EUROPE‘S NEW UNITARY PATENT SYSTEM · 3/2/2016 · which should make the unitary patent system...

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Michael Platzöder Partner, German and European Patent Attorney

March 2, 2016

EUROPE‘S NEWUNITARY PATENT SYSTEM

A Brief Overview

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① THE CURRENT CLASSICAL EP-PATENT SYSTEM

② THE NEW EP UNITARY PATENT SYSTEM

③ KEY ASPECTS OF THE NEW SYSTEM

④ STRATEGIC AND PRACTICAL CONSIDERATIONS

OVERVIEW


①THE CURRENT „CLASSICAL“ EP-PATENT SYSTEM


MAIN ASPECTS OF THE CLASSICAL EP-PATENT

Today, the EP-Patent is “unitary” only during Examination and Opposition but effectively disassembles into a “bundle” of national patents thereafter

Filing & Examination

Central before EPO

3 alternative languages

of proceeding

(EN, DE, FR)

Post-grant validation

and renewal country by

country

Opposition &Appeal

Central before EPO

Revocation/limitation

effective for all

designated countries

Enforce-ment

Country by Country

Invali-dation

Country by Country


REMAINING SHORTCOMINGS OF THE EP-PATENT

While compared to the pre-EPC situation, the EP-Patent has radically simplified obtaining patent protection in Europe, some key drawbacks remained:

High costs &

Fragmentation

Translations

(partially reduced by London Agreement)

Validations & Renewals

Enforcement

Invalidation

(post Opposition)


②THE NEW EUROPEAN PATENT WITH UNITARYEFFECT („UNITARY PATENT“)

Spain

Participating EU countries, no ratification yet of UPC –Agrmt.

Non-participating EU countries(ES, HR)

Poland(still needs to sign UPC

agreement )

Non-EU but EPC-member

states, may notparticipate

Participating EU countries, UPC –Agrmt. ratified

Croatia

Source of image: Wikipedia


THE LEGAL FRAMEWORK DEFINING THE NEW “EUROPEAN PATENT WITH UNITARY EFFECT”

Council Regulation (EU) No. 1257/2012 * regarding creation of unitary patent protection

Council Regulation (EU) No. 1260/2012 * regarding applicable translation arrangements

Agreement on Unified Patent Court (UPC) **

Rules of Procedure for Unified Patent Court **

* Implementing Enhanced Co-operation within EU** Multi-lateral Treaty, signed but not fully ratified yet

Competition policy in Europe

The competition rules for supply and distribution agreements

EuropeanCommission

Competition DG’s address on the world wide web:

http://europa.eu.int/comm/dgs/competition/index_en.htm

Europa competition web site:

http://europa.eu.int/comm/competition/index_en.html

OFFICE FOR OFFICIAL PUBLICATIONSOF THE EUROPEAN COMMUNITIES

L-2985 Luxembourg

ISBN 92-894-3905-X

9 789289 439053

8K

D-42-02-997-EN

-C

Competition policy in Europe

The competition rules for supply and distribution agreements

EuropeanCommission

Competition DG’s address on the world wide web:

http://europa.eu.int/comm/dgs/competition/index_en.htm

Europa competition web site:

http://europa.eu.int/comm/competition/index_en.html

OFFICE FOR OFFICIAL PUBLICATIONSOF THE EUROPEAN COMMUNITIES

L-2985 Luxembourg

ISBN 92-894-3905-X

9 789289 439053

8K

D-42-02-997-EN

-C


THE BASIC IDEA BEHIND THE UNITARY PATENT

Lower costs &

No Fragmentation

No Translations

(1 translation during transistional period)

Central Renewal at EPO @ lower

fees,No Validations

UnitaryEnforcement

@ UPC

Unitary Invalidation

@ UPC

(post opposition)

UPC = newly established „Unitary Patent Court“

Lowerlitigationcost per country


THE LIFECYCLE OF A UNITARY PATENT

EP-patent application and prosecution • Filing and prosecution incl.

examination/opposition/revocation/limitation (+appeal) at EPO• Identical proceedings as for classical EP-patent

Request for unitary protection• to be filed with EPO by patent proprietor• in language of proceedings• within 1 month from publication of grant

Unitary effect• effective from date of grant, • Unitary patent replaces individual effects of the EP-Patent, but only

for states in which UPC-System is already effective at the time of the registration of the unitary effect for that patent !

Litigation exclusively before new UPC• esp. (Non-)Infringement and• (In-)Validity


THE STRUCTURE OF THE UPC


SCHEDULE OF INFRINGEMENT PROCEDINGS (1ST INST.), FAST (~ 14M) AND RATHER FIXED SCHEDULE

WrittenProceeding

• Lasts 9 months (planned schedule)• 2 briefs per party allowed, within fixed deadlines

IntermediateProceeding

• Lasts 3 months (planned schedule)• Exploration of settlement opportunies, incl. through mediation, and/or arbitration*• Clarification of issues, fix further schedule, prep. hearing of experts/witnesses, etc.• Intermediate conference, may be phone/video conference

Oral Hearing

• Lasts 1 day (planned schedule)• Focus on issues identified during intermediate procedure• Written court decision incl reasons within 6 weeks of oral hearing (planned schedule)

• 2nd instance: approx. 15 months• Revocation action (if separate): approx. 13 months

* At the UPC Patent Mediation and Arbitration Centre (located in Lisbon and Lijubljana)


③ KEY ASPECTS OF THE UNITARY PATENT


THE UNITARY EFFECT

The unitary patent provides uniform scope, protection and lifetime throughout the participating countries and takes effect upon publication of the grant.

