by Giuliana Miglierini
The date of 1 April 2023 may mark an important step in the procedures to defend or challenge intellectual property rights. According to the current roadmap, since that date the Unified Patent Court Agreement (UPCA) will entry into force and the Unified Patent Court (UPC) will officially be able to receive the first cases.
Seventeen EU member states ratified up to now the UPC Agreement; for other seven, ratification is still pending. The new specialised body will decide on patent litigations (both infringement and revocation), with respect to both unitary patents and European patents validated in the adhering countries.
The organisation of the UPC
The Unified Patent Court is comprehensive of a Court of First Instance and a Court of Appeal. The Court of First Instance has its central division located in Paris and a section in Munich, plus local or regional divisions in adhering member states.
The Court of Appeal will be based in Luxembourg and will be responsible for decisions on appeals against decisions of the Court of First Instance. Its president is the legal representative of the UPC.
The UPC will also include a Patent Mediation and Arbitration Centre and a Registry located at the Court of Appeal (with sub-registries at every division of the Court of First Instance). The Registry shall be responsible for the organisation of all administrative and procedural tasks for the Court.
Preparatory activities to the activation of the Unified Patent Court included in 2022 the selection of judges. A total of 85 judges have been appointed, of which 34 are legally qualified judges and 51 technically qualified judges. They all have to assume their duties by the date of the entry into force of the UPC Agreement. Mr Klaus Grabinski (DE) has been designated as President of the Court of Appeal, Ms Florence Butin (FR) will be the President of the Court of First Instance. The Presidium of the UPC is also comprehensive of other two judges from the Court of Appeal and three judges from the Court of First Instance. The full list of the appointed judges is available at the UPC website.
Proceedings at the Court of First Instance will be held in the official language of the member state hosting the local or regional division. Member states can also designate one or more of the three official languages used by the European Patent Office (English, French or German) as the language of proceedings of their local/regional division. Proceedings discussed before the central division, or where the parties so agree, may refer to the language in which the patent was granted (English, French or German). Proceedings before the Court of Appeal shall usually refer to the same language used before the Court of First Instance.
Activation of the CMS Sunrise functionalities
According to the current roadmap, the expected date for the start of Sunrise period is 1 January 2023. From this date, the Case Management System (CMS) functionalities of the UPC should be activated.
Access to the CMS will require strong authentication; the Court published a document to clarify requirements for the two certificates needed to access the CMS system. Both of them can be obtained by a Qualified Trust Service Provider, according to the eIDAS regulation (regulation EU 910/2014 on digital identity).
The first certificate must be compulsory used for authentication to the system and login; the second one can be used to electronically sign the documents before uploading them into the CMS. The authentication certificate must be stored in a physical device (smart card or USB stick); this requirement is optional for signature certificates.
In view of the activation of the CMS Sunrise period, the UPC has planned a testing period for external users from 28 November until 16 December 2022. The available CMS test environment is a copy of the CMS production environment. Testing will allow to validate the CMS with respect to real world environment and to confirm the functionality of all system components and their compliance with legal and business requirements.
As for the interoperability of data, the Unified Patent Court has signed an agreement with the European Patent Office to provide the legal basis for the exchange of data between the EPO’s European Patent Register and the UPC’s Register. The entry into force of this agreement will coincide with that of the UPC Agreement.
The impact for the pharmaceutical sector
The entry into force of the new unitary patent system (i.e. the unitary patent and the Unified Patent Court) may have a significant impact on the pharmaceutical sector, where patent litigation are a quite common event along the lifecycle of a medicinal product.
The opportunities and risks offered to pharmaceutical companies by the new system have been discussed in an article by Zack Mummery published in the blog of UK’s law firm Reddie & Grose.
The possibility to have just one intellectual property right valid in seventeen different countries is one of the main advantages, as it avoids the need to validate European patents at the national level. Costs shall thus decrease both with respect to validation and renewal fees. On the other hand, the choice of a unitary patent obliges the company to pay renewal fees for the entire life of the patent, or to dismiss it entirely. It would be no longer possible to select the territories of interest where to maintain the patent active, as it currently occurs for the European patent.
A grey area of uncertainty highlighted by Zack Mummery is the possibility for supplementary protection certificates (SPC) to be based on a unitary patent. SPCs are currently governed by laws at the national level, but the EU Commission is discussing the possibility to activate a single SPC right valid across Europe.
Should a litigation occur for patent infringement, for example, a positive outcome for the originator company before the UPC would reinforce protection in many European countries. On the contrary, should the judgement be in favour of the other party, the originator may lose in a while protection over a great part of the European market. Another risk mentioned in the article is the possibility of a central revocation of the patent.
Major pharmaceutical companies may prefer to continue defending their intellectual property right through many different actions at the national level. Despite the higher costs, this approach is considered more flexible and it may lead to different outcomes in different countries, thus ensuring better protection of the interested markets.
According to Mr. Mummery, this sort of consideration should be kept in mind for important patent rights, for which the costs of validating a European patent individually in EU member states “will present a lower risk than validating as a unitary patent”. Exactly the contrary may apply to smaller pharmaceutical companies and start-ups, for which the lower costs of a unitary patent may result in more appealing.
The UPC can also decide on European patents validated in adhering member states, leading to the same risks for the protected markets seen above. During the transition period of seven years, the opt-out option will allow to choose among the UPC or national courts to judge on infringement and revocation of existing and new European patents. Furthermore, the Sunrise period allows interested companies to opt-out for up to three months before the activation of the new system. “However, given the potential value of some patents in this sector, the uncertainty of how judges will decide matters of infringement and validity, and the added flexibility of being able to launch separate actions in different European countries, opting patents and applications out of the UPC will be very attractive for many organisations”, writes Zack Mummery. Attention should be paid also to divisional applications during the transition period, as it may lead to the contemporary presence of both European and unitary patents rights.