The New European Unitary Patent and Unified Patent Court: Are You Opting In?
The Gibbons Institute of Law, Science & Technology recently hosted a program to explore significant changes underway for the European patent landscape. At this program, Dr. Christoph Cordes, Partner at the German law firm Esche Schümann Commichau, presented an overview of the new European Unitary Patent and Unified Patent Court, and was joined by several panelists in a discussion about the anticipated impact of this new European patent regime.
The Unitary Patent and Unified Patent Court are developments undertaken by the European Commission to achieve a more uniform approach to patent protection in member states within the European Union (EU). In order to take effect, an underlying Agreement on the Unified Patent Court must be ratified by 13 of the 25 member states of the EU (including Germany, France, and Great Britain). Eight member states, including France, have presently ratified the Agreement, which is expected to take effect by early 2017. Implementing Regulations for the Unitary Patent have also been promulgated.
Once the Agreement takes effect, patent applicants may elect to have patents filed in and granting from the European Patent Office (EPO) treated either as Unitary Patents having effect in all EU states that have ratified the Agreement at that point, or as “classical” European patents having effect only in countries specifically selected for validation in accordance with the European Patent Convention (EPC). Applicants may also continue to alternatively file patent applications directly in national patent offices of interest in Europe rather than in the EPO.
The Unified Patent Court (UPC) will have jurisdiction over all infringement and revocation actions involving Unitary Patents. During a transitional period of either seven or 14 years, owners of classical European patents may elect to “opt in” to the jurisdiction of the UPC, or “opt out” in favor of the national courts of the countries specifically selected for validation. After the transitional period expires, all Unitary Patents and classical European patents will be subject to the exclusive jurisdiction of the UPC.
The UPC will consist a variety of local, regional and central trial-level divisions in various EU countries, as well as a Court of Appeal sitting in Luxembourg. Judges will be selected according to legal and technical qualifications, and each division will include judges selected from multiple member states. Decisions will be applicable to and enforceable in all participating EU member states, and injunctive relief will be available as a potential remedy.
Some interesting insights and predictions emerged from the panel discussion. Panelist Teresa Stanek Rea, Partner at Crowell & Moring LLP, served as Acting Under Secretary and Director of the U.S. Patent & Trademark Office (USPTO) during a period when the Agreement on the UPC and Implementing Regulations for the Unitary Patent were being developed. During this time, Ms. Rea had significant interaction with the EPO in her role as USPTO delegate to the “IP5,” a group representing the five largest state intellectual property offices (USPTO, EPO, Japan Patent Office, Korean Intellectual Property Office and State Intellectual Property Office of the People’s Republic of China). Ms. Rea noted that EPO president and delegate Benoit Battistelli was especially interested to learn about the USPTO’s parallel experience in building a Patent Trial and Appeal Board (PTAB) to adjudicate post-grant proceedings implemented as part of the America Invents Act (AIA). Looking ahead to the new European patent regime, Ms. Rea predicts that differences among the local, regional, and central trial-level divisions of the UPC and in the national courts for European patents that have opted out from the UPC’s jurisdiction will provide many opportunities for creative patent lawyering.
Panelist James Hayles, Senior Patent Attorney at Pfizer Ltd., finds that the new European regime has been creating a bit of schizophrenia among European in-house patent counsel. On the one hand, the Unitary Patent will provide an attractive and substantial life-cycle cost savings in comparison to classical European patents under the EPC that are validated in a substantial number of EU member states. On the other hand, present uncertainty about many operational aspects of the UPC (for example, the sources of precedent that will be used to guide UPC opinions) may retard early commitment to the new regime. In the pharmaceutical industry, Mr. Hayles predicts that most classical European patent owners will initially choose to opt out from UPC jurisdiction.
Panelist Thomas Hoxie, Partner at Hoxie & Associates LLC, is more optimistic. As former Worldwide Head of Intellectual Property Litigation for Novartis Pharmaceuticals, Mr. Hoxie found adjudication of European patent disputes in the national courts could be chaotic. Quite frequently, infringement and revocation actions brought in multiple national forums led to very different outcomes. In an effort to mitigate these effects, attempts were made to provide for a quasi-unitary enforcement by means of litigation stays following an initially-filed national action and multi-jurisdiction enforcement of injunctive relief orders issued by a single national court. Mr. Hoxie believes the new European regime will be a step towards a more rational pan-European approach. He predicts that the Unitary Patent will be widely adopted to achieve the substantial cost savings offered in comparison to classical European patents, while acknowledging that owners of classical European patents of high commercial importance may choose to opt out from UPC jurisdiction during the transitional period.
Only time will tell which of the panelists’ predictions will ring true. Gibbons will continue to monitor further developments concerning the new European patent regime.