A new unitary patent for EU countries – what companies need to know

It looks like a unitary patent covering 17 EU countries will come into force around the turn of the year. Companies should be vigilant, as the new system will require them to make choices and consider prices. “Comprehensive protection will be more easily available, but it is good to be aware of the financial risks in advance”, says Marjut Honkasalo, Kolster’s European Patent Attorney and Partner.

When the new system comes into force, the patent application process will not change, but in addition to the existing classical European patents, a unitary patent can be registered with the European Patent Office (EPO). Going forward, companies will therefore be able to protect their inventions in the countries covered by the system with three different patents: a national patent applied for from each country’s own patent office, a unitary patent registered with the EPO, or country-specifically validated classical European patents under the current system. In Finland, a national patent is applied for from the Finnish Patent and Registration Office.

“The new system means that businesses will need to make decisions specific to the invention and to the company. This is because it is up to the applicant to decide whether to validate a patent granted by the European Patent Office as one or more national patents, as is current practice, or to register it as a unitary patent covering 17 EU countries. In other European countries, the current practice is continuing. Applications will be evaluated by the European Patent Office on the same basis as before”, says Marjut Honkasalo, European Patent Attorney and Partner at IPR expert firm Kolster.

A regional patent system has been planned for member states of the European Community since the 1970s. The goal is now within view, as certain elements of the court agreement under the new unitary patent system came into force provisionally in January. Once the court arrangements are sufficiently in place, Germany will ratify the court agreement. At that point, it will also be known when the regional unitary patent system takes effect. Honkasalo estimates that this will take place at the end of this year or in early 2023 at the latest. The new system includes both a Unified Patent Court and a unitary patent.

For country-specific European patents, annual fees are paid separately to each country. The unitary patent, on the other hand, has a single annual fee covering all the countries covered by the system. The annual fee amount for the unitary patent corresponds to the sum of the annual fees paid to Germany, France, Italy and the Netherlands.

“If a company needs extensive country coverage for its patent, it will benefit from the system. The unitary patent can mean savings when you do not have to pay country-specific annual fees.”

One of the risks of the reform is significantly more expensive patent disputes

The Unified Patent Court (UPC) is an essential part of the unitary patent system. Once the system enters into force, existing granted national European patents will automatically come under its jurisdiction, unless they are specifically opted out or subject to a dispute before a national court.

The advantage of the Unified Patent Court is that its decisions apply to all EU countries participating in the system. However, no one knows yet how the Unified Patent Court will operate and what kinds of decisions it will make.

“All companies with national European patents must be vigilant in this matter and consider whether they want any disputes before national courts or the Unified Patent Court. Even before the new system comes into force, patent holders or applicants may opt out their European patents and patent applications from the Unified Patent Court. In that case, any disputes concerning the European patents will be before national courts”, Honkasalo says.

There is a seven-year transition period for opting out, which can be extended by another seven years. Opt-out will not be possible if an action concerning the national European patent has been brought before the Unified Patent Court. Unitary patents, on the other hand, cannot be opted out from the Unified Patent Court.

“From a Finnish point of view, handling disputes in the new court will be considerably more expensive than previous practices because of higher court fees. If two companies bring a dispute over infringement of a national European patent before the Finnish national court, i.e. the Market Court, the court fee will be EUR 2,120. If the dispute is brought before the Unified Patent Court attached to the Market Court, the court fee will be at least EUR 11,000. Although small businesses will receive a discount of 40%, the price will still be higher than it is now”, Marjut Honkasalo emphasises.

The unitary patent has already been ratified by the Netherlands, Belgium, Bulgaria, Italy, Austria, Latvia, Lithuania, Luxembourg, Malta, Portugal, France, Sweden, Slovenia, Finland, Denmark and Estonia.