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FALQs: The Unified Patent Court and Unitary Patents in Europe

The following is a guest post by Zeynep Timocin Cantekin, a foreign law intern working with Foreign Law Specialist Jenny Gesley at the Global Legal Research Directorate of the Law Library of Congress.

On March 20, 2020, the German Federal Constitutional Court (Bundesverfassungsgericht, BVerfG) published its decision on the constitutional complaint against the ratification of the Unified Patent Court (UPC) Agreement. It stated that the German Act of Approval “is void on the ground that the German Parliament did not adopt the law with the required two-thirds majority necessary to amend the Constitution.” This judgment delays the commencement of the operation of the UPC and unitary patents, because the UPC Agreement enters into force only after the 13th European Union (EU) member state has ratified and deposited the UPC Agreement, including the three EU member states with the highest number of European patents in effect. Those member states used to be France, Germany, and the United Kingdom (UK) before Brexit. (UPC Agreement, arts. 84, 89.) The language of the UPC Agreement has not been amended post Brexit. Currently, 16 member states have ratified the UPC Agreement, including the United Kingdom and France. Before the decision of the German Federal Constitutional Court, the unitary patent system was expected to start at the end of 2020.

This blog post will provide a primer on the proposed unitary patent protection scheme (UPP scheme) and will explain the fundamentals of unitary patents and the UPC.

1. What is the current patent law regime in Europe?

The current European patent system is not a singular centralized system. There are three ways to obtain a patent in the territories of the EU member states. The patent applicant can obtain a national patent through the national patent offices, apply for a European patent through the European Patent Office (EPO) under the legal framework of the European Patent Convention (EPC), or apply for an international patent under the legal framework of the Patent Cooperation Treaty (PCT) at the World Intellectual Property Organization (WIPO). However, the EPC and PCT systems only simplify the application procedure and national courts are still the competent authorities that rule on infringement and validity issues.

A “classic” European patent is a bundle of national patents issued under the EPC, which is an intergovernmental treaty and not an EU law instrument. In order to obtain a European patent, the patent applicant files an application with the EPO and lists any of the 38 contracting states to the EPC, which include all 27 EU member states, in which they wish to register a patent. Once granted, European patents take effect as separate national patents, and patent holders have to validate their patents separately in each designated country and pay separate renewal fees. Although the application can be filed in any of the three working languages of the EPO (English, French, and German), the patent proprietor must translate the patent into the language of the designated countries in order to make it valid in that country. Either the Opposition Division or the Boards of Appeal of the EPO can adjudicate limitation, revocation, and opposition proceedings within 9 months after the grant; however, only national courts have jurisdiction to rule on infringements.

The headquarters of the EPO in Munich. Photo by EPO.

2. What is a unitary patent?

Since the 1970s, EU member states have tried to create a unitary patent protection scheme to harmonize court practice and to simplify patent costs, dispute settlements, and translation requirements. In December 2012, the “unitary patent” was finally created as an enhanced cooperation mechanism. An enhanced corporation mechanism is a procedure which allows a minimum of nine EU member states to work together in a certain area. The unitary patent will be governed by two regulations, Regulation (EU) No 1257/2012 and Council Regulation EU No 1260/2012, both of which will be applicable once the UPC Agreement enters into force. On March 10, 2011, 25 EU member states (excluding the UK after Brexit) authorized their country’s participation in the enhanced cooperation mechanism for the creation of the UPP. Spain and Croatia do not participate in the enhanced cooperation mechanism and unitary patents will not be available there.

The unitary patent, or as it is officially called, the “European patent with unitary effect,” is a patent that would be granted by the EPO under the rules of the EPC. (Regulation (EU) No 1257/2012, art. 2.) There would be a single procedure to obtain a unitary patent throughout the territories of all of the participating member states. Once granted, a patent proprietor would pay a single renewal fee to the EPO. Fifty percent of the renewal fee would be retained by the EPO and the rest would be distributed to the participating member states in accordance with the EPC and the agreed-upon distribution key.