Preconditions:

• Same claims for all countries

• Entry of unitary effect in official Register @ EPO upon prior request made within 1 month form grant

Uniform protection with equal effect in all particip. states*

Limitation, transfer, lapse and revocation, only as whole

Limitation and revocation effective ab initio (ex tunc)

BUT: Licensing as whole orwith territorial limitations

* Only those, for which UPC-System is already effective at the time of the registration of the unitary effect!


LANGUAGES AND TRANSLATIONS

Basic concept: No more translations beyond language of proceedings (LOP), only granted claims must be translated into the 2 other official EPO-languages.

However: Exceptions apply during a transitional period and for disputes.

Transitional Period *

If LOP = EN:Translation into any

other official EUlanguage

If LOP = DE or FR:Translation into EN

Disputes

Infringement:At request of defendant:

translation into language of venue

of infringement or of defendant’s

domicile

At request of court:Translation into

language of court proceedings

* Lasts 6-12 years (tbd.) from the coming into force of the Unitary Patent system


RENEWAL FEES - CONCEPT

Basic concept: unitary renewal fees administered and collected by the EPO

Renewal fees (annuities)Central collection

by EPO

Can only be paid by proprietor

Yearly, progressive fees, starting in year after grant

Level of fees = „True Top 4“

15% discount, if willingness to grant a license to anyone for

appropriate consideration was filed


RENEWAL FEES -VALUES


Europäisches Patent mit einheitlicher WirkungJahresgebühren des Einheitspatents – 1/5

• 24. Juni 2015: Ausschuss EPA-Verwaltungsrat („Select Committee“) einigt sich auf die sog. „True Top 4“-Alternative

• Dies bedeutet, dass die Höhe der addierten Jahresgebühren von DE, FR, GB und NL als Referenz verwendet wird

! Auf den ersten Blick attraktiv

0,00 €

1.000,00 €

2.000,00 €

3.000,00 €

4.000,00 €

5.000,00 €

6.000,00 €

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Vergleich der Jahresgebühren

DE, FR, GB

True Top 4 (DE,FR,GB,NL)

Patentjahr

Jahr

esge

bühr

en

Lifetime of Patent

Ren

ewal

fee

From a cost point of view, the unitary patent only becomes attractive, if protection for 4+ countries is desired, and during the transitional period costs for 1 translation even

comes on top (today for DE, GB and FR only translation of claims needed) !


PRIVILEGES FOR SMEs AND NON-PROFIT ORGANIZATIONS

SMEs*, natural persons and certain non-profit organizations benefit from privileges which should make the unitary patent system easier, less costly and legally secure.

Damage claims:

court shall consider knowledge of infringement before provision of translation,esp. if infringer is a privileged entity

Compensation scheme:

reimbursement of costs of translation from any EU-language into LOP per Art. 14(2) EPC, up to ceiling

Privileges**

* SME: < 250 employees and (turnover< 50 M€ or balance sheet total ≦ 43 M€)** Privileged entities: SMEs , natural persons, non-profit organizations, universities and public research

organizations having their residence or principal place of business within a EU - Member State

Reduced court fees:

40% discount on 1st and 2nd instance court fees


COST OF UPC LITIGATION

• Mix of fixed and value-dependent fees, • equal or lower than today‘s value-dependent court

fees in DE • 40% discount for qualifying SMEs

Court fees

• likely higher than in current DE litigation, because ofhigher complexity of proceeding (e.g. interimprocedure, more experts, questions of EU law) andmore agressive time limits

Attorney's cost

• Table of value-dependent defined ceilings, which maybe reduced on a case-by-case basis (if exceptionsapply)

• significantly higher than for current DE litigation

Recoverablecosts

(Looser pays)


UNITARY PATENT AS AN OBJECT OF PROPERTY

The Unitary Patent is treated as object of property in its entirety and in all participating States as a national patent of the particip. state …

… in which is has unitary effect, and …

(a) … in which acc. to the EP Patent Register* the applicant has residence or principle place of business on the filing date,

(b) or, if (a) does not apply: in which applicant has residence or a place of business on the filing date.

For joint applicants: per (a) or (b) for the first applicant in the order of entry for whom (a) or (b) applies

If neither (a) nor (b) are applicable for

any applicant: State where EPO is headquartered(= Germany)

* Acquisition of a right may not be dependent on any entry in a national patent register


EXHAUSTION

The unitary patent is subject to exhaustion within the EU. In contrast to the classic bundle EP-patent exhaustion is now explicitly codified.

