Unitary patent and UPC

What is a unitary patent?

In addition to a Dutch or European patent, there is now a third way of protecting an invention: the unitary patent.

What is the difference between a European and a unitary patent?

There are four major differences:

I. A European patent can be registered in 38 countries, these are the European Union member states plus a number of other countries such as Turkey, Norway and Switzerland. A unitary patent is only valid in participating EU member states. There will be a minimum of thirteen and a maximum of 25 participating states.

II. A European patent is registered in each individual country after a common granting procedure. A unitary patent is registered for all participating member states simultaneously. This means that there is less red tape and translation work involved in the process of granting a unitary patent than in the case of a European patent.

III. In the case of a European patent, the annual renewal fees have to be paid per country whereas, in the case of a unitary patent, these costs are settled for all participating states in one go.

IV. In the case of a European patent, court cases can be fought out per country. In the case of a unitary patent, one court decision by the new UPC (Unitary Patent Court) will apply in all participating states.

Which member states are participating in the unitary patent?

Who is going to be involved will depend on the individual ratification process per EU member state. Participation is therefore a political choice per state. Approximately 17 countries will be participating from the start. Germany, France, Great Britain and the Benelux are definitely going to participate. Spain and Poland are definitely not going to participate.

When is it going to come into effect?

The expectation was that the unitary patent would become operational early 2017. The Brexit has however put a spanner in the works. Following the positive decision of the Court of Justice on 5 May 2015, the final legal obstacle has been overcome. The effective date still depends on the ratification process and the progress made in setting up the new accompanying court system, the Unified Patent Court.

How much does a unitary patent cost?

The costs can be broken down into one-off and annual costs. The one-off costs involved in establishing a unitary patent will be around € 1,500 and mainly consist of the submission of a translation. These costs are considerably lower than the total costs of registration per country in the case of a European patent. NB: the one-off costs are costs incurred after the patent has been granted and the costs of the application and granting have already been incurred.

The European Patent Office recently published the renewal fees for this new patent. The fees for the unitairy patent represent the sum total of the renewal fees in the four countries with the highest number of European patent registrations: Germany, France, United Kingdom and The Netherlands. The renewal fee starts at 35 euro for the second year and increases to € 4.855 for the twentieth year.

What is the Unified Patent Court?

The Unified Patent Court (UPC) is a new European patent court system that deals with the unitary patent and European patents if the patent holder opts for the UPC. These specialist courts deal exclusively with patent cases. The court is international with at least three judges from at least two different countries per case. This new judicial system offers one chance for appeal.

Where will the UPC be established?

The UPC will have local branches in most participating states, including in the Netherlands (The Hague). In a number of cases smaller states will work together in regional branches. There is also a ‘central’ branch (a kind of screening unit) with offices in Paris, London and Munich. The Court of Appeal is going to be established in Luxembourg.

How much does a court case cost at the UPC?

The costs of a court case in the Netherlands currently range from € 30,000 to € 300,000. In the case of a European patent, separate proceedings have to be conducted in each individual country. A pan-European case can soon run into several millions. It is expected that legal proceedings at the UPC will cost between € 40,000 and € 600,000. However, if it involves a complex case with significant interests then the costs at the UPC may also run into the millions.

What is the working language at the UPC?

The basic rule is that the local branches will use their own native language or alternatively, will opt for one of the official EPO languages (English, French or German). The expectation is that most local branches will opt to use English as their official working language. However, parties are free to agree mutually on any of the three EPO languages. The central branch of the UPC will only use either English, French or German. It is expected that in seventy percent of cases the working language will be English.

If I opt for a unitary patent, will I still be able to work with my Dutch and European patent attorney and lawyer?

Certainly. Our patent attorneys have the right kind of expertise to advise you on the complex subject of the unitary patent. All the patent attorneys at EP&C are not just Dutch patent attorneys but also European patent attorneys. They are very well informed about the ins and outs of the new system. EP&C regularly publishes information about the unitary patent in the form of white papers for example, as well as contributions to various knowledge portals such as Gate2IP. EP&C also organises workshops on the unitary patent.

What are the advantages of the new patent system for me as an entrepreneur?

Geographically greater protection for your technology at a lower cost; less paperwork, so less bureaucracy; you will have the opportunity to tackle infringers effectively; and as the new system provides a third patent option, you now have more choice.

What are the disadvantages and risks of the new patent system for me as an entrepreneur?

The system is still relatively expensive, especially if you are planning to register a European patent in a limited number of countries. You also run the risk of losing your patent everywhere during one single court case. As a patent infringer, you can also be summoned to appear at a local branch of the UPC in a far-away country in which you rarely work. Moreover, you will not be able to control the renewal costs by gradually reducing the number of countries in which your intellectual property is protected.

What should I do with my existing European patents? Should I change them into a unitary patent?

It is impossible to change them. You can only obtain the unitary effect in the case of patents that are granted after the new system comes into effect. For your existing European patents you can (and must) decide whether to conduct any legal proceedings at the UPC.

Spain and a number of other EU-states are not going to participate in the unitary patent. What is going to happen in those countries?

The existing European patent will continue to apply in EU-states that are not going to participate in the unitary patent, so that can be used as a supplement to a unitary patent. Of course the same also applies to a number of non-EU states such as Norway, Turkey and Switzerland.

Can I still take patent cases to the national court?

All court cases relating to a unitary patent should be taken to the UPC. In the case of a European patent, you can use an opt-out to indicate that you wish to instigate legal proceedings at the national court, should that be necessary. This option will be available for patents that are granted within seven years of the new system coming into effect and, in that case, will apply for the term of that patent. It goes without saying that the national court will continue to be authorised to rule on cases involving a national patent.

Is there anything I should be doing right now to prepare for the arrival of the unitary patent and the UPC, or can I wait to see how things develop?

The Brexit has pushed back the starting date of the unitary patent, so there is still time for taking decisions. There are, however, a number of matters you should start to think about, possibly in consultation with your patent attorney or lawyer. One of these is the choice of the court system in future infringement cases. Moreover, if you have already applied for patents for inventions for which you want a unitary effect, you could possibly delay the granting procedure.

The unitary patent will offer greater protection for less money. You could therefore already consider submitting more patent applications because the unitary patent will be in place by the time these are granted. In addition, it is advisable to check your current licensing contracts for compliance with the unitary patent and the UPC.