What you need to know about the UPC and UP and what they mean for you and your business
Introducing the UPC and UP
The UP will be a single patent that will be issued by the European Patent Office (EPO) and will cover all of the EU states that have ratified the UPC Agreement. We expect only 17 EU states to have ratified the agreement on start-up – Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovenia and Sweden.
Instead of paying annual renewal fees in each state, the patent owner will pay a single renewal fee for a UP. This fee will be around the same renewal fee as for the four main EU states.
The UP once granted will be a single right that can be enforced or attacked as one – which means if it is revoked, the revocation is valid for all ratifying countries.
Following commencement, the UPC will be the default Court for all disputes relating to European patents.
When will this change happen?
The UPC and the UP will both come into force on the first day of the fourth month after the month that Germany deposits its ratification of the UPC Agreement. The exact date will not be known until Germany make their deposit, but there is talk that the UP and UPC could start as early as October 2022. Given this timescale, it is worth considering the options and activities that may be required now.
How does this change today’s situation?
Today, the EPO examines and issues European patents. These are effectively a bundle of separate national rights and after grant the owner has to activate the patent in each national state where they would like protection – let’s call this the classic European patent.
Classic European patents are examined as a single application until grant but in reality, are independent rights in each country in which they are activated post-grant. Following grant there is a 9-month Opposition period in which they can be attacked as one. However, after this period has expired, they can only be enforced or attacked individually
Once the UPC Agreement takes effect, the EPO will still examine European patent applications in the same way it does today. When registered, these granted patents will still be open to opposition as they are now.
However, if the owner of the European Patent would like it to be converted to a UP to obtain unitary protection in the UP ratifying member states, they must request this within one month of the grant of the European patent. This period cannot be extended. For states not party to the Unitary Patent or where they are a party but a UP is not desired, the European patent can still be activated in the individual national states – just like today.
All UPs must be litigated in the UPC. For classic European Patents, the UPC will be the default Court but the owner of a classic European Patent can decide to litigate in the national courts. To do this, they must “opt out” of the UPC.
A patent owner can file the opt-out at any time from when the sunrise period starts to the end of the transition period. It will not be possible though to opt out once litigation in the UPC has commenced.
Again, the timing of the sunrise period will depend upon when Germany deposits its ratification of the UPC Agreement; it is the three-month period before the UPC becomes effective. This means that the owners of European patents, European applications or European Supplementary Protection Certificates (SPCs) can opt out of the UPC before it commences. The transition period will end at least seven years after the UPC starts but there is provision to extend this by another seven years.
What does this mean for European non-EU countries such as the UK?
The European Patent Convention covers several European countries that are not EU members, including the UK, Iceland, Norway, Switzerland, Turkey, Monaco, Liechtenstein, North Macedonia, San Marino, Albania and Serbia.
The European patents for these countries, as well as the ten EU members states that are not ratifying the UPC agreement, will be treated in the same way as a classic European patent. Thus, a European patent may become a unitary patent for the 17 EU member states that have ratified the Agreement, and separate national rights for all the other countries of the European Patent Convention if the European patent is activated in those states.
Things to consider before commencement of the UPC
- Before the sunrise period starts, we recommend that patent owners review their patent portfolios and identify if they would like to opt any or all patents and applications out of the jurisdiction of the UPC.
- If a patent owner does decide to opt out, they should be aware that there are specific requirements for opting out. Only the proprietor or applicant can request an opt-out. The representative filing the request will be required to complete a declaration stating that they are entitled to act on behalf of the registered proprietor or applicant. Therefore, it is important to check that the registered proprietor details are correct on all patents and application in your European portfolio. If recordal of transfer is required, this should be undertaken as soon as possible.
- Delaying opt-out is risky, since once proceedings are commenced at the UPC, it is no longer possible to opt out. Therefore, we would advise patent owners that do not want to have their patents under the jurisdiction of the UPC, to opt out as soon as possible.
- Licences and agreements relating to European patents need to be reviewed since exclusive licensees can commence proceedings under the UPC unless the licence or agreement states otherwise. Once this has been done, it is too late to opt out of the UPC.
- The EPO has made it possible to postpone the grant of currently pending applications until after the UPC and UP come into force. This means that applicants can convert patents to UP status within one month of the grant. For applicants who have pending applications that are expected to grant imminently, if a UP is required, we can file a postponement request with the EPO.
- An opt out can be reversed. However, once you have opted back in, you cannot later opt out again. It may be sensible to opt out as a default until the UPC has been tested.
- As the cost of a UP is expected to be approximately the same as the renewal fee for a classic European patent for four individual major EU states, for proprietors who only activate their European patents in a few countries, the UP may be more expensive than the classic European Patent. Thus, it will not always be cost effective to choose a UP over a classic European Patent, especially if the key states of interest are not covered by the UP.
How can we help?
October may seem some way off as the weather eases gently into Summer. But before we know it, the UPC will be upon us. We would recommend that all clients contact us to review their European patent portfolios as soon as possible so that, together, we can decide the best course of action for your business.