Among other changes, the CCNM introduces new provisions regarding patentable employees’ inventions. These new provisions apply to any employee of the In-scope Companies who is the author of an invention made during the performance of (i) an employment contract which includes an inventive mission corresponding to their actual duties or (ii) studies and research explicitly assigned to them.
In light of its temporal scope, the CCNM should apply to patentable inventions of mission created on or after 1 January 2024.
As explained below, actions may be necessary to comply with the CCNM.
Main changes brought about by the CCNM regarding employees’ inventions
In addition to incorporating provisions of the French Intellectual Property Code (hereafter the « FrenchIPC ») pertaining to employees’ inventions, the CCNM introduces new rules:
It sets a minimum amount (300 euros) of additional remuneration which the employer must pay to any employee who makes an ‘invention of mission’.
The CCNM (article 149) provides that the right to this additional remuneration arises “on the date of the invention”. It follows from this provision that the 3-year limitation period for claims for payment of wages, provided for in article L3245-1 of the French Labour Code and applicable in this matter, starts to run from this date.
For the sake of simplicity and as a precaution, the In-Scope Company could consider the date of the employee’s declaration of the invention as the starting date of the 3-year limitation period, given that it is generally difficult to determine the exact “date of the invention”.
The 3-year limitation period is shorter than the 5-year limitation period set by ordinary law (droit commun). However, it exceeds the 2-year limitation period provided for in article L1471-1 of the French Labour Code (created by a law of 14 June 2013), which should apply to the payment of the fair price of an attributable out-of-mission invention (thereby replacing the 5-year limitation period provided for by ordinary law). This application is contingent upon the interpretation provided by the courts.
It also requires the employer to consider “the terms and conditions of any extra remuneration to be paid to the employee who is the author of an invention of mission, in particular when the invention is of exceptional interest to the company”.
What In-scope Companies should do now
The CCNM’s new ‘additional remuneration’ rules put an end to an outdated and partly illegal version of the CCNM.
Indeed, it is worth recalling that, following a decision by the French Cour de Cassation of 22 February 2005, the provisions of the National Collective Agreement for Engineers and Managers in the Metallurgy Industry of 13 March 1972 – which provided for an additional remuneration only for inventions “of exceptional interest to the company, the importance of which would be disproportionate to the inventor’s salary” – no longer produced effect. The French Cour de Cassation ruled that these provisions were null and void, considering them too restrictive considering article L611-7 of the French IPC which requires the employer to pay an additional remuneration to the employee inventor.
From now on, the « exceptional interest » of an invention is only one factor among others when considering a possible ’extra’ remuneration, in addition to the minimum additional remuneration of €300.
The new provisions of the CCNM could be interpreted by the courts as obliging the employer to pay an additional remuneration following a review of the invention’s value by a patent committee, according to criteria to be defined, including the criterion of the invention’s “exceptional interest” for the company. It is therefore advisable to set out the conditions and criteria of this review in the company’ IP policy.
According to case law, inventions of “exceptional interest” may be groundbreaking inventions, inventions that generate or lead to the expectation of high revenues for the company (sales, margins), or those that have benefited from significant development investments. These are only examples, as the exceptional interest depends on the context of the invention and the company’s field of activity.
Please note: the CCNM does not apply to interns. Inventions made by interns of the In-Scope Companies are subject to a specific legal framework. This framework was created by the ordonnance of 15 December 2021 and its implementing decrees of 11 August 2023. The legal framework for interns’ inventions, inspired by that applicable to employees, applies to all interns who are authors of software or inventions (see our detailed newsletter for more information on this legal framework).
For simplicity and, again, as a precaution, we advise companies to align their IP policies for interns’ inventions with those for employees’ inventions. In doing so, we recommend considering the differences in wording between the legal frameworks applicable to interns’ and employees’ inventions in order to mitigate potential legal risks (in particular, the notions of “financial consideration” and “host company”, which are specific to the legal regime applicable to interns’ inventions, should be carefully considered).
In conclusion, In-Scope Companies should review their employment contracts, as well as their internal policies and company-level collective agreements relating to employees’ and interns’ inventions, to ensure that they comply with the new provisions of the CCNM and mitigate the risk of future claims.
Please do not hesitate to contact us if you need any assistance in this matter.
MICHEL ABELLO Managing Partner michel.abello@abello-ip.com
Following Germany’s ratification of the Agreement on a Unified Patent Court (UPCA)1 on 17 February, it is now certain that the Unified Patent Court (UPC) will open its doors on 1 June 20232. Patent litigation in Europe is thus about to undergo one of the most important changes in its history.
Our second Newsletter on the UPC dealt with the strategic implications of the “opt-out”. We have seen that all unitary patents (UP3) and classical European patents (EP) without opt-out will be subject to the jurisdiction of the UPC. It is now necessary to review what litigants involved in proceedings before the UPC should expect.
We will review the main features of proceedings before the UPC, as well as the different phases of a typical proceeding up to the judgment of the Court of First Instance. Possible actions to preserve evidence of infringement, as well as provisional actions to quickly stop a threatened infringement, will also be discussed.
Focus on some salient features of proceedings before the UPC
An overview of the UPC
The UPC is a new international and supranational civil court, and the first in the world entirely dematerialized, which will profoundly change patent litigation in Europe by simplifying and centralizing it. It will make it possible to obtain a decision valid on the territory of all the participating States. Thus, for disputes where acts of infringement take place in several States, a single action can be brought before the UPC (instead of an action before each national court where infringement is alleged), leading to a single decision having effect in all 17 participating States (and in the long term, in all EU Member States) – and even beyond in all States designated in the European patent in certain circumstances.
Organisation-wise, the UPC comprises a single Court of First Instance, a single Court of Appeal and a Registry4. The Court of First Instance consists of a central division based in Paris, with a section in Munich (and possibly also in Milan), and several local and regional divisions throughout Europe5. The Court of Appeal has its seat in Luxembourg6.
The UPC has a multinational composition and currently comprises a total of 85 judges: 34 legally qualified judges and 51 technically qualified judges7. The judges have been chosen after a highly selective process, resulting in the selection of judges with the highest level of expertise and proven experience in patent litigation. Many will initially serve on a part-time basis.
The Rules of Procedure of the UPC (UPC-RoP)8 provide that the final hearing on infringement and validity issues must be held within one year9. This period is counted from the date of receipt of the statement of claim by the Registry10.
The proceedings are pre-formatted, with the following steps:
To meet this timetable, the time limits in the written procedure are predetermined and very short, generally much shorter than the time limits traditionally granted before most national courts in the participating States.
Indeed, for an infringement action, the exchanges of pleadings during the written procedure are supposed to take place over a six- to nine-month period, as follows11:
For an action for revocation, the time limits are even shorter since the defendant must file its statement of defence within two months from the service of the statement for revocation. The statement of defence may include a counterclaim for infringement12.
