European patent with unitary effect and Unified patent court
13. dubna 2017 9:41
Our office is interested in all status updates relating the new system of European patents with unitary effect since the acceptance of European Regulations regarding this matter in 2012.
Latest development of ratifications of the “European patent package”
Currently the protection of patents in Europe is ensured by the European patent system, which is based on the European Patent Convention (EPC). Beside all of the 28 members of European Union, also 10 other countries are present in this system. These countries are Albania, Switzerland, Island, Lichtenstein, Monaco, Macedonia, Norway, Serbia, San Marino and Turkey. The IP rights for European patents are granted by the European Patent Office (EPO) which is seated in Munich. The validity of a granted European patent is ensured by so called validation. This means that after grant, the applicants must take further administrative steps (which may include translation into local language, or payments of further fees) to have their rights protected. Validation in its current state is criticized a lot, especially due to the fact that different countries have different requirements regarding formalities and also unpredictable financial burden.
Another issue with the current system lays in the functions of judicial protection in case of patent infringement. Nowadays it is necessary to have multiple parallel litigations in different countries which may, and often does, lead to different outcomes, which is a real complication for marketability of applicants’ rights. It is completely logical that the need for changes in current system has come from the biggest countries however the parameters of their markets are hardly accessible for Czech business operators. The Minister of Justice, Robert Pelikán, said: “Unfortunately we need to accept the fact that the course in this matter will be set by the Western-European countries with high percentage of patents and patent related litigations.”
The main advantage of the upcoming unitary system shall be its financial accessibility. The costs for gaining protection in different countries vary a lot and the new system should provide for its simplification. Further the system of annuity payments for maintaining the validity of patents shall be simplified and shall be equal to sum of fees in four most commonly validated countries (Germany, France, Great Britain and the Netherlands). According to the EPO the current system is so financially and administratively complicated that average European patent is validate only in 3 – 4 EPC countries.
On the other hand the financial situation completely changes when talking about the new court system. Basic court fee is set to 11.000 EUR. To this price also a further, value based fee will be added and this fee may vary from 11.000 EUR to 231.000 EUR. This may be economically unbearable for most of Czech business operators. Just for reference – in the Czech Republic, the fee for patent related litigation is set to 2.000 Kč per one dilatory entitlement. The proposed prices of proceeding before the Unitary Patent Court are, when compared to Czech market, extremely high and may prevent some of the applicants from claiming their rights when infringed. This is also the statement of the Czech Bar Association, which also points out that this will be the first time when the jurisdiction of civil proceedings is taken out of the Czech Republic and will not subject to the law and constitutional order of the Czech Republic.
The path leading to the unitary system has never been easy. Firstly, Spain and Italy decided not to participate in the project because of the language regime, which kept only French, German and English as official languages. The rest of the languages shall be replaced by machine translations however the level of such translation is still poor and unusable.
The main condition for the unitary system to become valid is ratification of the UPC by at least 13 states, which has to include France, Germany and Great Britain. On 10.02.2017 Italy has presented the ratification documents and became 12th participating country, however up to today, only France out of the necessary three, has validated the UPC. The current events regarding the Great Britain leaving the EU have made the fate of UPC (Unified Patent Court Agreement) unclear.
The Brexit situation is studied most deeply mainly in Germany, which is the last of the “top three” countries to ratify. The German Bar Association has issued a statement that in case the Great Britain will not ratify the UPC before leaving the European Union may trigger a provision of Vienna Convention on the Law of Treaties, when one of the participants prevents an agreement from validity then the participant is regarded as he has never been a part of the agreement. This means that according to the German Bar Association the ratification of Great Britain will not be needed at all. It is foreseen that in future the Great Britain will become a part of the unitary system as non-EU member, however the system must first come into force.
After a certain hesitations, the Czech Republic joined the unitary system preparations, however has not yet ratified the UPC. The current proposal is extremely disadvantageous for Czech companies. For example just the price for attorney’s work may reach up to 3 million EUR.