty affecting cases

pending before the UPC or a loss of patent protection in the UK.

Under the principals of legal certainty and the protection of acquired

rights, which are guiding principles of international, European and

national law, legal arrangements will have to be made to prevent any

effect on pending cases and any involuntary loss of protection in the

UK.

58

The implications of Brexit (cont'd)


14 Member States (including Italy in February) have ratified the UPC

Agreement,

2 more Member States have received parliamentary approval for the

ratification and are expected to complete the ratification soon

(Slovenia and Latvia),

2 more Member States have finalized the ratification bills but not yet

launched in the national Parliament.

59

Process towards the coming into operation


The ratification in the UK, which has been delayed because of the

elections, is now expected before the end of this year. The UK has

already obtained the parliamentary approval for the ratification of the

UPCA. The last outstanding step is the parliamentary approval of two

orders implementing the Protocol on Privileges and Immunities into

national law, which have been launched in the UK and the Scottish

Parliaments.

In Germany parliamentary approval for the ratification has been

obtained on 31/3/2017. Germany will however envisage to withhold

the formal ratification until the fall to allow for an entry into force of the

UPCA in early 2018. Some more delays could be caused by a

complaint at the Constitutional Court against the ratification bill.

60

Process towards the coming into operation (cont'd)


Before the coming into force of the UPCA there is a need to pass

through a period of provisional application of about 6 - 8 months to get

everything ready for the coming into operation of the UPC.

This period will start with the entry into force of the Protocol on the

Provisional Application, after its ratification by Germany. The entry into

force of the Protocol requires that is has become binding for 13

Member States including Germany, France and the UK. For the UK it is

already binding. The complaint against the ratification bill before the

Constitutional Court could cause some delay.

61

Process towards the entry into operation (cont'd)


With the beginning of the provisional application the UPC will acquire

legal personality, its governing bodies (Administrative, Advisory and

Budget Committees) will be set up.

The Administrative Committee will formally adopt all legal texts,

including the Rules of Procedure and all decisions prepared by the

Preparatory Committee and will recruit the judges and staff for the

UPC.

62



The recruitment of the judges (about 40 Legally Qualified and 50

Technically Qualified Judges) will be the most challenging task for the

governing bodies (Administrative and Advisory Committees).

Vacancies were already published by the Preparatory Committee

which received 840 applications, 5% for both TQJ and LQJ, 62% for

TQJ and 32% for LQJ. Among the former are mostly European patent

attorneys, among the latter are all the renowned judges from the

specialist patent courts in Germany, the UK, the Netherlands and

France.

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Luxembourg: Court of Appeal


London: Life Sciences Section of the Central Division Aldgate Tower


Düsseldorf: Local Division


Italy: Local Division


Letter box of the UPC - Munich Section of the Central Division


Thank you for your attention!

Mr. Michael Frohlich

Director, Unitary Patent,

European and International Legal Affairs

+49 (0)89 2399 5200

[email protected]

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mailto:[email protected]

Documents

Overview of the Unitary Patent and the Unified Patent Court · 2017-11-30 · European Patent Office The Unitary Patent is a European patent granted by the EPO under the EPC's rules