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EPO publishes second edition of the Unitary Patent Guide
Background
It is expected that the Agreement on a Unified Patent Court (UPCA) will enter into force end of 2022 or beginning of 2023. At the same time the European Union regulation 1257/2012 and 1260/2012 will enter into force relating to the European patent with unitary effect (Unitary Patent) and the translation arrangements.
The Select Committee of the Administrative Council of the European Patent Organisation has prepared the secondary legislation, in particular the Rules of procedure relating to Unitary Patent Protection and the Rules relating to the Fees for Unitary Patent Protection. Recently, some of the rules have been updated together with the Unitary Patent Guide.
Unitary Patent Guide
The Unitary Patent Guide explains in detail the procedure at the EPO for obtaining a Unitary Patent and the annex procedures.
In particular, it provides:
• General information about the Unitary Patent (Section A);
• Details how and when the request for unitary patent protection has to be filed and which information has to be provided to the EPO (Section B)
• The compensation scheme for specific SME and organisations (Section C);
• How and when the renewal fees have to be paid (Section D);
• The publication of the EPO regarding the Unitary patent, in particular the content of the register and a file inspection (Section E);
• Details how to register transfers, licences and other rights and file statements on licences of right (Section F);
• Other procedural questions like the language regime, representation and fee payment (Section G);
• Legal remedies against the EPO decisions, in particular the role of the Unified Patent Court and interlocutory revision by the EPO (Section H); and
• Transitional Measures.
The Unitary Patent Guide is regularly updated in its HTML version.
Record Filings at the European Patent Office in 2021
Despite the pandemic filings of European patent applications increased again. 188 600 patent applications were received by European Patent Office (EPO) in 2021, which is an increase of 4.5% in comparison to the previous year.
This is the highest number of applications ever filed in one year. The EPO’s Patent Index 2021 shows that patent filings rebounded significantly last year after a slight dip in 2020 (-0.6%).
In general the number of patent applications is seen as an early indicator of how the budgets of research and development investments of companies worldwide evolve. 
Source website of EPO
For applications in 2021 the top countries of origin were the US (25% of total filings), Germany (14%), Japan (11%), China (9%) and France (6%). Wherein patent applications are concentrated in a few countries, with five countries accounting for 64% of European patent applications in 2021, and the top 20 countries accounting for 95%.
The strongest growth in patent applications at the EPO in 2021 was happened due to filings from China (+24% in comparison to 2020) and the US (+5.2%). Applications from South Korea were also increased in 2021 (+3.4%), while Japan experienced a slight decrease filings (-1.2%). Patent applications from the 38 European Patent Organization countries experienced an slight increase last year (+2.8%). However, the number of applications from Europe continued to decline, falling from 50% of the total in 2013 to 44% in 2021. This trend shows that the European market is considered as relevant to companies outside Europe. Especially companies from Asia, seek to protect their inventions on the European market.
In accordance with the general numbers Huawei was the leading patent applicant at the EPO in 2021 (as in 2019), wherein Samsung, and LG were in second and third place. Ericsson and Siemens both moved up a position, to fourth and fifth respectively. The top ten includes four companies from Europe, two from South Korea, two from the US, and one from each of China and Japan.
This IP Alert is for information purposes only and does not constitute legal advice.
Transfer of IP rights for free: the downside of gratuity
The transfer of intellectual property rights free of charge must be qualified as a donation, and as such must comply with the requirements specific to the matter (Decision of the Paris Court of Justice, February 8, 2022, No. 19/14142).
This case involved a trademark and Community designs owned by two individuals, Mr. X and Mr. Z. The rights were transferred in 2015 to company A, of which Mr. Z is the sole partner and manager.
In 2018, Mr. X criticized the transfer that took place in 2015 and sued Mr. Z and the company A for nullity of the transfer.
The Paris Court of Justice granted Mr. X’s requests and ruled that:
- The trademark and design assignment shall be requalified as a donation;
- The contract is void since it did not comply with the formalities imposed by Article 931 of the Civil Code.
The reclassification as a donation is justified by the fact that the contract concluded in 2015 explicitly entails the transfer of ownership of the trademark and designs “free of charge”.
With respect to the formalism to be observed, article 931 CC provides that “All acts involving inter-vivos donation shall be executed before a notary in the ordinary form of contracts; and a copy of the same shall remain noted, under penalty of nullity”
The case law allows two exceptions to this formalism. The first is the case of manual donation which require the physical delivery of the thing given. The second concerns disguised or indirect donation, for which it is accepted that the conditions of form follow the act from which they take on the appearance.
