Speaker 1  0:00  
Hello, and welcome to today's autumn webinar, the European unitary patent in the UPC. My name is Anne McCollum. I am one of autumns educate team and I am today's staff post. All lines have been muted to ensure high quality audio and today's session is being recorded. If you have a question for the presenter, we encourage you to use the q&a feature on your zoom toolbar. Should you need closed captioning during today's session, the Zoom live transcript feature is turned on and available on your toolbar. Before we begin today, I would like to acknowledge and thank autumns online professional development sparks sponsor, Marshall Gerstein, we appreciate your ongoing support. I would now now like to welcome a member of our online professional development committee, Carmen Carrera Martin from Erasmus Medical Center in the Netherlands. Thank you, Carmen for connecting us with Fritz.

Speaker 2  1:06  
Thank you, I'm from a production and Well, me, good in Good morning. Good afternoon. Good evening, wherever time so I'm Jim may be a guest. fritzy is going to be here today telling us about the UPC and the unitary patent system in Europe, and free to study biology in the Netherlands and obtaining his PhD degree in microbiology in the University of Groningen. And he also was a visiting researcher in the University of Alaska in Fairbanks, where he studied molecular genetics and DNA diagnostics, which further developed techniques that have applications in the medical and veterinary fields, and ended up in a startup company for which he was co director. After that, in 2001, he joins payroll Patent and Trademark forum in the Netherlands with offices all around Europe, and he have extensive expertise in therapeutic and diagnostic applications. And they have supported several Life Science patterns. Lately, he has became the coordinator of the changes in his office in connection with a UPC and the unitary patent system. And with that, I think I give the floor to Fritz and start the webinar.

Unknown Speaker  2:39  
Well, thank you very much, Carmen for your kind introduction. And also, thank you, Anna, for being today's moderator. I also like to thank the autumn organization for the opportunity and for me today of the unitary patent system, as it is coming into effect in Europe. And the subtitle of today's webinar is weighing the risks and benefits for universities. The unified patent board has only come into existence on the first of June of 2023. So it is new to all of us. Today, I'm going to provide you with some points of attention in particular risks and benefits that you as university transfer managers may want to be aware of.

Unknown Speaker  3:29  
So in today's talk, I will discuss what the European patent is, and the reasons why a European unitary patent needed to be creative. I will tell you how to do things. Thereafter, I will discuss what the UPC is unified patent court, and the possibility to opt out of the Unified patent court and what that means. Of course, I will then try to summarize what will change and what will not change, and how that impacts your pets and your portfolio. Now, I would like to finish this by giving you some ID of how to address the changes challenges and opportunities. That is actually fantastic new system breaks through Europe. But it's all it's not all gold on the horizon. So first of all, what is a European patent? When you have to understand that you must understand that a European patent is a patent granted by the European Patent Office under the legal framework of the European patent convention, and European patent convention is an international treaty between 27 European Union member states and 12 non European Union member states and 12 adults 12 our United Kingdom or after Brexit, Turkey Norway Switzerland, Liechtenstein, Iceland, Monaco Montenegro Just reasonably similar, you know, Albania, Serbia and Macedonia, and our extension states and validation states. But in effect, a lot of those large number important number of those EPC states is not a European Union member state. Now, a European patent, in effect is split after the grant into a bundle of national patents. There's national patent laws in the Netherlands, in Germany, in in the UK, and all of these courts decide on the validity and infringement of a patent in their national jurisdiction. So the European patent is subject to the national rules of the EPC member states when it is granted, and there is no single jurisdiction for disputes on those patterns. And that means that multiple litigations in different countries go on simultaneously, often on the very same patent issue.

Unknown Speaker  6:02  
And we call that the classic European bundle of veterans. And in the current system, you file a European patent application, or regional states from the PCT is examined by the European Patent Office and is granted by European Patent Office, you can validate that in one or more countries, up to 44 states. And you do that by filing a translation of the full specification for claims in each country. And you pay the validation fee for each country. Of course, there's a new payment over new fee euro for each of the country reading that disaffiliated aims litigates, before national courts in each country separately.

Unknown Speaker  6:52  
Sorry, I don't have to click a little, little smaller than. So the classic European bundle patterns. In summary, we get a centralized grant. And it's a bundle of nationally validated patterns. Now, if you look at the EPL member states, you can see that there's a large group of red countries there, including Turkey, and the United Kingdom. And they're all separate states where the patterns are failing. There's a big difference from the United States, where there's actually one jurisdiction where the best discoveries, and because of all these national laws and the the individual payments of renewal fees, the European patent is considered a very expensive methods. So why should there then be a unitary patent? Well, this stems already from post war Europe, where people have considered to form a United States of Europe. Well, that has not really materialized. But European Commission is still pursuing this unity. NSF patents are a vital element of the market, internal market of the United of the of Europe, of the European Union. And growth in the market should come through innovation. And in order to have improved competitiveness of European businesses, we must facilitate the patenting system, increase its efficiency, reduce the costs, and enhance the legal certainty for the best to one hand, and the public on the other hand, so we must have cost effective option for a broader better protection in territorial sense, and for Dispute Settlement across the European territory. Now, how would that come about? They're stupid pillars. First is the creation of a Euro EU European Union pet, that is called the unitary patent. And the second is the setting up of a unified jurisdiction for patent disputes, and that is the unified patent court.

