The unitary patent is coming: three important questions before you file

The European unitary patent system has been in the works for quite some time, but now it looks like it will finally be implemented in 2023. While it comes with potential for major cost savings, it may not be the best option for every company.

 

First, a brief primer:

 

“We know from our experience of the London Agreement back in 2008 that changes in European Patent regulations can be complex to navigate,” notes Erica Gatland, Vice President of IP Operations at RWS IP Services. “At RWS our undertaking is that our customers will receive clear, impartial information to help them achieve the right balance of geographic coverage and current and future cost, supported by easy-to-navigate software solutions that simplify the decision-making process.”

 

In preparation to make those complex decisions surrounding the implementation of unitary patents, below are some important considerations. Because the opt-in window is so short—only a month after publication of the grant—patent owners should develop a plan well in advance.

 

The unitary patent system includes only EU member states. Therefore, if a company has a major business presence in other countries in Europe such as the United Kingdom or Switzerland, patents registered there would still need to be maintained and enforced separately.

 

In addition, not all EU member states will participate in the system. Croatia and Spain opted entirely out, and Poland appears to be taking a wait-and-see approach.

 

Finally, the agreement implementing the unitary patent system must be not only signed, but also formally ratified by participating EU member states. As a result, when the system as a whole goes into effect, issued unitary patents will be effective only in countries where the agreement has been both signed and ratified. The number of countries included will likely change over time. The unitary patent certificate will indicate the countries where it is effective. Even if other countries later ratify, the registration will not be retroactively effective in those countries. This will be a consideration for docketing and other record keeping.

 

Although a unitary patent will not provide complete coverage throughout all of Europe, a patent owner can combine unitary patent rights with traditional European patent rights in other countries.

 

Previously, national judiciaries ruled on infringement issues for European patents. The Unified Patent Court (“UPC”) will have exclusive jurisdiction over disputes relating to both infringement and validity of unitary patents. Further, the UPC will have jurisdiction over disputes regarding traditional European patents, with important caveats.

 

For at least seven years after implementation, owners of traditional European patents can opt out of jurisdiction by the UPC, unless an action has already been filed regarding the patent before the UPC. Conversely, owners of traditional European patents can later withdraw an opt-out and agree to jurisdiction by the UPC unless an action already has been filed before a national court.

 

Proponents of the UPC note that it will employ specialized judges and the rulings will have a harmonizing effect across all EU member states that are in the system. Harmonization is a double-edged sword, however, as a decision in a UPC matter brought by a single opponent will have effect across all participating states, regardless of the opponent’s geographic reach.

 

Ultimately, the other considerations above lead to this last question. For a bet-the-company patent, it can be downright frightening to imagine a single action invalidating part or all of the patent based upon a UPC action brought by a single accused infringer from a country that may not even be important to your company’s business strategy.

 

On the other hand, for high volume filers, the cost savings and efficiency of a unitary patent may be quite beneficial.

 

Companies must not only consider the risk of large-scale invalidation in their strategies of where to file, but also should carefully consider fallback positions to build into their claims to provide protection for unitary patents.

 

Patent portfolio management always involves some balance of costs versus coverage. In the early going of the unitary patent system, this will be amplified. Early, thoughtful strategy and re-evaluation over the next several years will be crucial.