Europe’s new unitary patent is still on track, with a start date in spring 2017 now viewed as likely. Among the ongoing business of the Unified Patent Court’s Preparatory Committee a final publication on court fees and recoverable costs has recently been issued.
No opt out fees
There will be no fee charged for opting out of the system, or for withdrawing an opt-out.
The opt-out, available for a transitional period to all holders of European patents and applications, will permit businesses to “wait and see”, only including their portfolios in the UPC system when they are satisfied with how it is working. Or patent-holders may choose to divide their portfolios between patents that they want to operate as unitary, and others that they would like to remain as traditional EPs.
Because much of the administrative burden of this process will lie with the patent applicant, it has (very sensibly) been decided that charging a fee for the process would be inappropriate. This will be welcome to patent-holders, who will no longer have to budget for a fee that would not have become due on their portfolios without the introduction of the UPC system.
This was a really positive response to patent-holders' concerns about the possible opt-out fees, and a victory for common sense, when it was appreciated that the major costs for the Court in administering the opt-out would be in handling receipt of payments!
If all goes well, the opening of the sunrise period for opting-out will begin later this year. The transitional period for opting out will last seven years from when the system takes effect, with a possible seven year extension.
Fees and recoverable costs too high for SMEs?
The UPC publication also deals with court fees and recoverable costs caps. Court fees will include fixed and, for claims valued at over €500,000, value-based elements.
While micro and small enterprises will be able to apply for a 40% reduction in court fees, some remain concerned that they will prove too onerous, particularly where non-practising entities threaten to assert patents against SMEs. There is especially a concern that the substantial initial fee of €11,000 will apply to relying on a defence of invalidity of the patent.
Similarly, the recoverable costs ceilings can be adjusted to take account of a party’s ability to pay. But with a potential upper limit of €5 million for the most complex cases, many remain concerned about the level of exposure.
UK law changes to align with the UPC
The UK’s patent laws need adjusting to bring them into line with the unitary patent system. New rules in the form of a draft Order are well on their way to completion. These will take effect when the UPC Agreement comes into force, and will make a series of changes to the UK Patents Act.
Importantly, among the areas covered are the rules concerning patent infringement. Going forward, there will be differences in the areas of contributory infringement and the acts that are excluded from infringement (such as the Bolar exemption for testing of medical and veterinary products to gain regulatory approval) depending on what type of patent you are looking at. So, for example, a new exception allowing the decompilation of computer programmes in certain circumstances will be applicable to unitary and EP patents, but not nationally granted ones.
Some query whether having these detailed differences in infringement law between national, EP and Unitary patents is in fact consistent with the UPC Agreement. Another fertile area for litigation?
All this could of course be thrown into doubt by a vote to leave in the UK’s EU referendum in June, although UK government minister Ed Vaizey, seemed confident in Parliamentary debate that the UK would be able to find its way back into the system.
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