Hunton Retail Law Resource

In a significant change to the European patent system that will impact patent prosecution and enforcement strategies in one of the world’s largest retail markets, the European Unified Patent Court (UPC) begins operations and the European Patent with Unitary Effect (Unitary Patent) will be available at the European Patent Office (EPO) on June 1, 2023. Early requests for Unitary Patent protection on applications that may grant prior to June 1 can be filed starting March 1.

It is vital for retailers that maintain European patent portfolios, enforce patent rights in the European Union (EU), have had European patents asserted against them, or otherwise do business in the EU, to understand what this change means.

Currently, patent protection in Europe can be obtained through either a national patent, filed directly with a particular country’s patent office, or a patent filed with the EPO and then validated into individual countries where patent protection is desired. A national patent or EPO validated patent can be enforced only through an individual country’s court system—patent enforcement is not uniform across the continent. This lack of uniformity raises prosecution costs by requiring patent applicants and holders to pick and choose countries in which to validate and enforce their patents. This presents a risk that, as competitive and economic conditions change, the countries selected may not be optimal throughout the term of patent protection and enforcement.

But starting in June, there will be an option to obtain a single Unitary Patent, to be enforced in countries that ratify the agreement for the UPC. Presently, 17 countries have chosen to participate in the UPC framework: Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, and Sweden. Additional countries may join in the future. Spain, Poland, Croatia, and the United Kingdom are not participants at this time.

A Unitary Patent offers a consolidated bundle of rights enforceable through the UPC and can be maintained through payment of fees directly to the EPO, which may be cheaper over time than the fees for national or validated patents. The UPC will have sole jurisdiction over Unitary Patent enforcement and revocation, which Unitary Patent holders may not opt out of once the UPC is in effect. Notably, for existing applications, applicants can opt out of the UPC’s jurisdiction for a three-month sunrise period from March 1-June 1, 2023. The opportunity to file an opt-out request will remain available for at least seven years from the start date of the UPC. A request to opt out can be withdrawn at any time.

Moving forward, with the availability of the Unitary Patent and UPC, retailers will want to closely consider their options for European patent protection and enforcement. Scope of protection, cost, enforcement potential, past practices (e.g., where has patent protection been obtained or needed previously?), and more, will be important factors in determining what makes sense for retailer portfolios and business needs. Decisions retailers will need to make soon include:

• Should we request Unitary Patent protection on existing applications?
• Should we opt out of the UPC’s jurisdiction?

On one hand, the Unitary Patent and UPC jurisdiction may allow prosecution and enforcement efficiencies for patent applicants and holders across many countries through a single patent and court. On the other hand, if successfully challenged at the UPC, a patent is at risk of revocation across the entirety of the UPC’s jurisdiction, whereas revocation must proceed on a country-by-country basis outside of the UPC.

While patent portfolios and the inventions they protect can vary widely across the European retail market, some retailers may find that a combination of national patents, European patents, and Unitary Patents provides the most effective protection. This may be true for retailers with business interests that cover many of the countries that have ratified the UPC agreement. Alternatively, for retailers focused on only a few countries, a portfolio of national patents or a validated European patent may suffice to provide the desired level of protection.

From the patent enforcement perspective, retailers should consider whether national courts, the UPC, or a combination offers the most effective enforcement regime for a particular patent. The different patent law standards applied in these courts need to be assessed and understood. For example, some retailers may find an enforcement strategy using a combination of national courts and the UPC the most effective, while others may need to focus only on a few specific countries using the national court system. For retailers monitoring a competitor’s patent rights or facing infringement allegations, opposition practice before the EPO should be considered as yet another tool for challenging a patent at the EPO prior to grant.