Home » Patents » CIPA Seminar: UP and UPC series: Episode 3 (The UPC Landscape – what will it look like?)

CIPA Seminar: UP and UPC series: Episode 3 (The UPC Landscape – what will it look like?)

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IMG_8533The third in CIPA’s unitary patent seminar series was delivered by Vicki Salmon. This webinar provided a detailed look at the whole unitary patent system, the current patent landscape in Europe and the differences between the two.

National Courts

To place the unitary patent system into context Vicki reminded us that gaining protection within the present system within Europe involves obtaining different national rights (patents, utility models) or a granted EP patent. Infringement and revocation happen on a local basis and different systems offer different provisional measures (interim injunctions, evidence, saisie). In addition to the local revocation route the EPO also provides a time limited route to revoke an EP patent during opposition proceedings.

An EU wide patent regime would offer the chance of avoiding duplication of litigation in multiple states with the possibility of conflicting decisions (e.g. Improver v Remington).

The unitary patent system – One assignment, one renewal, one revocation

One assignment, one renewal, one revocation may sound like an early rejected draft of the lyrics to Queen’s hit One Vision but it essentially describes the proposed unitary patent system.

The Unified Patent Court will be a specialist court comprising trained judges where a single litigation action will allow an EU wide injunction or revocation to be made. The patent profession is naturally a little risk averse but it is noted that the new unitary patent system comes with transitional arrangements including the “opt-out” process which was covered in Episodes 1 and 2 of the CIPA lecture series (Episode 1 here and Episode 2 here).

The origins of the unitary patent system can probably be traced back as far as the 1950s and there have been numerous false starts along the way (e.g. Community Patent Convention). What we’ve now ended up with are a couple of EU regulations (covering the unitary patent and the translation regime) and the Unified Patent Court Agreement, an international agreement which is currently between EU member states only.

Out of the 28 EU member states it is noted that Croatia wasn’t part of the EU when the unitary patent system was agreed and has not yet signed up. Of the remaining 27 states, 25 are taking part in some shape or form (Poland is not planning on ratifying the UPC Agreement and Spain has stayed out of the system altogether).

Unitary patent versus European patent

Looking at the unitary patent against current European patents Vicki noted that the current system under the EPC provides access to 38 contracting states. Validation states are chosen on grant and the costs of validation depend on whether the territory in question requires any translation to occur (e.g. claims only or full translation). A portfolio made up a classically validated European patents can be pruned over time, can be individually transferred and can have different claim sets in different states.

In contrast the unitary patent will cover at least 14 states on entry into force (the minimum of 13 states will be exceeded by at least one country). Requesting unitary effect needs to occur one month from grant and all the applicants for the patent need to agree. During a transitional phase a translation of the full specification will be needed. Countries that are outside the unitary patent system will need to be validated in the current manner.

Unitary patents are, according to Article 7 of the unitary patent regulation, objects of property and the national law that applies is determined by the member state where the first named applicant has its residence. Where there are joint owners then the first owner based in a member state determines the national property law. In the event that none of the owners are based in a member state then the default law is German law.

Which infringement law applies to a unitary patent is determined by Article 5 of the unitary patent regulation. Damages in infringement cases may be limited by the need for local translations of the specification. The unitary patent will be maintained by payment of a single renewal fee (meaning that portfolio pruning will not be possible). A single assignment will transfer a unitary patent and a revocation action at the UPC will revoke a unitary patent in its entirety. It will be possible however to licence a unitary patent by territory.

The Unified Patent Court

The Unified Patent Court comprises a Court of First Instance, a Court of Appeal and a Registry. The Registry will keep a register but it is important to note that this is not the same as the EPO’s patent register.

The Court of First Instance will in turn comprise a Central Division (based in London (Chem-bio cases), Munich (Mechanical engineering cases) and Paris (all other cases)) and a series of local and regional divisions. The Baltic regional division will cover Sweden, Estonia, Latvia and Lithuania. Local divisions will also be found in Austria, Belgium, Denmark, France, Finland, Germany (there will be four local divisions in DE), Ireland, Italy, the Netherlands and the UK.