The code of the intellectual property does not provide for any additional exemption, but only that the transfer of property must be done in writing (article L. 714-1, paragraph 4 of the CPI in its then drafting)
In this case, the things transferred being intangible rights and therefore not susceptible of physical delivery, and the deed of transfer clearly mentioning that the transfer of ownership of the trademark and the models “free of charge”, the contested deed could not benefit from either of the two exemptions.
The court rightly concluded that it was therefore, by definition, an undisguised donation of intangible rights, so that it should have been concluded before a notary. The assignment contract is therefore declared null and void.
The transfer in question concerned physical donors, but an identical solution could have been pronounced, in our opinion, if it had been a question of legal entities as donors. Indeed, the article 902 of the CC provides that “All persons may dispose of and receive either by donation inter-vivos or by will, except those whom the law declares incapable of doing so”, which does not exclude legal entities. The Court of Cassation (C. Cass, com., May 7, 2019, appeal n ° 17-15.621) has confirmed such an assessment.
We recommend to be particularly vigilant when transferring your intellectual property rights, and in particular in the case of intra-group transfers for which it may be tempting to avoid the payment of a price for the transfer. LAVOIX’s team of experts are available to assist you in these procedures.
National, regional and international offices to implement the standard WIPO ST.26 for the sequence listings as of july 1, 2022
The Committee on WIPO Standards (CWS) adopted new WIPO Standard ST.26, which represents nucleotide and amino acid sequences listings in XML, replacing WIPO Standard ST.25.
The representation of sequence listings in XML format rather than TXT format intends to improve access to international sequence databases. The new standard further harmonizes sequence listing practice among patent offices and requires mandatory annotation of additional sequence types (nucleotide analogues, D-amino acids, branched sequences), so that more sequence data will be searchable.
The filing date (not the priority date) is the reference date that determines if the new ST.26 rules apply. Refiling a sequencing listing when a divisional application is made is a matter of national or regional law. As of today, the EPO is understood to require filing a divisional application filed on or after July 1, 2022 in the new ST.26 format.
A newly developed global software tool “WIPO Sequence” that enables the preparation amino acid and nucleotide sequence listings according WIPO Standard ST.26 is provided on the WIPO homepage.
More details on the standard WIPO ST.26 may be found under the WIPO and EPO websites.
Providing evidence of trademark exploitation within new invalidity proceedings is critic
The invalidity procedure has been modified by the provisions of the “Loi Pacte” (in force since December 11, 2019) in particular with regard to its admissibility conditions, which, with respect to the evidence of exploitation of the prior trademark invoked, are twofold:
1. Proof of use of the earlier trademark subject to the obligation to use it
Article L 716-2-3 provides that, subject to inadmissibility, the owner of the earlier trademark on which the action is based must provide proof:
- if the trademark is subject to the legal obligation of use at the date of filing of the nullity action, of the serious use (or a reason for non-use) of the trademark during the five years preceding the date on which the request for invalidity was filed;
and
- if it was subject to an obligation of use on the filing date or priority date of the contested mark, of the serious use (or a reason for non-use) of the mark during the five years preceding the filing date or priority date of the contested mark.
The proof of use must therefore relate to two distinct reference periods.
The last provision may lead to a surprising situation in the event that the challenged mark is very old and the owner of the earlier mark invoked is denied his action on the grounds that he was not using his mark at the filing date of the mark whose invalidity is sought. This would result a prohibition of bringing an invalidity action even though the action is not subject to any prescription!
Finally, for the record, the proof of such use has consequences not only on the admissibility of the action, but also on the scope of the opposability of the invoked trademark, which will be deemed to be registered for each of the goods or services for which serious use has been proven or reasons for non-use have been established only.
2. Evidence of the distinctiveness of the earlier trademark for the purposes of assessing the likelihood of confusion
The new Article L 716-2-4 provides that an application for a declaration of invalidity based on an earlier trademark is inadmissible if that trademark had not acquired a sufficiently distinctive character at the filing date of the challenged trademark likely to justify the existence of a likelihood of confusion.
The question that arises is how this condition of “acquisition of distinctive character” will be assessed.
To our knowledge, no decision has defined this new condition yet, which we interpret as requiring the owner of the earlier trademark to demonstrate that its trademark has been used in such a way that the risk of confusion would have been obvious on the day the contested trademark was filed. This leads to prepare and submit a comprehensive file evidencing the notoriety of the invoked prior mark!
Particular attention must therefore be paid to the ability of the owner of the invoked trademark to prove its use and distinctiveness at these different periods.
Lavoix is at your disposal to assist you in protecting and defending your trademarks in the new invalidity proceedings.