Unknown Speaker  9:17  
So two pillars are the unitary patterns, which is no different than a normal European patterns, but with a unitary effect in only the participating EU member states. So it is a European Union European Commission initiative, only European Union member states can participate. And the unified patent board is the second pillar, which is a single board for handling both infringement and validity. Well, now it comes for both classic European patterns and unitary methods.

Unknown Speaker  9:59  
This may come as A bit of a surprise, why would the UPC be have jurisdiction over the classic European patterns? Well, that is because the European Commission wants to fade out the classic European patent system. In terms of territorial scope of the unitary patent and UPC, I just give you the 17 member states that are currently member to the agreement. And the agreement is called the UPC agreement, or the grip agreement on the UPC. And in orange in this map, you see those states that have not only signed the UPC agreement, but also have ratified that in their national law. And in those countries, at this moment, you can get unitary protection. If you apply for unitary patent with the EPO, then there are some states like the yellow states that have not yet ratified, but have signed up agreement. And one goes are, for instance, Parliament in Greece. So those will be UPC states as we call them in the near future. Then there are other states, such as Turkey, in the rest, and Great Britain, the UK, that are non EU member states, and they cannot participate in the UP UPC system. And then there are EU member states like Spain and Poland, who are opposed to the agreement completely, and they have not signed the agreement. So also in those countries, you cannot obtain a unitary patent.

Unknown Speaker  11:48  
So the unitary patent is actually a European patent with a unitary effect. And this affiliation option after the grant of your European patent, it is a normal alternative actually to the Old National validations but only for UPC states. That looks one single registration is required for having the better the force in 17 of the UPC states, and one single yearly renewal fee needs to be paid. In addition, only one single translation of the patent specification is required. But the UPC has exclusive here the US election. As we'll see later, there is no doubt of the UPC jurisdiction possible. If you have a unitary patent, that UPC is your court, there is no effect in the non UPC states and non EU countries have a unitary patent. And finally, a unitary patent is unitary, it cannot be transferred per country. But locally, it can be licensed per country.

Unknown Speaker  13:03  
How to Obtain unitary patent, that's not very difficult. The request for unitary effect of the European patent must be filed within one month from the grant of the European patent. And that is a short time. But therefore we ask our applicants to provide jury instructions, you find a single translation of the complete specification, and that is still required in a period for about seven, the first seven years. The EPO wants its translation machines to be improved. And it wants the applicants and patentees to provide the translations to feed and improve these translation machines. So you file a single translation of both description, the claims and the drawings. And making translation of drawings is mostly a quite a lot of work. If the patent language is in German or French, the translation must be in English. And if the patent is in English already, then you can use any other EU language, Spanish even incense it is not a UPC or European patent country, but even Spanish to file a translation in the translation itself has no legal effect, and is only for information. And most importantly, there are no fees for filing a request for a unitary effect that a doctor uncooked out there may have been filed for a patent application at the moment that dependent application receives unitary effect. Therefore opt out is automatically removed from the registry. Maybe there's a bit of a sentence that comes too early but just wanted to say it at this stage of the presentation. The opt out This automatically removes

Unknown Speaker  15:08  
that to give you an idea of the cost savings of the unitary patent, if present, provided this graph, and you see that in the, in your in your new fees in Europe are incremental, in the first, the first year that you need to pay your new fees, your new three, they're quite low and they become incrementally higher. In the 20, you may pay as much as 20,000 euro per year to have your patent still enforced in the 70 countries of the UPC. And you've seen that blue continuous line, that the level that you need to pay to the EPO is a lot lower, it's equivalent to about three large territories, for instance, France, Germany and the Netherlands. So in effect, the the cost savings are pretty good, but you must understand, thank you better. That's the normal the most patentees in Europe, only validate their patents in at most five, four to five countries. That's the average. And it means that the Europe, the European Patent Office has decided that about three four is a good annual fee to 40. European for the European Union, the unitary patent. Having said that, for that price, you get protection in 17 countries. And that is something that most patentees in Europe have never had. Now on to the unified patent court. First of all, let me tell you something about the structure of the court because that is important for how we have to view the impact of the court on our patents. There is courts of first instance where you bring the case and as a Court of Appeal in Luxembourg. And the courts of first instance consists of three central divisions, 13 Local divisions, and one regional efficient. Well, after London left the European Union, there were no sense three central deficiencies anymore, there was only Paris and Munich. And in London, it was decided it was initiated that the IPC plans as a of human necessities meaning pharmaceuticals, and C chemistry would be located. Now Milan has opted to replace London with this opting out no agreement on the position of Milan, and the workload of London is distributed between Munich and Paris. Munich now takes the chemistry and Paris takes that human necessities ie pharmaceuticals. That is not so important. That's the fact that there are also three local deficients the local divisions are not in each UPC country. But you can see that there's three local divisions or four local divisions already in Germany, Dusseldorf Hamburg, Mannheim Munich. Also it has to do with the fact that most patent litigation cases take place in Germany in Europe. There's also one in The Hague in Louisiana, Lisbon, Milan, and, of course, Paris, but that's a local efficient in Paris. So they have a local and essential deficient embarrass. There's hellscape, Copenhagen, Brussels and Vienna, from the other way around. And then there's the regional division for the Nordic and Baltic states in Stockholm. The rules determine which port you must use.