3. How can patent applicants obtain unitary patents?

The application and examination procedure in the EPO would remain the same. The patent applicant would file for a classic European patent with the EPO. (EPC, art. 14; Regulation (EU) No 1257/2012, art. 9; Council Regulation (EU) No 1260/2012, art. 3.) After the grant of the European patent appears in the European Patent Bulletin, the patent proprietor would have one month to decide whether to request unitary effect and would have to file this request together with one other translation of the patent specifications. If these requirements are met, the EPO would register the patent as a unitary patent in the “Register for unitary patent protection,” which would be part of the European Patent Register. (Regulation (EU) No 1257/2012, arts. 9, 3(1); Council Regulation (EU) No 1260/2012, arts. 3, 4, 6.) Unitary patents would coexist with national patents and classic European patents for non-participating member states and non-member states in the EPC. However, double protection by a European patent and a unitary patent for the same territory would not be allowed. The unitary patent would cover only the territories of the member states who have ratified the UPC Agreement at the time of the grant.

4. What is the Unified Patent Court and why it is needed?

The UPC would be a court for the contracting EU member states of the UPC Agreement. The UPC Agreement is not open to non-EU states and not all EU member states have acceded to the UPC Agreement. (UPC Agreement, art. 84 para. 1.) The UPC would have exclusive jurisdiction in infringement and revocation proceedings concerning unitary patents, and its decisions would be binding in the territories of the member states that have ratified the UPC Agreement. (UPC Agreement, arts. 32, 34; Regulation (EU) No 1257/2012, arts. 3, 5, recital 9.) Under the current system, separate infringement proceedings in national courts are costly and they cause legal uncertainty and differing court decisions from various countries.

Patent-office, Washington, D.C., examiners at work. sketched by Theo. R. Davis. 1869. Library of Congress Prints & Photographs Division. //hdl.loc.gov/loc.pnp/cph.3c02673.

5. According to the UPC Agreement, how would the UPC operate?

The UPC would be a two-level court, with a Court of First Instance (UPC-CFI) and a Court of Appeal (UPC-CA). (UPC Agreement, arts. 6-7, 9-10.) The UPC-CFI would be a single court with a central division in Paris, branches in London and Munich, and several local and regional divisions spread out in the contracting member states. It is unclear how Brexit will affect the set-up of the UPC-CFI as discussed in more detail in question 7. The UPC would rely on the EPC as a source of law among other sources. (UPC Agreement, art. 24.) Like any national court of an EU member state, the UPC would apply and have to respect the primacy of EU law. Under article 267 of the Treaty on the Functioning of the European Union, if a question arises before the UPC concerning the interpretation, validity, or application of EU law, it would be necessary for the UPC to refer that question to the Court of Justice of the EU (CJEU) and request a preliminary ruling. (UPC Agreement, arts. 20-21.)

6. What legal challenges were brought against the UPP scheme?

Spain and Italy brought legal actions before the CJEU in 2011 seeking annulment of the enhanced cooperation mechanism of March 2011, opposing the language arrangements, and alleging lack of competence, misuse of powers, and distortion to the competition in the internal market. On April 16, 2013, the CJEU rejected all allegations and dismissed the actions.

Spain filed two more actions for the annulment of Regulation (EU) No 1257/2012, alleging several infringements of the EU Treaties; however, the CJEU again dismissed all complaints. Following these decisions, Italy joined the enhanced cooperation mechanism in September 2015, and ratified the UPC Agreement in February 2017.

7. What is the future of the UPC and unitary patents?

Currently, 25 states (including the United Kingdom) have signed the UPC Agreement. Poland participates in the enhanced cooperation mechanism, but decided to first observe the implementation of the system before signing. Spain and Croatia are not participating in the enhanced cooperation mechanism and have not signed the UPC Agreement.

The implications of Brexit on the future of the unitary patent system remain unclear. Although there has been no official announcement, there have been statements in the media suggesting the intention of the UK not to take part in the UPC and the unitary patent system. Since then, clarity has been sought from the UK parliament. Following these statements, in March 2020, the Preparatory Committee of the UPC, which is responsible for the implementation of the UPC Agreement, published a statement noting that “[o]nce Germany will be in a position to ratify the UPC Agreement … arrangements will be made to deal with the practical implications of the UK’s departure.”

Following the recent decision of the German Federal Constitutional Court, the German Minister of Justice and Consumer Protection Christine Lambrecht stated that the Federal Government intends to “carefully evaluate the decision of the Federal Constitutional Court and examine possibilities to remedy the identified lack of form during this legislative period.” The Preparatory Committee published a statement noting that “despite the fact that the judgement will result in further delay, the preparatory work will continue, while the judgement and the way forward is further analyzed.”

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