8 The UPC-RoP are available at this link. 9 Preamble of the UPC-RoP, point 7. 10 Rule 17.4 UPC-RoP: “The action shall be regarded as having commenced before the Court as from the date of receipt attributed to the Statement of claim.” 11 Rule 23, Rule 29 (a)(b)(c)(d) UPC-RoP. 12 Rules 49, 51, 52 UPC-RoP.
After the written procedure, there is an interim procedure, during which the judge-rapporteur may take various steps that he or she deems necessary in preparation for the oral hearing. For example, he may ask the parties to provide explanations on specific points, answer specific questions, produce evidence and/or documents. The interim conference, if ordered, allows the judge-rapporteur to clarify the parties’ positions, establish a timetable, explore with the parties the possibilities of settling the dispute amicably, make orders regarding the production of evidence, etc. The judge sets the date for the oral hearing. The interim procedure must last 3 months13. The oral procedure consists of a one-day hearing14.
This time-limited proceedings before the UPC is an advantage for patentees, who will obtain a decision on the merits more quickly than before the national courts of the UPC participating States. For example, in France, it takes approximately 1.5 to 2 years to obtain a first decision on the merits of an infringement action with a counterclaim for revocation (assuming no procedural issue arises).
However, this will be a new challenge for the parties and their counsels, who will have to be very responsive throughout the proceedings. Plaintiffs, who can prepare their case several months in advance, should be less affected than defendants, who will have limited time to prepare their defence. They will only have three months to conduct a prior art search, find the grounds for invalidity of the patent(s), and formulate non-infringement arguments. However, as a matter of pragmatism, the UPC-RoP provide that the UPC judges will have discretion to apply the procedural rules “in a flexible and balanced manner”15 to organize the proceedings “in the most efficient and cost effective manner”16. This flexibility may consist in, for instance, extending time limits (even retroactively17) for complex actions, or allowing an exchange of further written pleadings18. But conversely, for simple actions, the Court may decide to shorten any time limit19. Only experience will show to what extent judges will use this flexibility in the early years of the UPC to keep it attractive.
It should be noted that before the UPC, the determination of the damages awarded to the successful party may be the subject of separate proceedings after the decision on the merits. Likewise, separate proceedings may be initiated for costs.
The requirement to “put everything on the table at the outset”
To meet the one-year deadline, the UPC-RoP require each party to present all its arguments and evidence in its first written pleadings (i.e., the statement of claim or the first statement of defence). Parties and their counsels will need to observe this requirement with great deal of care, because the potential consequences are drastic: the Court may disregard any step, fact, evidence or argument that a party has not taken or submitted within a time limit set by the UPC20. For any change of claim or any amendment to its case, a party will have to seek leave from the judge, and to provide reasons why the amendment could not be made from the outset (except for unconditional limitation of the claims, which will always be granted)21. In practice, this requires:
For the infringement plaintiff, to present all its infringement arguments in the first brief, along with all the evidence, offers of evidence, and proceedings to be taken to supplement the evidence. Strategically, it is therefore preferable to have all the measures of obtaining evidence carried out before the action is initiated, even though the judge-rapporteur may order them during the interim conference22.
For the defendant in an infringement action, to raise all its arguments of non-infringement as well as all his attacks on the invalidity of the patent in the first statement of defence. This means that the prior art searches will have to be carried out in a very short time, and that all the prior art will have to be submitted from the beginning.
13 Rule 101.3 UPC-RoP. 14 Rule 113 UPC-RoP. 15 Preamble of the UPC-RoP, point 4. 16 Preamble of the UPC-RoP, point 4. 17 Rule 9.3(a) UPC-RoP. 18 Rule 36 UPC-RoP. 19 Rule 9.3(b) UPC-RoP. 20 Rule 9.2 UPC-RoP. 21 Rule 263 UPC-RoP. 22 Rule 103 (a) and Rule 104 (e) UPC-RoP.
Fees before the UPC: a new parameter to take into account
As the UPC is supposed to be self-financing, all parties must expect to pay court fees. This is a major novelty for litigants, who, in some national jurisdictions such as France, do not have to pay any fee before initiating a patent action23.
The fees include fixed fees and, for certain actions, value-based fees, i.e., fees whose amount depends on the value of the action24. In its 8 July 2022 decision, the Administrative Committee set the fee amounts25 for the principal patent actions:
Fixed fees: 11,000 euros for an infringement action, a counterclaim for infringement or an application for provisional measures. For an action for revocation, the amount is 20,000 euros.
Value-based fees: they only concern certain actions (essentially infringement actions or the like, such as an action for declaration of non-infringement or an application to determine damages) and can vary from 2,500 euros for an action with a value of more than 500,000 euros, to 325,000 euros for action with a value of more than 50 million euros. The parties indicate in the statement of claim or defence the value of the action, which is then determined by the judge-rapporteur at the interim conference. The criteria for determining the value of the action are beyond the scope of this newsletter, and the parties and their counsels should refer to the guidelines of the Administrative Committee of the UPC to determine it.
To alleviate these fees, the Rules of Procedure provide for a 40% reduction for small enterprises and micro-enterprises26. In addition, partial refunds are provided for in case of withdrawal or settlement, the refunded amount depending on the stage of the proceedings: 60% before the closure of the written procedure, 40% before the closure of the interim procedure and 20% before the closure of the oral procedure27. If the case is heard by a single judge, a refund up to 25% is possible28.
It should be noted that these refunds may be refused “in exceptional cases” considering the behaviour of the party29. Conversely, the refunds may be increased in the same circumstances, up to 100% if they threaten the economic existence of a party30.
23 In France, the only exception (which is not specific to patents) is the 225€ stamp applicable to all appeal proceedings with compulsory representation. 24 Article 36 UPCA. 25 Administrative Committee – Table of Procedural Costs – Decision of July 8, 2022 available under this link. 26 Rule 370.8 UPC-RoP. 27 Rule 370.9 (b) (c) UPC-RoP. 28 Rule 370.9 (a) UPC-RoP. 29 Rule 370.9 (e) UPC-RoP. 30 Rule 370.10 UPC-RoP.
Legal costs
Like before the French courts, the legal costs (including lawyers’ fees, experts’ fees, witnesses’ fees, etc.) of the winning party will generally be borne by the losing party before the UPC31. However, we note two novelties compared to French practice:
In cases where a party is only partially successful, the UPC may decide that the costs will be divided equally between the defendant and the plaintiff, or that each party will bear its own costs.
After the decision on the merits, and if applicable, a decision on the determination of damages, the successful party may also obtain a decision on costs in a separate procedure32.