Unknown Speaker  18:58  
I go on about this board, because consider that it's important for you to understand what this Court means for your patent. Do unified patent court works like this, the applicable law is the European patent convention, as we all know it when the European patent is granted. The rules of novelty inventive step sufficiency of disclosure, that all is still the same as the European patent officer users. But then there's the UPC agreements, and the rules of procedure, of course of the UPC. Well, in addition to these three legal frameworks, of course, there's a whole range of other legal documents that the court must abide by, and as of part 40, the bears convention on on priority, the Patent Cooperation Treaty PCT rules, so that of course There's a lot more about the European patent convention and the UPC gradients are the most important. And you receive relevant also determines where you must start a case. Which case, if you want to start an infringement case, as a patent proprietor as a patentee, you must do that at a local division in the UPC state where the infringement occurs, or where the defendant has residence or place of business. And you may start your infringement action at the Central Division if the defendant is from outside UPC territory. Now for invalidity actions, they nullity reification. invalidity or normally infringement declarations by defendants, you must do that at the Central Division. And branch must be based on the technology of course. Now what may happen is that a local division may transfer it case to the Central Division. When in an infringement action, the defendant brings a counterclaim for invalidity. So we have an infringement action is brought before a local deficient. The defendant may say I file a counterclaim for invalidity. And then one of the options is that the local deficient transfers the complete case to the Central Division. In short, it looks like this, we have local and regional efficients on the one hand, and the central divisions on the other. The local divisions vary here infringement actions, and, eventually easily the counterclaims. But when it comes to invalidity itself, we go to Central deficients. And those are transferred and pastes are transferable between both courts.

Unknown Speaker  22:03  
Well, very important part you by patent board is that it is efficient. Well, what is efficient? This is a timeline for infringement proceedings before the UPC. And this is not worse based on experience. This is the heart deadlines set for responses that need to be filed. At the beginning of an infringement case. At time point zero, there is a Statement of Claim and the Statement of Claim is that the party is infringing. Then within three months, the alleged infringing party must reply by filing a defense and also immediately a counterclaim for invalidity, for instance, then the written procedure that ends within six to nine months. And then an entry and procedure starts when parties are advised to seek mediation and to come to an agreement on settlement. And if that doesn't work, there will be an oral procedure and an oral hearing, which six weeks after the oral hearing, the decision must be there for the oral procedure cannot then not take one month. That's it already takes six months for a decision that you see that eight to 50 months is the timeline for infringement proceedings take into account that normal court proceedings in most of the European countries, or others in the Netherlands, Germany, UK, take about two years. And in the German system, they may leave quite fast for infringement proceedings. But in Germany, invalidity actions are always also apart from infringement actions, and we call them the bifurcation. invalidity is determined by a different court than infringement infringement, we can determine quite quickly, we can look at the product product, we can look at the claim, and we see that it's free, it is infringed. And when it comes to invalidity, it's very often that technical judges have to be included in the whole panel. And that means that invalidity cases are heard by different boards, and in litigation Germany also take about 24 months. So you see that the timeline here in the unified patent court is extremely quick.

Unknown Speaker  24:33  
Just to give you an impression of the people in the unified patent board, this is taken in Paris a couple of months ago. I believe that the first of June when the judges took their oath in the poetic justice in Paris. Nice blue and here and little impression of the first luminary injunction hearing in Munich, between 10 times genomics and NanoString. I mean, the me the picture, actually, but here, behind me, you see the picture, you can take an indie courtroom, because it is such an exciting moment that the first hearing takes place. There was an international panel of judges, two from Germany, one from the Netherlands and one from France. And the decision was expected yesterday. And it came out yesterday, which was really good. We can see that this fort in this local efficient in Munich is quite patentee. Friendly. With which is nice, what better DCE? And, and currently, maybe this is a good time to start asking people if they have any questions in the meantime, because I am now starting with a different type of more strategic part of talk.

