EU Unified Patent Court a Step Closer

Germany’s recent ratification of the Protocol on Provisional Application of the Unified Patent Court Agreement (Protocol) brings the establishment of the Unified Patent Court (UPC) another important step closer.

Following the UK’s decision to opt out of the UPC, the significant hurdles to the UPC entering into force were ratification by Germany, the re-allocation of the central division court that had originally been allotted to the UK and sufficient ratifications of the Protocol.

Following the German Constitutional Court ruling inadmissible two new constitutional challenges to Germany’s ratification of the UPC, Germany signed its instrument of ratification, but has yet to deposit it with the Council of the European Union. It is expected that Germany will deposit its instrument of ratification of the UPC Agreement once the other hurdles have been settled.

Italy qualifies as the third biggest EU Member State for UPC purposes following the UK’s withdrawal from the EU. It is expected that Italy will therefore replace the UK by hosting one of the sections of the central division of the UPC, with the others being in Germany and France. Initially the allocation of disputes to the three sections of the central division was according to the top level codes of the International Patent Classification. Paris was allocated (B) performing operations and transporting, (D) textiles and paper, (E) fixed constructions, (G) physics and (H) electricity, Munich was allocated (F) mechanical engineering, lighting, heating, weapons, blasting and the London was allocated (A) human necessities and (C) chemistry and metallurgy. It is not yet clear whether Italy will take over the UK’s allocation or whether the allocation of subject matter will be redistributed.

The Protocol allows specific provisions within the UPC Agreement to be provisionally applied before the rest of the UPC Agreement provisions enter into effect. There is no set period for provisional application, but it is currently expected to apply for around 6-8 months. The Protocol needs to be ratified by 13 signatory states to the UPC Agreement (including as above the three largest), and currently Austria looks likely to be the 13th signatory state with indications that it will do so during the first quarter of 2022.

Once it enters fully into force the UPC will have jurisdiction in relation to disputes concerning existing European patent applications and patents (EP) unless the patentee opts out. If the patentee opts out during the transitional period of 7 years national courts can have jurisdiction provided no action before the UPC has been brought. Where a patentee has opted out during that 7 year period they can also opt back in provided no action has been brought before a national court of a UPC Agreement member state. Eventually, the UPC will also have jurisdiction in relation to European unitary patents (UP), being an EP granted after entry into force of EU Unitary Patent Regulation 2012-1257 (which commences with the UPC Agreement) and for which the owner has opted in to the UP grant option within 1-month of the mention of grant. If the owner opts for grant as a UP the UP will be deemed to have effect from the date of publication of the mention of grant.

There are various considerations to take into account when deciding whether to opt out of the UPC for existing rights and whether to opt for grant as a UP when mention of grant for an EP is issued following the commencement of the UPC and UP legislation. The following are some notable considerations:

• If an existing bundle of national rights validated from an EP are in the names of different proprietors, then all of those proprietors would have to opt out of the UPC in order for an opt out application to be effective;
• Once opted in for a UP cannot be opted back out of;
• UPs have unitary effect in applicable jurisdictions and are only enforceable and revocable as a single patent;
• UPs cannot be partially assigned, but they can be partially licenced; 
• UPs are likely to be more cost effective when the UP covers 4 or more member states;
• If a UP is unlikely to be renewed up to its full term, then renewal fee savings will be less significant;
• If a UP is granted before a new member state accedes to the UPC Agreement, the UP will not extend to that new member state;
• It is envisaged that translation from one of the EPC official languages will not be required for non-litigated patents. However, until machine translation significantly improves UPs granted in German or French must be translated into English and all UPs granted in English must be translated into German or French;
• Proceedings before a central division will be in the language the UP was granted in, while local or regional divisions use an official language of the hosting state unless discretion allows the language of grant to be used;
• Nullity actions for a UP can be anyone irrespective of whether they are effected by the UP.

Author: Quinn Miller

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