Watch the video for the implications to your business.

My friend Stephen Carter from Mewburn Ellis gave a 10-minute talk about the European Unitary Patent Package at the 10x Medical Device Conference in May 2016 – before the Brexit vote.

If you have a European patent, or aspirations to get a European patent or licenses, this is going to impact you.

Stephen explained, in Q1 2017 we should see a “single patent that gives you protection across the whole of the EU. We also expect a single Unified Patent Court with jurisdiction not only over this new European Unitary Patent but also over existing European patents that have already been granted.”

Stephen Carter: Thank you Joe and thanks to all of you for sticking with the program and staying for what we call in the UK, “The Graveyard Slot.” So we are about to get in Europe and we hope Q1 of next year what’s referred to as the European Unitary Patent Package. And we’ll get into one of those but we’ve been waiting for it for an awful long time and to give you some context as to how long we’ve been waiting for it, so that little kid in the what my Mum assures me was a very fashionable outfit at the time back in about 1975 was when people first started talking about having a single European Union-wide patent. And here we are now in 2016 and finally it’s about to happen.

So what is this package? Well it comes in two parts. There’s the European Unitary Patent. So as Joe said, that is a single patent that gives you protection across the whole of the EU. Alongside that, we get the Unified Patent Court. Now this is a single court. It has several seats around Europe that is ostensibly single court which has jurisdiction not only over this new European Unitary Patent but also over existing European patents that have already been granted. And that’s one of I guess, the big take-home today. So anyone that currently has a European patent, has aspirations to get a European patent or licenses, a European patent, this is going to impact you.

Another important take-home is that the EU isn’t what you might consider the whole of Europe and it’s certainly not what the whole of the current European Patent Convention. It’s not all the countries that are covered by that. This new Unitary Patent doesn’t even give you protection across the whole of the EU because there’s a couple of countries that hadn’t signed out to it yet.

Spain being the noticeable one which probably will never join up. Croatia is the little sort of upside down U-shaped country down in the corner which probably will sooner or later. And then Poland is lagging behind a bit but everyone expects it to. But even if those EU countries sign up, you’re still not going to get coverage for the countries listed there that you can get coverage for the current European Patent System.

And so that system is going to carry on running alongside this new patent. So actually although Joe kind of build this as a simple vacation thing. We have a single patent. It actually just added another layer of complication to this system in Europe.

This is just kind of blatant advertising by me I suppose. These are a few of the companies that I help with their European patent needs.

And the other thing I wanted to point out was that so medical device patents are hot in Europe at the minute. Had been for a while. You see from this slide which is dated from 2015 from the European Patent Office that medical technology was the number one technology area for patent filings in 2015. It’s also the fastest growing technology area for patents in Europe. And it’s been growing pretty steadily over the last 10 years. And a lot of that is down to you guys over here. So you’ll see that 41% of the patents that are filed in this technology area are filed by US companies. So thank you for that.

So let’s just quickly go over what the current environment looks like for patents in Europe and what’s going to change about it. So this is the, if you like, the traditional model where you can still file and you still will be able to file national patents in national patent offices. So you can file your German application in the German Patent Office. Get a German patent. And that’s enforced in the German National Court likewise with these other countries.

Alongside that currently, we have the European patent system which a lot of you are very familiar with and this is the most common route currently to getting patent protection across the EU and in that broader set of countries. So you file a single application in the European Patent Office but once that grants, it splits down into a bundle of national patents. So you end up in the same position you are in when you follow the national route and you have to enforce those separately in the national courts.

So what’s going to change? The first part of the package that’s going to change is we’re going to get this new Unified Patent Court and that is going to be a forum where you can enforce and I guess importantly other people can attack your existing granted European patents.

So not patents that have come by the national route but patents that come by the European patent office. That unified patent court will have jurisdiction over them. For a transitional period which is 7 years initially and it could be added another 7 years on top of that, you have the choice of forums. So you can still go to the national courts if you want to and we anticipate that people will probably do that initially because they’re known forums, recognized forums that they understand how they work.