Speaker 1  26:04  
Of course, we do have one question. It is while the Unity patent gets you coverage in 17 countries, if a unitary patent gets invalidated, you lose coverage and all 17 countries in one shot versus if you opt out. An entity would have to bring invalidation proceedings in each specific country. Correct.

Unknown Speaker  26:32  
Correct. But then you'd have to have validated in each of those 17 countries. And usually that does not occur. But it's a very good point. Yeah, we will come to it. There is some advantages to having a dispersed patent landscape fairly dated in several countries. I'll come to that because it's a strategy. And that strategy is no longer possible when you have a unitary patent. Of course, in the countries that are not member, not a UPC state, no, they have not signed an agreement on the UPC, then you must still validate your patent in those countries. So you will still get a checkerboard of different situations in Europe.

Speaker 1  27:23  
Next question, are you expecting additional countries to join the UPC in the near future? Yes,

Unknown Speaker  27:30  
absolutely. higher degrees will be joining soon. And I expect actually that a lot more up European Union countries, I hope all 27 will join. The thing is if you have a unitary patent now that is valid for the 17 countries, if more countries exceed that will not broaden the territorial scope of your patent. It is at the moment that the unitary effect is provided. At that moment, those countries where that have ratified are the countries that have the UPC, where the pattern takes is enforced. And you would have to you cannot request unitary effect for countries that have exceeded only later. So that's important.

Speaker 1  28:24  
Okay, next question. Are invalidity proceedings before the UPC? Do the proceedings involve an entire patent? Or can they be split into individual proceedings per claim as a tactic to attrition patentees such as before the PT A B? Hmm.

Unknown Speaker  28:48  
No, we don't. We don't know that in Europe. It's it does not occur in in the Dutch legislation on the Dutch courts, not in the UK and also not in Germany. It's the patent as a whole. And patentees may limit their patent during during legal proceedings by surrendering claim one and filing an amendment. And then it's up to the court to decide if that amendment is allowed. Of course based on the EPC rules, no extension of subject matter. No extension of patent protection. But if the claim is northern inventive and sufficient, it it may be remained in force. But the scenario that you described there before the Patent Trial and Appeal Board, we don't have that system.

Speaker 1  29:43  
Okay, that any more questions before we start on the second half of the presentation

Unknown Speaker  29:55  
Hearing none and I continue Okay,

Unknown Speaker  30:02  
thank you. And we're reading out questions. So I'm starting now with a with a subject that that requires action from patentees. And applicants, it is the opt out the opt out from the unified patent court. The opt out ensures that actions on classic European patterns may still be brought before the national courts. And how do we file an opt out? Well, we simply notify a register of the UPC that the proprietor holder of the European patent or patent application is opting out of the UPC jurisdiction, this can only be in a transitional period of seven years. And that transitional period is chosen to be able to be extended by another seven years. So actually, 14 years is the maximum. So the opt out can be filed for a limited period of time, but the opt out is for the entire lifetime of the battens. So even if it is filed, from between now, from now, six and a half years from now, it's still in time in the transitional period. But it still will be opted out for the lifetime of the patent, which may be a benefit application that has just been published. But you need a European publication number, in order to opt out, cannot opt out an application that is has not yet been released. And you must do so notify the registry on behalf all two owners. So all the two owners must in fact, agree on the opt out. Now, I've been asked, do we need documents? No, you don't need documents, we cannot even add documents. When making this request to the registry. We just have to say the names of the true owners. And to own it is not the registered owners in the registry of the European Patent Office, or the or the German national register or the Dutch National Register? No, it is the actual two owners. And maybe the two owners have not even changed the register yet after they have occurred acquired the patent. But the two owners, the actual owners of the patent must, must do that. And is that checked? No, it's not checked. But the opt out is invalid if it's not done properly. And in so many chat when legal proceedings are started. So that's a bit of a bit of a story. But you know, it is important, it's extremely important that the true owners are indicated on the request. But you will not see something coming back from the UPC stating that oh, this is not correct. So you have to make sure that you're doing it correctly. Now after the transitional period of seven years, actions on European patents, classic bundle patterns in UPC, UPC states can only be brought before the UPC. That's the last sentence here before the UPC.

Unknown Speaker  33:30  
There's also the possibility to withdraw the opt out. We call it the opt in with the unified patent court. And an opt in ensures that action some classic European patents may again be brought before the UPC. Well, there's one single opportunity to opt out. And when opted out the National Portrait jurisdictions, and there's only one single opportunity to opt back in. You're allowed to file an opt in and opt out at any time during the lifetime of the patent. But only not if legal proceedings have started on that patent. For instance, the legal proceedings have started for a national court by a third party. And we want certainly that the European patent that we own is opted in with the UPC. No, that's not possible because now we are locked in the National Court. And vice versa if a patentee starts proceedings proceedings before the UPC, it is not possible to opt out of the UPC ever again, not even when the proceedings are terminated.