The Court of Appeal and the Registry will be in Luxembourg and the Mediation and Arbitration centres will be in Lisbon and Ljubljana. Time to check you’ve signed up to an Airmiles account…..

Within the UPC, EU law will have primacy (Article 20 of the UPCA) and questions can be referred to the CJEU under Article 21 UPCA.

Panels within the Court of First Instance and Court of Appeal will comprise a multi-national board of judges. Local/regional divisions will have three legal judges with the possibility of an additional technical judge. The central division will have one technical and two legal judges and the appeal court will have three legal and 2 technical judges.

The choice of jurisdiction in the UPC is controlled by Article 33 UPCA and an action may be brought in the location of the infringement or threatened infringement, in the location of the defendant (if they are based in a member state) or in the central division (if there is no appropriate local or regional division). Revocation actions can be held in the same court that an infringement action is brought but may be referred back to the central division. There is therefore the possibility that cases may be bifurcated but it is expected that local and regional divisions will hear both infringement and validity actions.

Revocation actions and declarations of non-infringement may be brought in the central division unless an infringement action is pending elsewhere.

The language of proceedings (Article 49 UPCA) in the UPC will be the language of the member state that the local division is based in or the language designated by the regional division. Official languages of the EPO may also be used which means that English has been specified by a number of local divisions as an option.

The actions over which the UPC has exclusive competence are detailed in Article 32 UPCA (infringement, revocation, declarations of non-infringement, prior user rights, provisional measures and injunctions, damages, licences of right and appeals from the EPO relating to the unitary patent).  Infringement provisions are detailed in Articles 25-27UPCA with prior user rights and exhaustion covered in Articles 28 and 29 UPCA.

Decisions of the UPC will result in injunctions, damages awards and revocation across all participating member states.

As discussed in more detail in our review of the first and second episodes of the CIPA UP/UPC series, during a transitional period of 7 (or 14) years there will be a dual jurisdiction arrangement between the UPC and national courts. This is likely to make it tricky to provide Freedom to Operate opinions as there may be different applicable law depending on whether a granted patent is a unitary patent or not (or whether a granted EP patent is opted out or not).

Vicki noted that the UKIPO is offering to do opinion work but queried whether they have fully thought through the implications of which law will apply.

Other points of note in relation to the transitional provisions of the UPC: (i) when considering the opt-out of a granted EP patent it should be appreciated that the co-owners of a patent and/or the owners of an SPC may have different representatives; (ii) opt-out requests are not going to be examined apparently. This may mean that the opt-out status of opted out patents could be challenged.

Parties before the UPC must be represented by either a lawyer or a European patent attorney with extra qualifications. Vicki noted that there is no limit on the type of lawyers who can represent at the UPC. Vicki also encouraged European patent attorneys who will fall within the grandfathering provisions to register as representatives as soon as they are able since the grandfathering provisions will only be temporary.

Court fees in the UPC will comprise fixed fees and potentially value based fees. Infringement actions will cost 11,000 Euros + potentially a value based fee (the level of the value based fee can be seen here), revocation actions will cost 20,000 Euros and counterclaims for revocation will cost between 11,000-20,000 Euros. It is noted that there are reductions for small and micro-entities and also rebates to encourage early settlements. Cost recovery is available to the winning party in the UPC on a banded scale. It is noted that the cost recovery bands do not match up exactly with the value based fee bands.

The UPC aims to be a quick territory with cases getting to trial in a year. This timescale compares favourably to EPO opposition and appeal timescales however national courts may offer similarly speedy trials.

Double patenting – the seminar ended with a quick note on double patenting between national systems and the unitary patent. The UK has opted not to allow double patenting between GB patents and EP(UP) patents (i.e. the same situation as presently between granted EP patents and national GB patents). In Germany however double patenting appears as though it will be allowable.

Mark Richardson 6 June 2017


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