1st Annual Life Sciences Law Forum: what do we know about the Unitary Patent?

Day two of the 1st Annual Life Sciences Forum in London saw panellists discuss the European Unitary Patent (UP) and the Unified Patent Court (UPC).

Chris Mercer, president of the Chartered Institute of Patent Attorneys (CIPA), paraphrased former US Defence Secretary Donald Rumsfeld, highlighting that when it comes to the UP and UPC, there are “things we know we know, things we know we don’t know, and things we don’t know we don’t know”.

Alongside Adam Cooke, partner at DLA Piper LLP in London, Mercer outlined some of the key implications of the new patent system and suggested strategies for dealing with it.

Under the current system, applicants can file national patents in EU member states, as well as a European Patent before the European Patent Office (EPO), designating any of 38 EPO contracting-states.

The UP, which could cover up to 27 EU member states (but currently looks like covering 25) will provide an ‘administrative advantage’, Mercer said, because it will be administered by the EPO, but there are significant potential difficulties too.

The new patent will be subject to a single renewal fee, which may well be advantageous in some circumstances, but gives no scope for allowing patents to lapse is particular jurisdictions, he said. “If you don’t pay it, your patent dies completely, everywhere.”

Mercer suggested that companies may look at a combination of national patents and the UP or a European Patent to ensure that their risks are limited, even in the event that it costs more to pursue this strategy.

Cooke spoke primarily about the UPC, under which UPs and European Patents will be litigated unless companies decide to opt out of the system (opt out is possible for seven years, possibly extendable to 14).

Currently, “you have to sue in a number of different countries, and the rules of procedure are very different”, he said.

While the UPC should solve some of those problems, there remains a lack of clarity on the exact rules of procedure, and it will still be possible for divisions in different jurisdictions to treat, for example, infringement and invalidity proceedings, differently.

He also highlighted a slight irony of the proposed system, using the example of the recent Actavis v Eli Lilly case in the UK, which he said suggests that “the move to a unified system has caused national courts to be more innovative”, including as in that case, issuing rulings with pan-European effect.

Cooke added that companies would be wise to opt out of the new court system: “It’s difficult to see why you wouldn’t want to opt out, given that you can opt in at any time.”

Other issues, such as the identities of the judges in the new system, costs, language, and the ultimate role of the Court of Justice of the European Union, are yet to be fully determined, but especially in the latter case, could have a large impact on the ultimate success of the system, he said.

Strategy

Mercer said that companies would be wise to start by filing a national patent application: “If you get a UK patent, that’s a good thing,” he said. Then, after 12 months, “file a [Patent Cooperation Treaty] application”, which can then give rise to an EPO application for a UP or a European patent, or national patents.

Cooke said: “It seems essential to me to file national patent applications in key countries”, whatever else companies choose to do.

As for the court system, the risk of high damages based on coverage in many states at the same time could be daunting. Mercer suggested that foreign companies may try to have patents assigned to UK inventors in order to allow them to use the UK local division of the court, and that there may be ways of drafting claims to ensure that at the second instance, they reach a particular division (one of London, Paris and Munich).

Turning to the costs of litigation, Cooke said that given the complexity of the system, “it is likely to be pretty expensive”. However, he said: “One would think it would be less expensive than litigating in the UK High Court … having said that, it’s all pretty front-loaded.”

The agreement still requires ratification by 13 participating states including the UK, Germany and France, and Cooke said that realistically the first patents won’t be granted under the new system until 2015 at the earliest.

The 1st Annual Life Sciences Forum is organised by Practical Law Company, and finishes today.