TaylorWessingWhen the new system of unitary patents and a Unified Patent Court (UPC) is introduced, it will be the most radical change to the European patent landscape in a generation. This may happen as little as two years from now and so, given the nature of the changes to ownership and enforcement that will be made possible, and the revocation risks, it is imperative that those with patents now begin to consider how they can adjust to, and benefit from, this new system. This is particularly the case for patents held by multiple owners and licensees.

At present, the EPO grants a bundle of patents across Europe (European patents, or “classicals”). Each patent in the bundle protects one of the countries designated in the original application filed with the EPO. Aside from opposition at the EPO within the first nine months of grant, enforcements or challenges to the validity of these patents must be fought in the national courts of their respective designations. This can mean several national actions if infringements in more than one country are to be stopped.

In contrast, a unitary patent (full name “European patent with unitary effect”) will be a single, pan-European right protecting all the EU Member States (excluding Italy, Spain and Poland). This patent will be a new option for patent holders and will exist alongside the above classical European patents, together with the existing system of national patents.

Unitary patents are obtained in the same way as classical European patents, except that a request for unitary status must be filed with the EPO within one month of the date of grant. If this period is missed, the opportunity to obtain unitary patent status is lost and the patent remains of the classical European type.

At the same time that the unitary patent comes into force, the UPC will begin hearing disputes concerning unitary patents and classical European Patents (but not national patents). In the UPC, it will be possible to enforce or revoke, in one action, a unitary patent or a bundle of classical European patents simultaneously in all of the territories that they cover.

This pan-European nature of UPC decisions creates risks as well as benefits. On the one hand, a patentee considering obtaining unitary patents needs to be aware that such patents could be revoked across all the Member States protected, in one action. On the other hand, this risk might be outweighed by the potential to enforce a unitary patent across all these same states, also in one action. A patent holder does not have to request unitary status for a patent if they do not wish to. But, classical European patents become automatically subject to a potential action in the UPC, unless they are actively “opted-out”. Although for a transitional period of seven years classicals can be litigated in either the UPC or the national courts, they too are at risk of a pan-European revocation in the UPC. On the other hand, when opted-out, a classical European patent can only be enforced or revoked in the national courts, country-by-country, subject to the opt-out later being withdrawn. There are also cost savings to bear in mind. Although the renewal fees for a unitary patent are not yet known, potentially large legal cost savings are expected to come from the ability to enforce, defend or challenge in one set of UPC proceedings, rather than several national proceedings.

Opt-out requires the lodging of an application by the proprietor or, if it is co-owned, by all proprietors. Hence, co-owners must agree a common strategy on opt-out. Furthermore, whilst licensees do not need to consent to opt-out, given the potential consequences of this decision, particularly for an exclusive licensee, licensees are likely to want to negotiate to have a say in  the opt-out decision. Because of the risks of the new system, as well as the benefits, careful decisions about whether to obtain unitary patents and which patents to opt-out of the UPC are now pressing to be made before the court opens its doors for business.