Lisa Desjardins (Lisa): You're listening to Canadian I.P. Voices, a podcast where we talk intellectual property with a range of professionals and stakeholders across Canada and abroad. Whether you are an entrepreneur, artist, inventor or just curious, you will learn about some of the real problems and get real solutions for how trademarks, patents, copyrights and industrial designs and trade secrets work in real life.
I'm Lisa Desjardins and I'm your host.
The views and opinions expressed in this podcast are those of the individual podcasters and do not necessarily reflect the official policy or position of the Canadian Intellectual Property Office.
Imagine if Canada, the United States and Mexico joined forces and created a new North American patent system through which applicants could apply for patent protection, and that there would also be a court in which these patents could be challenged. How would these patents relate to existing Canadian, American and Mexican patents?
Well, there is no need to panic because this isn't happening here, but it is similar to what is happening in Europe, where the unitary patent and the Unified Patent Court are established. To learn more about this and what anyone applying for a patent in Europe needs to know, I'm fortunate to be joined by Anthony Dearden, who is a Canadian patent agent and European patent attorney based in Gowling's Vancouver office. Anthony is a member of the I.P. Group and specializes in drafting and prosecuting patent applications for clients in the tech sector and has also developed information and tools to help I.P. practitioners and applicants better understand the unitary patent and the Unified Patent Court.
Anthony, welcome to the podcast!
Anthony: Thank you for inviting me, Lisa.
Lisa: This is a really interesting topic, it has been the subject of a lot of conversations, not only for I.P. practitioners in Europe but, of course, it concerns Canadians as well. But before we dive into the topic, can you tell us a little bit about yourself and the kind of work that you do?
Anthony: Yes, absolutely! So, I guess I started my career in around 2007 in the U.K., where I worked for a couple of different U.K. trademark and patent attorney firms. Eventually, I qualified as a European patent attorney and then made the move to Canada in about 2015, where I am now based, as you said, in Gowling's Vancouver office, working as a Canadian patent agent. My practice is mainly focused on patent prosecution, so I deal with everything kind of in the pre-filing stage of preparing a patent and then the prosecution of patent applications, both domestically in Canada as well as in the U.S. and around the world, Europe as well in particular, and where we leverage our network of associates to assist us in the filing and handling of foreign applications.
On top of patent prosecution, I also do a fair bit of what I'd suppose we'd call ancillary type services. So things like developing I.P. strategies for our clients, doing patentability searches and reviews, carrying out freedom to operate searches where we advise clients on the risks posed by third-party patents, and I also do a fair bit of infringement and validity work. In terms of the sectors I work in, I have a background in physics, so I tend to work primarily with tech clients. So I work a lot with software and computer-implemented technologies, a lot of A.I., machine learning, quite a bit of clean tech.
In terms of how this fits into my work with the unitary patent and the U.P.C., I am a member of the firm's, what we call, the U.P.C. working group. It's a collaboration between… Well, it's comprised chiefly of some of our colleagues in our firm's London and Birmingham offices, and it's got a couple of Canadian patent agents as well, including myself and my colleague Edith, who also works in Vancouver with me. The goal of the group is to disseminate and to educate both members of the firm and our clients and associates around the world about what's changing in Europe. These two major changes that are finally going to see the light of day next month, so the U.P.C. and the unitary patent. It has been exciting to stay abreast of developments and also helping to share the news and educate people at Gowling and elsewhere.
Lisa: Sounds like I've got the right individual for this podcast.
Anthony: I hope so!
Lisa: Yeah, this is great! So it used to be that people would apply for a European patent and then sort of cherry-pick whatever countries that used to make sense. Tell us about the differences here between the old and the new system. How does the unitary patent fit into all of this?
Anthony: Yes, that's right. So, I mean, if we wind the clock back quite a long ways, it used to be that if you wanted protection in Europe, you had to go to the national patent office of the country in which you wanted protection. So, for example, if you wanted a U.K. patent, you'd file your application at the U.K. patent office. If you wanted a French patent, you'd file at the French patent office, and so on.
In the 1970s, the introduction of the European Patent Office, or the E.P.O., really simplified the whole process by which you apply for protection in Europe. So now, instead of filing multiple applications in multiple different countries, you could file a single European patent application in French, English, or German, and the E.P.O. would handle the examination of that patent. When the patent is granted by the E.P.O., it doesn't give rise to a single European patent; it gives rise to what we call national validations, which are effectively a bundle of separate national rights. So that European patent application splits into a bundle of separate and individual national patents. These patents can only be enforced or challenged via the national courts.
