The Unified Patent Court (UPC) is now a large step closer after Germany ratified the Protocol on the Provisional Application (PPA) of the Unified Patent Court Agreement (UPCA).

The UPCA is an ambitious piece of legislation, created with the intention of harmonizing patent law across the EU. This would provide patent protection via a Unitary Patent – as well as enforceability, validity and invalidity – across all of the EU Member States signed up to the Agreement. Alongside this Unitary Patent is a Unified Patent Court system, with its primary Central Division courts in Paris, Munich, and a third city yet to be determined, which would decide on matters of patent validity and infringement. London was originally also a location for a Central Division court until the UK confirmed that it would not be taking part in the UPC system.

The ratification of the agreement had been held up by a number of constitutional complaints in Germany against the UPC. However, these have now been rejected by the German Federal Constitutional Court. Following the Court’s decision, the Bundestag approved the Consent Law, which was issued on 12 August 2021, and Germany formally deposited its instrument of ratification with the European Commission on 27 September 2021.

However, the ratification of two more Member States was still required for the Protocol to enter into force. Slovenia has since also ratified it on 15 October, and Austria is expected to follow suit soon.

Once this has been done and the PPA is in force, the UPC will then have a legal capacity and the provisional application period will begin, during which the secondary legislation for the UPC will be adopted, the budget set, the electronic case management system completed, and the judges appointed.

The provisional application period is expected to last somewhere between 6-10 months. Upon completion of this period, the final instrument of ratification of the UPCA will be deposited by Germany.

The UPCA will then enter into force on the first day of the fourth month following the deposit of the final instrument.

It is therefore possible that the UPC will be up and running sometime during 2022.

When it is up and running, unless they are opted-out, granted European patents will be subject to the jurisdiction of the UPC as well as the national courts of the UPC countries. This means that patentees will be able to enforce their European patents in a single action across all the countries that have ratified the UPC Agreement and where the patent is validated.

Conversely, these patents can also be attacked, and potentially revoked, in a single action before the UPC’s Central Division. This contrasts to the current situation where a European patent is a bundle of national rights, each of which can only be revoked in separate actions before the national courts after the EPO’s 9-month opposition period has expired.

The UPC system is however not compulsory. For the three months leading up to the UPC becoming operational, there will be a so-called ‘sunrise period’, which will provide the opportunity for owners of European patents and patent applications to opt out of the UPC system before it even starts. For those patents which are opted out, the current situation will continue to apply. Therefore, opting out a European patent during the sunrise period is the only way to guarantee that it will not be centrally attacked in the UPC system.

For European patent applications which are pending before, but granted after, the UPC system starts, their owners will need to validate the European patent as national patents as they do now, and simultaneously file an opt-out demand, to avoid the possibility of proceeding being filed in the UPC before the patentee can opt-out.

It will however be possible to opt back in any patents which have previously been opted out, as long as there is no ongoing national litigation involving those patents. This may be relevant if a patent owner wants to try and enforce a patent across Europe in one action. If this is done, however, it would not later be possible to opt the patent back out of the UPC system.

There will also be a transitional period of 7 years (which may be extended for a further 7 years) within which patentees can opt out a European patent from the UPC’s jurisdiction, unless proceedings before the UPC have already begun. Additionally, during this transitional period, there will be the choice of whether to bring an action relating to a European patent before a national court or before the UPC. Once the transitional period ends, if the patent is in the UPC system, proceedings must be brought before the UPC.

For patents granted under the UPC as a unitary patent, the possibility of opting out or bringing an action before a national court during the transitional period will not be available.

With the UPC now becoming a reality in the near future, owners of European patents and patent applications should therefore give thought as to whether the UPC system or the current system would be more beneficial for their rights.

For advice on the UPC and how it may affect your patents or applications, please contact one of our experts.