Unitary Patent and Unified Patent Court approved by the European Parliament

December 11, 2012

Today, a historical decision was taken by the European Parliament when the two regulations regarding the Unitary patent, including its translation arrangements, and the Agreement on the Unified Patent Court were adopted. This means that an entirely new European patent system finally will become reality after a long, long wait.

Today's decision by the Parliament followed the prior endorsement of the regulations and the agreement by the EU Competitiveness Council. The remaining steps of the procedure are the final decision by the Council later in December and the signing of the agreement at a diplomatic conference on 18 February 2013.

The new patent system will not enter into force until the agreement has been ratified by 13 Member States (including Germany, the UK and France). At the earliest, the patent package may enter into force on 1 January 2014. However, as the ratification process in the Member States may take some time, it is more likely that this will not happen until 2015.

One remaining obstacle to the entry into force of the new patent system is that Spain and Italy have challenged the enhanced cooperation procedure – whereby 25 of the 27 Member States have proceeded with the legislation without the participation of Spain and Italy – before the Court of Justice of the EU (CJEU). Today however, the Advocate General of the CJEU gave its opinion on the case and the conclusion of Advocate General Bot is to propose that the Court dismiss the actions brought by Spain and Italy against the enhanced cooperation in the area of the Unitary Patent. Although the CJEU may present an opinion that differs from that of the Advocate General, the process will continue. It is also unlikely that the Court will come to another conclusion in its judgment in a year's time.

In brief, the new Unitary Patent means that individuals and companies can obtain a patent, a "European Patent with Unitary Effect", that is valid throughout the Member States of the European Union (with the exception of Spain and Italy) through a single application filed at the European Patent Office. Patent applications will have to be submitted in English, German or French. The new system will mean substantial cost reductions after the grant of European patents compared to today's system, due to reduced translation requirements, payment of official validation fees and a single renewal fee for the whole area. During a transitional period, European Patents with Unitary Effect will have to be translated into English or, if the language of the proceedings is English, into one other EU language.

The Unified Patent Court will have exclusive jurisdiction regarding infringement and revocation proceedings involving European Patents with Unitary Effect. It will also have jurisdiction with respect to "regular" European Patents, but during a transitional period of seven years, national courts will retain their competence and there is also a possibility for patentees to "opt-out" during this period. The Court will have a Court of First Instance and a Court of Appeal. The central division of the court will have its seat in Paris with sections in London and Munich. Cases in the central division will be distributed according to the eight international patent classes. Classes A (human necessities) and C (chemistry and metallurgy) will be heard in London, class F (mechanical engineering, lighting, heating, weapons and blasting) will be heard in Munich and the remaining classes B (performing operations and transports), D (textiles and paper), E (fixed constructions), G (physics) and H (electricity) will be heard in Paris. It will also be possible for Member States to set up local and regional divisions of the court. For instance, it is likely that Denmark, Finland, Sweden and the Baltic countries will set up a regional court with its seat in one of the Nordic countries. Local or regional divisions will be competent to hear cases if the defendant is domiciled, or the infringement occurred within, the territory of the local or regional court. Local or regional courts will also be competent to hear counterclaims for revocation. The Court of Appeal will have its seat in Luxemburg.

Draft Rules of Procedure for the Unified Patent Court have been drawn up by a working group consisting of three judges and four lawyers. The Rules of Procedure are very extensive and the draft version contains over 500 rules. As of 18 February 2013, there will be a consultation procedure under which all the stakeholders may provide their comments on the draft rules of procedure. Once the consultation procedure has been concluded, the governments of the Member States will negotiate the final version of the Rules of Procedure. The final version is scheduled to be ready by June/July 2013.

As the unitary patent system may enter into force as soon as in 2014 or, more likely, in 2015, and will also apply to pending European patent applications, applications filed today will most probably be affected by the new rules. Consequently, it is necessary for any company doing business in Europe to already start to carefully consider the implications of the new unitary patent system.

Magnus Hallin

11 December 2012