THE EUROPEAN PATENT WITH UNITARY EFFECT
A single European patent has been an ambition of the EU for over 40 years. In December 2012, the European Parliament and European Council approved the “EU unitary patent package” to establish:
(i) a European patent with unitary effect (“EPUE”); and
(ii) a single European patent court to decide European patent litigation (see our information page on the Unified Patent Court).
The EPUE will provide a single patent right in 26 of the 28 EU member states (the “participating member states”). At the moment, Spain and Croatia will not be participating member states for the EPUE, but can join later. The EPUE is designed to reduce the costs involved in the grant of European patents.
Currently, patent protection can be obtained in Europe either by:
(a) applying for a patent in each individual European country to get one or more national patents; or
(b) applying for a European patent at the European Patent Office (EPO) under the European Patent Convention (EPC).
However, a European patent application must be “converted” into national patents on grant (so-called “validation”), because the EPO only provides a central examination system. The validation procedure usually requires translation of at least some of the patent into the language of each country in which protection is wanted. The translation costs can be very high, depending on the number of countries wanted and the length of the patent application.
The EPUE provides a third option when the EU patent package comes into force. The EPUE can be selected instead of (or in addition to) the validation procedure, and the patent will not need to be translated (after a transition period expires).
The EPUE will not be available until the UPC is ready because any litigation with respect to an EPUE cannot proceed until the UPC is ready. The UPC will open its doors when the UPC Agreement comes into force after ratification by 13 countries (including France, Germany and the UK).
Currently (May 2016), 10 countries, including France, had ratified the UPC Agreement. Although, Poland and the Czech Republic have indicated they will not ratify the Agreement before it comes into force, there appears to be enough political momentum from the remaining countries to bring the Agreement into force.
As a further development, Italy has recently officially joined as a Member State for the EPUE (having originally been opposed to the system with Spain). Extending the protection of the EPUE to include Italy is welcomed by supporters of the system as Italy is the fourth largest economy in the EU.
The UK aim to ratify in 2016 and Germany began the ratification process in February 2016.
Logistics are a major factor in determining the timescale for the UPC (and thus the EPUE). Some of the factors include: time to find new court buildings in various European locations, selection and training judges, as well as setting up IT systems.
Progress has been made, and the UK government has signed a lease for the London location of the Central Division of the UPC. In addition, a Provisional Application Protocol was signed on 1 October 2015 to allow the early implementation of some aspects of the UPC.
The UPC Preparatory Committee has announced that it aims to “complete its [preparatory] work by June 2016 with a view to the UPC opening at the start of 2017.”
The EPUE will be obtained through the European Patent Office (EPO). Applicants apply for a European patent application, and the EPO examine the application as before. The Applicant decides whether or not to register for an EPUE when the European patent application is granted.
At this point, a patent owner can register for an EPUE, as well as optionally validating in any of the EPC contracting states that are not covered by the EPUE. Registration for an EPUE will not be mandatory and patent owners can validate under the current system if they wish.
Registration for an EPUE will be a simple administrative task, and the EPO do not intend to charge an official fee for registration. Translation of the patent will be required in the early years of the system.
There are many languages spoken in the EU, and so the language used for the EPUE has always been a difficult political sticking point. The EPO has been working with Google to improve machine translation for the technical subject-matter contained in patents. So, it is proposed that the EPUE will be available automatically in all of the languages of the participating member states by machine translations.
However, the legislation recognises that machine translations are not fit for purpose at the moment. The EPUE will need to be translated into another language until machine translations reach an acceptable standard. The transitional period will last no more than 12 years.
For European patent applications granted in English, the patent will be translated into the language of any one of the other participating EU member states. For European patent applications granted in French or German, the patent will be translated into English.
The level of renewal fees for European EPUEs was one of the most anticipated aspects of the new patent system. The EPO have decided to set the renewal fees at a level that reflects the national renewal fees for the top four countries in which European patents are validated in currently, namely the UK, France, Germany and the Netherlands.
This “Top Four” proposal for the renewal fees is set out in the following Table.
UP renewal fee proposal (Euro)
UP renewal fee proposal (Euro)
In our experience, European patents are validated on average in four to five states, with many patent owners only validating in two or three states. The level of the renewal fee may mean that the EPUE is not attractive to some patent owners who typically validate their European patents in only a small number of countries, such as the UK, France and Germany.
However, it is possible that the simpler process of registering for an EPUE (compared to the validation process) may make an EPUE an attractive option. In addition, the EPUE can provide broader territorial protection.
The protection provided by the EPUE is not defined precisely in the Regulation relating to the EPU. Instead, the protection provided by an EPUE is defined in the Unified Patent Court Agreement.
The UPC Agreement sets out that the EPUE provides the rights to prevent:
(I) direct use of a patented product or process; and
(II) indirect use of a patented product or process.
The provisions are similar to the wording in, for example, the UK Patents Act. However, the scope of indirect infringement appears to broaden. Under UK law, at least, a third party needs to supply an “essential means relating to the invention” in the UK for putting the invention into effect in the UK. This is a “double territoriality” requirement.
Under the UPC provisions, a third party would be liable for indirect infringement for supplying the essential means relating to an invention in one participating member state for putting the invention into effect in another participating member state.
The Agreement also sets out the exemptions from infringement. Exemptions include acts done privately and for non-commercial purposes, and acts done for experimental purposes.
The EPUE can only be transferred (e.g. assigned) as a single right in all participating rights. However, a licence may be granted in respect to all of the EPUE or any number of the participating states.
The EPUE Regulation also sets out the applicable law for entitlement disputes and transactions. The law of a participating member state will apply where an applicant of a European patent application (that becomes an EPUE) has their residency or principal place of business in that participating member state at the time of filing the European patent application. For example, an EPUE owned by a company based in France at the time of filing will be governed by French law.
For applicants with their residency or principal place of business is not in a participating member state, German law will apply. As an exemption, if the applicant (at the time of filing of the application) had a place of business in a participating member state, then the law of that participating member state will apply. It is unclear whether companies with their principal place of business outside of the participating member states but places of business in several participating member states will be able to choose which law applies.
Several countries, such as Switzerland, are contracting members of the EPC but not EU members. So, the EPUE will not provide protection in these countries. However, protection from a European patent application can still be obtained in the current way. So, a patent owner wanting to cover all EPC contracting states can opt for an EPUE and validate in the remaining states in the same way as before.
This information is simplified and must not be taken as a definitive statement of the law or practice.