The Unitary Patent and Unified Patent Court An overview of the upcoming

changes

Cambridge Wireless Legal SIG meeting

Campus London

Adrian Toutoungi, Eversheds LLP

1 July 2015

• Existing patent system in the EU

• What is going to happen?

– New Unitary Patent – key features

– New Unified Patent Court – key features

– Q4 2016?

• Action items for now

Practical steps to prepare for the Unified Patent Court/Unitary PatentOutline

Existing patent system in the EUProblems

• High validation costs and renewal fees

• Post-grant enforcement of each national patent only in the relevant national court

• Parallel proceedings occur with high costs and risk of inconsistent decisions

• Different procedural rules (discovery, evidence, bifurcation, timetable, costs)

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New systemThe aims

• Lower cost for patenting and enforcement proceedings in the EU

• Improved efficiency of the Courts – simply and fair procedural rules

• Easy access to enforcement – a local presence

• Enhanced legal certainty and predictability of judicial practice

• Judges with the highest experience and quality

• Better access to EU Customs enforcement

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New systemThe solution?

• The unitary patent

– Regulation (EU) 1257/2012 of the European Parliament and the Council of 17 December 2012 on the creation of unitary patent protection (“Unitary Patent Regulation”)

– Council Regulation (EU) 1260/2012 of 17 December 2012 on the creation of unitary patent protection with regard to the applicable translation regime (“Translation Regulation)”

• The Unified Patent Court

– The Agreement on a Unified Patent Court dated 19 February 2013 (“the Court Agreement”)

– Draft Rules of Procedure (17th draft, 18th/final due shortly)

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The Unitary PatentA very brief summary

Unitary Patent – key features

• Single patent covering most EU member states

– including DE, FR, NDL and UK (“EU-24”)

– not HR, ES, IT or PL

– nor other non-EU EPC states (CH, NO)

• Existing EPO application procedure will apply

• Exists in parallel with national patents and bundle patents

• Provides uniform protection and equal effect throughout EU-24

– including lapse, revocation, limitation, transfer

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Unitary Patent – key features

• Can be licensed in respect of whole or part of EU-24

• One-stop shop: centralized post-grant administration by the EPO

– renewal; maintenance of unitary register; recordal of transactions; translations

• Can only be enforced in the new Unified Patent Court (even in initial 7-year transition period)

• Unitary patent as an object of property

– transfer, security, execution, insolvency, licence

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Unitary PatentHow to apply Appeal

Proceedings

(EPO BoA)

Refusal or withdrawal of applications

Limitation Revocation Opposition Proceedings

Filing and formalities examination

Search report with preliminary

option on patentability

Substantive examinations

Grant of European patent

European patent application

On the request of the patent proprietor

(within 1 month)

European patent with unitary effect in the territories of the EU-24

Appeal proceedings

(UPC Central Division)

Estimated validation cost savings

European patent 3 MS (DE, FR, UK)

European patent 5 MS (DE, FR,

UK, IT, ES)

European patent 13

MS

European patent 27

MS

Enhanced cooperation 25 MS + 2 other MS

Translation € 680 3,910 8,800 23,375 5,610

Publication € 0 308 1,500 2,987 308

Representation €

0 500 2,200 5,750 500

Total € 680 4,718 12,500 32,112 6,418

Unitary patent renewal fee scale (True Top 4)

Year Fee (€) Year Fee (€)

2 35 11 1,460

3 105 12 1,775

4 145 13 2,105

5 315 14 2,455

6 475 15 2,830

7 630 16 3,240

8 815 17 3,640

9 990 18 4,055

10 1,175 19 4,455

20 4,855

TOTAL 35,555

The Unified Patent CourtA very brief summary

The basic features

• Exclusive jurisdiction

– validity and infringement

– unitary patents, bundle patents, SPCs

• Pan-EU remedies

• Enforcement by patentee or exclusive licensee

• 7-year transitional period

• Opt-out for existing bundle patents/applications

• Recovery of costs

• Hybrid procedure, German-influenced

The proposed structure

Court of Appeal (Luxembourg)

Appeal

(facts & law)

Local division (Germany x4,

Belgium, Finland, Denmark, Ireland)

Central division

(Paris, London, Munich)

Regional division (Nordic)

Court of Justice of EU

preliminary

request

binding decision

Regional division (Balkan? CZ/SK?)

Local division

(Italy, England, the Netherlands,France)

Unified Patent CourtFees and recoverable costs

• Current proposal (May 2015)

– Fixed fees for actions/appeals (€11,000)

– Additional value-based fee on sliding scale up to €220,000 for actions of €500,000+

– Fee payable on counterclaim for revocation

– Fixed fees for other procedures (opt-out; saisie; protective letter)

• Cap on recoverable costs (€3 million for actions of more than €50 million)

Pros and cons of UPC

• Eliminating certain types of parallel litigation

• Possibly increased certainty of decisions on validity and infringement... eventually

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• Traps for the unwary – a completely new landscape

• Teething problems

• Subject Matter Jurisdiction -limitations mean that multiple actions possible

• Reference to CJEU on matters of EU Law – delay and uncertainty?

• Pan–EU injunction (no US-style eBay Inc v MercExchangetest)

• Increased risk of patent troll activity

PROS CONS

Immediate effect on users of the current European patent system…

• Patentee with existing EPs

• Applicant whose EP application is about to be granted

• A patentee with an EP to be enforced

• A competitor wishing to invalidate

Action items for now

Action items for now

• Carry out review of EP portfolio

– opt-out?

• Consider targeting competitors’ patents with central revocation attack

• Identify and review key IP agreements

• Update internal templates/precedents

• Consider filing protective letters

• Consider changes to patent filing strategy – do you have any categories of invention for which unitary effect would be desirable? New importance for national route/PCT? Filing divisionals? More oppositions?

• Start thinking about changes to your patent litigation strategy in Europe

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Adrian ToutoungiPartner, EvershedsDirect dial: +44 (0)122 344 3831Mobile: +44 7887 754482 Email: adriantoutoungi@eversheds.com

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