Vince Cable to sign the UK up to a central European patent system

19 Feb, 2013

Following decades of negotiations between European states, Industry ministers from 22 EU Member States are this afternoon expected to sign an agreement which will lead to the creation of a Unified Patents Court and a Unitary Patent for participating EU countries. Signatories include Vince Cable, Secretary of State for Business, Innovation and Skills, and his French and German counterparts.

Patent protection in Europe is currently subject to a fragmented system, whereby organisations can make a single application for a European patent but on grant will in effect obtain a bundle of national patents which are enforced in the national courts of each country.

Once ratified, the agreement signed today will enable the establishment of a single court system to handle the enforcement (e.g. against an alleged infringer) and validity of patents. It will also allow the regulations creating the Unitary Patent, adopted in December 2012 by the European Parliament, to come into force.

Keith Hodkinson, Chairman of Marks & Clerk International, comments:

“Businesses must now start to plan their patent filing tactics and existing portfolio management decisions with the possibility of using the new court system, and having it used against them, in mind.

“Whilst the Unified Patents Court will oversee cases involving Unitary Patents, it will also deal with existing and future non-unitary European patents granted in one or more of the participating states. However the transitional provisions, as currently drafted, provide options to evade the system if you do not want central attack and infringement proceedings for tactical reasons for a potentially very long time. Parties can still opt out of – and back into – the new court system if they hold a traditional European patent, whilst their opponents may be able to take steps to prevent opting out or in or to commence proceedings to procure a potentially more favourable forum.

“The procedure for opting out at the outset could become log jammed and we could see a spike of anticipatory or preventative actions being filed. We may see many parties opting out until the operation of the new system becomes clear. Equally some parties such as non-practising entities may find the possibility of a virtually pan-EU attack very attractive as an efficient means of seeking to implement their monetisation programmes.

“Many large corporates may still simply conclude that the certainty of using national filings in the key EU markets outweighs the uncertainty of the transitional regime. Until the renewal and prosecutions costs are clearly shown to be significantly lower than now, national filings may even increase, particularly given the delays with applications and the procedural problems applicants are facing in the EPO. Many SMEs may reach the same conclusion if they want patents granted more quickly: until you have a patent you cannot sue anyone. Furthermore, having a patent in two or three key countries, such as the UK, France and Germany is often just as effective as having a European patent in terms of a commercial barrier to entry for your competitors.

“Really, the UPC is not going to solve the major problem of the current European patent system, which is the cost and delay of prosecution before the EPO itself.”

Graham Burnett-Hall, Patent litigation lawyer and Partner at Marks & Clerk Solicitors, continues:

“Having one court system for patents across much of Europe will in the long term make enforcement of intellectual property rights much simpler for all businesses, large and small. It means that a British organisation whose patents are being infringed by a party in, for example, Slovakia, no longer has to go through the national Slovakian court system to enforce its patents. Instead it will go to the relevant division of the Unified Patent Court, which will apply the same law and procedure in every country taking part. Equally, if infringement is taking place in multiple countries, this can be dealt with through one central court case.

“The complexity of such a huge change in the European patent court system means it will take time to establish how effective it proves to be. In particular, the Court needs to be staffed by judges that are properly equipped to handle the peculiarities and technicalities of patent law. Other details such as the involvement of the Court of Justice of the European Union will also have a huge impact on how the Court runs and how well it works for European business.

“Under the new system we will continue to see English as the dominant language in the patent world. In the central division, cases will predominantly be heard in the language in which the patent is granted. 85% of European patents are granted in English, which is unlikely to change under the new system. In fact, for at least the first six years, all Unitary Patents, if not already in English, will have to be fully translated into English by the time of grant.”

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