It is important to understand the difference between the Unitary patent and the conventional European bundle patent. Namely, the Unitary patent is defined as a single patent granted with equal effect throughout each and every participating Member State, and is also maintained and litigated as a single unit with decisions applying equally to all participating member states. In other words, any limitation, transfer, revocation, or lapse of a unitary patent will apply equally in all participating Member States.

The Unitary patent shall coexist with the National patent and European patent, however, different rules will be applicable to it. Not only will the Unitary patent affect newly filed applications, but it shall also affect applications pending before the European Patent Office and even already granted European patents.

The aim of this newly introduced Unitary Patent System is to create a uniform procedure where the patent holder can apply for one patent which shall automatically take effect in all participating Member States. There will be no need to perform separate payments for designation, validation, or subsequent renewals before the National Patent Offices. Now, a centralized procedure shall finally be made possible. This represents one of the major benefits of the Unitary Patent System. Not only is the procedure centralized, but the costs of maintaining a patent have been considerably reduced and the payment of the renewal fees has been simplified.

However, how are pending applications and already granted patents affected?

The matter of jurisdiction of pending and granted European patents has been resolved with the introduction of the UPC, which is set up to decide on the infringement and validity of both Unitary patents and classic European patents.

It is important to note that this fact implies that all European patents shall automatically be subject to the decisions of the UPC instead of the National Patent Offices. With the introduction of UPC, the issue of litigation in respect of a single patent occuring in different countries and before different courts has been eliminated. Instead, the process shall be simpler and more effective.

However, it should be noted that not all patent holders would benefit from this new system and some may want to be excluded from the jurisdiction of the UPC. For instance, it is understandable that certain patent holders do not want their IP rights to be challenged before the UPC and to remain trapped within the Unitary Patent System.

Therefore, the European Patent Office has introduced a transitional period of seven years (which can be further extended) during which it shall be possible to exclude granted patents and pending applications from the new system by filing an opt-out request. By filing the opt-out request, national courts, instead of the UPC, will retain jurisdiction for these IP rights. Additionally, should the patent holder change their mind and decide to take advantage of all the benefits of the Unitary patent, the opt-out request can be withdrawn, which would result in these patents remaining under the jurisdiction of the UPC permanently as the opt-out request cannot be subsequently refiled. The possibility of opting out is available during the „sunrise period“, which is announced to commence on 01 March 2023.

What is also important to note is that the Unitary Patent System is still developing, and rules pertaining to the newly introduced system are subject to alterations. However, this article sets out the ground rules of the unitary patent and the UPC of which everyone in the IP world should be aware  in order to make the best decisions for their clients’ patent porftolios.

The Unitary Patent System will definitely be welcomed by many patent holders, however, it shall also see many requests to opt out from this new system. Therefore, it is the perfect time to thoroughly prepare and weigh up all the options before the start of the sunrise period in March in order to decide whether the Unitary Patent System is fitting for one’s patent portfolio.

Only time will tell whether the Unitary Patent System will bring about all the proposed improvements and advantages, and whether the work of the UPC will be as smooth as planned. At this moment, there is no right or wrong answer on whether to opt out or not. While some patent proprietors will not want the administrative burden of filing opt-outs, others are more concerned about the possibility of their patent being subject to a central attack. Hence, the decision to opt out shall ultimately come down to whether the UPC has legal features that a patent holder would not be able to avail themselves of at the national level.