2022 forecast: the year of the UPC?
In the second part of WIPR’s forecast series, leading lawyers offer their views on the impending Unified Patent Court (UPC) and its impact.
Read on to discover the key issues to look out for…
United Patent Court: ‘exciting times ahead’
This year could finally herald the arrival of the much anticipated and long-awaited UPC, after years of hurdles and setbacks.
Established by an intergovernmental treaty in February 2013 by 25 EU states, complaints disputing the legitimacy of the UPC in 2017 blocked progress on the agreement for three years.
Meanwhile, the UK’s confirmation that it will not be part of the UPC in the wake of Brexit presented another stumbling block, as one of the central divisions of the court was to be hosted in London.
But now Germany has ratified the protocol on the provisional application (PPA) of the UPC Agreement, it is a certainty that the UPC will finally materialise.
Those preparatory stages are to be enabled through this final phase, which requires acceptance and ratification by Austria.
But as Myles Jelf, partner at Bristows, notes: “Estimates vary as to how long this establishing phase will take but it is likely to be 6-12 months from the point that the PPA goes live.”
Once the PPA is in effect, he notes the preparatory committee will evolve into the UPC's administrative committee which has the power and authority to establish and complete the necessary court infrastructure, including recruitment and training of judges, registry, and IT systems.
This, he explains, will create a “sunrise” period of four months to allow court users to make their final preparations (and for patentees to ‘opt-out’ European patents which they do not wish to be swept into the new system) before the court actually opens its doors.
The road ahead for the UPC is now pretty clear, agrees Wouter Pors, partner at Bird & Bird. who predicts that this development will galvanise brands and their IP counsel into action.
Pors anticipates exciting times ahead, noting that the volume of UPC litigation may grow faster than most people expect”, observing that: “while industry has been a bit silent in the past years as there was a standstill due to the constitutional complaint in Germany, that has now changed”.
“Companies are actually starting to ask for advice on how to include the UPC in their patent strategies. In the major international patent disputes in electronics and life sciences the UPC will become a forum to include in the options,” he explains.
“Also, the companies that are deeply involved in patent litigation will want to help shape the UPC case law. Most likely the central division will also become an important forum for freedom to operate strategies”, says Pors.
The unitary patent could emerge as a crucial asset for startups and universities, he predicts, because they will be able to get protection across a number of countries for a single fee before deciding where their core market will actually be.
This year will undoubtedly be dominated by strategies gearing towards the UPC, now that it is genuinely back on track, agrees Leythem Wall, director of Oxon IP.
This focus, he predicts, could see companies filing European Patent Office divisional applications to be filed as companies test the new system. Meanwhile, others will deliberately stall the prosecution of EPO applications, by taking extensions or using further processing to delay a grant in time for the unitary patent so they can benefit from a potentially significant cost saving in validation and renewal fees.
“If the UPC ‘sunrise period’ comes into play in 2022, then we shall also see a wave of European patents being opted out of the system. I would expect a wave of UPC revocation actions being filed,” he reflects.
But while some minor changes may yet emerge during the final preparatory phase, the most important task remaining is the selection and education of the UPC judges.
“The selection will be based on the previously submitted indications of interest, there will not be a new opportunity to apply at this stage. All of this should be finished by the end of the year and then the court can open its doors,” notes Pors.
But the UPC could still face significant challenges in this arena, as Rudolf Teschemacher, senior consultant at Bardehle Pagenberg told WIPR. “One of the main tasks is the selection and the appointment of the future judges of the UPC. The original application period dates back to 2014 and the preparatory committee launched a top-up campaign in 2019. It remains to be seen whether these preparations provided an appropriate basis for the appointments to be made.”
And what will the UPC mean for IP lawyers themselves? Wall also anticipates that the UPC will see more non-EU firms, based in the US, UK, Switzerland or Norway opening offices in a UPC member state. “If Milan or The Hague/Amsterdam is selected to replace the London UPC central division, then this will likely be the city/country of choice for new offices,” he predicts.
Additionally, the onus will be on lawyers to adopt an increasingly EU-centric outlook, predicts Pors. It will be interesting to see how the UPC will affect the market for legal services, since patent litigators can act in any UPC division, which will create an international playing field that requires thorough preparation,” he says.
Discover more in part one of our 2022 forecast series here, where attorneys explore why this year could be when the thorny issue of patent eligibility is finally untangled, while the IP implications posed by the COVID-19 pandemic and the rise of the metaverse will continue to loom large.
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