Unknown Speaker  34:52  
I give you again, this overview is graph of unitary patent countries and other European impacted countries. And I cannot state that enough that it is important to understand that if you have your unitary patterns in unitary government countries, you will miss a large part of Europe, a large part of the UPC, and most importantly, the countries that our year on the lower part Spain, Switzerland, Turkey and the United Kingdom. Those are important territories when it comes to markets, huge market size, but not part of the up unitary patent system. Now, why is that important? It means that the classic European patent will always exist. Even if all European member states become a party to the UPC agreement, there will still be countries party to the EPC member to the APC that are not European Union members. So it is important for every APC member state that is not an EU member state or not a UPC Member State. And normal validation in a national arrest is required after grants. So it will continue to be available. Also for normal UPC states, not only the member states that are not previously but also in the UPC states, and national validation will still be possible. And you may ask, it cannot be oh, by the way, I have to, you cannot validate your national patterns, your industrial European patterns in a state if the UPC state is a state where the unitary effect takes place. So if you request a unitary patent, you cannot validate the European patent for Germany anymore. That option is no longer possible. And you will say maybe that's that's that's logical, because then you would have two patterns. For instance, the nationally fed updated European better to Germany and a unitary patterns also affiliate for Germany. And then they say, well, you'd be surprised because double patenting is in fact, quite possible after the UPC has taken effect. If a German national patent is filed under German legal jurisdictions, like directly with the German patent trademark office, such a patent that is granted by German patent trademark office as a German patent medical exist with a unitary patent, or with a European patent, fill it for Germany, that is nationally validated, provided that that nationally validated EP D patent is under the UPC jurisdiction. And you can see now, you can now understand why I have German data jurisdiction for my national German patent and UPC jurisdiction, whom either are unitary patents or the nationally validated European patents in Germany, provided that additional opted out because then it would fall under German legal jurisdiction. And this is something that in many countries is not been solved. But in Germany, they have they have make this ruling law, we're actually waiting for the Netherlands to do the same in France. But if you have your classic European patterns, you need to separately pay up new fields to peaceful each country. And the translation requirements of that classic European patent are determined by the London agreement. In some countries, you have to file a complete specification, and others you only file translation of the claims. But in UDC states, the UPC will always have exclusive jurisdiction over declassified validated European patent unless an opt out is wild. This is information that is so complex that I'm just going to practice a little bit with you. If we file a European patent application, and it is granted by the European Patent Office, you can go one of two ways. Within one month, the bottom part, you must request a unitary effect of the European patterns. And the unitary pattern then becomes enforced in the UPC UPC states. There is no opt out possible from the UPC it. UPC is always the court that is that has jurisdiction over the unitary pattern. But there is another possibility which is above within three months from the grid. Out of the European patent, you can validate in the European patent in any EPC country, the classic European patent, and you arrive at a bundle of national patents of that European patents. And that's classic up being patent can be opted out or opt in of the UPC. And now you know that because there are countries that are not EU members, you have a combination also of the two. Again, in an overview, what terms procedure translation requirements, maintenance, cost, infringement and validity, and sale or transplant in the unitary patent system, it is one month after grant. There's one request for registration, one translation, one annual fee of one centralized procedure, as well as a one single registration in the register with the EPO, nobody received with the EPO and transfer is not possible for country because it is it is one it is one illegal product. Licenses are possible per country though. If we look at the classic validation, a country that is three months after ground, it's done per country. Translation depends very much on the country choice. Annually, you must pay maintenance fees for better than each country. And proceedings can either be brought before the UPC. If the UPC of that is filed, the proceedings are then heard by national courts, and that stration is possible, but still is possible a transfer possible per country. So we will change. biggest change is that newly granted European patterns can now become unitary patterns. And classic European patents validated in a UPC state will fall under UPC jurisdiction. Unless opted out, there's the opt out again. Now everything is still optional. And many things will not change for except, for instance, the examination and ground proceedings before the European patent always will not change at all. And newly granted, European beds can still be validated nationally in all of the EPC states. evaluated, internationally validated European pattern can by the way, never become a unitary patterns, because they have been validated classically or any. But classic European patterns that are validated in a UPC states will fall under national law when an update is filed. And in a non UPC state, they will also always fall under national law. And that is not a no change in with the current system or the the classic system. So there are options for the classic European patterns that is validated in UPC status because UPC only comes into view. When you are in a UPC state, of course, you can opt in, then you don't need to do anything. So your court case for all seven of the member states will take place if there's proceedings. And there will be one decision on infringement, but also one decision on revocation. And it takes effect in all of the 17 member states also for your classic European patent. And opting out for certain action is required, you need to file an opt out. But separate litigation then occurs in each state. And if the ballot is revoked, it is only for that state. Now we come to the interesting part of where does this all fit in our strategy? Well, there's risks and benefits of each of the systems. And I give you a number of reasons to opt out the classic European patent from the UPC. One risk of the UPC system for penalties, for instance, is that central replication, you lose protection of the patent in one fell swoop. There's also uncertainty on the interpretation and the application of the law. Because there is no jurisprudence yet in the UPC. We all trusted the judges has been done have been the left Aiken narrowed, and we know that there are very good experts, but the court as a whole even know how it will. And as I've told you, the timelines in the UPC are extremely short.

