C.A.G. Insights

Game changing steps taken to finally unite the European patent system, (UPC/UP)

After many years of planning, and threats to implement it, both the Unified Patent Court (UPC) and the Unitary Patent (UP) are (likely) finally becoming reality sometime between mid-2022 and early 2023.  UPs will provide protection in those European Union (EU) member countries that elect to participate in the UPC/UP system (with the hope that protection will eventually be available in all EU member countries) with a single, indivisible patent.  UPs will be enforced and litigated at the newly created UPC, which will have ‘Central Divisions’ (based on technologies) located in Paris and Munich, and an appeals court in Luxembourg.  Multiple Local and Regional Divisions under these Central Divisions have also been established, with more likely to come.


Start of the UPC/UP System

With the ratification of the Provisional Application Period of UPC Agreement (PAP-Protocol) being adapted by the minimum number of EU Member States on December 2, 2021, the PAP-Protocol entered into force and the Provisional Application Period began.  It is expected to take about 8 months for the preparations needed to implement the UPC to be completed (i.e., budgets, IT, recruitment of judges, staff hiring, etc.).  If this time estimate holds true, the UPC could start operating as soon as late summer or early fall of 2022.  However, one major hurdle still remains, and that is the location of the seat for the third Central Division, which was originally to be located in London.  But with Britain’s withdrawal from the EU, and the UK officially electing not to participate in the UPC/UP system, a new provision of the PAP-Protocol must be drafted and agreed upon for location of the third Central Division.  The current rumor is that Italy is close to securing enough support to get the third Central Division in Milan.  Once this Provisional Application period has sufficiently advanced, Germany is expected to ratify the UPC Agreement, which will trigger a 3-4 month countdown until the UPC Agreement finally enters force, the UPC opens its doors, and UPs start to be issued.


Unitary Patents

After grant, traditional European patents serve as independent national rights in those EU countries where the necessary steps for validation are taken. By contrast, a UP will be a unitary intellectual property right that may be enforced in the entire territory covered by the UPC Agreement.  As such, a UP can only be abandoned or revoked in its entirety with respect to the territory covered, while traditional European patents may be separately enforced, abandoned, and revoked in each country where it was validated.  At present, the territory of UPs will cover at least 17 EU Member States, i.e., Austria (AT), Belgium (BE), Bulgaria (BG), Germany (DE), Denmark (DK), Estonia (EE), Finland (FI), France (FR), Italy (IT), Latvia (LV), Lithuania (LT), Luxemburg (LU), Malta (MT), Netherlands (NL), Portugal (PT), Slovenia (SL), and Sweden (SE).  Non-EU countries such as the United Kingdom (UK), Switzerland (CH), Liechtenstein (LI) and Norway (NO) will not participate in the UPC system.  Some EU countries, such as Spain (ES) and Poland (PL), have indicated that they do not currently intend to participate in this system, but have not officially decided as such.


Applicants will be able to obtain a UP once their European patent application has been examined and granted by the European Patent Office (EPO), if electing to do so.  A UP will be available to applicants with European patent applications that are currently pending, provided that their eventual grant date falls after the agreements/laws governing the UPC/UP enter into force.  Additionally, the jurisdiction of the UPC will also extend to ‘conventional’ European patents that have been validated in one or more participating EU countries.  However, patentees will be able to “opt-out” their conventional European patents from the jurisdiction of the UPC during a transitional period, which will last for the first seven years of the court’s existence, at least.  After the transitional period, the UPC will have exclusive jurisdiction over UPs and all European patents designated to participating EU Member States, unless these European patents have been opted out of the UPC’s jurisdiction.


Opting In or Out of the Unified Patent Court

After the start of the UPC, all European patents, not just UPs, must be litigated in the UPC where an action involving a European patent is brought in a member state of the UPC, unless the patent owner opts out of the UPC.  A so-called “Sunrise Period” will provide a three-month window before the UPC becomes fully operational.  During this period, owners of existing European patents, which have been validated in one or more countries that are members of the UPC System, can file a free request to opt out of the UPC.  Opting-out during the Sunrise Period is important for patent owners who want to avoid the central jurisdiction of the UPC, which covers all validations of existing European patents in the participating member states of the UPC system.


By opting out, only national courts would have jurisdiction over the relevant European patent, in line with the present litigation system in Europe.  Opt out requests can be filed or withdrawn (“opt in”) after the Sunrise Period, with the risk of a European patent being “forced out” by a national action involving that patent, or “forced in” by a central UPC action.  If an opt out request is not filed for a European patent during the Sunrise Period and a central invalidation (or “nullity”), infringement, or other action involving that patent is started in the UPC, it would then not be possible to opt out.  If an opt out request is filed for a European patent and a national invalidity, infringement, or other action is started in one of the validation countries of a European patent, it is not possible to then opt in again.



The cost of electing for a UP is expected to be about the total costs required for validating a current European patent in three member countries of the European Patent Convention (EPC).  Thus, requesting a UP will have major cost benefits over traditional European patents if, after grant of the European patent application, validation would have been sought in more than three member EPC countries.  This cost benefit needs to be weighed against the additional costs associated with UPs of preparing a full translation of the granted patent application into English (for non-English applications) or another official EU language (for English applications) during a transitional period of up to 12 years.


There will also be possible risks arising from the exposure of valuable IP rights to a new court system, which would be operating for the first time as a court and under rules of procedure newly drafted for the UPC.  As mentioned above, UPs are enforced or invalidity as a unitary IP right, and thus any decision negatively affecting a UP affects those rights for all UPC member countries.  Conversely, however, decisions positively affecting a UP take effect throughout all such member countries.


In view of the cost and IP right implications, Carstens, Allen & Gourley can assist you in preparing for the UPC/UP system.  For example, we can assist you in analyzing your European patent portfolio to evaluate whether or not to opt out existing European patents from the threat of collective attack via the UPC based on product coverage, strength, importance, scope of protection, and validity concerns.  Such evaluations are urgent since the Sunrise Period may start as soon as mid-2022.  We can also assist you in determining whether to request a UP after grant of your pending patent applications, as well as assessing available options for delaying any close-to-grant pending patent applications to allow time to determine whether requesting a UP after grant would be advantageous.  In addition, we can assist you in reviewing your contractual matters, such as licenses and patent-related agreements, with respect to opt out and litigation responsibilities or requirements.



In sum, important changes under the new UPC/UP system include that a UP must be litigated in the UPC, and that all traditional European patents must be litigated in the UPC for member states of the UPC, unless the patent owner opts out for those patents.  An opt out request will be available from the beginning of the Sunrise Period and also after the Sunrise Period; however, if proceedings are commenced in the UPC before an opt out request is filed, the patent owner is restricted to the jurisdiction of the UPC.  A validly filed opt out request is effective for the life of the patent.  Finally, it is important to note that the UP and UPC systems do not impact the EPO Opposition and Appeal procedures, and thus both traditionally granted/validated European patents and UPs will be treated equally in such procedures.


To learn more about the implementation of the UPC and UPs, and if you would like our assistance in navigating these exciting and sweeping changes to European patent practice, please contact James H. Ortega at www.caglaw.com.