The Allure of Europe’s Forthcoming Unitary Patent

Soon you may be able to get a single patent, which will be enforceable throughout most of Europe in a centralized European patent court. On December 17, 2012, the European Parliament and the Council of the European Union adopted a regulation that has moved Europe much closer to an integrated patent system.^[i]

The regulation lays the foundation for a “unitary patent,” enforceable upon issuance throughout most of Europe in a new Unified Patent Court, with implementation targeted for Spring of 2014.^[ii] Under this arrangement, the three languages of the European Patent Office (EPO)—English, French, and German—will continue to reign supreme. The EPO will administer the unitary patent. Although the arrangement contemplates that the unitary patent filing can be initiated with an application in any official language of the European Union, the application must be translated into and prosecuted in one of the three official languages, just as with present applications filed in the EPO.

Spain and Italy, unhappy with this language regime, have not agreed to participate in the new arrangement. Some commentators nevertheless expect these countries to join eventually so their citizens can enjoy the benefits of the unitary patent. A formal agreement among the participating countries to establish the Unified Patent Court is targeted for this year.^[iii]

Unlike the present system, no further translation will be necessary for making a unitary patent enforceable in any participating country, although the patent owner will be required to provide, at the request of the court, a translation of the patent into the language of the proceedings and, at the request of the accused infringer, into the language of the country where the alleged infringement occurred or where the infringer is domiciled.^[iv]

Under the present system, one can apply for a patent from the EPO in any of the three official languages, but the resulting patent cannot be enforced until and unless it is “validated” in a country that is a member of the European Patent Convention. Although recent developments have mitigated the problem somewhat, validation typically involves considerable translation expense. When a present-day European patent is validated in a particular member country, it can then be enforced just as a national patent of the particular member country—but only in that country. Enforcement proceedings for infringement in other European countries must be initiated separately in each such country.

The benefits of the new unitary patent are obvious: simplicity in prosecution, trans-European enforcement, and uniformity of results. In addition, the regulations contemplate reduced renewal fees^[v] and subsidized translation expenses^[vi] for EU-based small and medium-sized enterprises.

Risks in Putting Your Eggs in the EPO Basket

The unitary patent has a dark side as well. Ease of enforcement also means greater downside risk. If the Unified Patent Court finds a unitary patent not infringed, it is not infringed anywhere the Unified Patent Court has jurisdiction. If the Unified Patent Court finds a unitary patent invalid, the patent is invalid everywhere and for all time. Although the Unified Patent Court will have a Court of Appeal^[vii], every unitary patent holder must encounter the risk that enforcement activity will result in the loss of all patent rights. Under present law, by contrast, the determination by the court of a given country that an EPO patent, validated in that country, is not infringed or is invalid will have no mandatory effect outside of that country (although such a determination may have persuasive effect).

In fact, the risk of putting all patent eggs in the same basket exists, to a substantial degree, even now. For example, when a present-day European patent issues, it can be subject to attack, for a period of nine months, in an opposition proceeding. If the opposition is successful, all European patent rights associated with the patent will be lost.

A patent owner can offset the risk of a successful opposition somewhat by filing one or more follow-on applications (called “divisional applications”). EPO rules recognize the divisional application as appropriate for seeking further protection when more than one distinct invention is claimed in the original application. For example, in amending patent claims to overcome an asserted ground for revocation of the patent in the course of an opposition, the patent owner may confront an added-matter rejection, and a divisional application may provide a solution to this problem.^[viii]

A divisional application must be filed before issuance of the parent application and has the same technical content as the original application; the divisional application is given the same effective filing date as the original application. In fact, most patent jurisdictions permit the filing of such divisional applications, which provide a valuable mechanism for augmenting patent coverage for an invention or a set of related inventions. Specifically, each divisional application gives the patent owner a new opportunity to obtain an additional patent with claims that characterize the invention in a distinct way.

However, since 2010 the EPO has placed time limits on how late in the prosecution process a divisional application can be filed^[ix], so sometimes when the patent owner would like to file a divisional application, it is too late under EPO rules.

