Unitary Patent: the road so far

As the Unitary Patent system is drawing nearer and nearer, it is important to review the current situation, and what the future holds.

One of the most important legal documents of an integrated European patent system is the European Patent Convention (EPC) of Munnich signed in 1977. The EPC allows obtaining a patent in several countries based on one application, but it does not make it possible to obtain a unified patent. The applicant must undergo the European patent validation process and after it has been granted, the European patent will be automatically separated into national patents. Thus maintenance, invalidation, and infringement are governed by national law.

 The EPO Headquarters in Munich | European Patent Office

The EPO Headquarters in Munich | European Patent Office

The EPC can be considered a successful initiation. The original eight ratifying country is now as many as thirty-eight and the European Patent Office receives approximately 90 000 European patent application per year.

However, some studies indicate that this system has some flaws as well. The validation process is usually easy and cheap, but if numerous countries are involved, it can result in high costs. In order for the patent holder to enforce his rights (e.g. in an infringement case), he must start different procedures in different countries which in some cases may lead to completely different results. These factors indicate that maintaining and enforcing rights related to a European Patent can be expensive and difficult.

Requirements towards a unified patent system:

  1. Validation in one procedure, preferably more cost-efficient than now
  2. Decreasing translations costs
  3. Decreasing maintenance costs
  4. Unified rules on administration and maintenance
  5. Providing higher level of legal certainty through unified substantive and procedural rules

A general principle during the creation of a new patent system is the fact that patents (as a result of that they provide exclusive rights) may lead to monopolies, thus distorting the market. Besides the original roles of a patent (making it more likely that the investment into research and development is returned), we cannot forget about its strategic potential. One of these ways is creating a so called patent thicket, which means that the right owner does not utilize his invention, rather blocks potential competitors from research. This method is rather an obstacle than an incentive for innovation. Decreasing maintenance fees can result in a higher amount of such “strategic” usage of patents.

 The patent thicket can be an obstacle innovation

The patent thicket can be an obstacle innovation

Besides legal ways like creating patent thickets, there are actors that act in bad faith and seek to make profit from the flaws of the patent system. The most typical example for that is the existence of patent trolls. They usually buy licenses from bankrupt companies and threaten others with infringement procedures. In worse cases they are not afraid to start these procedures.

 Patent troll

Patent troll

The Unitary Patent system is built on three laws: the Regulation, the Translation Regulation and the Agreement on a Unified Patent Court. Since the Council declared that a unitary patent system with regards to all member states is not yet possible, 25 member states decided to move on in the form of enhanced cooperation. The Agreement will come into force when it is ratified by at least thirteen member states including Great Britain, France and Germany. So far only seven countries (Austria, Belgium, Denmark, France, Luxembourg, Malta and Sweden) have ratified it but there are still obstacles ahead… (to be continued)

Pintz & Partners