The reimbursement of legal costs in the context of this decision on costs will be subject to ceilings set by the Administrative Committee, which depend on the value of the action (which must therefore also be determined for an action for revocation)33. Without going into detail, it should be noted that, depending on the value of the action, the ceilings vary between 38,000 euros and 2 million euros. As an exception, in limited situations – e.g., in complex cases or when several procedural languages have been used – the UPC may, upon request of a party, increase the ceilings by 50% (for a value of litigation up to 1 million euros) and by 25% (for a value of the action between 1 million and 50 million euros) and up to 5 million euros for cases with a value of the action greater than 50 million euros. The UPC may also lower the applicable ceilings on the costs to be reimbursed when the reimbursement of such costs by the losing party would threaten its economic existence, particularly where the losing party is an SME, an NGO, a university, a public research organization or a natural person.
Means of evidence before the UPC
The UPCA lays down general rules on evidence and facts. The following principles are worth noting for litigants and their counsels:
The UPC will base its decisions only on the facts and evidence submitted by the parties or introduced into the proceedings by order of the Court34.
The representatives of the parties must be fair in presentation of the facts and evidence since they must not misrepresent points of law or facts to the UPC knowingly or with good reasons to know35.
31 Article 69.1 UPCA. 32 Rule 150 UPC-RoP. 33 A draft decision in this sense (archived link) had been elaborated by the JUB preparatory committee, but is not yet finalized. 34 Article 76.2 UPCA. 35 Article 48.6 UPCA.
If an alleged fact is not specifically contested by a party, the fact will be held to be true between the parties36. Therefore, each fact alleged by the opposing party must be contested, or else it will be considered true by the UPC. If a party relies on a contested fact, it will therefore have to produce evidence in support of its allegation37.
Since the burden of proof is on the party relying on a given fact, any party will have the right to ask the Court to order the opposing party or a third party to produce evidence that is within their control38.
As far as means of evidence are concerned, the UPC offers a very complete range of tools at the disposal of users39: hearing the parties, requests for information, production of documents, hearing witnesses, opinions of experts, inspection of premises, comparative tests or experiments, and sworn statements in writing (affidavits). Some of these means of evidence are new for French practitioners, such as the hearing of witnesses and parties, and may be well worth using.
Varied and numerous means of evidence are available, presumably to enable judges of different nationalities and sensibilities to conduct the proceedings in a manner similar to their national practice. It will be interesting to see to what extent the central, local, and regional divisions of the UPC will develop a unified approach to the use of these various means of evidence, or whether local practices will develop.
The UPC-style seizure: as attractive as the French saisie-contrefaçon?
In France, as in Belgium and Italy, the saisie-contrefaçon is currently the most important proceedings to obtain evidence of the infringement. Most infringement actions start with this measure, because it is efficient and has a moderate cost. On the other hand, seizures are little used in Germany or in the Netherlands. Will the same be true with the UPC?
The equivalent of the saisie-contrefaçon (or preservation order) is provided for in Article 60 of the UPCA, which provides that the Court may, even before the commencement of an action on the merits, order prompt, provisional measures to preserve evidence in respect of the alleged infringement. These measures may include a detailed description (with or without the taking samples) or a physical seizure of the allegedly infringing products. To be valid, the UPC seizure must be followed by an action on the merits within 31 calendar days or 20 working days (as is the case with the saisie-contrefaçon proceedings we know in France).
Although the two are in some extent similar, the seizure before the UPC is different from the French saisie-contrefaçon. We do not provide here a detailed comparison between the two types of seizure and their respective advantages and disadvantages (which may be discussed with your counsel), but it should be noted that:
The UPC seizure has a very broad territorial scope since a seizure measure can be enforced in several UPC participating States, which makes it a valuable means of evidence for disputes where the infringing acts occur on the territory of several States.
The UPC seizure is in principle adversarial: if the plaintiff wants the seizure to be ordered without the other party (the defendant) being informed, he will have to state the reasons why they should not be heard40 (e.g., that any delay would cause irreparable harm, there is a risk of destruction or concealment of the evidence, there is a need to resort to the effect of surprise, etc.). However, even if the plaintiff has requested that the defendant not be heard, the UPC may decide to inform the defendant of the application for a seizure and invite them to file an objection to the application41. Fortunately for the plaintiff, if the UPC decides to inform the defendant, it must first give the plaintiff an opportunity to withdraw the application, which can then remain confidential.
The UPC seizure “gives the defendant a voice” with the “protective letter” system, which is a major change compared to the familiar saisie-contrefaçon. Provided for in Rule 207 of the Rules of Procedure, this system allows a potential defendant to any provisional measures (and therefore to a seizure) to file a protective letter with the Registry, in which he or she sets out the reasons why the measure should not be ordered. Unlike an application for a preliminary injunction, we believe it is unlikely that a protective letter will be a determining factor since the seizure is an evidentiary measure. However, it may influence the extent of the relief that the judge will be inclined to grant, and especially to encourage the use of trade secret protection measures.
The UPC seizure report is limited to the UPC: unlike the French saisie-contrefaçon, in which the report can be used in any proceedings, including foreign proceedings, the UPC seizure report can only be used in the context of a UPC proceedings on the merits42, unless otherwise specified by the Court.
In summary, although it has an advantage in terms of its territorial scope, the UPC seizure not as easy to implement for patentees as the French saisie-contrefaçon. Only time will tell whether this means of evidence will be actually used by the parties, and whether certain divisions will be more inclined to reinforce its effectiveness by using it ex parte.
Interim injunctions
For situations where the infringement must be stopped quickly (and well before a decision on the merits is made within a year) it will be possible to seek injunctive relief against a suspected infringer.
The injunctions are intended to43:
prevent any imminent infringement,
provisionally prohibit the continuation of the alleged infringement,
to make the continuation of the alleged infringement subject to the lodging of guarantees to ensure the compensation of the patentee.
The UPC may order a preliminary injunction against the defendant, seizure or delivery of the suspected infringing products to prevent their circulation, seizure of the defendant’s movable and immovable property, including the blocking of his bank accounts, as well as an interim award of costs44.
The application for provisional measures must be reasoned and very detailed. The applicant must set out the requested measures, explain why provisional measures are necessary to prevent a threatened infringement or the continuation of the alleged infringement45, and why its interest in obtaining such measures should prevail over the interests of the defendant46. He will also have to provide sufficient evidence to convince the judge that he owns a valid patent and that the patent is infringed or likely to be infringed47.
In the case of a non-adversarial (i.e., ex parte) application, the reasons why the defendant should not be heard must be explained (as in the case of seizure for infringement). A high duty of loyalty on the part of the plaintiff is expected by the UPC: the applicant has a duty to disclose any material fact of which he is aware that could influence the UPC in its decision to issue an order without hearing the defendant as well as any pending proceedings or unsuccessful attempts in the past to obtain provisional measures based on the same patent48.
It should also be noted that – as with the seizure – even if the applicant has requested that the defendant not be heard, the UPC may decide to inform him of the application for provisional measures and invite him to file an objection to the application, convene the parties to a hearing (with or without the presence of the defendant)49. Only in cases of extreme urgency, the UPC may immediately decide on the application.
