A long courtship for unity – As the European unitary patent system will soon come into force, consultations on a unitary supplementary protection certificate gain momentum | MoFo Life Sciences
After myriad challenges, delays and hurdles, the establishment of the pan-European patent court, the Unified Patent Court (UPC), is finally gaining momentum. On January 19, 2022, the UPC came into being as an international organization. This date marks the start of the Period of Provisional Application (PAP), which was triggered by the ratification by the thirteenth Member State of the PAP Protocol. The Administrative Committee, one of the three governing bodies of the UPC, had no time to lose and resumed its preparatory work with an inaugural meeting on February 22, 2022. Since then, the preparatory measures seem to be in full swing. The interview process for candidate judges began at the end of March 2022. As soon as the Court is deemed functional, which is expected to take approximately eight months of preparation, Germany will deposit its ratification of the agreement on the unified jurisdiction in matters of patents (UPCA), a last step which it is currently delaying – in agreement with the other Member States – in order to master the timetable. From then on, the final three-month countdown will begin until the UPCA comes into effect and the UPC opens its doors.
With the UPC reaching its home stretch, Supplementary Protection Certificates (SPCs) have become the fundamental area of intellectual property (IP) protection that remains fragmented across member states.
SPCs are sui generis Intellectual Property Rights. They grant up to five years (and in the case of pediatric extensions, five and a half years) of additional protection for a medicinal product or veterinary medicinal product or plant protection product which has obtained marketing authorisation. CCPs were introduced to compensate for the lengthy process of regulatory procedures. The protection is based on European regulations n° 1610/96 (concerning CCPs for plant protection products) and n° 469/2009 (concerning CCPs for medicinal products) (“CCP Regulation”) and is available in all EU Member States. EU. However, the application and approval is handled at Member State level. This remained the same despite the advent of the European patent package, which introduced the unitary patent (UP) and the UPC, but did not provide for unitary SPCs.
[The European Patent Package introduced the Unitary Patent (UP), a single patent having effect in all participating EU member states, and the Unified Patent Court (UPC), a court system having jurisdiction over UPs with its decisions having effect in all participating member states.]
Therefore, UPs can only be extended by national SPCs.
In a 2020 assessment, the European Commission (EC) found that the CCP system in general provides effective incentives for innovations, and the EC found that the main shortcomings are rooted in the national administration and management of the CPC. Therefore, the European Parliament has asked the EC to address this fragmentation of the CPS. During its legislative work, the EC launched a so-called “call for evidence” to gather comments on how to tackle this problem. The call for evidence raises three topics for discussion:
a) The baseline scenario without policy change. The CCP system would continue to operate on the basis of existing European and national rules. Member States could continue in an uncoordinated way to recalibrate their SPC practices, with different approaches persisting across the single market.
b) Non-legislative instruments, including guidelines based on the best practices of national patent offices and the case law of the Court of Justice of the European Union (CJEU) (an overview of the main decisions (until the beginning of 2019 ) can be found here), aimed at further harmonizing the current CCP system.
c) Legislative changes, possibly combined with non-legislative changes, including:
1) Creation of a centralized system of protection by SPCs in the EU, with the aim of reducing the cost and burden and making the procedure for granting SPCs more predictable. A centralized system would facilitate the creation of standardized, common and publicly accessible digital databases. This centralized system could consist of: (i) a unit SPC, complementary to the future unit patent; (ii) a unified procedure for granting batches of national CCPs, without creating a unitary CCP; or (iii) a combination of both. The detailed characteristics of a centralized CCP system will be assessed in an impact assessment (e.g. a review and granting authority (a virtual authority composed of CCP experts from Member States or an authority from the EU), language provisions (English only or multilingual), and judicial review); and
2) Targeted amendments to the SPC Regulation based on best practices from national patent offices and CJEU case law to further harmonize the current SPC system.
The call for testimonials is open for comments until April 5, 2022. All members of the public can provide their comments and feedback. Submissions will be posted here.
Meanwhile, the UPC commissions will continue their preparatory work. A fully operational UPC is expected to open in early 2023 or even late 2022. From then on, a seven-year transition period, during which patent holders can opt out of the exclusive jurisdiction the UPC, will begin. It is crucial for UP holders and applicants to make balanced decisions and keep an eye on the UPC strategies of other market players.
On the one hand, the exclusive competence of the UPC has the advantage of
cost-effective litigation system. Participating in the UPC could be seen as an opportunity to shape this new system. On the other hand, being at the mercy of a newly created tribunal can be daunting, as the results might be perceived as less predictable than in more familiar systems. This could be particularly the case given that a declaration of invalidity would extend to all participating Member States.
Therefore, the right strategy can only be tailored based on the risks or strengths attached to a specific patent portfolio and its market environment. Owners and applicants should use the home stretch of the UPC to familiarize themselves with the UPC system and its procedures and obtain advice on UPC strategy, where applicable.