So for example, if you wanted protection in the U.K., France and Germany, you'd file a single application and then, at grant, you would choose to have that patent validated in France, the U.K. and Germany, and it would give rise to three separate individual patents.
As of June 1 this year, which is in just over a week as of the date of this recording, there's going to be a brand new type of patent that's available to anyone pursuing a patent application in Europe. So, when the E.P.O. allows your patent application, on top of going with the traditional national validations routes, you will have the option of going for a unitary patent. And unlike separate national rights, the unitary patent is a single patent covering multiple different jurisdictions. 14 in total at present count, but that number will increase as more and more countries ratify the agreements.
There are quite a few gaps in the coverage that it does provide. So, the unitary patent is tied to E.U. law, so it won't cover any non-E.U. countries, so countries such as Norway, Switzerland or even the U.K. since Brexit. These are non-E.U. states, so it won't be covered by the unitary patent. It will also not cover any states that have not signed up to the agreement. Spain is probably one of the biggest omissions there.
Now, does that mean that you have to go for a unitary patent or national validations? No, you can adopt a hybrid approach. So, you can use your national validations and to plug in the gaps with the unitary patents. For example, if you wanted protection in Italy, France, Germany and the U.K., you could cover all three of those, so you could cover Italy, France and Germany with your unitary patent and you could add on coverage in the U.K. by validating your patent in the U.K. as well.
So, it's a pretty big change. There are other types of unitary patents that exist in the world. I believe there's one in the G.C.C. and potentially Eurasia, although I don't often file in those jurisdictions. But there are other patents that cover multiple countries but never before in Europe. So, this is a huge change, and it's going to be exciting to see how it works in practice.
Lisa: Very interesting. You said 14 different countries. Now, you'd have to consider certain factors when you decide whether or not you're going to go for this unitary patent. So, can you help me explain when does it make sense to apply for a unitary patent?
Anthony: That's the million dollar question, Lisa. When does it make sense? I think one of the big advantages that's being touted in favour of the unitary patent is its potential for cost effectiveness. Because at the moment, the cost of getting protection in Europe, never mind the cost that you've incurred to prosecute the application, but the costs that are incurred when the E.P.O. grants your patent, is generally going to scale with the number of countries in which you want protection. So, if you want protection in three countries, it will cost you x. amount. If you want protection in six countries, it's likely going to cost you two x. amount. With the unitary patent, you're going to be getting protection in many different countries at a much lower price point.
Now, if you typically validate your European patents in just a few countries, it's probably still more cost effective to go for national validations. But if you typically want wide-ranging coverage, for example, if you're big pharma and you want patent protection in all available states, then it's likely going to be much more cost effective to go for a unitary patent. I believe that the renewal fee for a unitary patent, that's the fee that you have to pay year on year to keep the patent alive, is set to be about the same as four or five times the cost of renewing four or five national validations. So, you can kind of see a break-even point around that number of national validations. That's cost effectiveness.
Another big advantage is that because it's a single right covering multiple countries, there's no longer going to be any need for parallel litigation if you want to enforce the patent. So, you no longer need to bring the patent or bring an action in any of the national courts or multiple national courts. You can bring an enforcement action via a single court, which is the U.P.C., which we'll talk about later in more detail. So, I think it's going to… One of the other attractive points is that it reduces the potential complexity of litigation and it also opens the door to things like pan-European injunctions. You could get an injunction that is enforceable in multiple European countries, all from a single patent, instead of having to apply for that injunction in many different, separate national courts. Those are all big pluses for the U.P.
A couple of disadvantages: The fact that it's a legal right in multiple countries is kind of a double-edged sword. What I mean by that is that the unitary patent is also vulnerable to central revocation. So, if you lose that patent, you lose the patent in all of those countries. Whereas with a bundle of national rights, those patents have to be challenged on a country-by-country basis. There is a mechanism at the moment in Europe for central revocation, but it's very time limited, it's called European opposition. When the E.P.O. grants a European patent for a limited window of nine months, anyone can oppose the grant of that patent, and if successful, it will knock out all of the national validations. With the unitary patent, there is no time limitation. You can attack unitary patents for as long as the patent is in force.
Lastly, unlike a bundle of national patents, they each have their own renewal fee that is payable. The unitary patent has a single renewal fee that is going to be payable, so it's easier to manage from an administrative point of view. But one of the downsides is there's no ability to scale back the renewal fees that are payable on a bunch of national patents with the unitary patent. So if you have a selection of national patents, as the patent term progresses, you could opt to drop certain patents for cost reasons. If the renewal fees are getting too expensive for example, you could selectively abandon certain patents. You can't do that with the unitary patterns. You either pay the fee or you don't. And if you don't, you lose protection in all the countries that it covers.
