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Until recently there was no way to obtain a single patent right covering several European countries. However, the framework around patent protection in Europe is changing. The new unitary patent (UP) system will enable applicants to obtain a single patent right covering multiple EU jurisdictions and is now planned to come into force on 1 June 2023, following a recent announcement. Many companies must now begin to evaluate how best to approach these new aspects of patent protection in Europe.
In this article, we provide a brief outline of UP and discuss some of the strategic factors that companies may consider when deciding their approach to UP, taking the biomedical engineering sector as a case study.
unitary patent
Previously, the next best thing to European-wide protection with a single patent right was the European Patent, which provides a bundle of individual national rights. Upon the grant of a European patent application centrally by the European Patent Office (EPO), the EPO is required to validate and maintain the patent separately in each member state in which protection is required.
After the UP system is implemented, applicants will be able to request the creation of a UP within one month of the grant of a European patent through the current EPO system. Unlike the traditional verification process, UP will cover all EU member states participating in the UP system (currently 17).[1]another 8 expected to join[2], out of the current 38 EPO member states). Therefore, applicants will soon be faced with the important choice between covering the EU member states participating in the UP system and being valid in each of these states separately.
In the wake of Brexit, the UK moved away from the UP system, which is tied to the EU, and thus it will no longer be possible to obtain patent protection through UP in the UK. However, UK protection can still be obtained in parallel with UP protection by validating European patents using the existing process. The same applies to other EPO states that have (so far) declined to join the UP system, such as Spain, or are not EU members such as Turkey.
Once implemented, one UP will be renewed each year using a single renewal fee payable centrally on EPOs covering all states of UP. UP will also be enforced and invalidated as a single authority through the Unified Patent Court (UPC), a new pan-European court. This makes it easier to obtain more comprehensive patent coverage and enforcement in Europe; However, this comes with the risk of central repeal in the participating EU states, along with other important implications.
strategic thought
Cost is usually a central concern for small and large entities alike. There are three main cost-sources involved in obtaining and maintaining post-grant protection using a European patent. The validation fee is the fee associated with registering a European patent on a chosen national register. Some jurisdictions require a translation fee to complete the verification. Every jurisdiction also requires a renewal fee each year to keep the patent in force.
A common approach to controlling costs is to retain patents granted only in the UK, France and Germany, using translations already obtained to complete the patent application process in these economically important states. Verification can be completed. An interesting comparison is to consider the cumulative cost of this general approach of validating and maintaining a UP with a European patent valid in the UK. This latter approach still covers the UK, France and Germany, but comes with additional coverage of the 15 other participating EU states.
According to a conservative cost analysis performed at Gil Jennings & Avery, the cumulative cost of the UP approach breaks even with the common approach three years after grant, assuming there is a grant of 6 years from application filing. After this point, the UP approach is less costly, despite additional patent coverage in 15 states. This is partly due to the intentionally competitive renewal fees that have been set for the UP to encourage further uptake of the system and to provide a more accessible European patent framework.
Therefore, in terms of cost, the UP system may provide value for money even for applicants following the simplified approach of maintaining patents only in the UK, France and Germany. Of course, applicants validating and maintaining patents in more widely participating states than just France and Germany at present could see additional and more immediate cost benefits.
However, despite these potential cost benefits, there are other important factors that should be considered before deciding whether to request UP for all your European applications granted after the UP system is in place, as summarized in Table 1. given in
Accreditation and renewal in the biomedical engineering field
A natural follow-up question is: how widely do the actual patent owners actually validate and maintain their patents in Europe? For various reasons, such as geographic distribution of sales or manufacturing, patent verification strategies can vary widely between different technology sectors. A sector-specific analysis provides a more insightful overview of the different approaches adopted by proprietors in the same sector.
Therefore, to answer this question, we examined a cross-section of 25 European patents granted to various biomedical engineering applicants in 2017 and counted the EPO states in which these patents remained in force at the time of writing. Nevertheless, we believe that clear parallels can be drawn between biomedical engineering and many other fields. Thus, the points below may apply equally to companies with similar positions in different sectors.
