As a tool for protecting innovation, patents are an important asset for research-based life sciences companies - high-stakes and high-cost litigation in multiple jurisdictions is common where “blockbuster” drugs are concerned.
What is the Unified Patent Court?
The Unified Patent Court (UPC) system aims to streamline patent litigation in Europe and avoid forum shopping between different national courts, radically bringing down the cost and reducing the uncertainty of patent litigation in the EU. It involves fundamental changes to the European patent litigation system for participating states. The court goes hand-in-hand with a new Unitary Patent (UP), a single patent which provides protection for a patentee across all participating EU states, much as the existing EU trade mark (EUTM) does for trade marks.
Which countries are taking part?
At the time of writing, 24 of the 27 EU Member States have signed the UPC agreement which establishes the new court. So far 17 have also ratified, but all the signatories are expected to ratify in due course. Of the countries which have not yet signed up, Spain has indicated that it does not intend to sign whereas Poland and Croatia are expected to sign eventually.
How does the UPC affect UK patent owners?
The UK is not participating in the UPC. This means that European patents[i] designating the UK are not subject to the jurisdiction of the new court. Nor is the UK participating in the UP. However, businesses rarely own patents in one country alone. All businesses (including UK businesses) owning patents or supplementary protection certificates (SPCs) in participating EU Member States will have automatically become subject to the jurisdiction of the new court unless opted out of before the court went live on 1 June 2023. This is also relevant to licensees and parties to research, collaboration and joint venture agreements.
What are the advantages and disadvantages of the new system?
Advantages of participating in the new system include that patentees should be able to save the costs of litigating in multiple European jurisdictions and to obtain pan-European injunctions and other pan-European remedies. So, staying in the system will potentially put patentees in a very powerful position. However, there is also a major risk - just one action in the UPC could result in the revocation of the European patent in all participating countries. This, coupled with the fact that this is a new, untested system involving many procedural differences, including in relation to the presentation of evidence, and that there is a fear that some judges will be inexperienced, means that many patentees are wary of being among the first to use the system.
Opt-out can be withdrawn
An opt-out lasts for the life of the relevant patent. However, it does not have to be forever. It can be withdrawn at any time up to the end of a transitional period (see below).
When is the deadline for opting out?
During an initial seven-year transitional period (which may be extended by another seven years) the UPC system will run in parallel with the “old” system of national patent courts, allowing patentees and others to choose which system to take action in. However, the rules provide that once a patent has been litigated in the UPC it may be locked into the UPC, and vice versa. Many patentees are expected to opt some of their patents out of the UPC as soon as possible to avoid the danger of being locked in in this way. This would allow them to see how the system beds in and then withdraw the opt-out later.
Emily Heenan