Lisa: Quite a few things to unpack there. Let's start with the cost. There's a tool called the U.P. calculator tool that I know you've helped develop. What is that tool?
Anthony: Yeah. So the U.P. calculator tool is an in-house tool that myself and two of my colleagues developed here at Gowling, and it's designed to kind of cut through all of the cost-benefit analysis that needs to be taken when your European patent grants to decide whether it's more cost-effective to go for a unitary patent or cost-effective to go for a bundle of national patents. What we found is that the analysis can actually be quite complex. There are many different factors to take into account, and it's not just the number of countries you're interested in. It's the translation requirements that are attached to each specific national patent office that can really affect the calculus of which is the right direction to go in.
Another nice feature that we've built into the tool is the ability to forecast the cost profiles of going for a unitary patent versus national validations. If one were to drop certain patents during the patent term, as I mentioned earlier, if one were to take advantage of this pruning that's available with the bundle of national rights, and the tool is then developed to have this feature in it that allows you to see what that looks like and to visually see the different break-even points between opting for a unitary patent or national rights. So, I encourage our listeners to check it out, and I think there'll be a link on the podcast website.
Lisa: Absolutely. And then you mentioned the Unified Patent Court. The unitary patent is not just a single change. Once you have that patent, there's going to be a court available for that patent and the matters concerning the patent. How will that work?
Anthony: That's right, Lisa. So as I mentioned earlier, the national courts are responsible for national patents, but which court is going to be responsible for the unitary patents? It's not the national courts, it's the brand new type of court which is being introduced. So it's the Unified Patent Court, or U.P.C. The U.P.C. is going to have sole jurisdiction over unitary patents. So you can only enforce or challenge a unitary patent via the U.P.C.
Ultimately, the goal of the U.P.C. is to harmonize European patent litigation to some extent. So just like the E.P.O. was designed to streamline and harmonize the patent granting and the patent examination process, the U.P.C. is there to harmonize and streamline patent litigation in Europe, which can often be quite complex, burdensome, and can even give rise to different, conflicting decisions if litigation is launched in multiple different countries. For example, a French court might find a patent valid and infringed, but a German court looking at the very same patent for the same invention might find their patent invalid.
So the U.P.C. will have jurisdiction over unitary patents, and another very important feature of the U.P.C. is that it will also have jurisdiction over existing European patents, and that means that existing European patents can also be challenged via the U.P.C. and therefore will also be vulnerable to central revocation. So the owners of national patents derived from European patents will have the ability, they'll have two choices. They can either go via the national courts or via the U.P.C.
Now, you know, it's a completely untested system, and no one knows if the court is going to be relatively more patent-friendly or patent-unfriendly. The court is going to be designed to promote fast litigation. I think the timeline that's been set from the filing of an initial claim to the rendering of a decision has been set to about one year. Now that's in theory, time will tell to see if that timeline is going to stick, but litigation via the U.P.C. is probably going to be more expensive than litigation brought by a single national court, but it will likely be cheaper than parallel litigation launched in multiple different countries. So a lot of factors to consider when deciding whether or not to use the U.P.C. or not to U.P.C. As I mentioned earlier, vulnerability to central revocation is a big con of having your European… Your national validations come under the jurisdiction of the U.P.C. But also, the ability to have a decision that would have legal affect in every country covered by the U.P.C.'s jurisdiction would be a big plus and something that might attract someone to try out the U.P.C. with their European patents.
Lisa: I can understand if people would hesitate to put all their eggs in one basket and not everyone is up for the unitary patent and the Unified Patent Court. Is it possible to opt out from the system? I mean, we read about hockey stick phenomenon at the moment. Companies are starting to opt out of this system. How does it work?
Anthony: That's right. So, there is an opt-out mechanism available. If no action is taken on June the first, all the European patents currently in force in countries that are covered under the U.P.C.'s jurisdiction will automatically come under the U.P.C.'s jurisdiction. If you do not want that to happen, the way to do that is by filing what's called an opt-out. So, you can actively opt out your national validations of your European patents from the U.P.C.'s jurisdiction. The goal primarily there would be to shield those patents from the risk of central revocation. You can opt out your European patents throughout the entire patent term. There was also an opportunity to opt out your patents for what we called the sunrise period, which was a three-month period running from March the first this year until June the first, which is the date on which the U.P.C. and the U.P. go live. So, the idea of the sunrise period was to give patentees the opportunity to proactively withdraw their patents from the U.P.C.'s jurisdiction and shield them from the risk of central revocation. You can still do that after June the first, it's just that if you haven't done it by June the first, there's always that risk that an action could be brought against those patents via the U.P.C. and, if successful, would knock out all of the patents that come under the U.P.C.'s jurisdiction. So, for example, if you had French, German and Italian patents and they were challenged by the U.P.C., you would lose all three of them if that challenge was successful, instead of the challenger having to petition each of the French, the German and the Italian courts. The I.T. systems that have been responsible for dealing with the influx of opt-outs are really backlogged at the moment, and I was reading a blog just last week where they were saying that it's quite possible that opt-outs filed even at this late stage in the day may ultimately not be processed in time, so it may already be too late to file your opt-outs before June the first, but I think statistically speaking, it's still, you know, I think the risk of litigation being launched against a patent that hasn't opted out on June the first is probably still quite low.
