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Radical changes to European patent litigation imminent as EU approves new unitary patent system

 

19 December 2012

Signalling the most radical change in European patent practice in over 40 years, on 11 December 2012 the European Parliament voted in favour of legislation that will create a new unitary patent right and unified patent court system across Europe.  The new system is expected to be up and running by mid-to-late 2014.  Subject to opt-outs during a transitional period, even existing European patents will automatically be subject to the jurisdiction of the new court. 

By creating a unified system of grant and enforcement, the legislation will fundamentally change the way patents are granted and enforced in Europe.  Presently, patents are granted centrally by the European Patent Office but result in a bundle of national patents which have to be enforced separately in each European Union Member State.  However, this country-by-country enforcement can result in increased litigation costs, delayed proceedings and conflicting decisions.  Under the new system, a unitary patent will be immediately effective and enforceable in the new Unified Patent Court, with decisions on validity and infringement being directly binding throughout the 25 Member States (Italy and Spain are not participating – see below).  The court will also deal with Supplementary Protection Certificates and the hope is that this will result in a more efficient, predictable and streamlined patent system. 

The new court will comprise of a Court of First Instance and an Appeals Court, with the Court of First Instance being organised into local and regional divisions, as well as a Central Division.  The Central Division will mainly be located in Paris, with London hosting a branch dealing with pharmaceutical, human necessities and life science patents and Munich hosting a branch dealing with mechanical engineering, lighting, heating, blasting and weapons patents.  Paris will handle cases relating to physics, electricity, transportation, textiles and paper, fixed constructions and performing operations.  The Appeals Court will be based in Luxembourg.

The new system is not without its critics, however.  Members of industry, practitioners and even some judges have expressed concerns that it could potentially increase litigation costs and legal uncertainty, whilst incentivising litigation by non-practising entities.  Italy and Spain have also challenged the legality of the legislative procedure used to introduce the framework and have opted out of the system (a decision on this legal challenge is expected from the Court of Justice of the European Union early in 2013, although the Advocate General has already recommended that the challenge should be rejected). 

While there may still be substantial lobbying from professional and industry organisations to prevent the three key Member States – France, the UK and Germany – from ratifying the agreement, many practitioners will focus on influencing the Rules of Procedure for the new Court.  With over 500 rules incorporating aspects of civil procedure from several countries, these rules will be a critical element in the effective operation of the new framework.  The final draft of the Rules of Procedure is expected to be released early 2013 for a one-month public consultation period.

With our first-class patent litigation team having specialists in all three seats of the Central Division, as well as in Luxembourg, Allen & Overy is one of very few leading international law firms equipped to advise applicants and litigants on navigating the new system.  We are currently analysing the substantive issues and their impact on our clients and will upload more information shortly.  For more information in the meantime please contact: Geert Glas (Brussels), Nicola Dagg (London), Laetitia Benard (Paris), Jens Matthes (Duesseldorf), Katia Manhaeve (Luxembourg).

 

 

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