Unitary Patent System moves a step closer

With the recent announcement of the location of the London division of the Unified Patent Court (UPC), many patent practitioners and patent-savvy businesses will be increasingly aware of the need to review and adapt their filing and litigation strategies to allow for the effects of the UPC Agreement.

Currently, proprietors of UK and European (UK) patents have two main venues for first instance patent litigation: the Intellectual Property Enterprise Court (IPEC) for relatively low-value claims and the Patents Court for relatively high-value claims.  In contrast, European patents with unitary effect (“unitary patents”) will be under the sole jurisdiction of the UPC.  During the initial transition period (seven years, with the possibility to extend to fourteen years) proprietors of European (UK) patents may, under certain circumstances, “opt–out” of the Agreement on a case-by-case basis.  European (UK) patents which have been “opted out” will remain under the sole jurisdiction of the UK national courts, unless and until the opt-out is withdrawn by the proprietor.

The statistics on UK patent litigation could provide some interesting insights for businesses deciding whether to “opt-out” a particular case.  In a recent study commissioned by the UKIPO, data from the Patents Court and the IPEC (and previously the Patents County Court) showed that between 2007 and 2013 the Patents Court was still the forum of choice for European (UK) patent litigation, even after the 2010 cost and procedural reforms.  This is evident from the fact that there were eight times as many cases involving a European (UK) patent at the Patents Court as there were at the IPEC.

However, the number of cases at the IPEC rose significantly after the 2010 reforms, with no observable rise in the number of Patents Court cases.  It is also interesting to note that the number of cases involving small and medium-sized enterprises (SMEs) saw a similar rise after the 2010 reforms.  These could be indications that the IPEC provides a low-cost forum for SMEs that may not otherwise enter into litigation.

Thus, for SMEs validating their patent in a small number of member states, retaining the ability to use the relatively low-cost IPEC in the UK may be advantageous. However, this should be balanced, with the cost of the opt-out fee and the potential costs of litigation in the other states in which the patent is to be validated, against other factors such as the costs of litigation at the UPC and the potential value of pan-European remedies that may be available via this route.