In ruling on the application for provisional measures, the UPC will consider in particular:
the apparent validity of the patent, i.e., whether it has been upheld in opposition proceedings or whether it has been the subject of proceedings before any other court;
the urgency of the matter;
whether the respondent was heard;
whether a protective letter has been filed. We have seen above that any person who believes that a request for provisional measures against him or her is likely to be filed soon can file such a letter50, which is likely to be of much greater interest in the matter of a preliminary injunction.
It should also be noted that the UPC may decide to summon the parties to an oral hearing. The decision may be delivered orally to the parties at the closure of the oral hearing, or in writing as soon as possible after the closure of the oral hearing51. If an action on the merits is not initiated within 31 calendar days or 20 working days from the date set by the UPC in its order, the respondent may request revocation of the provisional measures52.
For more information on your strategic options for proceedings before the UPC, we invite you to contact our teams.
As mentioned in our first Newsletter of 12 December 2022, it is now official: the UPC should open its doors and receive its first cases on 1 June 2023, i.e., two months later than the previously announced date of 1 April 20231. This second Newsletter will explain the strategic implications of the “opt-out” for European patent proprietors and European patent applicants.
The third Newsletter (to be published next month) will focus on the stakes, in particular from the procedural viewpoint, of the setting up of the UPC, which will lead to radical changes in litigation, in particular with regard to the (very short) time limits for judgment, damages, injunctions, etc.
Basic principles: UPC jurisdiction and opt-out
In the participating States2, the jurisdiction of the UPC may be summarized as follows:
As a general rule, all unitary patents (UP3) and classical European patents (EP) are subject to the jurisdiction of the UPC.
However, during a 7-year transitional period4 from the date of entry into force of the Unified Patent Court Agreement (UPCA)5:
National courts or authorities will still have jurisdiction over an action for infringement or revocation of an EP patent6. In other words, during this period, the UPC and national courts will have concurrent jurisdiction over EP patent litigation: patentees will be able to choose to defend their EP patents, and third parties will be able to choose to attack these, either before the UPC or before a national court.
EP patent proprietors and EP patent applicants may decide to opt out from the UPC’s jurisdiction.7
By exercising the opt-out, EP patents will no longer be subject to the jurisdiction of the UPC; only national courts will have jurisdiction.
The opt-out may be withdrawn at any time (i.e., even after the end of the transitional period), provided that no action has already been brought before a national court in respect of the patent or SPC at issue8. This action, commonly called the “opt-in”, is irrevocable.
In non-participating States (see our previous Newsletter), EP patents remain subject to the exclusive jurisdiction of national courts.
1The UPC press release is available on this official link. 2 Currently 17 EU Member States: Portugal, France, Belgium, Luxembourg, The Netherlands, Italy, Germany, Denmark, Austria, Slovenia, Sweden, Finland, Estonia, Latvia, Lithuania, Bulgaria, and Malta. 3 European patent with unitary effect, referred to as a Unitary Patent (UP) for simplicity. 4Which may be extended for another 7 years, after consultation by the UPC Administrative Committee with the users of the system, 5 years after the entry into force of the UPCA (Article 83.5 UPCA). 5The UPCA is available at this link. It is scheduled to take effect on 1 June 2023. 6Article 83.1 UPCA. 7Article 83.3 UPCA. 8Article 83.4 UPCA.
Essential practical principles on the opt-out
The exercise of the opt-out is subject to several conditions that should be borne in mind:
An opt-out is only possible for EP patents and for published EP patent applications9. There is no opt-out for a UP. The opt-out applies to all participating States designated in the EP patent; therefore, if a UP is granted, it will never be possible to make an application to opt out, even for those participating States which are not covered by the UP due to having joined the UPCA after the UP has been granted.
It is no longer possible to opt out in case an action has already been brought before the UPC (in this case, the patent is forever “locked-in” in the UPC system).10
An application to opt out may be made in advance, at the earliest 3 months before the entry into force of the UPCA, during the so-called “sunrise period”11, which will start on 1 March 2023. This option to opt out early ensures that patent proprietors and patent applicants can avoid being “locked-in” in the UPC system, which would happen if a third party were to bring an action before the UPC on 1 June 2023 at 00:01.
The application to opt out may still be made after the entry into force of the UPCA, at any time and at the latest 1 month before the end of the initial 7-year transitional period12.
Applications to opt out must be filed with the Registry of the UPC, via the “UPC Case Management System” (CMS). It is recommended to act through an authorized representative, such as a lawyer or a European patent attorney, due to the subtleties related to this application which will be explained in the following.
When the EP patent (or patent application) is owned by several persons, all proprietors (or applicants) must file the application to opt out simultaneously13. Otherwise, the opt-out is invalid. If the person filing the application to opt out is not recorded as the proprietor or applicant in the (EPO or national patent office) registers, he must file a declaration to the effect that he is the proprietor of the EP patent or patent application.14
If no action has been brought in the meantime before a national court15, the opt-out may be withdrawn at any time, i.e., the EP patent (or patent application) will be placed under the concurrent jurisdiction of the UPC (and ultimately the exclusive jurisdiction of the UPC, at the end of the transitional period). This is called the “opt-in”. A new opt-out cannot be made after an opt-in16. All the proprietors (or applicants) of the patent (or patent application) must simultaneously withdraw the opt-out, for the withdrawal to be valid17. The withdrawal is therefore no longer possible if a national action has already been initiated: in this case, the patent is “locked-out”.
Since the UPC Registry will not perform any identity checks regarding applications to opt out or to opt in, some stakeholders have expressed concern about the risk of illegitimate and/or fraudulent opt-outs or opt-ins, which could expose a patent to action before the UPC or a national court against the wishes of the patent proprietors or patent applicants. The Rules of Procedure of the UPC (UPC-RoP) have been amended to address these concerns, via Rule 5A, which provides for a simplified and fast procedure with the Registry to have an unauthorized opt-out or opt-in removed upon reasoned request18.
The application to opt out will become effective upon entry in the Register by the Registrar19. Unless the opt-out is withdrawn, it will remain in effect for the entire term of protection of the EP patent. In other words, it will continue even after the end of the 7-year transitional period.
9 Rule 5.1 of the Rules of Procedure of the UPC (UPC-RoP) available at this link. 10 Article 83.3 UPCA. 11 Provided for in Rule 5.12 UPC-RoP. 12 Article 83.3 UPCA. 13Rule 5.1 (a) (1st sentence) UPC-RoP. 14Rule 5.1 (a) (2nd sentence) UPC-RoP. 15Article 83.4 UPCA. 16Rule 5.10 UPC-RoP. 17Rule 5.7 UPC-RoP, by reference to Rule 5.1 (a). 18Rule 5A UPC-RoP. 19Article 83.3 (last sentence) UPCA.
