Upcoming Changes to the European Patent System and Implications for Israeli Businesses

After years of delays, Europe’s Unified Patent Court and Unitary Patent system will be implemented in about a year from now. The Unified Patent Court and Unitary Patent system represents the most important change ever seen in the European patent landscape since the establishment of the European Patent Office almost 50 years ago.

The new system will have two major impacts on the international patent landscape. Firstly, patent litigation in Europe will become much more attractive to international businesses through a unified litigation system covering the world’s largest single economic market and Israel’s largest trade partner. In time, European patent litigation will presumably be of equivalent importance as US patent litigation. Secondly, the new system will lead to harmonizing patent law within Europe. This will particularly benefit Israeli businesses offering products and services globally over Europe as they will enjoy a streamlined and cost-efficient Intellectual Property system.

Unified Patent Court

The Unified Patent Court (UPC) is a common court of the European participating member states established to replace the current country-by-country approach for infringement and revocation actions concerning patents granted by the European Patent Office. This specialized court will make the Europe-wide enforcement of patents easier by avoiding the need for parallel actions, and by reducing costs resulting from litigation in multiple jurisdictions. It will also offer greater legal certainty by preventing occasional inconsistent decisions in different countries.

Eventually, the UPC will have exclusive jurisdiction, not only over the new Unitary Patents, but also over standard European patents. However, at the start of implementing the new system, there will initially be a transitional period of at least 7 years, during which standard European patents may be opted-out of UPC jurisdiction. It is important to note that, by default, standard European patents granted before or after the start of the UPC will be subject to UPC jurisdiction, and will therefore be at risk of central revocation if not opted out. Therefore, Israeli businesses should now consider their IP strategies, and determine whether to subject their current European patents to the jurisdiction of the UPC.

European Patent with Unitary Effect (Unitary Patent)

The launch of the UPC also means the birth of the Unitary Patent: a single right that provides uniform protection across the 24 UPC member states. The list of states that will participate in the Unitary Patent, once the UPC becomes operational, includes Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, and Sweden. Cyprus, The Czech Republic, Greece, Hungary, Ireland, Romania, and Slovakia plan on joining shortly thereafter.

Once the UPC is up and running, companies will apply in the usual way for European Patents at the European Patent Office, and after the grant of the patent has been published, they will have a month to request Unitary effect. The advantages of the Unitary Patent are essentially twofold. Firstly, the Unitary Patent will simplify the current administrative charge on patent applicants, by removing the need for complex and costly national validation procedures, and by unifying the currently fragmented renewal fee system: there will be only one renewal procedure, one deadline, and one fee, that will closely correspond to the sum of the renewal fees paid for the four countries in which European patents are most often validated. Secondly, Unitary Patents will be automatically subject to UPC jurisdiction, and patentees will therefore be able to enforce Unitary Patents across all participating member states centrally, rather than having to pursue infringers under the different national designations of a standard European patent. This, however, also means that Unitary Patents can be attacked and revoked centrally.

From a practical standpoint, in view of the increasing value of European patents, care should be taken to ensure that patent applications are drafted to withstand European scrutiny. Ensuring that applications meet European patent application thresholds will allow Israeli applicants to fully benefit from the new system once the UPC opens its doors.