Cartoon showing two men in suits going into two differrent buildings, one labelled 'National Court' and the other 'Unified Patent Court'

Comment: Euro patent reforms promise simpler cheaper experience for innovators

Supporters of long-delayed changes to Europe’s patent system believe they will finish a process that is only half complete.

An indispensable component of any innovative society is its patent system, which allows innovators to protect their inventions and disclose them in the marketplace, so facilitating economic growth. The patent system is regarded as a central pillar of national economic infrastructure.The European Union is no exception, and as economic and political integration have gathered pace there have been several attempts to put Europe’s fragmented patent systems on an EU-wide footing.

An enormous step forward was achieved when the European Patent Convention (EPC) came into force in the 1970s, allowing applicants to benefit from a centralised examination procedure at the Munich-based European Patent Office (EPO). What an applicant receives from the EPO (a ‘European patent’), however, is effectively a bundle of national patent rights. After grant of the patent, further administration is conducted by national institutions and, crucially, adjudicated upon by national courts.

Critics pointed out that the EPC, despite its success, was only ‘half a patent system’ and argued that an integrated Europe needed a single instrument rather than a bundle of national rights, and a single court to handle disputes. Even worse, European patents are considered to be expensive to obtain and to litigate, and the disparate legal systems sometimes produce different rulings in respect of the same invention. Compared to other large economic blocs, such as the USA, with a single patent office and single legal system, Europe, despite a market of 508 million, was perceived as being disadvantaged.

After a glacial legislative process, a plan to overhaul the system now appears set to bear fruit. A package of reforms that should be implemented by the end of 2016 will create a Unitary Patent and a Unified Patent Court (UPC). The Unitary Patent will cover (potentially) all EU member states, a single legal instrument that will be issued and administered during the whole of its term by the EPO. The UPC, working from multiple locations under a single set of rules, will provide judgments in disputes related to infringement or invalidity of unitary patents, and, in many cases, ‘classical’ European patents.

Only EU member states are eligible to join, with the UK, Germany and France required to be party to the new system. Should the UK vote to leave, then the other states could be initially in a dilemma, but may simply amend this requirement and go ahead without the absent UK.

What does it mean for users? Patent applicants will decide whether they want a unitary patent or prefer a European patent. For many, the main benefit of a unitary patent may be in terms of costs. The relevant EPO committee has adopted a pricing structure designed to be highly competitive with a European patent. For the same price as a European patent renewal in four countries, the owner of a unitary patent will be able to maintain it in an area covering up to 28 countries (if all EU member states eventually ratify). Users may find it convenient, too, that the EPO will handle all steps of the application and administration.

Patent litigation may also, in some cases, be cheaper before the UPC than before national courts. For European patents, an international dispute could be heard simultaneously before several national courts. The court fees of the UPC have not yet been decided, but are likely to be set at a competitive level. In any case, a single UPC procedure is likely to cost considerably less than parallel proceedings at multiple courts.

The UPC should, over time, offer a harmonised approach and a single body of case law, with less possibility of exploiting national procedural differences through ‘forum shopping’. More importantly, it will make decisions across Europe, which will hopefully streamline, simplify and accelerate disputes.

It is impossible to predict the long-term effects of the reforms, but they represent a radical change to the patent landscape.

David Sant is a partner and chair of the European Patent Litigation Group at the London office of law firm Pearl Cohen.

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