Unknown Speaker  44:55  
It's also not know what the impact of UPC decision is In non UPC courts, that is a risk for patentee that wants to have a portfolio that is divided among a lot of different European countries, they have to forget that this patent is revoked in one fell swoop. The impact of the UPC decision on non UPC codes may be important. There may be what we call a long arm of the UPC, you don't know that. And actually, in that sense, you may not want to have any decision by UPC. Like in Germany, there is actual bifurcation of proceedings and infringement and validity are decided in separate courts. There is that is decided separately, and that may lead to higher costs and different claims interpretation for the case of infringement and the case of validity. Now, this is an important thing, exclusive licensees of a European or unitary patent can start with infringement proceedings before the UPC by themselves, they do not need the patentees approval unless the agreement between them the License Agreement provides otherwise. So a patentee may be dragged into an invalidity proceeding if the license agreement does not prevent the licensee from bringing an action, and I'll give you the scenario in a in a little bit. There's also benefits of the national courts for deputies, and maybe also a reason to opt out of the UPC when you have a classic European patent. There, there's complex national parallel procedures if you have a whole blanket of national patents, it's very unattractive for a third party to start litigation. There are so many litigations that even start to get the patent theory in Europe. That is, those multi jurisdictional litigations are mostly very costly and complex. And the patentee maintains control over the enforcement and litigation strategy. Because now the exclusive licensee has no standing before national courts ability may choose to litigate a patent in a national court of its own choice, rather than to be subjected to UPC jurisdiction.

Unknown Speaker  47:38  
Now, there's also reasons against opting out of the UPC when you have the classic European patterns. One of those, of course, their centralized proceedings, and the UPC provides very fast and efficient litigation proceedings for 80% in gross national product of the European Union. So if your patent is strong, and you want to infringe it off the market, it's fantastic to have this new PC available, you may avoid the costs and complexity and the duration of multi jurisdictional litigation if we just discussed, there is only one board, and it does not require a team of lawyers each of the relevant countries. You may also avoid different decisions between the different courts. It's very often that the German court and the UK court reach completely opposite decisions. This This creates improve Legal Certainty within the European Union markets. Now one other reason why you may not want to opt out the classic European system is that you have helped shape the system with infringement or verification actions, but for universities shaping the system, I think it's not a priority. So strategic considerations on the UPC further, there is a risk of central revocation as we've said, but that may have a different impact on different industries. Consider a pharmaceutical product that is often only protected by a single patents versus a mobile phone technology that is covered by a multitude of patents. Now, what happens if the patent is revoked for the pharmaceutical product? In 17, UPC states in one world, that pharmaceutical product is left completely unprotected. Whereas for the mobile phone technology, there's maybe still four or five patents into in effect for the same product and infringes can still not bring their product to the market. And it means that different industries tend to have totally different strategies. And I will show that that is not only won't be expected. It's only what we also what we see some other strategic considerations with respect to the ABC now that you know how it works. We expect that litigation before the UPC is more expensive than a single national court case, for instance, in the Netherlands, because cases before the UPC are valued based, the fees that you must pay are value based. And the cost awards that are issued by UPC are expected to be hired at a cost award now given by national courts costs award means the losing party pays the cost of the winning party or the prevailing party. And the cost awards can be quite considerable, for a university, several 100 1000s of euros in legal costs of the winning team having to pay that is not something to look forward to. Now there's still uncertainty in the UPC if a counterclaim for invalidity is referred to the Central Division, that bifurcation, that is still an uncertainty. But it's based on the German system and of course, German system. German legal system has had a great say in how the UPC has come about while there is a risk of negative court decisions, that that they have a high impact to SMEs, because SMEs do not regularly engage in multi jurisdictional proceedings. They have lower smaller wallets, and they have don't have big legal teams. So small, medium sized enterprises, as well as universities bring the risks that are far, far more significant than the risks that large industries face in this UPC system.

