Edited by Paola Furiosi, Federica Pezza and Francesca Caliri
The new unitary patent system opens for business on 1 June 2023, when the International Agreement on the Unified Patent Court (UPC) enters into force.
With regard to the Milan seat of the central division, a trilateral political understanding was found among Italy, France and Germany. However, to date the text of this agreement is not final, as it will have to be formalized during the next meeting of the UPC’s Administrative Committee. Also, some perplexities remain with regard to the actual impact, in terms of opportunities, of such an assignment for the Italian seat.
What is a patent and what is meant by a “unitary patent”
A patent is a title by virtue of which a temporary monopoly of exploitation (for a maximum period of 20 years) is conferred on the subject matter of the patent itself. Such a monopoly consists of the exclusive right to make the patented product, dispose of it and trade in it, as well as to prohibit third parties from producing, using, marketing, selling or importing it. Pursuant to Article 45 of the Italian Industrial Property Code, inventions, from any field of technology, which are new, require an inventive step and are capable of industrial application may be the subject of a patent for invention.
With specific reference to the unitary patent, the latter represents a new type of industrial property right, which will initially be recognized in 17 member states of the European Union (Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovenia and Sweden) and, subsequently, in 24, as soon as Cyprus, the Czech Republic, Greece, Hungary, Ireland, Romania and Slovakia will have completed the required legislative steps. This new patent will complement, but not replace, the patent protection which exists today at the national level (in Italy, at the Italian Patent and Trademark Office, “UIBM”) and at the European level (at the European Patent Office, “EPO”).
The Unified Patent Court
The Unified Patent Court is a muti-jurisdictional court which, starting from 1 June 2023, will be competent to decide on matters relating to the unitary patent (such as, for example, infringements committed or threatened, invalidity of the patent, claims for compensation) and the European patent (but limited to the member states).
Indeed, the mentioned reform of the European patent system will result in numerous benefits both for companies and patent owners. First of all, with respect to the type of application to be filed, when it comes to unitary patents it is not necessary to proceed with the designation of the individual countries where protection is sought (as it is the case for the traditional European patent) as one single application will be sufficient. An additional advantage concerns validity, which is also unitary in all the member states. Also, one single fee shall be paid for the application and the maintenance of the unitary patent in all the member states; and its amount will be way inferior to the current cost of an European patent valid in the same countries; the geographical scope of protection will not vary if designations are dropped over time; and there will be no validation or translation costs for the patent. Finally, with respect to jurisdiction, the UPC allows for the centralization of powers, leading to a significant simplification and harmonization of procedures.
Powers and competencies of the UPC
Starting from 1 June 2023, a 7-year transitional period (extendable up to a maximum of 14 years) will begin during which the UPC and national courts will have shared jurisdiction over traditional European patents. This means that, during this first phase, the owner of a traditional European patent, will have the choice of challenging the validity of third parties’ patents with a single action before the UPC or by means of multiple claims before individual national courts. Once the time limits have expired the UPC will have exclusive jurisdiction over traditional European patents.
However, in line with the relevant laws, individual owners of European patent applications or European patents granted in individual countries are allowed to prevent patents validated in individual countries from automatically becoming subject to the jurisdiction of the UPC, by means of an express declaration of waiver (so called “opt-out” procedure). If the opt-out is chosen, the only applicable jurisdiction will be the one of the individual validating countries.
With reference to competencies, the Milan seat joins those of Munich, which will be responsible for chemistry and metallurgy, and Paris, responsible for pharmaceuticals. Thus, no public text of the agreement was made available to date, as things now stand it seems that the Italian seat of the UPC will be given residual jurisdiction over the following: medical-veterinary science and hygiene, pharmaceutical patents without Supplementary Protection Certificates (“SPCs”), non-pharmaceutical biotech, agriculture, food and tobacco, personal and household goods, and sports and entertainment.
Half Satisfaction
Although for Italy, and for Milan in particular, the establishment of a seat of the Unified Patent Court undoubtedly represents a great opportunity, given the potentially related flows of foreign investment, the actual economic impact of this assignment for our country is far from being clear.
First of all, to date no official statement was circulated establishing the actual allocation of competencies in the three seats, as the only official document in this regard is a note from the Italian Farnesina published on 18 May 2023. It should also be noted that the competencies originally intended for the one and only London UPC seat, do not seem to have been equally divided among the three designated European offices, following Brexit. On this point, the disappointment mainly relates to the pharmaceutical sector, given that it appears that only minor cases will be dealt with in Milan, both because the Italian jurisdiction is limited to patents without SPC certificates and because, where such drugs were qualified as “chemical products,” then the jurisdiction will be for the German seat.
Still, even when the mentioned trilateral understanding will have received the final approval of the other member states, it is estimated that the Italian seat of the UPC will be made operation only starting next year, resulting in the medium-term allocation of all the pending litigation to the other European seats.
In the last few days, it was announced that if an actual imbalance between the matters allocated to each venue takes place, a discussion table would be reopened in order to ensure a fair and effective allocation. The issue therefore remains a knot to be untied.
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