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EU patent court – the countdown also runs for Life Science Companies

The Agreement on a Unified Patent Court (EPC) is expected to enter into force at the beginning of 2019. To date, 16 EU Member States, including Great Britain, have already deposited their ratification document. Despite the Brexite vote, the UK government decided in November 2016 to continue the ratification process. All legislative steps have now been completed; the ratification document was deposited at the end of April 2018. British industry and politics had confirmed in advance that Great Britain will largely benefit from the new Unified Patent System. The highly attractive London department of the Central Chamber, responsible for chemistry and pharmaceuticals, had aroused particular interest here.

Now only missing for the entry into force is the ratification of Germany. The new European Patent System will then start with about 20 EU Member States and bring together a market of more than 360 million people. The launch follows a phase of provisional application of about eight months, during which patent holders may waive the jurisdiction of the Unified Patent Court in respect of their European patents.

What are the remaining hurdles?

Only ratification by Germany is required for the patent law reform to come into force. Although Germany had completed all the necessary legislative steps by 2017, a constitutional complaint blocks German ratification. The Federal Constitutional Court has not yet decided on the action, the proceedings are still listed for a decision in 2018, a decision in early summer is considered probable.

Preparatory measures required in 2018

Once Germany has ratified, the court system will begin quickly. That is why it is important to prepare already now. Many fundamental decisions on application strategy, future inventions, pending patent applications, existing European patents, licensing agreements and R&D projects are required now.

Opt-out requirements

The Unified Patent Court is competent for all European patents which have not expired at the date of entry into force of the EPC. This therefore concerns European patents applied for since 1999. Patent holders who opt out their existing European patents from the new system must pay close attention to effective registration. For example, only the real beneficiary can make the opt-out request. The application itself must be submitted by an appropriately authorised person.

But should you decide to opt out? The new court system is promising. It considerably facilitates Europe-wide litigation. The costs are the same as in German infringement and nullity proceedings, the cost risks can be better planned, there are fewer instances. The procedure will be much quicker, nullity and infringement will be decided in the same procedure. The court cost cap for nullity proceedings speaks in favour of the new system as well as its Europe-wide enforceability. And even if the patent is subsequently declared null and void, an infringer who has been finally convicted cannot assert a claim for rescission. Compensation paid shall also remain with the patent proprietor. Finally, the new Rules of Procedure are explicitly adjusted to patent disputes and nullity proceedings, which will ultimately benefit all parties involved in the proceedings. Another major advantage is that you can rely on your trusted IP lawyers, who will be able to act and intervene throughout Europe in the future.

Patent holders should therefore tend to be cautious about the opt-out option in order not to rashly cut off a promising path for future Europe-wide patent disputes.

License agreements, co-ownership and R&D projects

In licensing agreements, co-ownership and R&D projects, all parties should now discuss the preparation for the EPC and decide jointly, for example, whether they want to declare an opt-out, whether a licensee should be entitled to file an action, whether they want to apply for a European patent with uniform effect (single patent) for their pending European patent application and finally whether they want to keep their national German or French patents. In this respect, it should be noted that Germany and France have now overturned the prohibition of double protection. In Germany, this important change applies to all national patents granted after the entry into force of the EPC. An ongoing national grant procedure at the German Patent and Trade Mark Office could therefore be slowed down if necessary.

Unified patent

After the EPC enters into force, patent holders can apply for uniform effect for their European patents granted in the future. All European patents granted after the entry into force of the UPCA can have a uniform effect. The new court has exclusive jurisdiction over these single patents and only a single annual fee has to be paid. This simplifies administration considerably.