How to stand towards the opt-out?
As of 1 March 2023, patent proprietors and patent applicants will have to choose between two stances toward the opt-out:
Do nothing, in which case all their EP patents and patent applications will be subject to the concurrent jurisdiction of the national courts and the UPC in the participating States; or
File an application to opt out, for some or all the EP patents and patent applications in their portfolio, to exclude them from the UPC’s jurisdiction.
To assist in this choice, it is necessary to discern the advantages and disadvantages of being subject to the jurisdiction of the UPC.
The UPC will allow a centralization of patent litigation, with many advantages for patent proprietors and patent applicants:
For transnational infringement litigation, it will be possible to bring a single infringement action before the UPC (instead of an action before each national jurisdiction where the infringement is alleged, as is currently the case), leading to a single ruling valid in all UPC participating States at the same time (i.e., initially 17 countries, and probably 25 or even 27 countries in the near future) with substantially reduced procedural costs;
In general, the UPC should rule in patent cases faster (proceedings before the UPC are supposed to last one year20) than national jurisdictions;
It will finally be possible to obtain transnational prohibition measures, as is already the case for European trademarks and designs;
The damages for infringement will be substantially higher (as the compensated acts of infringement will cover all UPC participating States);
The UPC affords its users a variety of means of evidence21 to prove the alleged infringement (seizure or forced production of documents, opinions by experts, hearings of parties and witnesses, comparative tests and experiments);
As soon as litigation before the UPC will be unified, one may hope for a greater harmonization at the European level, which will contribute to increase legal security. This is even more the case since the rulings of the UPC will be rendered by panels of judges selected among the most experienced in patent litigation in Europe, which panels will almost systematically include a technical judge specialized in the technical field of the patent (generally a European patent attorney or a former patent examiner).
Although it has yet to prove itself, the UPC should be a powerful tool for patentees, providing them with a one-stop shop for defending their patent(s) more effectively.
If one disadvantage of the UPC had to be mentioned – and it is quite important –, it is certainly that patent proprietors will risk central revocation of their patent. Indeed, with the UPC, a third party will be able to bring a single action for revocation before the central division22 (or before the local divisions, as a counterclaim to an infringement claim23) and have the patent revoked in all the participating States at once. However, this risk must be considered in context: a European patent can already be opposed at the EPO, within a 9-month period following its grant. The only difference is that this central attack will be possible at any time.
Nevertheless, as a hedge against this risk, it will be possible for patent applicants in some participating States, including France and Germany, to further secure their invention by “double patenting”. In other words, as of 1 June 2023, patent applicants will be able to obtain double protection for the same invention, via (i) a French national patent and (ii) a UP or an EP patent that has not been opted out24. This new system is a major advance for patent applicants; it contrasts with the current situation, where a French patent cannot coexist with an EP patent validated in France, as the former ceases to have effect to the extent it covers the same invention as the EP patent25, if the latter survives opposition proceedings, or at the end of the 9-month opposition period if no opposition is filed. Double patenting will allow patentees to retain protection by a national patent if the EP patent is revoked by the UPC, and thereby to reduce their risk of “putting all their eggs in the same basket”, so to speak.
20Preamble of the UPC-RoP, point 7. 21 Article 53 UPCA. 22 Article 33.4 UPCA. 23 Article 33.3 UPCA. 24 Please note that the rules of double protection will vary according to the country: see our previous newsletter on this subject available on this link. 25 Article L. 614-13 of the French Intellectual Property Code, as currently in force.
Opt-out or no opt-out: how to choose ?
Although the UPC has many advantages, the fact that it is a new jurisdiction – whose multi-national judges have yet to build up a unified body of jurisprudence – may lead some EP patent proprietors and patent applicants to legitimately wonder whether it is appropriate to opt out, to “wait and see” and avoid being involved in the UPC’s “shakedown tests”.
However, it should be borne in mind that the UPC has a so-called “long arm jurisdiction”: any party can be sued before the UPC by other patentees, even if it has opted out each and every one of its own EP patents. Such a party would suffer the disadvantages of the UPC (reduced defence time compared to the claimant, unfamiliarity with the functioning of the Court), without any of the claimant-side advantages (injunction and pan-European damages within a judgment period of about one year).
Therefore, a reasoned choice should be preferred, on a case-by-case basis and considering all strategic parameters.
To facilitate this reflection, we provide below a non-exhaustive list of criteria that may weigh for or against opting out:
The strategic value of the invention covered by the patent and the company’s litigation strategy If the patent application or patent covers a technology which is strategically important for the company, staying in the UPC system will allow to effectively defend this patent in case of infringement and to benefit from a ruling having effect in all UPC participating States, with higher damages for infringement. A positive ruling from the UPC could also have an indirect “domino effect” on the resolution of disputes in other jurisdictions.
The strength or weakness of the patent or patent portfolio Patent proprietors or patent applicants may be tempted to opt out weak patents, i.e., patents whose validity they know could easily be challenged before the UPC. On the other hand, if they know that their patents are strong in terms of validity (especially if they have already survived litigation or opposition proceedings before the EPO), the risk of a central revocation before the UPC is lower, and opting out may not be relevant.
The market position of the patent applicant or patent proprietor vis-à-vis its competitors Some patent proprietors may think that the safest solution is to opt out most or all the patents in their portfolio. Apart from the fact that this approach will require filing an opt-out whenever a new EP patent application is filed, it will be necessary to act quickly, because opting out is possible only if no action concerning the EP patent in question has already been brought before the UPC, including by a third party. If a patent is fragile and/or if its proprietor fears that one of his competitors will bring a revocation action before the UPC, he will have to make an application to opt out as soon as possible after the patent application is published, so that an action from a competitor before the UPC26 cannot block the possibility of exercising an opt-out.
On the other hand, proprietors who plan to opt out some or all of their patents and rely on the possibility of withdrawing the opt-out (i.e., opting in) just before bringing infringement proceedings before the UPC, should keep in mind the risk of being “locked-out”. Indeed, a competitor could thwart this strategy simply by initiating national proceedings27 concerning the relevant patent(s) in any participating State prior to the withdrawal of the opt-out.
In an opt-out has been made, if the patent proprietor intends to initiate an action before a national court because the infringement is confined to the territory of a single State, he will have to make sure to opt in beforehand, if he wants to avoid preventing himself from filing an action before the UPC later on in case transnational infringement is detected.
Whether or not to allow the UPC to have jurisdiction over a company’s patents will depend on the situation of the company, or even of each patent. A global strategic reflection with regard to the opt-out should be carried out now with your counsels, in order to be ready for the launch of the UPC.
How to prepare between now and 1 March 2023?
Patent applicants and patent proprietors should prepare now for the launch of the UPC. To this end, we recommend:
Defining a strategy towards the opt-out, by choosing whether to stay in the UPC system or to leave it.