The other thing you can choose to do for that initial transitional period is you can opt your European patent out of the Unified Patent Court. So if you have currently granted European patents and you’re a bit nervous about this new court that’s being set up, you don’t know whether they’re going to be pro-patentee or pro-defendant. You can opt your patent out of that system.

So if you’ve got existing patents, the only forum will remain the national courts. You can at any point in the future choose to opt that patent back into the Unified Patent Court. So one strategy that we anticipate a lot of people will adopt is they will opt everything out to start with. They’ll see how the court is performing and then if they in anticipation of litigation, they will opt back in. And you can only do that once.

So if you opted back in, you’re then stuck in the system. Once the transitional period is over, then the Unified Patent Court would have exclusive jurisdiction. So you’ll be stuck with that court.

The other thing that’s coming in is the Unitary Patent. So that comes in and from Day 1, any unitary patent that you have granted will be under the exclusive jurisdiction of this unified patent court. It’s a decision that you could make at the point of grant of your European patent application. So the application procedure is exactly the same as currently. And what happens is once you get to the point of grant where now you would choose the individual countries that you want to validate in, one of those validation options will become the unitary patent. And if you go down that unitary patent route, then you cannot have the corresponding national patent which are greyed out there. What you can also do at that point is you can pick off the other countries that aren’t within this Unified Patent system.

So countries like Spain who although they are part of EU will probably never join the unitary patent system and countries like Switzerland, Norway which are not members of the EU but are available by the European Patent route.

So in terms of benefits, there’s a whole host of benefits and possible downsides. I don’t know if we’ll have time to go into many of them. One of the big benefits is if you’re someone who files geographically broadly in Europe, then you’re going to be massive cost savings in the renewals of the renewal fees downstream when you have your granted patents.

So that graph at the top right there, shows the difference between the renewal fees and the blue line at the bottom that you would pay for a granted unitary patent versus the renewal fees you would have to pay and these annual fees you pay in each individual countries. You’re covering all 25 countries and that signed up to the Unitary Patent.

The other benefit is central litigation. That’s a double-edged sword. So you can enforce centrally. You can get EU-wide relief. So you can get an injunction across the whole EU based on your unitary patent or your European pa
tents bundle. But the flipside of that is you can be attacked centrally. So that’s one reason why we anticipate lots of people will opt out.

So in terms of decisions that are needed and these are decisions that are needed sooner rather than later I suggest. One key decision is do you want to go down the unitary patent route or are you going to stick with the more traditional national validation. So that route remains open to you once the unitary patent comes in.

Factors that are going to come into play there are which countries are commercially important to you. If it’s … some of my clients, they basically focus on UK, Germany, maybe one other jurisdiction it’s probably actually going to be more cost-effective for them to stick with the current system and not use the unitary patent. But if you’re filing broadly in Europe by using the unitary patent, you’ve got access to those very large cost savings for the downstream costs.

But you also need to consider whether you want flexibility to drop countries later. So some people as product life reaches the end of its life, they maybe have started with a broad geographical coverage in Europe. They’ll cut the size of their portfolio. If you’ve gone down the unitary patent route, you can’t make that cut to stop with the unitary patent. And also I need to ask whether you’re prepared to be under the jurisdiction of this new court. And if you have made the decision you want to go down the unitary patent route, don’t think about it being something that’s just for the future.

If you have pending applications at the European patent office now, you can take steps to slow down the examination and the prosecution so that you don’t reach that point of grant and the decision point until Q1 2017 when we anticipate that these unitary patents will be available.

The other big decision, my final point is you need to decide whether you’re going to opt-out or not. And obviously by staying in, you have the convenience of EU-wide enforcement but by staying in, you also have the risk of central attack and the guest of honor will take home as you want to start reviewing your portfolios now because Q1 2017 is not very far away.

The end.

Joe Hage: Thank you Stephen.