On December 11, 2012, the European Parliament approved the latest proposals for a Unitary Patent and, before the Court of Justice of the European Union (“CJEU”), the Advocate-General Yves Bott proposed the dismissal of the actions filed by Spain and Italy against the European Council’s decision to authorize the “enhanced corporation” of 25 of the 27 EU Member States in this legislative project. It is now expected that Italy will follow the Advocate-General’s view and, thus, may join the enhanced cooperation procedure implementing the Unitary Patent system.
Provided that the legislative package is signed and ratified in time (which remains to be seen) by at least thirteen Member States, including Germany, France and UK, the Unitary Patent system may start in spring 2014. This development is all the more remarkable because the Unitary Patent project almost came to a halt this summer, when the European Parliament postponed its vote on the legislative package due to significant changes to the text suggested by the European Council in its meeting of June 28 and 29 (cf. IP Report 2012/III, 1.).
The legislative package now approved consists of a European regulation creating a Unitary Patent by means of “enhanced cooperation” (cf. COM(2011) 215 final of April 13, 2011, as amended by Council doc. 17578/11 of December 1, 2011), a European regulation establishing a translation regime for the Unitary Patent, and an international agreement between the cooperating Member States setting up a “Unified Patent Court for the settlement of disputes relating to European patents and European patents with unitary effect” (“UPC Agreement”; Council doc. 16222/12 of November 14, 2012).
In its initial version, the draft European regulation on the Unitary Patent included the Articles 6 through 8 with regulations on substantive patent law – in particular the meaning of direct and indirect infringement, hence, the scope of patent protection. As a consequence, these issues of substantive patent law would have fallen under the competence of the Court of Justice of the European Union (“CJEU”), which was widely criticized. Therefore, in the following process, Articles 6 to 8 were deleted from the draft regulation. On November 19, 2012, the Member States agreed on a draft regulation regarding the Unitary Patent comprising a new Article 5 (a) (“Uniform protection”) stipulating the right of the proprietor of a Unitary Patent “to prevent any third party from committing acts against which the patent provides protection” (cf. paragraph 1). In detail, the patent holder’s right and its limitations shall be determined by the national law of the Member States applicable to Unitary Patents. This refers to Articles 14 (f) to 14 (i) of the UPC Agreement which are to be integrated into national law by ratification of that agreement. On the substance, Article 14 (f) defines direct infringement, Article 14 (g) defines indirect infringement; whereas Article 14 (h) stipulates the limitations of the patent right, and Article 14 (i) provides for third parties’ rights based on prior use of the invention. Since these articles are no longer part of the regulation, the legal issues arising shall not be decided “by the non-specialized judges of the CJEU” (cf. IP Report 2012/III, 1.). Instead, these issues shall be dealt with by the Unified Patent Court. It remains to be seen whether the CJEU will accept this intention or not.
The new “European patent with unitary effect” (“Unitary Patent” or “UP”) will be granted by the EPO under the rules and procedure provided by the European Patent Convention (“EPC”) – also applicable to the present European “bundle” patent. However, whereas the European “bundle” patent becomes a bundle of national patents once validated in the respective EPC Member States, the Unitary Patent will enjoy unitary protection throughout the territory of the 25 cooperating member states upon its granting.
The new Unified Patent Court comprises a Court of First Instance, a Court of Appeal and a Registry. Further, the Court of First Instance will consist of a central division as well as local and regional divisions. In Germany, the local divisions are expected to be located in Dusseldorf, Mannheim and Munich – where the well-known patent infringement chambers of the respective District Courts have their seats. It may be that a fourth local division will be opened in Hamburg. In Germany, any panel of a local division of the Unified Patent Court (Court of First Instance) will consist of two legally qualified German judges, which are expected to be picked from the very experienced patent infringement chambers of the Dusseldorf, Mannheim and Munich District Courts, and one legally qualified judge not being a German national. Additionally, upon request by one of the parties of the proceedings, a technically qualified judge with qualifications and experience in the field of technology concerned will be allocated from the Pool of Judges to the respective panel. Therefore, as regards the German local divisions, the judges hearing the case are expected to have the necessary standing for deciding patent cases.
The Unified Patent Court has exclusive competence for infringement actions, actions for declarations of non-infringement and actions for provisional and protective measures and injunctions – regarding Unitary Patents, European “bundle” patents and supplementary protection certificates (“SPCs”). In this respect, the Unified Patent Court will render a single judgment having effect throughout the 25 cooperating Member States. Moreover, the Unified Patent Court is exclusively competent for individual actions and counterclaims for revocation of Unitary Patents, European “bundle” patents and SPCs. Also in this regard, there will only be single proceedings. This may result in the respective patent being invalidated throughout the 25 cooperating member states on the basis of a single court ruling.
As regards patent strategy, it is important to know that, regarding European “bundle” patents, there will be a seven-year transitional period starting from the date of entry into force of the UPC Agreement. During this transitional period an action for infringement or for revocation of a European “bundle” patent may still be brought before national courts or respective national authorities. Further, the owner or applicant for a European “bundle” patent granted or applied for prior to the end of that transitional period may opt-out from the Unitary Patent system – hence: the exclusive competence of the Unified Patent Court – unless an action (for revocation) has already been brought before the Unified Patent Court. This might prove as an effective way to safeguard a European “bundle” patent from Europe-wide revocation. Because the owner of such European “bundle” patent may withdraw its opt-out at any time, unless an action (for infringement or for revocation) has already been commenced before a national court. Even better, the owner may re-enter the Unitary Patent system once he seeks to obtain a Europe-wide judgment on the infringement of his patent.
Certainly, discussions on the pros and cons of the Unitary Patent system will not stop, even after ratification of the UPC Agreement by the cooperating Member States. It remains to be seen whether industry will rely on the Unitary Patent system in order to benefit from the Europe-wide enforcement of such patents or whether there will be a revival of applications for national patents in order to avoid the Europe-wide revocation of a Unitary Patent obtained. Further, during the transitional period, owners of European “bundle” patents need to carefully assess on a case-by-case basis whether to use the mentioned opt-out and opt-in mechanism.