In the event it is decided to opt out (and with the assistance of your counsel):
Defining the list of patents to be opted out.
Obtaining consent from all proprietors or applicants of the patents to be opted out, as they must all file the application to opt out.
Checking that they are all registered as patent proprietors (or patent applicants) in all European States where the patent is in force (or the patent application is filed).
If a license agreement exists on a patent to be opted out, reviewing the agreement for any applicable UPC and opt-out clauses, including whether consent from the licensee is required.
More generally, all contracts concerning EP patents (R&D contracts, consortium contracts, collaboration contracts, etc.) must be audited to examine how the UPC will impact them, and if necessary to amend them – to settle in advance questions such as filing a UP, double patenting, filing an opt-out or opt-in, initiating an action before a national jurisdiction or the UPC, etc.
Considering filing a national patent (or keeping it in force) in addition to an EP or UP patent, to obtain double patent protection for the invention.
26See Article 32.1 UPCA – by bringing, for example, an action for revocation, an action for declaration of non-infringement, or an action for provisional and protective measures and injunctions. 27 E.g., an action for declaration of non-infringement, an action for revocation, or an action for provisional and protective measures and injunctions; these may be brought even in respect of a EP patent application (Rule 5(6) UPC-RoP).
The entry into force of the Agreement on a Unified Patent Court (UPCA) of 20 June 20131 is now only subject to ratification by Germany (which has already signed the UPCA).
On 5 December 2022, the Unified Patent Court (UPC) announced2 that it will start operating as of 1 June 2023, i.e., two months later than the originally scheduled date of 1 April 2023. In turns, implies that the “sunrise period” will start on 1 March 2023 instead of 1 January 2023.
On the other hand, the European Patent Office (EPO) has announced3 that the starting date of the EPO transitional measures remains 1 January 2023.
The establishment of the UPC will, in the short to medium term, lead to a major revolution in patent litigation in Europe and thus in European patent strategy.
The entry into force of the Agreement will also automatically entail the entry into force of Regulation (EU) No 1257/2012 of 17 December 2012, creating the so-called unitary patent4, in accordance with Article 18 of the Regulation.
To anticipate these important changes, we will devote three consecutive newsletters to this topic:
The first, namely this one, is dedicated to the unitary patent, 1/3
The second will focus on the opt-out, in particular to explore the strategies to be implemented during the sunrise period from 1 March to 31 May 2023, 2/3
The third part will be devoted to the challenges, particularly from the procedural viewpoint, of the establishment of the UPC, which will lead to radical changes in the litigation process, particularly with regard to the (very short) time limits for judgment, damages, injunctions, etc. 3/3
1) What is a unitary patent?
As most of you know, the European patent is not, contrary to what its name might suggest, a legal right of European scope, unlike trademarks or EU designs. Indeed, while the examination procedure (including opposition) is unified before the EPO, in accordance with the European Patent Convention (EPC)5, the European patent must then undergo national validation in each EPC member country in which the patentee wishes to have protection, and each of the national validations constitutes a separate legal right.
This system has a number of practical consequences, particularly from the financial and administrative viewpoints (namely, each national validation is subject to fees and representation costs, and the renewal fees, once the examination procedure has been completed, must be paid in all the States in which a validation is to be maintained) and from the procedural viewpoint (legal actions must be brought before national courts and have effect only for the territory of the State in question, each validation of the same European patent may be independently licenced or assigned).
The unitary patent (i.e., the European patent with unitary effect) has been created to eliminate this complexity, by creating a genuine, unified legal right in all EU Member States participating in the enhanced cooperation6, which legal right will fall under the exclusive jurisdiction of a supranational court, namely the UPC.
1 The agreement is available on this official link. 2 The notice from the UPC is available on this official link. 3 The notice from the EPO is available on this official link. 4 Regulation 1257/2012 is available on this link. Please note that this regulation is accompanied by Regulation 1260/2012 on translation arrangements, available on this link. 5 The EPC of 5 October 1973, including its revisions, is available from this link. 6 Enhanced cooperation is a mechanism whereby a group of at least nine EU Member States is allowed to create legal instruments in a particular area within the EU, to enable it to make faster progress in that area than other Member States, which may decide to stay out or join at a different pace.
In other words, the unitary patent will be managed by a single patent office, i.e., the EPO. There will be no more validation formalities, and a single renewal fee will be need to be paid, to the EPO7. In addition, court decisions will be valid for the territory of all participating Member States and no longer only for the territory of one State. For example, a single ruling will be sufficient for deciding the validity of the unitary patent in all the participating States, while infringement can be recognised in the same way throughout the territory in question. In addition, it will finally be possible to obtain a transnational prohibition measure, like with European trademarks or designs8.
It is important to note that the unitary patent and the UPC are EU mechanisms, which is not the case for the European patent, which may cover up to 44 states (i.e., EPC member states, and extension or validation states), among which many non-EU states such as Switzerland, Turkey, and the UK:
7 The amount of the renewal fees for the unitary patent should correspond to the average amount of renewal fees for a classic European patent validated in 4 countries. See Article 12.2.c) of Regulation 1257/2012. 8 It should be pointed out that certain actions will remain within the jurisdiction of the national courts even for a unitary patent, namely those which do not fall within the substantive jurisdiction of the UPC: these include actions relating to a contract (e.g., a licence agreement), ownership or employee inventions. In this case, the action must be brought before the competent court under the Brussels 1bis Regulation.
Naturally, the unitary patent will not have effect in those states which are members of the EPC but not of the EU. Nor will it have unitary effect in the two EU Member States which do not participate in the enhanced cooperation which led to Regulation 1257/2012 (i.e., Croatia and Spain), or in the eight others which participate in the enhanced cooperation but have not yet ratified the UPCA (i.e., Poland, Cyprus, the Czech Republic, Greece, Hungary, Ireland, Romania, and Slovakia).
In all these countries, the European patent will remain a classic European patent, without unitary effect, with the usual consequences (validation formalities country by country with possible translation, payment of annuities at national level, jurisdiction of national courts, etc.).
As of the date of writing this newsletter, the unitary patent will therefore cover 17 EU Member States9:
9 Portugal, France, Belgium, Luxembourg, Netherlands, Italy, Germany, Denmark, Austria, Slovenia, Sweden, Finland, Estonia, Latvia, Lithuania, Bulgaria, and Malta.
The 8 states already participating in enhanced cooperation will probably join the club of 17 soon, leading to a single territory of 25 states (and even Spain might decide to join enhanced cooperation during the Spanish Presidency of the EU, in the second semester of 2023):
However, the territorial scope of the unitary patent will be determined as of the date of registration of that unitary effect at the EPO10. In other words, it is not intended to extend the unitary effect of a previously granted patent to States which join the UPCA after such registration.
