Harmonisation of patent protection and enforcement in Europe
The commencement of a new unified patent system in 2022 is set to revolutionise the EU’s patent protection regime. While EU regulations establishing the Unitary Patent system entered into force in 2013, they will only apply when the Unified Patent Court (“UPC”) Agreement has been ratified by 13 member states (including mandatory ratification by France, Germany and Italy as the Member States in which the highest number of European patents had effect in 2012).
While the commencement of the new regime has been delayed by Brexit and constitutional challenges to the ratification of the UPC Agreement in Germany, these obstacles now appear to have been overcome and it is estimated that the UPC will start operations around mid-2022. However, Ireland has not yet held a referendum to ratify the UPC Agreement, nor has the Irish Government made the necessary preparations in order to position Ireland as a hub for European patent litigation under the new regime. Key lobbying groups such as IBEC have recently called on the Government to immediately set out a timetable for Ireland’s ratification of the UPC Agreement and to undertake preparatory work in relation to the establishment of the UPC.
Under the existing structure, the only enforceable patent rights are national patents. This means that applicants seeking patent protection in Europe must register their granted patent application in each Member State where protection is required. Additionally, patent owners may only pursue alleged infringers on a country-by-country basis, meaning that there are often parallel cases about the same European patent happening in multiple courts in various EU Member States.
The new unified patent system will provide a simpler, more cost-effective regime, affording businesses a streamlined and harmonised “one-stop” shop administration process for granting and enforcing patents. A single “Unitary Patent” system for registration will involve the payment of one registration and validation fee for the grant of a patent with broad territorial scope, and there will be only one single fee for patent renewals. There will be a centralised enforcement system under the UPC, which will eventually replace the role of purely national enforcement courts in different EU Member States in respect of the enforcement of European patents and Unitary Patents, thereby enabling patent owners to enforce their patents uniformly across 24 participating countries in Europe. Therefore, the new unified patent system will dramatically reduce registration, renewal and litigation costs for businesses who wish to protect and enforce their intellectual property rights.
Opportunity for Ireland to host the UPC’s life sciences Central Division
The UPC will comprise a decentralised Court of First Instance with local, regional and central division sections located in certain EU Member States, and a centralised Court of Appeal. Local Divisions will deal with claims for patent infringement taking place in the relevant Member State. The Irish Government has decided to establish a Local Division of the UPC in Dublin, which will promote industry-wide benefits associated with being an international gravitational centre for IP, as well as increased employment in relevant legal and support services sectors.
Patent revocation and certain other claims will commence in various Central Division sections of the UPC, depending on the subject matter of the patent and the applicable UPC Rules. The main seat of the central division will be Paris with further sections in Munich (dealing specifically with mechanical engineering patents) and in one other participating country (dealing with life sciences patents). The life sciences section of the Central Division was originally allocated to London, but will need to be re-allocated following the UK’s withdrawal from the UPC Agreement as a result of Brexit. Ireland’s position as an English-speaking, common law country may weigh heavily in its favour should the Irish Government decide to make a bid to host the life sciences section of the Central Division. Cases before the Central Division must be conducted in the language in which the patent concerned was granted, and 55-60% of patent specifications filed at the European Patent Office are written in English .
Additionally, Ireland’s common law status could act as a bridge to important third-country common law systems such as the United States and Australia. According to IBEC, securing a Dublin seat of the Central Division would increase Ireland’s GDP and national income, adding €314 million and €1.25 billion to the Irish economy annually. Irish-based firms in the chemical, pharmaceutical, medical technology and life science sectors could grow by a further 1% and 4% per annum. This opportunity is also significant for Ireland to retain its reputation as a key global hub for life sciences (nine of the top ten pharmaceutical companies are located here), and attract major RD&I investment associated with increased patenting activities by Irish-based firms in the life sciences sector. However, in order to avail of these benefits, Ireland must proceed with ratifying the UPC Agreement without delay and actively campaign to secure the life sciences Central Division seat.
Key takeaways
- The new Unitary Patent system and Unified Patent Court will harmonise patent protection across 24 EU Member States, thereby greatly reducing legal and administrative costs for businesses seeking to protect and enforce their IP rights.
- The new patent protection regime will likely commence in 2022. Ireland could stand to benefit significantly by hosting the life sciences Central Division of the Unified Patent Court. However, the Government has not yet made a formal bid for this opportunity nor has it scheduled a referendum for ratification of the UPC Agreement.
- Key lobbying groups such as IBEC have recently called on the Government to immediately set out a timetable for Ireland’s ratification of the UPC Agreement and to undertake preparatory work in relation to the establishment of the UPC.
For further information please contact Michael Byrne, Deirdre Kilroy, Nicola Dunleavy, Bronagh Carvill or any member of our Commercial Litigation and Dispute Resolution and Intellectual Property teams.