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Pankhuri Malik is an IPilogue Writer and an LLM Candidate at Osgoode Hall Law School.

The IPilogue reported in September 2021 that with Germany’s ratification of the Protocol on Provisional Application of the Unified Patent Court Agreement (“Agreement”), the Unified Patent Court (“UPC”) may become a reality by 2022. Now, on January 19, 2022, Austria became the 13^th Member State to ratify the Agreement, clarifying the timeline for the UPC. Austria’s ratification triggered the protocol’s entry force clause and kicked off the Provisional Application Period (“PAP”).

The PAP is expected to last anywhere between eight and twelve months, subject to the time required to finish the preparatory arrangements for the UPC to commence operations. While Germany has internally passed enabling legislation for the UPC, its ratification is yet to be officially communicated. It is expected that once the Member States are satisfied with the preparations for the UPC, Germany will deposit its instrument of ratification.

Currently, the EU patent regime requires the patentee to have its patent (granted by the European Patent Office) validated in the Member States individually. Thereafter, any claim of infringement and/or invalidity is required to be prosecuted through separate legal proceedings in all nation states. The UPC, through its agreement to set a single and specialized patent regime, with its accompanying regulations, consolidates the national patents into a streamlined process. Under the UPC, innovators will be able to enforce their patents in a single court. Similarly, invalidation proceedings will also be adjudicated upon in the UPC, removing the need for parties to prosecute their patent rights individually in all member countries. Further, the cost of renewal of one UPC patent is expected to be equivalent to roughly the sum of national renewals in the top four EU countries.

At the moment, the UPC has 25 signatories and 16 Member States, including Austria, have ratified it. Once Germany’s ratification document is received, the UPC will commence from the first day of the fourth month after receipt of the document. This could happen as early as September 2022. The UPC is expected to commence operations in late 2022 or early 2023.

At the moment, since the practicalities of the UPC are still unknown, it is understandable that innovators may be apprehensive to avail the jurisdiction of the UPC immediately. The Agreement therefore provides for an “opt-out” period. In other words, innovators may be able to avail one of the following three options:

1. Proceed under the jurisdiction of the UPC;
2. Opt out of the jurisdiction of the UPC and continue to avail patent rights under the regime in place; or
3. Opt for a hybrid system, where an existing European patent may be validated under the UPC and separately through national validation in non-Member States.

As of now, this transition period is only valid for seven years, and is further extendable by another seven, after review at the five-year mark.

The work to prepare for the commencement of operations of the UPC is being conducted by the Preparatory Committee (“Committee”). The Committee is comprised of all Member States to the Agreement, and its accompanying regulations. At the outset, the Committee is undertaking work under 5 broad heads:

1. The legal framework;
2. Financials;
3. Information technology;
4. Infrastructure; and
5. Human Resources.

However, the Committee is a short-lived endeavour and will only survive for as long as preparatory works are still underway.

Under Article 24 of the Agreement, the UPC will operate on Union Law, the UPC Agreement signed by the Member States, the Convention on the Grant of European Patents, and other international agreements applicable to patents and binding on the Member States. Alongside, the UPC will also take national law into consideration.  Under the hybrid system mentioned above, any existing patent rights that may be validated under the UPC will continue to be governed by national laws.

Now that the UPC has become a reality, almost a decade after it was first conceptualized, it is expected that the European patent landscape will drastically change. For one, the holistic costs of securing patent protection in the EU are projected to drop by almost 70%. Similarly, the timeline for securing a patent and litigating its infringement and validity is also expected to significantly drop. All in all, with the removal of administrative barriers to securing patent protection, we should expect to see a substantive increase in patent applications in the EU.