The pros and cons of the unitary patent

01-05-2015

Maria Zamkova

The unitary patent is one of the oldest topics of discussion within the EU, starting in the early 1970s. The creation of the European Patent Office (EPO) in 1977 was a small step on the right path. However, you still had to translate the patent application into the languages of the country of interest, pay for validation and, in cases of infringement, handle the dispute in national courts.

On December 10, 2012, 24 EU member states (including Sweden) agreed to create the unitary patent system. It was expected to come into force in 2014 together with the Unified Patent Court (UPC). As we know, Spain and Italy chose to remain outside the system, and although the regime can start soon, we have to wait a bit longer for the UPC.

Swedish legal preparation

The Swedish member of the European Parliament, Cecilia Wikström, was actively involved in the negotiations that led to the 2012 decision. “A common European patent is a key to strengthening Europe’s competitiveness in a globalised world. We must be able to compete with the US, Japan and other developed countries,” she said in an interview with the trade magazine Entreprenör just after the agreement was signed. She expects an 80% reduction in the cost of protecting patents once the system is working.

In 2014, the Swedish government submitted a referral to the Council on Legislation (Lagrådet) for adapting Swedish law concerning unitary patent protection within EU. A part of this is that although an applicant that chooses to validate a European patent in Sweden should still file a Swedish translation of the patent’s claims, the Swedish translation will no longer have any legal effect. For national Swedish patent applications with a filing date of July 1, 2014 or later, the applicant can now both file and have the patent granted in English.

"Swedish inventors have commented especially that the new system will increase their chances of competing with US and Asian companies."

Alexander Ramsay, vice chairman of the preparatory committee dealing with the establishment of the UPC, is another Swedish specialist in this area. In an article published 2014 in legal science journal Svensk Juristtidning, Ramsay replied to some questions raised by Swedish industry that:

The new system is not harmful for countries with a low level of patent activity;

The UPC promotes unity, not ‘forum shopping’;

The system does not increase complexity; and

The UPC will not mean Europe becomes a playground for ‘patent trolls’.

On March 4, 2014, Sweden, Lithuania, Latvia and Estonia were the first countries to agree on a regional division of the upcoming UPC. Denmark and Finland have chosen to not join this regional division. This of course is a weakness and may cause problems regarding disputes in the Scandinavian market.

What’s in it for Swedish industry?

In 2014, the total number of granted patents at the EPO increased by 3.1% to more than 274,000, which is a new record level. Swedish companies accounted for 5,132 of those patents. Ericsson was the most active, filing 1,345 patent applications to the EPO, followed by SKF, Electrolux, Scania, Volvo Cars and Sandvik. However, less than 20% of all European patents are normally validated in Sweden.

The two main questions are related to the costs and legal proceedings of the UPC. For companies that already want full EU protection, the reduction of costs will be essential. This is important for large Swedish companies, but even more for small to medium-sized enterprises. Swedish inventors have commented especially that the new system will increase their chances of competing with US and Asian companies.

For those companies that still have limited budgets, using the unitary patent system in combination with licensing agreements will provide new business possibilities. Of course, the risk is that if you lose in a court proceeding, the full unitary patent will fall.

One conclusion of assessing the pros and cons for Swedish industry is that inventors probably will, after all, wait before using the full system. The main reason for that is to see how the upcoming UPC will work out. But don’t forget to plan today.

Maria Zamkova is chief executive of Fenix Legal. She can be contacted at: maria.zamkova@fenixlegal.eu

patent applications, EPO, UPC, SKF, Electrolux, Scania, Volvo Cars, Sandvik, Ericsson, EU

WIPR