Currently, if a company requires patent protection across the EU, they must patent their invention in each Member State individually. This is costly and entails a burdensome administrative process, as fees for translation and validation are necessary for each country selected. Following more than 40 years of intergovernmental negotiation, a new agreement has developed, allowing patent protection across most of the EU (25 member states) in a single application process. This is the largest reform of the EU IP system for decades. It aims to reduce patenting costs for businesses (particularly SMEs) and promote innovation in Europe.
There are essentially two parts to the reform: 1) creation of a new type of patent called a ‘Unitary Patent’ which will apply to several countries at once and 2) the creation of a new international court, the ‘Unified Patent Court’ (UPC), which will have the exclusive right to issue judgements in lawsuits involving Unitary Patents, e.g. on questions of infringement and validity. The new system will run in parallel with the existing European patent system rather than replacing it. However, the UPC will have jurisdiction over cases relating to existing European Patents unless they are ‘opted out’.
There is still a few critical steps to be taken before the system comes into full force. Primarily, each participating country must ratify the Unified Patent Court Agreement to give legal effect to the new court. Unitary patents cannot be issued until a minimum of 13 states, which must include the UK, Germany and France, ratify the agreement. The UK Brexit vote has introduced some uncertainty but late last year the UK authorities stated their intent to move ahead with the ratification process as soon as possible. In Ireland, ratification will require a constitutional referendum but as yet, no date has been set.
In January 2017 the Preparatory Committee in charge of setting up the UPC announced their aim to start the Provisional Application Phase (PAP) by May, 2017. The PAP will establish the organisation and commence operation of the UPC’s formal governing bodies. It also means that the recruitment and training of Judges for the court will start mid-2017. Ultimately, the committee expect that the UPC will come into effect at the end of 2017, dependent of course on successful ratification of the agreement and a few other procedural details.
The preparatory committee also 'assume' that the so-called ‘sunrise period’ for ‘opting out’ existing European patents will commence in Sept 2017. In practice, this means that existing European patents, which are normally only validated in a few member States, will automatically attain unitary effect (i.e. apply across all participating States) after the UPC comes into effect. That is, unless the owners of those patents choose to opt them out, in which case they remain as they are.
The expected September deadline for the sunrise period gives a minimum of 3 months to decide but companies should start to plan their strategies earlier to be fully prepared for the impact on their businesses. The overall reform should lead to significant benefits and opportunities for Enterprise Ireland clients. However, as with any radical reform, there are potential downsides and pitfalls. The new system may not suit everyone and therefore companies should consider their options, and engage with it strategically. For example, companies should decide whether to participate in the new system or stick with the existing European patent system. Which patents in their portfolio should have unitary effect and which should be opted out? What is their future patent filing strategy and what should be done now in preparation? How will the new UPC structure affect their ability to enforce their patent rights? To answer these and other questions companies should engage with their legal and IP professional advisors as early as possible.