Not all European countries are part of the Unitary Patent System. Poland, Spain and Croatia have decided not to sign the UPC Agreement. In fact, Spain and Croatia did not even participate in the creation of unitary patent protection under Regulation 1257/2012 of 17 December 2012. The UK did initially sign the UPC Agreement but, due to Brexit, decided to withdraw from the Unified Patent Court project in July 2020.
There are various reasons why those countries did not sign the UPC Agreement. To name just a few: there were concerns that, as a result of the unitary patent system, there would be a sudden increase in the number of patents covering national territories, which would not be translated into the local language; likewise, in the case of Spain and also related to the language regime, concerns that Spanish companies would be forced to litigate in English, French or German in invalidity and non-infringement proceedings which would be heard by the UPC; or concerns related to the higher costs of litigation in the UPC than in a national court, which would be a particular problem for SMEs.
In spite of this, the Unitary Patent is also important for businesses in those countries that did not sign the UPC Agreement, for the reasons that we discuss briefly below.
1. Actions that should be taken by European patent holders from countries outside of the UPC and business entities offering their products in countries within the UPC
First of all, after the new system has entered into force, European patent holders (including companies based in countries that are not part of the UPC system) should decide whether they want their exclusive rights to be covered by the jurisdiction of the Unified Patent Court, or whether they want to continue as before – where disputes regarding those patents are resolved by national bodies, separately in each jurisdiction.
The absence of a decision by patent holders (the so-called “opt-out procedure”) means that the Unified Patent Court has exclusive jurisdiction both with regard to infringements and to the revocation of those patents in the countries covered by the UPC Agreement.
What is more, European patent holders from countries that are not signatories of the UPC Agreement should also review their existing licensing contracts, e.g. with regard to clauses concerning dispute resolution, to verify whether the Unified Patent Court is or is not competent to hear patent disputes that could arise under these agreements.
What is important is that business entities that conduct their business in countries covered by the UPC Agreement (for example, companies that offer and export their products in such territories) should also analyse whether their products fall within the scope of unitary patents and so whether they should conclude relevant licence agreements. The absence of such an agreement could create a risk of being sued before the UPC.
2. What will be the procedure for obtaining and enforcing patents in countries out of the UPC Agreement?
Companies based in countries that are not part of the UPC system who wish to obtain a European patent with unitary effect may do so through the applicable procedure.
However, any company wishing to obtain protection in countries that are not part of the UPC system, will have to proceed as usual, i.e., validating the European patent in countries that are not part of the UPC system or applying for a national patent in those territories.
Likewise, actions for non-infringement and invalidity with respect to patents in countries outside the UPC Agreement must still be brought before the national courts of those countries.
Accordingly, patentees who wish to enforce a patent in the UPC territory and in the UK, Spain, Poland and/or Croatia, as well as competitors who wish to invalidate the corresponding patents in those territories, will have to juggle different proceedings, and take into account from a strategic standpoint different factors such as case law, costs, timelines, etc.
3. Strategic considerations for a system concerning the co-existence of unitary, European and national patents systems within Europe
Given the co-existence of unitary, European and national patents there are be strategic choices to be made by a patentee/implementer. The possibility of parallel proceedings in national and UPC courts yielding conflicting judgments on the same facts means that Claimants must consider what location and type of patent may give them a more favorable chance of a positive outcome. For example, there are certain differences in approach that may push a Claimant one way or another and parties should consider tactical advantages when planning a litigation strategy:
- Expert/witness evidence and cross examination - Expert evidence and extensive cross examination play a significant role in UK and Spanish trials. In contrast the UPC looks set to take a more restrictive approach;
- Claim Construction - The courts' approach to construction may differ between the UPC and national courts on issues such as infringement via equivalence;
- Disclosure – Disclosure obligations are likely to differ significantly between the UPC and national courts;
- Filing of evidence – Evidence must be filed at a different stage. The UPC is more similar to the Spanish system in this regard as they are both front-loaded, and different to UK trials;
- Confidentiality/Privilege – Both the treatment of confidential documents/materials and privilege are highly developed concepts in many national courts, like the UK. It remains to be seen how these issues are dealt with by the UPC; and
- Availability of preliminary injunctions – in some national regimes the procedure of obtaining preliminary injunction decisions may allow the Claimant to easier and faster obtain such a decision than within the UPC.
Accordingly, a Claimant needs to carefully consider the above factors and decide on a forum/patent system to accommodate that.
Parties facing conflicting judgments may be forced into hard commercial decisions, particularly if there is the possibility of one of those Courts setting/determining a global FRAND licence for example. There is also a question as to whether the choice of litigating within multiple regimes will mean that the longstanding and well tested national courts have such a strong pull that a significant numbers of patentees “opt-out” and avoid the UPC all together in the early years.
It therefore remains key for patentees and implementers to consider the multiple regimes on offer and the tactical/strategic considerations open to them, particularly given the large markets that will not be covered by the UPC or unitary patent.
