On 19.11.2021, the Austrian Parliament took one of the last steps necessary for implementing the EU-wide unitary patent and opening the Unified Patent Court. The Austrian Parliament approved the “Protocol to the Agreement on a Unified Patent Court on provisional application”, which enables the establishment of the Unified Patent Court. The Parliament approved the treaty on 2.12.2021 and the President of Austria could sign it into law before Christmas. Ratification by Austria would fulfill the required number of 13 ratifications for implementation and the final preparations could begin. Now, for example, competent judges will be appointed and the IT system will be set up. This preparatory phase will take at least eight months but may also take longer. Optimistically, the Unified Patent Court could open its doors as early as the second half of 2022.
The unitary patent
Ratification is a decisive step towards an EU-wide uniform patent system. It was already possible to file a centralized patent application for 38 European states at the European Patent Office. After grant, however, such a European patent “disintegrates” into national rights, which are treated the same way as patents granted at the national level.
Now comes the possibility of obtaining a patent with unitary effect for all the 25 participating EU states. The future system offers considerable advantages – but also entails risks for patent owners. For it is (almost[1]) “all or nothing” throughout the EU since the unitary patent – apart from lower fees – brings two decisive innovations:
[1] Not included are Spain and Croatia and, in effect, Poland.
Effects of the unitary patent
It will now be possible to file a request for unitary effect at the European Patent Office, which will prevent the disintegration of the centrally filed patent into a bundle of national patents. The unitary patent has equal effect in all participating states and can only be limited, transferred or declared invalid or lapse in all participating states.
As a result, right holders can enforce the unitary patent against infringers before a single court – the Unified Patent Court – with effect for all participating EU states. Main actions based on national patents and partial national rights of European patents, on the other hand, only affect the respective state. Therefore, anyone who wants to sue patent infringers throughout the EU must initiate proceedings in many states in parallel.
Conversely, the Unified Patent Court can also invalidate a patent for all participating EU states with only one decision. Previously, the possibility of a declaration of invalidity for all designated states existed only within nine months of the grant of the patent by the European Patent Office – or thereafter in individual proceedings before the national offices.
The Unified Patent Court
The Unified Patent Court has a central chamber in Paris with satellite chambers in Munich and – planned until BREXIT – London. After the UK’s exit from the EU and the unitary patent system, it is not yet clear whether and, if so, where a third chamber will be established.
In addition to the central chamber, there are various local and regional chambers. A local chamber will be established in the building of the Austrian Patent Office in Vienna.
Jurisdiction of the Unified Patent Court
The Unified Patent Court will have jurisdiction for unitary patents[1] and also European patents without unitary effect.
For such bundle patents, there is overlapping jurisdiction with national courts and patent offices. Therefore, patent holders may bring infringement and invalidity actions equally before national courts/authorities and the Unified Patent Court. However, in the first seven years after the introduction of the unitary patent, patent holders can “opt-out” for European patents without unitary effect. In this case, only the national courts will continue to have jurisdiction. An opt-out is no longer possible for already pending proceedings.
[1] Spain and Poland do not participate in the Unified Patent Court Agreement
Strategic options for patent holders
Thus, patent holders are faced with strategic decisions.
The first decision to be made at the application stage is (a) to apply for national patents before the local patent offices, (b) to use the centralised application procedure to obtain a European patent, which will disintegrate into national patents upon grant, or (c) to seek a unitary patent.
The advantage of a unitary patent is the possibility of EU-wide enforcement in a single procedure. This will also apply to European patents unless they are opted out of the jurisdiction of the Unified Patent Court, thus avoiding the risk of a patent being declared invalid or not infringed for almost the entire EU with a single decision.
The speed with which the Unified Patent Court will become relevant in practice also depends on this decision by the patent owners. If patent owners react cautiously, national proceedings will continue to dominate in the coming years.
Outlook for Austrian companies
For the “normal case”, i.e. the application for a patent and its unchallenged existence for its entire duration, the unitary patent is advantageous. Protection can be achieved uniformly without particular filing costs for large parts of the EU.
In principle, also enforcement of a unitary patent should have a cost advantage. However, it remains to be seen how high the costs of proceedings before the Unified Patent Court will be in practice. Particularly, enforcement via the “national route” may be cheaper for patents that are only exploited in a geographically limited area where procedural costs are low. This may apply to Austrian SMEs with regional activities. Here, national or “traditional” European patents may, under certain circumstances, be enforced more cheaply.
The often-criticised fact that under the existing system, decisions can be different country-by-country may also be advantageous from the perspective of the patent holder. In this case, patents remain at least partially valid and can be enforced in some states. Maintaining this possibility may be a strategic option in some cases.
From the perspective of a potential defendant, the unitary patent and the Unified Patent Court must also be viewed in a differentiated manner.
On the one hand, an unjustified action can be fended off in a single proceeding for all states participating in the system. Furthermore, not only can the Unified Patent Court establish lack of infringement in one decision, but also invalidate the unitary patent for all participating States. Thus, from a defendant’s perspective, the new system has advantages.
However, the defence before the Unified Patent Court is more time-consuming than before the Commercial Court of Vienna. However, the defendant has no choice here: if the plaintiff has a unitary patent, he must bring an infringement action before the Unified Patent Court, which the defendant must accept.
A notable innovation is also that proceedings can be conducted in English before the local chamber in Vienna.
The Unified Patent Court will, of course, also have its own new Rules of Procedure. These combine influences from procedural rules of different countries. Especially in the first years, the Unified Patent Court will have the clarify many procedural issues. The IT system of the Unified Patent Court will provide workflows for the conduct of proceedings, knowledge of which will be a prerequisite for professional representatives.
Conclusion
The new system, consisting of the unitary patent and the Unified Patent Court, is a milestone towards simplified protection of inventions in almost all EU Member States. For litigation, the goals of more uniform jurisdiction and (in view of very few patent cases in some smaller member states) qualitative improvements of relevant decisions will certainly be achieved. A possible disadvantage is an exposure to potentially more time-consuming proceedings compared to Austrian litigation, even in cases of lesser importance.
Christian Gassauer-Fleissner has been involved in shaping the procedural rules for the Unified Patent Court in his role as a board member, president and now member of the Advisory Board of the European Patent Lawyers Association (EPLAW; www.eplaw.org).
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