Additionally, over the past decade, the EPO has taken an increasingly strict view of how claims in an application or a patent can be amended. The European Patent Convention requires the patent application to “disclose the invention in a manner sufficiently clear and complete for it to be carried out by a person skilled in the art.”^[x] Similarly, the European Patent Convention requires the claims to “be clear and concise and be supported by the description.”^[xi] A related requirement prevents amending the application “in such a way that it contains subject matter which extends beyond the content of the application as filed.”^[xii] While these requirements are similar to United States requirements^[xiii] of enablement of the invention in the application, of support for and specificity of the claims, and prohibition against adding new matter, the prohibition against adding new matter tends to be interpreted by the EPO more strictly than in the United States.

As a consequence, some applications that result in issued patents in the United States and Japan, for example, may not pass muster in the EPO, and if EPO patents do issue, they might be revoked in opposition proceedings.^[xiv] The point is not that the EPO is tougher in requiring novelty and an inventive step^[xv] over the prior art. Rather, it is that the EPO favors a formalistic analysis of the text of the application in determining whether the claims are proper. The EPO has demonstrated a strong preference for claims that correspond with precision to the textual content spanning a single continuous stretch of the application. When that correspondence is lacking, the EPO will tend to reject the application, even when a technically trained person would find the claimed subject matter well described in the application.

In other words, under the present regime of the EPO, there are two serious problems. First, divisional applications are limited in time and may not be available when needed, and, second, formalistic requirements are imposed on the application in the course of examination or opposition proceedings. Because the EPO applicant or patent holder risks loss of patent rights in every country in Europe where coverage is being sought or has been obtained, there is already a problem of too many patent eggs in one basket.

An Alternative Approach to Patents in Europe

Given these risks with the present European patent system, a seldom explored alternative is worth considering—national filings in individual European countries. When coverage in only about four or five European countries is desired, and when all of the costs are taken into account, the cost of separate national filings is similar to the cost of going through the EPO. Even if coverage is desired in more than four or five European countries, it may make good sense to file separately in the European countries desired. Typically there are no time limits on divisional applications as long as they are filed before the original application has issued. And rejections for formalistic reasons in national patent offices of European countries are less common.

When the EPO was first established in 1978, its administrators expressed keen awareness of the public fear of putting all patent eggs in one basket. They assured an anxious community of patent filers that they would grant patents in a fair manner. A new era is upon us, and the EPO has little corporate memory of those early days. Indeed, the vast preponderance of filings in any national patent office in any particular country of Europe is only by nationals of the particular country. Once there is a decision to seek coverage outside of the home country, the universal approach is to use the EPO.

It is time to reconsider. European patent filings do not have to go through the EPO. As Europe prepares itself for an integrated patent system, it is appropriate to consider alternatives when the EPO, as keeper of the faith of an integrated patent system, has begun to stray from its roots as a fair arbiter of patent destiny.

^[i] A related regulation adopted on the same day by the Council addresses translation issues in this context.
^[ii] See press release of Council of the European Union, page 3.
^[iii]Id.
^[iv]See regulation pertaining to translation issues, page 4.
^[v]See regulation, Article 12.
^[vi]See press release of European Parliament, pages 1-2.
^[vii]See Factsheet, page 4.
^[viii]See Rule 36 and Article 82. More generally, when the invention is important, it often takes time to develop claims that effectively characterize an invention. A divisional application can provide an opportunity to seek a patent with claims that distinguish over newly uncovered prior art or that otherwise more effectively characterize the invention—although this expanded use of the divisional application has no doubt contributed to the imposition of time limits for divisional applications discussed later in this article.
^[ix]Rule 36.
^[x]Article 83.
^[xi]Article 84.
^[xii]Article 123.
^[xiii]See, for example, 35 U.S.C. § 112.
^[xiv]See for example, T 1710/09 (Merck/Fosamax), page 13, which holds that a claim amendment with a combination of limitations was not supported by the disclosure in the application, even though all limitations of the claim were disclosed in the application, because “no preference is indicated by specific words or in any other directly recognisable way and their singling out for reasons of original disclosure is not allowed.” To similar effect, see T 0223/11 (Hoffmann-La Roche/Bonviva). The author has had similar experiences in prosecuting through European patent counsel applications in non-drug fields as well.
^[xv]In the United States, a corresponding term is “non-obviousness.”