Unknown Speaker  52:03  
Now I give you this UPC scenario. Imagine imagine that as a university, you have given an exclusive license to your licensee. And your licensee sees. For instance, you're based in Germany or the Netherlands, and your exclusive licensee notices an infringement in Italy. He could start an infringement action before UPC local deficient in Milan, Italy. But the university you as licensor, you are not a party. Because the exclusive licensee has standing. Can they file a claim against infringer now with third party let's infringer files and invalidity counterclaim? Oh, now this is kind of interesting because the counterclaim now, it cannot be the invalid it cannot be brought against the licensee because the licensee is not the owner of the patent. And that means that the university licensor is notified by the UPC that this has become a party to the proceedings, namely an invalidity counterclaim. Now, the invalidity counterclaim, as you said, is maybe heard separately by the Central Division in Munich or Paris, which means warrior costs that nobody had anticipated, at least not the exclusive licensee. And what if the patent is revoked? Who's going to pay the third party costs award? If those are requested, who's going to pay those? So our advice is that the tune is in general to universities and small has Mises, to have a wait and see approach by opting out. That is a good strategy at this moment, you know, the opt out can always be withdrawn and the risk to be locked out of the UPC if that would be so beneficial. Well, if that occurs, if you're locked out of the UPC by a national action started by a third party in a national court is still a situation that's no different from the current situation.

Unknown Speaker  54:21  
So the unitary patterns and the long arm of the UPC or et cetera decisions may have an effect on other courts. Well, the UPC decision may also have direct cross border consequences for a patent validated in the non UPC states such as Poland and Spain, or even in non EU states such as the UK or Switzerland. So for instance, where the UPC has decided that it has jurisdiction in relation to deciding on damages for infringement over a defendant that's occurring within the UPC say in Italy But it may also exercise, it may also decide that is an exercise of jurisdiction in relation to damages arising outside of the UPC or even outside EU. For instance, if that Italian infringer is having huge activities in the UK, where also the products sold and stored, and stored, maybe for transport to Germany, UPC is date. So it is well possible that a UPC decision has immediate consequences also for non EU UPC jurisdictions. But we do not know yet. If the UPC can decide on damages from infringement here on the up patent in the UK under UK law, that will be interesting. And we still need to see how that all works out.

Unknown Speaker  55:58  
So the strategic considerations on the unitary betters on the other hand, not the UPC that you're their patent is whether you would seek national validations or the unitary patent. And the consideration there is what is the value of the patent? Is it? Is it really of enormous value? Well, then it's maybe a good idea to nationally validate, because it's not the price or the costs of the the lower cost of the unitary patent that will be so important. Almost, perhaps make no hard No, not an issue at all. But what it's important that it's important that the patent is enforced in this FD UPC states. Well, mostly, that's not even the case. If if only Germany, Great Britain, or UK and the Netherlands are, are needed for protection, then the national validation is even cheaper. And one other thing that we need to consider is central enforcement and that you go to one court to make sure that infringes do not use your patent. And poor Pan European injunctions and injunctions stop manufacturing the product, pay any damages, is that important. Now, what is important is enlisted. So what is the strength of the patent? Has it survived in opposition in the EPO, that means that is probably a very strong patent. And if it is a strong patent, you may choose to have it registered as a unitary patent, because it's a strong patent after all. So the real risk of central replication must also be weighed. Is that is that is that real? Is there a realistic chance, in view of the strength of the patent, that there will be a central ratification? That, of course, depends very much on the individual buttons. And you would have to actually go through the complete portfolio to determine which one would be suitable for national foundation or unitary patents. So there's sufficiency or enforcement that you may want to take into account when you decide on a European patent? Yes, we like the efficiency of that enforcement or risk of losing the patent. We don't like that all at once or only per country that is added to consideration all at once losing it all in one, or losing it per country, as we as we live now in Europe. So the cost of maintenance, which is lower for the unitary patent, versus the cost of litigation with may be higher. Except, of course, when you are a big industry and you're used to multi jurisdictional litigation, then the cost of litigation are always calculated and, and you know, their budget. And flexibility in Portfolio Management is a lost item. Because a unitary patent cannot be proved safer. It's for instance, that you always validated your patent in Germany, France and the UK. And all of a sudden with the unitary patent. You also get competitive force in Italy. Well, there used to be an infringer in Italy. That was never hurt by the patent because it was never meant to come in force in Italy. But all of a sudden, this Italian infringer is hurt by that it can it can do no else than to start invalidity proceedings. It is not possible to take Italy out of the unitary patent basket cannot be proved. So some data on the unitary patent system, you know, they're Sunday to our recent and some are not so recent six out of five may for instance on called touts. This is the GCD. The lower left graph is the opt outs filed per per technological field. And what's these 76,000 opt outs? The largest part 5000 was from pharmaceutical products. And at the end of June of 2023, there were a total of 535,000 opt outs from the UPC. And byte above me here, you can see how the from March starting the updates coming in from March until the first of June there was an enormous peak, then it died down but it's not steady at a certain level. The updates are still failed. And if you take into account at the EBO, EPO Yeley applications reached 190,000 applications and grants are about half of those about 95,000. We actually do not know how many granted patents are still in force in Europe. So if I frame the 1000s of dollars have been filed, we know that that is 7% only or 10% of all applications that have been filed but most applications will have already been abandoned. And will patents have been abandoned and may come out that UPC opt out files may reach higher numbers than we have. We anticipate percentage wise. For UPC court case shipped analysis 18 September there were 37 infringement cases, four of which were chemistry, Live Science cases, and six replication actions, of which four also were chemistry and life science. That is because I'm going to show you live science attorney for unitary patent sets of six September 2023, there were 7262 registered unitary patents, and that is relative to the expected 18,000 grants in the period since one June. And in that respect, you may say, well, it's about lopped off August unitary patent. Well, I'm not counting in the 18,000 grants, the enormous delay that has occurred in the six months running up to first of June 2023, when everybody waited for the web, actually the European Patent Office waited with granting granting patents. So there may have been 50,000 grants in the recent months. Whatever percentage of those are, have become unitary patents. We know that 77% of the register today patents are in the mechanics, electronics and physics field. And only 19% is in the health and coincides with when I've said that the risk for different technologies is four of the UPC and the unitary patent are different. So finally some conclusions and give some new so it's conditioning considerations. The role of the national courts for European patents is going to and taking into account at the loss of doubts may be filed just before first of June, actually a month every year 2030. Any patent that is then opted out will stay opted out for the rest of its lifetime, which is up to 20 years. So by 2050, which is long beyond my professional career, there will be no opt out, opted out patterns anymore and UPC will have exclusive jurisdiction jurisdiction on any European patent granted, I didn't think that national patterns like a Dutch national or German national patterns may gain in importance. Another conclusion is that the unitary patent is pretty cost effective way for a Pan European enforcement. But on the other hand, the National validation in non UPC states is still required. It's not that you're done out for Europe, certainly not. And I've seen applicants or patentees that I've had, I've had to tell time and time again, Lou, you have not addressed anything about the UK Yes, we know we don't want the UK okay, then it's loose, but make sure that if you do not do anything in the UK, within three months after grant, even after you have filed your request for, for a unitary effect of your European better than obtaining a unitary patent, you can still within two months thereafter go for national validation. The UPC provides fast and well defined legal procedures, and that central revocation in the UPC is a real risk.

