The EU Unitary Patent: Its Background and Overview.

 

After over 30 years of trying, the European Parliament and the Council have agreed on how to create a EU-wide patent regime to protect inventions better, cut costs and boost competitiveness.

 

The idea of a unitary patent valid throughout the European Economic Community was already being aired when the EEC was founded in 1957. In 1973 a “unified Community patent” was to be created by the Munich Convention, but the agreement never entered into force. After another unsuccessful attempt was the Luxembourg Agreement of 1989. In 1997, the European Commission published a Green Paper on the “Community patent”, followed by a proposal in 2000. A revised proposal was then put forward in 2004, but sunk by disagreement on language issues. The unitary patent proposal was finally tabled in 2011.

(A) The current system:

Currently in Europe it is possible to apply for a patent through three routes:

• The National route
• The European route
• The international route

Under the National route, applicants can apply for a patent in one or just a few countries within Europe. It is then necessary to file the application at the IP offices in the countries for which the protection is sought. The national route leads to national rights and confer protection at national level.

Under the International route, the Patent Cooperation Treaty (PCT) provides a unified procedure for 137 different contracting states. A PCT application is a “placeholder application” for national filings in individual countries, which is often referred to as an international application.

Under the European route, applicants are granted European Patents for some or all of the contracting states to the European Patent Convention (EPC). They can also be extended to the current extension states[1]. A European Patent is a bundle of national patents. Under Article 2(2) EPC a European patent shall, in each of the contracting states for which it is granted, have the effect of and be subject to the same conditions as a national patent granted by all that state, unless otherwise provided by the EPC. Each of these national patents may be subject to national translation and validation requirements and legal proceedings, and must be renewed individually in each country. The European Patent Convention established a centralized procedure for granting European patents. This procedure is used to process a single patent application in English, French or German, which are the three official languages of the European Patent Organization (EPO), a non-EU body. The European Patent Office (EPO) is able to search, examine and grant patents in a single procedure for up to 38 European states under the European Patent Convention (EPC).

However, a patent issued by EPO must be validated in all the countries where protection is sought. The validation procedure entails high costs, especially for translation services, and makes EU-wide patent protection thirteen times more expensive than in the US.

This current system will however remain available, though these European bundle patents may be subject to the jurisdiction of the Unified Patent Court (UPC) instead of the national courts of each member state. Applicants will also be able to continue to obtain national patents from the patent offices of each participating country, and go through the Patent Cooperation Treaty route.

(B) What is the aim of the Unitary Patent?

The aim of creating a EU patent with unitary effect is twofold.

First, to reduce current patenting costs. According to the European Parliament the cost could be cut by up to 80%[2].

This should improve the competitive position of EU firms vis-à-vis their counterparts in the US and Japan, where patents are much cheaper. Patenting an invention in Europe can be costly because once granted, a European patent can be enforced only at national level. This may well entail translating it into the official language of the country concerned. The patent holder must also pay national validation fees and annual renewal fees. Together, according to the European Parliament, these costs mean that maintaining a European patent for ten years in only six European countries can be four times more expensive than it would be in the US, Japan and many other advanced economies. The translation requirements for the Unitary Patent will be significantly simpler and cheaper, and it will be subject to a single set of renewal fees.

Second, to improve certainty as to the law and reduce litigation costs.

Patents on inventions with a high market value are frequently subject to litigation. Due to the lack of a unified litigation system, this leads to parallel lawsuits in different countries, sometimes with divergent outcomes. Currently, between 146 and 311 patent infringement cases are being duplicated annually in the EU member states. In 2013, this number is likely to rise to between 202 and 431 duplicated cases.

The Unitary Patent also offers savings for enforcement. A patentee will in fact only need to enforce their patent in one court, rather than in multiple national courts, avoiding duplicated litigation. Moreover, a Unitary Patent will be subject to a single set of rules, as opposed to the legislation of multiple countries. To enforce or to revoke today’s European Patent may entail multiple legal proceedings in various countries. The decisions of the new patent court, by contrast, will apply in all participating EU member states.

 

(C) Entry into force

Regulations 1257/2012 and 1260/2012 came into force on 20 January 2013. They will apply from 1 January 2014 or from the entry into force of the Agreement on a Unified Patent Court, whichever is the later date. However in order for the Unitary Patent to be available 13 member states including the UK, France and Germany must have ratified the UPC Agreement, which is not expected to occur before 2015. The status of ratification for each Member State can be found here.  The European Commission will report on how the new regime is working three years after it takes effect.

(D) Countries participating

The two EU Regulations establishing the Unitary Patent were agreed using the enhanced cooperation procedure, which enabled a smaller group of EU countries to make progress. Currently 25 EU countries are participating in the Unitary Patent. Spain and Italy have so far opted out of the unitary patent package, but could join in the decision-making process at any time.

In March 2011 the Council of the European Union issued a decision authorizing enhanced cooperation for the creation of a unitary patent protection. The enhanced co-operation mechanism was set out in the Lisbon Treaty and permits nine or more member states to use the EU’s processes and structures to make agreements that bind only those countries.

Spain and Italy applied before the Court of Justice of the European Union for the annulment of this decision on 30^th May 2011 and 31st May 2011 respectively, on grounds of lack of competence, misuse of powers and infringement of the treaties. The CJEU however dismissed their actions on 16th April 2013 arguing that the Council’s decision was within the boundaries of article 118 TFEU and that the decision had been taken as a last resort after the multiple unsuccessful attempts. The Court moreover rejected Spain and Italy’s argument about the Unitary Patent undermining the internal market by creating a uniform protection in one part only of the European Union. It is in fact inherent to the procedure of enhanced cooperation to create a framework only binding to Members States who have cooperated.

On 22^nd April 2013, Spain lodged an application before the CJEU against the European Parliament and the Council of the European Union for two actions. It asked first to annul Regulation EU 1257/2012 implementing enhanced cooperation in the area of the creation of unitary patent protection for lack of legal basis, and breach of the principle of autonomy and uniformity in the application of European Union law. It also asked for the annulment of Regulation EU 1260/2012 implementing enhanced cooperation regarding translation arrangements for the unitary patent. Spain argued that the Regulation lacks legal basis and infringes the principles of non-discrimination, legal certainty, and autonomy. The Advocate General, Yves Bot, however delivered his opinion on 18th November 2014 (see our post here), and  proposed that the Court of Justice of the European Union dismissed Spain’s challenge to Unitary Patent Regulations. Finally on 5th May 2015 the CJEU rejected all of Spain’s arguments regarding Regulations 1257 and 1260/2012 and dismissed both cases (see our post here for more details).

Italy has since signed the Unified Patent Agreement on 02nd  February 2013 and requested to take part in the enhanced cooperation on 07th July 2015. Its request was accepted by the European Commission on 30th September 2015.

 You can find all CJEU judgments in our final post on Spain v Council of the European Union.