Patent exhausted

Act concerning patented product in country/(ies) where unitary effect applies

Product was previously placed on the market in

EU …

… by or with consent of patent

proprietor

No legitimate grounds for proprietor to

oppose further commercialization


④ STRATEGIC AND PRACTICAL CONSIDERATIONS


OPTIONS FOR PATENT PROTECTION IN EUROPE

Unitary patent in the participating EU

states

National patents and utility models

Classical EP bundle patent in all or subset of

38 EPC-countries

Unitary patent participating states + classical EP patent in other countries

Unitary patent in participating states + national patents in (selected) other countries


THE PROS AND CONS OF THE UNITARY PATENT

Cost and uniform broad protection are the key factors in favor of the unitary patent, but “a single bullet kills the whole patent” and UPC-performance is still unknown

Pros Cons


COMPETENT COURTS FOR EP-PATENT LITIGATION

UPC has exclusive jurisdiction for unitary and classical EP-patents! But during a transitional period of 7 years*, patentee can opt-out for classical EP-patents applied or granted prior to the end of this transitional period.

* might later be extended up to a total of 14 years

• UPC has exclusive jurisdictionUnitary patent:

• UPC has exclusive jurisdiction (but also national courts competent during transitional period)

• unless opt-out, then national courts retain exclusive competency for patent lifetime

Classical EP bundle patent:

• National courts have exclusive jurisdictionNational patents and utility models:


Filing /nationalizing PCT

NATIONAL VS. EUROPEAN ROUTES TO PATENT PROTECTION IN EUROPE

...FR

GBDE

EP

National applications

EP-application

National patents(always national courts)

EP-Patent

...FR

GBDE

Prosecution Demand for Unitary effect? Opt-out?

EP

UP

EP“in”

EP“out”

EPMix*

PCT

PCT application(optional)

Unitary patent* Classical EP for non-UPC-members

UPC or** national courts competent

Only national courts competent

Grant

Opt-out

validation in non-UPC

Opt-in

Only UPC competent

** during transitional period only


TODAY’S PATENT LITIGATION LANDSCAPE IN EUROPE

Germany is the dominating patent litigation venue in Europe for both national (DE) and classical European Patents (EP)• Fast and highly effective proven and well-known system• High quality specialized judges • Low cost compared esp. to US and GB• Patentee-friendly: injunctions available by law, and bifurcated system, where usually

validity decision is taken much later than infringement decision

source: Preliminary Findings of DG Internal Market and Services; Study on the Caseload and financing of the Unified Patent Court, 2011

Infringement DE GB FR Total

avg. cases/yr. 1133 108 224 1882

in % 60,2% 5,7% 11,9% 100%


LOCK-IN EFFECT

For a classical EP-Patent or applications changing the court system is only possible, if no previous suit has been filed – otherwise a lock-in occurs!

1 e.g. infringement or counterclaim for infringement, revocation or declaration of non-infringement

No Opt-out Action1 filed@ UPC

Lock-in intoUPC-System

Opt-out Action1 filed @ national court

Lock-in intoNational-System

Risk: 3rd Party can lock you into one of thesystems, esp. into

UPC system

Counter-measure: use „sunrise period2“ to opt-out, before UPC-system fully

enters into force

2 Start date for sunrise period not announced yet


KEY STRATEGIC CONSIDERATIONS

The UPC-System will likely become effective in 2017 (Plan). However, for patent holders, it is already now time to prepare !

Mine portfolio to identify classical EP-patents/applications to be opted-out:• e.g. per portfolio segment, per individual importance, or to have specific mix of UPC

and non-UPC patents in same portfolio segment• Prepare for opt-out during sunrise-period

As only patentee can opt-out: Negotiate opt-out with Co-owners/Licensorsfor classical EP-Patents without 100% ownership

Select pending EP-applications to become unitary patents and manage prosecution such that:• Grant occurs only after UPC-system is effective (otherwise unitary patent not possible)• Desired regional coverage at grant already includes all desired key states for protection• New/existing divisional applications allow for parallel coverage of UPC/classical paths

File national patents (esp. DE-patents) as viable alternative, esp. if coveragein DE already generates strong leverage


DISCLAIMER

The materials of this presentation have been prepared solely foreducational and entertainment purposes to contribute to theunderstanding of European intellectual property law. They reflectonly the personal views of the author and are not individualizedlegal advice, in particular not for any specific legal situation or case.Thus, neither the author nor the Wallinger Ricker SchlotterTostmann Law Firm can be bound as representatives of their variouspresent and future clients or otherwise to the comments expressed inthese materials. The presentation of these materials does notestablish any form of attorney-client relationship with the author orthe Law Firm. While every attempt was made to ensure that thesematerials are accurate, errors or omissions may be contained therein,for which any liability is disclaimed.

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EUROPE‘S NEW UNITARY PATENT SYSTEM · 3/2/2016 · which should make the unitary patent system...

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