2) How to obtain a unitary patent?
Nothing changes in the filing and examination procedures before the European Patent Office (EPO). The unitary patent, or rather the unitary effect of the European patent, arrives as a new, optional option that can be activated for any European patent that will be granted after the date of entry into force (which is expected to be 1 June 2023, according to the latest announcements).
In practice, the request for unitary effect is a simple formality, which must be carried out by the applicant or his representative within one month11 of the decision to grant the European patent. It will be sufficient to have the unitary effect recorded in the European Patent Register (the request is not subject to a fee12).
Article 6 of Regulation (UE) 1260/2012 provides for a transitional period of 6 years (renewable for two years) during which the request for unitary effect must include a translation of the full text of the patent:
either into English, if the patent is in French or German (this English translation will usually already be available, for example when equivalent patent applications have been filed outside Europe),
or into any other official language of the EU, if the patent is in English.
10 Article 18.2 second paragraph of Regulation 1257/2012. 11 Article 9.1.g) of Regulation 1257/2012 and Rule 6 of the Rules relating to Regulation 1257/2012, adopted on 15 December 2115, available at this link. Note that re-establishment of rights regarding the unitary effect is available in accordance with Rule 22 of the Implementing Regulation. 12 Rule 5.II.5 of the above-mentioned Rules.
The aim is to achieve a reliable system of automatic translation of patent texts into all official EU languages by the end of this transitional period.
While the translation formalities are thus clearly reduced compared to a classic European patent with national validation13 , it should nevertheless be stressed that in the event of a trial (i.e., before the UPC), the patentee will be obliged to provide, at his own expense:
In the case of infringement proceedings, a translation either into the language of the State where the alleged infringement took place or into the language of the State where the infringer is domiciled, at the infringer’s choice14,
A translation into the official language of the court, upon request from the Court15. In practice, this will be limited to actions falling within the jurisdiction of the local and regional divisions of the UPC16, as the language of proceedings of the central division will be that of the patent17.
***
Two other transitional measures should also be mentioned:
Early requests for unitary effect, i.e., requests may be filed even before the entry into force of the UPCA, as from ratification by Germany18.
Requests for delay in issuing the grant decision until the date of entry into force of the UPCA, for European patent applications under examination19. Again, this option will be available from the date of ratification of the UPCA by Germany.
The request for delay must be filed following the notification under Rule 71(3) EPC (notification of text and bibliographic data), but before or at the same time as the applicant’s agreement to the text of the patent.
Both possibilities will be available from 1 January 2023, until 31 May 202320.
In practice, it will be worthwhile to file the request for delay, in order to have enough time to decide, on a case-by-case basis, whether it is relevant (from a strategic viewpoint) to request unitary effect, or to retain the concurrent jurisdiction of the national courts and the UPC, or, alternatively, to opt-out, in order to escape the jurisdiction of the UPC. Therefore, an early request for unitary effect should only be considered after a strategic and opportunity study has been carried out.
13 As a reminder, despite the London Protocol whereby some countries have partially waived translation requirements, it is often still necessary to provide a translation in the official language of at least the claims (Albania, Croatia, Denmark, Finland, Hungary, Iceland, Latvia, Lithuania, Macedonia, the Netherlands, Norway, Slovenia and Sweden) or even of the whole patent (Austria, Bulgaria, Czech Republic, Greece, Estonia, Spain, Italy, Poland, Portugal, Romania, Serbia, Slovakia, Turkey). Details are available on this link. Note that the London Protocol does not apply to translation requirements in the event of litigation. 14 Article 4.1 of Regulation 1257/2012. 15 Article 4.2 of Regulation 1260/2012. 16 Articles 32 and 33 of the UPCA determine the competence of the different divisions. 17 Article 49.6 of the UPCA. 18 Notice from the EPO dated 22 December 2021 available on this link. 19 Decision of the President of the EPO dated 22 December 2021 available on this link. 20 Notice from the EPO dated 6 December 2022 available on this link.
3) Why consider requesting unitary effect ?
Since this is an optional choice, the question arises as to whether an applicant should make use of the unitary patent.
Multiple benefits can be expected from the unitary patent:
Less administrative workload, by eliminating the currently existing formalities (notably representation) before the national patent offices, and therefore the corresponding costs, which typically amount to a few hundred euros per country.
Decreased translation costs, by doing away with the currently required translations of the European patent into the national languages, of the full text (Italy, Portugal, Austria) or of the claims only (Netherlands, Sweden, Denmark, etc.).
Possibly lower renewal fee costs: the cost of the flat rate renewal fee is equivalent to about 4 national renewal fees, for a territorial coverage equal to 17 countries.
Double protection is possible by means of a national patent, in those states which allow it (i.e., France21, Germany, Denmark, Hungary, Austria, Estonia, Finland, and Sweden22).
The map below summarises the situation on double patenting.
21 Article L. 614-13 of the French Intellectual Property Code, as currently in force; provides that a French patent ceases to have effect from the expiry of the opposition period on a European patent covering the same invention: this is the classic prohibition of double patenting. The future amended Article L. 614-13-II of the French Intellectual Property Code, which will come into force at the same time as the UPCA, provides, on the other hand, that a French patent covering the same invention as a ”classic” European patent will continue to produce its effects, in the absence of an opt-out. Similarly, Article L. 614-16-3, applicable only to unitary patents, also allows a French patent covering the same invention as a unitary patent to continue to have effect. In France (and in Germany, which has the same rules), double patenting is therefore a benefit granted to European patent holders who accept the jurisdiction of the UPCA. 22 According to the questionnaire SC/3/22 Corr 1 published by the EPO on 21 March 2022 available on this link. It should be noted that Estonia will only allow dual protection for the unitary patent, to the exclusion of the classic European patent even in the absence of an opt-out. In contrast, Denmark, Hungary, Austria, and Sweden allow double protection for a classical European patent even in case of an opt-out.
Position of the States participating in the enhanced cooperation regarding double patenting (i.e., cumulation of European and national patents)
***
Meanwhile, the main disadvantages of the unitary patent (during the 7-year transitional period23 of the entry into force of the UPCA) are:
Opt-out cannot be requested (including for the 10 other Member States not yet participating, which would join the UPC at a later date, as a European patent can only be opted out for all the countries24), and therefore it is not possible to escape the jurisdiction of the UPC, in particular to escape a central invalidity attack beyond the opposition period (9 months after grant);
It is not possible to benefit from the concurrent jurisdiction of the national courts and the UPC. Indeed, small disputes confined to one country could be more efficiently pursued before a national court.
23 According to Article 83 UPCA, this transitional period can be extended for up to 7 more years. 24 Article 44 of the UPCA and Rule 5(1)(b) of the Rules of Procedure of the UPC.
Opt-out and the issues related to the UPC litigation will be explored in our next two newsletters on the subject.