Unknown Speaker  1:05:33  
One thing that I've explained is about an exclusive licensee. And those exclusive licensees are entitled to bring actions before the UPC on their own. So you must review your licensing agreements with your exclusive licensee if they provide the right provisions. Now, finally, during the transitional period of seven years, a UPC opt out is possible. And we consider that a wait and see approach for universities is a very good strategy. Thank you for your attention today.

Speaker 1  1:06:23  
We do excuse me have two more questions. Are UPC opposition proceedings subject to the same rules as classic EP patents or is this a different process?

Unknown Speaker  1:06:45  
Well, let me rephrase the question or UDC invalidity proceedings, because a kind of invalidity proceedings before the EPO is what we call opposition. And in the court, we don't call it opposition. We call it a revocation or a nullity, actually. So there's a centralised possibility to have the patent off the table in the EPO, we call that opposition does that opposition is based on the rules of the EU EU European patent convention. This is the same as rules that apply to the UPC. So also their invalidity proceedings are based on the same articles rules of the EPC. The only thing is that the UPC Rules of Procedure also apply. And that means that different from in from, for instance, the EPO, there's totally different court assemblies, different judge panels, but that's the only difference. In effect, the UBC must decide based on European patent law, and that's also what the EPO does.

Speaker 1  1:08:09  
And also can a pan to file parallel validations to a UPC EU patent. In for example, D and L are guests in other ones france fr as a backstop against UPC invalidity.

Unknown Speaker  1:08:31  
As you can imagine, there's UPC invalidity, it's very nice to have something available. But if the UPC decides in in a UPC decision, that decision is binding for the Netherlands, Germany and France. It's not binding for the UK. So if you have a national pattern there

Unknown Speaker  1:09:01  
we always think that it is good if you have a divisional possibility to file a divisional and do something else with a divisional show instead of opting that out, or having that as a unitary patent, take the divisional and file that is as an national foundation or unitary patent and up to date instead of opted out. So you have not all of your eggs in the same basket. I hope that answers the question.

Speaker 1  1:09:39  
Okay, I think that's all of our questions for this session. So, on behalf of autumn, thank you for its for this informative presentation. Thanks to all of our attendees for joining today. Thank you Carmen for joining us as well. A recording of this webinar will be available for viewing In the autumn Learning Center within a week of this event and it is included with your registration, a copy of the slides will be there. Also, please complete the webinar evaluation which should open when you sign off of this session. This will help us serve your needs better in the future. So everyone thanks for joining and have a great day.

Unknown Speaker  1:10:25  
Have a great Day. Bye Bye

Transcribed by https://otter.ai