Figure 1 shows the results for each country with participating UP states shown in red and non-participating states in blue. States that are fully participating in the Soon UP system are colored orange. For this cross-section of the region, Germany was the most important jurisdiction, with 22 of a possible 25 patents remaining at the time of writing. Patents were maintained in Germany, the UK, France, Italy and to a lesser extent Spain, notably more frequently than in other EPO states. In some other EPO member states not shown in Figure 1, only one or two of the 25 patents were maintained, and these corresponded to one or two patents maintained very widely in many EPO states.
One notable jurisdiction is Italy, which has retained 11 of the 25 patents. Based on a cost analysis performed at Gil Jennings & Avery, as UP states, biomedical engineering proprietors seeking protection in Italy may be well placed to make further cost savings with UPC. It is also interesting to note that 15 out of 25 patents (60%) remained in force 5 years from the grant across France, UK and Germany. These owners will also be well positioned to make significant cost savings, especially if security is sought in additional participating UP states.
While these 25 patents represent a small fraction of the number of biomedical engineering patents granted each year, our findings suggest that many real businesses in this area could take advantage of the UP system to obtain comprehensive protection at a lower cost. Huh. Indeed, we may see the introduction of the UP system in the near future affecting the distribution of biomedical engineering patent protection across Europe.
However, as noted above in the context of Table 1, there are other considerations to take into account, and we illustrate some of these aspects below using case studies of three hypothetical biomedical engineering companies. Again, the same considerations discussed below will apply to companies in other sectors.
Company-Specific Case Studies
Case Study 1: Company A is a small start-up that has a European patent application based on a new prosthetic implant that is central to their business. Company A feels that obtaining protection in multiple EU jurisdictions will increase the attractiveness of the business to potential buyers and investors. Company A is therefore considering whether to have the patent recognized separately in the different jurisdictions or whether to choose to request UP upon grant of the application.
In this case, the application is of central importance to the business. Choosing to use the UP system provides more comprehensive protection, but comes at the risk of central revocation, meaning that patents arising from the application may be invalidated in a single revocation action in several major states. In contrast, choosing the traditional verification route preserves protection in other participating states even if the patent is successfully challenged in one participating state. Company A should carefully consider the extent to which the additional coverage provides attractiveness to investors with central revocation risk.
Case Study 2: Company B is a medium enterprise that develops medical imaging devices. Company B has some principal patent applications and some subsidiary patent applications relating to non-essential features of their equipment. Company B uses its patent portfolio as a revenue stream through licensing.
Here, Company B may also prefer to avoid the risk of central revocation for its core applications. However, those applications of less central importance may find it appropriate to use the additional geographic coverage offered by UP without creating undue risk. Another consideration for Company B is licensing. If Company B engages in licensing in multiple states, the additional patent coverage can be an attractive way to open up additional revenue streams. So Company B may lean towards making a request for UP.
Case Study 3: Company C is a multinational corporation with a large patent portfolio in various health engineering sub-sectors. Company C is involved in certain competitive fields in which granted patents are commonly contested or attacked.
Company C operates in contentious areas, and thus may have to consider further questions such as: Will the additional patent coverage interfere with (previously non-competing) companies operating in other UP jurisdictions? If so, Company C may in turn have to consider whether it is likely to provoke resistance from such entities as protests or attacks of central repeal.
Due to their large patent portfolio, Company C may also be prevented from using the UP as renewal fees cannot be chosen in the different participating states to reduce patent maintenance costs, unlike traditional European patents. This cost-inflexibility means that the company will be unlikely to choose the UP system for all its applications given after the C UP system is implemented. As in the previous examples, a case-by-case approach would be more appropriate, based on the technology covered by each patent and its relevance to Company C’s undertakings.
What would you do?
The UP system aims to reduce costs and simplify the patent process in Europe by centralizing the verification, renewal, enforcement and revocation of European patents. However, as we have seen from these examples, the consequences of using the UP system are not so straightforward. A tailored approach on the merits of each case is warranted to determine whether additional judicial coverage is worth the reduced flexibility and higher risk brought about by the possibility of central repeal. Would you choose to use UP, or would you stick to the traditional approach?
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