The Unitary Patent & The Unified Patent Court Andrew Clay - PowerPoint PPT Presentation

The Unitary Patent & The Unified Patent Court Andrew Clay Partner Intellectual Property & Technology Practice 37 Offices in 18 Countries

Major Changes Ahead For The European Patent System • The way the Europeans do patents is very likely to change significantly within the next couple of years. • This will have major implications for businesses based on the exploitation of new technology. • I am going to explain the basics of the current system and the changes which are likely to be implemented. 2

Where we are now (1) • The European Union has 27 member countries with a total population of just over 500m. • There are two basic routes used to obtain patent protection in Europe. • The first route is simply to make a number of separate applications in different countries (possibly as a result of filing a PCT application). The end result is a bundle of national patents. Where coverage in a large number of countries is required this will be a very expensive route. • The second route is to file (directly or via a PCT application) a single application at the European Patent Office in Munich under the European Patent Convention (1973). The European Patent Convention provides a framework for the granting of patents. An application under the EPC can lead to a patent being granted in up to 40 countries – the EU member states plus 13 other countries. 3

Where we are now (2) The EPC application procedure has the following main steps:- - Formalities examination - Search report and preliminary opinion on validity - Early publication (with search report) at 18 months after filing of the application/or the priority filing if priority was claimed. - Substantive examination - Grant - Possibility of post grant central opposition (9 months) 4

Where we are now (3) What happens post grant is where the problems begin. The EPC application becomes, on grant, potentially a bundle of national patents in the countries designated in the EPC application. To be granted in each such country the patent must be validated in that country, which involves translation in some countries (see following slides), paying publication fees and complying with various formal filing requirements. The overall cost of validation of an average patent for 13 member states is estimated to be about € 12,500 and more than € 32,000 if validated across all EU member states. 5

Where we are now (4) The London Agreement (Agreement on the Application of Article 65 EPC, OJ, EPO 2001,55) has improved the situation in relation to translation costs. The London Agreement provides that:- 1. Countries with English, French or German as their official language no longer require translation of the patent into their official language: the claims will be in all three languages – (Article 14(6) EPC). 2. Member states which do not have English, French or German as their official language must designate one of those three languages as their official language for the purpose of the London Agreement. They may then only require the claims of a European patent to be translated into their actual official language, provided that that European patent is in the official language (English, French or German) that the member state 6 has designated under the agreement.

Where we are now (5) All the countries not having English, French or German as their official language have designated English as their preferred language for the purposes of the London Agreement. 18 Countries have now ratified the London Agreement. The net effect is that translation costs for European patents have come down significantly, especially in cases where the European patent is in English. However Spain and Italy have indicated that they won’t ratify the London Agreement so that full translation in these countries is still required. A real shame as they are the fourth and fifth most popular countries after the UK, Germany and France. Full translation is also required in Bulgaria, Cyprus, the Czech Republic, Estonia, Greece, Montenegro, Norway, Poland, Portugal, Romania, San Marino, Serbia, Slovakia and Turkey. 7

Where we are now (6) Renewal Fees – Another Major Problem Once a patent has been validated in a particular country then to keep it in force national renewal fees are payable annually. If these are not paid then the patent lapses. The level of fees varies considerably across the EU. The deadlines for payment differ between different countries. In some countries payment of the fees by bank transfer is still not possible. Some countries mandate the appointment of a patent attorney and require communications to be in the local language. 8

Where we are now (7) The Net Effect The net effect of these costs is that the average European patent is on average now validated in only 5 countries – Study on the Costs of Patenting by Roland Berger Market Research. 9

Where we are now (8) Enforcement – A Further Major Problem Area There is no central litigation system in Europe for patents. A patentee generally has to start separate national infringement actions in each country where there is an infringement problem. This is very expensive and is simply beyond the pockets of most SME’s. Litigation procedures and practices vary considerably across Europe and even across a single country. Inconsistent decisions across different countries for the same patent and the same infringing device occur (e.g. the Improver litigation). 10

Where we are now (9) Overall Picture A fragmented, cumbersome post grant system where obtaining, maintaining and enforcing patents is expensive and time- consuming. In the US a single patent covers a market of 312m people. In China a single patent covers a market of 1.34bn people. In India a single patent covers a market of 1.2bn people. European business is therefore perceived as being at a disadvantage in its key home market. Although… 11

The Solution (1) These problems have long been understood. As long ago as 1959 a working party was set up to come up with a solution: its solution was a unitary European patent (see the Haertel draft of the community patent,1962). By 1975 a community patents convention (CPC) was signed by all the then 9 member states but it was not ratified by enough of them to bring it into force. In 1989 a further attempt to revive the CPC was made but again it failed. Little progress was then made between 1989 and 2009. 12

The Solution (2) In December 2009 the EU Competitiveness Council agreed a set of principles to implement a more integrated patent system for Europe. At its core were two fundamental elements:- 1. The creation of a unitary EU patent 2. The creation of a common patent litigation system with exclusive jurisdiction relating to both EU patents and EPC patents. The competitiveness Council envisaged unanimity amongst all 27 member states. Spain and Italy were never going to agree to any proposals they saw as promoting English, French and German. In any event the Court of Justice of the European Union ruled (Opinion 1/09) that the then proposed Europe wide arrangements were unlawful as they proposed to create a court system outside the EU legal framework. 13

The Solution (3) By December 2010 a number of member states asked the European Commission to work with them to implement a unitary patent limited to only those countries that were prepared to work together. Such a coalition of the willing is possible under what is known as the Enhanced Co-operation Procedure – see Articles 326 – 334 of the Treaty on the Functioning of the European Union. The Council of The European Union then authorised the use of the enhanced cooperation procedure on 10 March 2011 – (2011/167/EU). This had previously been approved by the European parliament. Spain and Italy have started a court action (CJEU) to block the use of the Enhanced Cooperation procedure, on the basis of an objection to the proposed language arrangements. That case is still pending. 14

The Solution (4) Since the use of the enhanced cooperation procedure has been sanctioned progress has been rapid. There are now two draft regulations and a draft international agreement. One of the regulations deals with the Unitary Patent and one with translation issues. The international agreement deals with the setting up of the Unified Patents Court. The rest of this talk will focus on the key aspects of these two regulations and the draft Unified Patents Court agreement and their implementation. I am not dealing with the proposed Court procedures. A word of caution is that, somewhat bizarrely, the current draft of the Unified Patents Court agreement, which was agreed by the Competitiveness Council on 5 December 2011 has never been published so there is some uncertainty about what the final draft will look like. 15