Lisa: You mentioned some of the risks before. Why else would you think companies are choosing to opt out of their existing patents?
Anthony: So I think we mentioned central revocation. I think that would be the main reason to opt out your patents, to shield them from this risk of central revocation and also to shield them from a court which is entirely untested and to adopt a better-safe-than-sorry approach and to see how the new court plays out in practice. One of the neat features of the opt-out is that you can later withdraw it, so the only real downside to the opt-out is the associated costs. You can opt out your patents and at a later point in time, if you want to then gain access to the U.P.C., you can effectively withdraw the opt-outs. You can opt back in, so you can adopt a better-safe-than-sorry approach initially and then wait and see how the U.P.C. plays out in practice and withdraw the opt-out if ever you want to then enforce your patent rights via this U.P.C., which is designed to streamline litigation and to potentially fast-track it, as opposed to having to launch litigation via multiple different national courts. Now, having said that, speaking from personal experience, I think the cost of opt-outs, especially for companies with substantial European patent portfolios, is something to consider. We're finding some companies have taken the approach that, well, if the risk of litigation, European patent litigation, is relatively low, I'm not going to bother with the opt-outs because statistically speaking, it's unlikely to be an issue anyways, particularly if you work in an industry which is not particularly litigious. So we're also seeing companies take the approach that, well, let's just see how it works out and let's not bother with this opt-out mechanism. But certainly, I would expect high-value patents, so for example, the blockbuster drug patents of pharmaceutical companies, to have been opted out now because otherwise, the risk is that they could lose protection in many different countries with a single revocation action brought by the E.P.C.
Generally speaking, my advice to anyone listening at this stage would be to build the unitary patent and the U.P.C. into your European I.P. strategy. Consider how they fit into your I.P. strategy. So for example, is the unitary patent the right fit for you? Is the fact that you could get coverage in many more countries going to be of commercial value to you? Or is it simply not worth the additional cost? And is also the risk of central revocation not worth it? Additionally, develop an opt-out strategy, come to a decision on which patents should be opted out of the U.P.C. and which patents should be left in. Remember that you can always withdraw opt-outs and gain access to the U.P.C. afterwards, so the only downsides to the opt-out, in theory, are the associated costs.
And lastly, now would be a good time to review licenses, agreements, contracts that you have with partners in Europe and elsewhere. So, who's going to control the opt-out? Who gets to decide whether a patent is a bundle of national patents coming under the U.P.C. jurisdiction or the national courts' jurisdiction? Also, who decides whether or not to go for a unitary patent? Because ultimately, a decision will have to be made when your European patent application is granted, whether it should be converted into the single patent, the unitary patent, or remain a bundle of separate individual national rights.
Lisa: Where can S.M.Es., inventors, and companies learn more about this?
Anthony: So, we have a section on our website which is dedicated to the U.P.C. and the U.P. It's called our Unitary Patent and the U.P.C. Hub. And I think there'll be a link to that portion of our website on the podcast website. There will also be a link, I think, to the U.P.C. calculator I mentioned earlier, and the U.P.C. website is also the main source of information for all things related to the Unified Patent Court and the unitary patent.
Lisa: Anthony, thank you so much. This has been so many things to keep in mind. Thank you so much for sharing your expertise and also sharing some of the tools available to people to start looking at this and to better understand how this will concern them. Thank you so much.
Anthony: Lisa, it was a pleasure being on the podcast. Thanks again for inviting me.
Lisa: Thank you.
You're listening to Canadian I.P. voices where we talk intellectual property. In this episode we've been learning about the new unitary patent and the Unified Patent Court in Europe from Anthony Dearden, a Canadian patent agent and European patent attorney at Gowling. The unitary patent system is effect as at . To learn more about this system, open the description to this podcast to find links to the European Patent Office. The description also has links to the unitary patent cost calculator Anthony mentioned, a tool that carries out calculations to help you work out if and when a unitary patent will be more cost effective than traditional validations.