Culminating in the signing of the Unified Patent Court Agreement on February 19, 2013, the European Union (EU) has taken a series of steps to implement a European unitary patent. This unitary patent, likely to be available in early 2014, will work in conjunction with the existing European Patent Office (EPO) process and provide a single enforceable patent across the participating EU member states.

Once the unitary patent is ratified, an applicant will be permitted to follow the usual EPO procedure for filing a European patent, but upon a decision to grant the patent, the applicant may designate the patent as “unitary” for protection across all participating member states. The decision to follow the unitary route must be made within one month after the grant is issued, and the patent will be maintained by the EPO in a large depository, rather than being sent to each of the 27 local patent offices within the EU.

Much like a U.S. patent that is enforceable in all 50 states, the unitary patent will be valid and enforceable over 25 of the 27 member states. In addition, a Unified Patent Court will be established to adjudge matters concerning unitary patents that may be enforced in all 25 participating member states.

Although the regulations for the unitary patent were issued in late 2012, they will not take effect until the Unified Patent Court Agreement has been ratified by 13 of the 25 participating member states. That process began after the recent signing of the Unified Patent Court Agreement, but is not expected to be complete until November 2013.

Today’s Situation

Currently, U.S. inventions are protected in Europe via two different routes. The first is by filing individual protection requests at each of the local EU patent offices. In this “a la carte” solution, an applicant using the Paris Convention may file up to 12 months from the date of the original filing in the United States.¹ Applicants also may directly knock on the door of the patent offices after the 18-month repose offered by the Patent Cooperation Treaty (PCT).

In the original European patent system, an applicant must comply with all of the local requirements imposed by each of the 27 local patent offices. Therefore, applicants must hire 27 local patent agents, translate the applications and prosecute each individually. They must also use local courts to enforce rights on a country-by-country basis. This solution was perfectly adapted back when goods or services were confined to a portion of Europe. However, thanks to the Schengen Agreement—which led to the creation of Europe’s borderless area that was subsequently incorporated into EU law—goods now flow rather freely in Europe from manufacturing countries to points of sale. As a result, a single patent in a single country rarely is sufficient to curb infringement.

The second route—available since the EPC was ratified in 1973 and the Munich-based EPO was formed, thus creating what is known as the “European patent”—allows an applicant to make a single request (either directly or via the PCT) for prosecution by the EPO. Under the EPC, an applicant gives the specification in English, German or French. After a single prosecution, the EPO grants protection, and the claims must be translated into the other two official languages. At this juncture, the owner of the European patent must then choose the countries in which protection and validation are desired. As in the “a la carte” solution, applicants must then comply with various formal requirements, provide translations and pay fees to each of the local EU patent offices. The only real benefit is the single prosecution by the EPO examiner. Together, the new unitary patent and the Unified Patent Court improve this disconnected and expensive system, but implementation and use of the unitary patent system are not without risks and disadvantages.

Below are some of the obvious advantages and disadvantages of the new unitary patent system:

Advantage: The Cost of Protection May Be Reduced Up to 80 percent

Currently, applicants must carefully weigh their future needs for protection. Entering all 27 member states might cost up to $37,000 (including translation fees), in addition to an initial $5,000 filing fee. Under the unitary patent system, the EPO will charge a single total fee of $10,000 for protection in 25 of the 27 states.

Disadvantage: Spain and Italy Will Not Be Part of the Unitary Patent System

As is the case in every large family, some members are not playing nice. Italy and Spain—two of the largest European nations—are upset that Italian and Spanish are not official languages of the unitary patent system. Therefore, these nations have refused to allow non-officially translated patents to be fully enforceable against them. In other words, the only way to ensure that a unitary patent is fully enforceable in these countries will be to have the filing translated using the EPO’s online translation platform.

Advantage: Single Enforcement

Today, it is not uncommon for parallel litigations to have different results in adjacent countries. Under the new rules of the Unified Patent Court, any ruling and validity adjudication will be binding and enforceable in all 25 countries.

Disadvantage: Forum Shopping

The Unified Patent Court will have to apply rules specific to the jurisdiction of the plaintiff who is filing the suit. Therefore, a party might “shop” for the most favorable country before initiating a case. A defendant will then be bound in all 24 other countries, even if the rules would allow the defendant to prevail.

Why Should I Consider My Options Now?

A European-examined patent application may be given unitary effect if the owner submits a request no later than one month after the grant of the patent is published in the European Patent Bulletin. Therefore, if the agreement is ratified by a qualifying number of member states by November 2013, then as early as March 2014, any granted European patent may benefit from unitary effect. Patents issuing before this date will not benefit from this change in law.

While March 2014 may seem distant, since the European patent grant procedure typically takes three to five years from entry to completion, applications filed in Europe as far back as 2009 may be able to take advantage of the new system. Taking into consideration the 12- or 30-month priority of designation available to European applications based on other national applications and PCT applications, respectively, U.S. applications filed as far back as 2006 that have also included related European applications may benefit from the unitary system and, ultimately, the cost savings described above. For pending European applications, it may be wise to delay the grant of any European patent in 2013 so as to benefit from the new unitary system.

If you have questions about the unitary patent and what it could mean for your international patent portfolio, please contact a member of the Vedder Price Intellectual Property group.

_{1 Paris Convention Article 4(C)(1); the priority date runs from either the filing of a Provisional Patent Application or a Non-Provisional Patent Application.}