This patent reform package in its composition is a unique legislative achievement, resting on two pillars: Regulation 1257/2012/EU on the creation of unitary patent protection (UPR) and Regulation 1260/2012/EU on the applicable translation arrangements (UPTR) are one element of the package. They were adopted in December 2012 within the framework of the enhanced cooperation (Art 20 TEU), allowing for European law to be created without the consent and/or participation of all EU Member States. Spain decided not to participate in the enhanced cooperation on the unitary patent protection, primarily due to language concerns and the new system's focus on the official languages of the European Patent Office (German, English and French). Italy decided to join the enhanced cooperation in the area of the creation of unitary patent protection as the 26th Member State only in July 2015 which was confirmed by the European Commission in September 2015.
Along with the Regulations, the other element of the package, the Agreement on a Unified Patent Court (UPCA) was signed by 25 EU Member States in early 2013. Spain, Poland and Croatia are not part of the Agreement. The entire patent reform package will enter into force as soon as the UPCA is ratified by at least 13 of those member states, which must include Germany, France and Italy. Pre-Brexit the UK was supposed to be the third "must-have" state. Please see the status of the ratification process here (overview provided by the European Commission). At the moment, only the ratification of Germany is missing for the UPCA to enter into force. It was agreed that Germany would deposit its instrument of ratification when the preparatory work is (mostly) completed and the court will be fully functional within the 3 month period triggered by the final ratification.
The European Patent with unitary effect
Based on the Regulations described above, a new type of European Patent, the "European Patent with unitary effect" (commonly being referred to as "unitary patent"), will be available. The procedure for obtaining a unitary patent will be the same as that for a European bundle patent. Within one month of the grant of a European patent, the patentee must choose whether to opt for unitary protection rather than to validate the patent on a country by country basis in those countries which have ratified the UPCA (and a European bundle patent elsewhere). In contrast to the current European bundle patent, the unitary patent will be one single patent, providing unitary protection in all participating EU Member States. On this basis, the patent proprietor may obtain an injunction with effect throughout the territories of all participating Member States and the patent may be revoked in one single action with the same pan-European effect (cf. Art. 5 UPR).
The validity requirements for a UP will be the same as for a European bundle patent, i.e. as set out under the European Patent Convention (EPC). Although the scope of protection of unitary patents is to be uniform in all participating Member States (Article 5 UPR), infringement is a matter of national law as is ownership (specials rules exist as to the latter: see Article 7 UPR). The requirements for the application, examination and granting of unitary patents will be governed by the EPC, while the European Patent Office will continue to be the competent body for examination and granting of such patent applications, as well as for handling opposition proceedings.
The most debated issue in the creation of the unitary patent has been the language regime. Spain filed two actions against several aspects of the unitary patent system with the Court of Justice of the European Union. The CJEU dismissed the first challenge (Cases C-274/11 and C-295/11) in April 2013, with which Spain, supported by Italy, sought annulment of the Council Decision 2011/167/EU authorising the use of the enhanced cooperation procedure to create the unitary patent (see here for more details). The CJEU also dismissed the second challenge (Cases C-146/13 and C-147/13) in May 2015 with which Spain was seeking annulment of the UPR and UPTR (see here for the decision in the case C-146/13 and here for the decision in the case C-147/13 for more details).
The UPTR specifically addresses the translation arrangements for the European Patent with unitary effect in essence by reference to the official languages of the EPO (German, English and French). In general, where the specification of a European patent with unitary effect has been published in any of these languages, no further translations will be required. However, during a transitional period, further provisions apply. Hence, where the language of the proceedings is French or German, a full translation of the specification into English is required, or, where the language of the proceedings is English, a full translation of the specification into any other official language of the European Union must be submitted. The transitional period lapses after of a maximum of 12 years. It may be terminated at an earlier point in time when the Council is satisfied that high quality machine translations of patent applications and specifications into all the official languages of the European Union are available. Thus, in practice it might still take a while until one of the objectives of implementing unitary patent protection in the EU, a simplification of translation requirements and a reduction of the associated costs, is accomplished.
Another more immediate benefit of unitary patents is the reduction in renewal fees when compared to the current "bundle patent" system. Unitary patents are subject to the payment of a single renewal fee to the EPO. Article 12 UPR provides that the level of renewal fees shall be set at a level that (a) is equivalent to the level of the renewal fee to be paid for the average geographical coverage of current European patents; (b) reflects the renewal rate of current European patents; and (c) reflects the number of requests for unitary effect.
The exact amount of renewal fees for unitary patents was set by the Select Committee of the Administrative Council of the EPO in June 2015, adopting the so called "True Top 4" approach, according to which the fees correspond to the sum of the renewal fees currently paid for the four countries in which European patents are most frequently validated today (Germany, France, UK and the Netherlands). Please see here for further information on the precise amount of fees. As these fees are (still) based on the situation in 2015, there may be a need to adapt the fee structure in the wake of Brexit. Arguably the lack of protection in the UK (to be compensated for perhaps by an additional national patent) may suggest a decrease of the originally anticipated fees.
This approach presents an attempt to set the fees at a rather business-friendly level, as the economical attractiveness will certainly be a decisive factor for the success of the unitary patents. On this basis, the UP renewal fees appear to be an attractive proposition at least for patentees who would validate their traditional EP bundle patent in at least four Member States, as they will obtain UP protection in 25 Member States for the same price. It remains to be seen whether SMEs, who may traditionally validate (or file nationally) in less countries, are sufficiently incentivised to opt for unitary patents in the future. For further background and commentary, please read on in our viewpoints section: "UPC: Let’s talk about money!".
When deciding whether or not to opt for a unitary patent on grant or a European bundle patent, it should be borne in mind that the European bundle patent offers some flexibility over the life of the patent in that the patentee may choose to no longer renew the patent in some countries with consequent savings in renewal fees. In the case of a unitary patent however, all the eggs will be in one basket: unless the renewal fee is paid, the entire patent will lapse.