Unitary Patents

Despite plans for Brexit, unitary patents and the Unified Patent Court (UPC) are likely to become realities in 2018. Companies with patent interests in Europe should be well-prepared for this, and must start looking into at least the following strategic considerations. Delay in this regard may cost them dearly.

To opt out or not

After 13 countries have ratified the UPC Agreement a sunrise period of a minimum of 3 months will start during which patent owners can opt out and keep their granted European patents, pending European patent applications and supplementary protection certificates outside the exclusive competence of the UPC. There will be a seven-year transition period during which a patent owner can opt out at any moment. However, at any time third parties may bring revocation proceedings before the UPC which may decide that a European patent will be revoked in respect of all participating countries. Once, an action has commenced in the UPC the patent owner can no longer opt out. Further, if a patentee opts out he will not be able to initiate infringement proceedings before the UPC. However, the patent owner can subsequently opt in if he wants to initiate a central infringement action before the UPC at a later stage. If your company does not wish to be among the first to be subjected to the untested UPC, opting out would be a sensible approach.

Your company should review its portfolio of European patent rights and decide in respect of which patent rights you wish to opt out. To avoid the risk of central revocation proceedings it is advisable to register opt-outs during the sunrise period.

Opt-out requests have to be authorized by all patent owners. Therefore, your company should check ownership of its patents because incorrect ownership details may invalidate opt-out requests. There will be no official fees for opt-outs.

What type of patents does your company want in the future in Europe?

Three types of patents will exist in Europe: National patents, unitary patents, and traditional European patents with an opt-out or not. Depending on the strength and commercial relevance of the invention, you will need to decide which type of patent to obtain.

If you are interested in European patents with unitary effect, you may wish to file one or more divisional applications at the EPO in respect of a parent application which is expected to be granted shortly. In this way, a mixture of patent rights could be created covering different countries and providing different scopes of protection. This may be an expensive scenario, but you should be aware of this option because the commercial relevance of patent rights may warrant such a tactic.

Check License agreements

Both licensors and licensees may want to check their existing license agreements, and they may wish to include UPC considerations in future license agreements. For instance, it is only the patent owner who can opt-out and apply for a unitary patent. Exclusive licensees will have the right to enforce a patent without the consent of the patent owner, unless otherwise provided for in the license agreement. This does not apply to non-exclusive licensees, unless the license agreement stipulates otherwise.