4) Link between unitary patent and SPC
As the unitary patent is a patent which has effect in the territory of at least one Member State, it may constitute a basic patent within the meaning of Article 2 of Regulation (EC) No 469/2009 on Supplementary Protection Certificates (SPCs) for medicinal products. The same applies to Regulation (EC) No 1610/96 on plant protection products.
In fact, SPCs are explicitly referred to in the UPCA25.
However, it is not currently possible to obtain unitary effect for an SPC in the same way as for a European patent, as there is no regulation providing for this. The European Commission is currently working on draft provisions for a unitary SPC26, but no concrete proposal has yet been made. This means that SPCs will still be national legal rights granted by the offices of each state when the unitary patent and the UPCA come into force.
However, the UPC does have jurisdiction over SPCs27 in the same way as for any European patent. More specifically, the SPC follows the fate of the basic patent: if the latter is the subject of an opt-out, then this opt-out extends de jure to all national SPCs based on this patent28. Conversely, opt-out is not possible for an SPC based on a unitary patent29 or on a European patent which has already been the subject of an action before the UPC30. Similarly, opt-out limited to the SPC is not possible, irrespective of the situation of the basic patent (e.g., in the case where the basic patent has already expired at the date of entry into force of the UPCA).
The situation of SPCs is therefore special:
They are national legal rights, granted and managed by the national offices. In the event of a decision to refuse an application for a SPC, the courts of the Member States will continue to have jurisdiction to hear an appeal.
But SPCs are subject to the jurisdiction of the UPC, except in the case of an opt-out of the basic patent, which is impossible in the case of a unitary patent.
The question arises whether the territorial scope of a SPC based on a unitary patent might differ from that of an SPC based on a classical European patent. Indeed, some authors have invoked Article 30 of the UPCA31 as well as Article 5 of the SPC Regulation32 to argue that an SPC based on a unitary patent should also have unitary scope.
25 See in particular Articles 2h) and 30. 26 In particular, it issued a call for evidence in March 2022 available on this link which could lead to a proposal for a regulation in the near future. 27 Article 3b) of the UPCA. 28 Rule 5.2 of the UPC Rules of Procedure available at this link. 29 Rule 5.2(d) of the UPC Rules of Procedure. 30 Rule 5.6 of the UPC Rules of Procedure, together with Rule 5.2 c). 31 “A supplementary protection certificate shall confer the same rights as conferred by the patent and shall be subject to the same limitations and the same obligations.” 32 “Subject to the provisions of Article 4, the certificate shall confer the same rights as conferred by the basic patent and shall be subject to the same limitations and the same obligations.”
However, this interpretation seems difficult to reconcile with the SPC’s status as a national legal right. Moreover, an SPC is by nature dependent on a marketing authorisation (MA), which may be a purely national MA. Such a unitary effect would create a significant legal risk for third parties, who would then have to verify the existence of national SPCs in all UPC member states, as well as potentially their national MA, which may be in many different languages. It seems more reasonable to us to consider, as the majority opinion does, that an SPC will only have an effect limited to the territory of the issuing State, even when it is based on a unitary SPC.
***
The disadvantages of a SPC based on a unitary patent include:
It falls within the exclusive competence of the UPC,
It cannot be the subject of an opt-out,
An invalidation of a national SPC due to the invalidity of the unitary patent (or of the European patent without opt-out) on which it is based is likely to lead to the invalidity of other SPCs granted on the same basis in the other UPC participating States, by way of consequence, because a decision of invalidity handed down by the UPC extends to the territory of all UPC participating States33
The advantages of a SPC based on a unitary patent (or a European patent without an opt-out) include:
An action may be brought before the UPC on the basis of all national SPCs issued in the UPC participating states simultaneously (provided that the owners of the SPCs are the same).
The possibility of basing the national SPC on a national patent and/or the unitary patent, in a number of participating countries.
5) The challenges of filing strategies
Given its imminent entry into force, the unitary patent is an option to be considered now for all pending European patent applications.
Indeed, several protection strategies are possible at the end of the European procedure:
European patent without unitary effect (classic)
European patent with unitary effect Without classical validations in non-UPC countries
European patent with unitary effect With classical validations in non-UPC countries34
National SPCs based on a European patent with unitary effect
Summary
Continue with the existing system with national validations
Unitary effect without national validations in non-UPC countries
Unitary effect + classic national validations in non-UPC countries
Unitary effect of the patent + classical national SPCs in UPC countries
Benefits
During the transitional period of 7 or 14 years: – National courts and the UPC concurrently have jurisdiction – Opt-out is possible35 (to exclude the jurisdiction of the UPC)
The territorial scope of the patent can be decided on a country-by-country basis
Double protection possible in some states (DK, HU, AT, FI, SE + FR & DE if no opt-out)
A single legal right valid in 17 countries
Double protection possible with national patents in the largest number of participating states (FR, DE, DK, HU, AT, EE, FI & SE)
Lower costs, less formalities in the participating countries
A single legal right valid in 17 countries + individual legal in up to 27 additional countries
Double protection possible with national patents in some participating countries
Lower costs, less formalities in the participating countries
Cases can be brought before the UPC on the basis of all SPCs simultaneously in 17 countries
Possibility of basing the SPC on the national patent and/or the unitary patent in some participating countries
Disadvantages
Higher costs, more formalities
No double protection in FR & DE in case of opt-out
Opt-out is not possible
Opt-out is not possible for all current and future participating Member States
Costs and formalities in between the two previous options
Opt-out is not possible for any SPC based on the unitary patent
33 Article 34 of the UPCA. 34 It should be noted that there are no changes to the costs and to the formalities for validation in non-participating countries. 35 Provided that no action before the UPC has already been brought (Article 83.3 UPCA). The opt-out may be withdrawn (the so-called “opt-in”) is possible, provided that no action before a national court has already been brought (Article 83.4 UPCA).
TO REMEMBER:
– The unitary patent is an option not subject to any fees, which is available for any European patent application, and which will then have unitary effect in the 17 EU Member States that have ratified the UPCA (and soon up to 25 or even 27 EU Member States)
– It will enter into force at the same time as the UPC Agreement, i.e., on 1 June 2023
– As soon as 1 January 2023, it will be possible to request a delay in issuing the grant of the patent until the date of entry into force of the UPCA, in order to have time to decide, on a case-by-case basis, whether or not to request unitary effect.
– The formalities associated with the unitary patent will be simpler, and the costs will be lower, compared to a classic European patent.
– The unitary patent will be subject to the exclusive jurisdiction of a supranational court, the Unified Patent Court, without the possibility of seeking an opt-out.
– It will be possible to double the protection by national patents, especially in France and Germany, for your most important patents, in case of filing a unitary patent or a European patent without an opt-out.
– A SPC can be based on a national patent and/or a unitary patent (or a non-opted-out European patent) in participating countries that allow dual patenting.
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