Ratification of the Unitary Patent and its Outcomes in Small European Countries

Authors: Dr. Jacekas AntulisAssociated Partner, Head of Patent Division at METIDA

metida_pasaulisThe approaching ratification process has brought the unitary patent into the spotlight. Only a year ago the concept of unitary patent was praised by many articles and reviews. At that time, it seemed flawless. Heads of different national patent offices applauded the unitary patent system without thinking what it could bring to different European countries. After a while, individual attorneys started tentatively writing about weaknesses of the unitary patent, which were overlooked by everybody (or, to be more precise, nobody gave a serious thought to it) during the initial euphoria. Time went by and more negative articles surfaced.

It is difficult to predict what the future holds for the Unitary patent. The new system is expected to be approved by the minimum number of countries (13) since it gives only an additional opportunity which does not close the door on a long-standing and time-tested system.

The key strength of the unitary patent lies in its price. It may reduce by as much as 80% on a case-by-case basis. However, it is only a number. The actual situation depends on the number of the countries taken. If it is fewer than 5 or 6 countries, this strength disappears. Hence, the key strength of the unitary patent is attractive only to pharmaceutical companies, while companies willing to commercialise their invention in three major European countries, namely Germany, the United Kingdom and France, do not see any advantages of it. On the other hand, these countries represent the same official languages of the European Patent Office (EPO), and therefore in terms of translations the new system will not bring any benefits to the main three markets.

Another strength of the unitary patent is a centralised yearly fee to the EPO. This allows applicants to avoid different fees for different national patent attorneys. On the other hand, nobody knows the exact amount of such yearly fee. It can amount to a fee of 5 to 6 countries, and it will be beneficial for pharmaceutical companies mostly.

There are also certain negative aspects of the unitary patent in the electronic space. Some do not trust the reliability and stability of the future legal system, and others think that the new system may effect professional reorientation of patent attorneys. Small countries are worried about high court fees which will be simply unbearable for local clients. Also, “patent trolls” may become more active and increasingly choose the most convenient for them judicial authority in the system. The unitary patent is believed to be less resistant to attacks by third parties and easier to revoke. It gives the impression that the European Patent Office under the guise of lower fees for a statistical average applicant wants to collect the same fees itself, depriving patent attorneys of small countries from the opportunity to earn from extensions and translations, and to take away the opportunity from all patent attorneys to earn from yearly fees. The statistics speaks for itself: around 50% of the European patents are extended only to three countries, 40% to five countries, 8% to 13, and only 2% to 27 countries.

Let us look at the situation in a small European country, presuming that the unitary patent takes effect. Understanding and solving a simple logical “scissors” task with operation “and” does not require any exceptional analytic abilities.

The following groups are distinguished:

1)      the 50% group extends to 3 countries;

2)      the 40% group extends to 5 countries;

3)      the 8% group extends to 13 countries;

4)      the 2% group extends to 27 countries.

  • After the potential ratification of the unitary patent system, the first group will not extend to small European countries and will not use the new system.
  • The second group has not and will not extend either because in many cases these two additional countries are Spain and Italy which are not willing to participate in this project at all. By the way, these countries (Spain and Italy) officially refused the new system not because of their desire to preserve their language, legal system, etc., but because of the fact that approx. 35% of the patent applications are extended to Spain and/or Italy, which generates a large share of the capital for local patent attorneys. Spain and Italy are large countries, their attorney organisations may influence such decisions, and national representatives listen to the opinion of their people weighing all pros and cons.
  • The third group includes many middle-sized or small countries. Some of the patents have been extended to these countries, but the introduction of the new system will stop this process as it is favourable to them to make use of the new Unitary patent system.
  • The fourth group has extended to almost all European countries. However, the introduction of the new system will stop this process as the new Unitary patent system will not be favourable to them.

A conclusion may be drawn that the Unitary patent will not bring any benefits to applicants from small countries and will create a catastrophic future for the entire sector of patent attorneys. If small countries had approximately 1,500 extension orders (validations) per year, now they will be left with almost nothing. As the new system will apply not only to new applications, but also the pending ones, its introduction reminds releasing “the brace in a car without inertia”.

The year 2014 will become a critical year for most of the patent attorneys. The situation of small countries is hopeless: if the new system is ratified, it does not matter whether the national representatives will sign it or not, small countries will be in a no-win situation either way. There is only a hope that the unitary patent system will not be ratified due to the insufficient number of the ratifying countries (fewer than 13).

Hence, before ratifying the new system, every national representative should think twice and make the right decision. After all, biting the hand that feeds you and your loyal taxpayers, including inventors/applicants, is not the best case scenario.

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