UPC and opt-out: definition, advantages and drawbacks
The present system of European (EP) patents granted by the European Patent Office, has the drawback that the same patent, validated in several states, may lead to several parallel disputes in these jurisdictions.
The Unified Patent package creates a unitary effect for European patents encompassing the states that have ratified the Unified Patent Court Agreement (UPCA – to be found here). That is to say, an EP patent with unitary effect will have the same effects in all the states that ratified the UPCA and where said patent has been validated.
It also creates a single court (the Unified Patent Court – UPC) having jurisdiction for such European patents with unitary effect.
The Unified Patent Court (UPC)
The UPC is expected to be operational by end of 2022. (See the notification on the UPC official website).
The UPC will be a single court that will have exclusive jurisdiction for European Patents with unitary effect (UP).
During a transitional period, it will have competence for European patents or applications without unitary effect (EP), in addition to the national courts, before which actions for infringement or for revocation of European Patents or declarations of invalidity of a supplementary protection certificate can be brought, provided the UPC competence is not opted-out (see below).
By default, when the UPCA will come into force, all current European patents, which are validated in countries that have ratified the UPCA, will automatically be subject to the jurisdiction of the UPC. The same will apply to pending European patent applications and SPCs based on European patents. However, to obtain a decision in a state where a European Patent has been validated but which has not ratified the UPCA, it will be necessary to bring an action before the competent national court (Spain and Poland).
Patents which fall within the UPC system are susceptible to be challenged by third parties before this Court and, in case of revocation, the decision will apply to all UPCA member states: By a single decision, the patent will be revoked in all states which have ratified the UPCA and where the European Patent has been validated.
Jurisdiction of the UPC over granted patents or pending applications without unitary effect can be excluded by choice of the owner or applicant so that only the national courts remain competent. This is known as “opt-out”.
Opt-Out Definition
Opt-out is an option open to applicants or patentees to exclude disputes related to any of their European patents (in force or expired) or applications without unitary effect from the UPC’s jurisdiction. Thus, any action for infringement or for revocation of a European patent will be heard by the competent national courts, just like the current system.
Opt-out has effect in all UPCA Contracting Member States in which the European Patent or the application is in force and for the entire lifetime of the patent without the need to notify the opt-out separately for the relevant Contracting Member States (Article 83.3 of the UPCA).
SPCs for opted out European Patents will automatically be opted out (granted SPCs or future SPCs based on the patent). Otherwise, SPCs can be opted out separately and this must be done by the patent’s owner.
According to an Explanatory Note by the Preparatory Committee published on January 29, 2014, a competent national court would have to apply the applicable national law and not the UPCA. Whether the national courts will follow this opinion, remains to be seen.
Period to Opt-Out
Opt-out will only be available during a limited period of time: the so-called “transitional period”.
Opting out will be initially available before the entry into force of the UPC, during the preceding provisional application (‘sunrise’) period expected to start at the end of summer 2022, up until the opening of the UPC (See the Entry into force of the Protocol on Provisional Application).
During this period, the UPC Registry will be established to register opt-out requests before revocation actions can be introduced at the UPC on the first day of the system. Indeed, if a UPC action is introduced before an opt-out is entered on the register, this will inhibit any later opt-out.
Opt-out will then be available during a transitional period of 7 years, as from the entry into force of the UPC agreement (with a possibility of an additional period of 7 years which may be decided by the UPC Administrative Committee) until one month before the expiration of the transitional period. (See Article 83.1 of the UPCA). After this transitional period of up to 14 years at most, the UPC will gain exclusive jurisdiction over European applications/European patents without unitary effect which would not have been opted out.
Proceedings
The opt-out requests will have to be filed with the UPC Registry. The opt-out will become effective on the day the notification of the opt-out is received by the Registry, provided that the opted-out patent has not already been the subject of a pending litigation before the UPC. It may therefore be crucial to file opt-out request once it is available.
The opt-out must be filed on behalf of the effective owner of the application or the European patent, at the time of the filing of the opt-out application, otherwise it will be considered null and void. Co-applicants or co-patentees of an application for a European patent or a European patent will have to act in common to exercise the opt-out.
Representation by a European patent attorney or lawyer is not required for filing opt-out requests. A person instructed by the company itself, such as an employee of the company can opt-out a patent.
It will be possible to manually identify an unlimited number of patents to opt out in the UPC Case Management system (CMS website can be found here) or to use an “Application Programming Interface” that will allow a selection of patents from a database outside the CMS that will then be exported to the CMS to be opted out. This last option will allow very large numbers of patents to be opted out easily and within a short amount of time.
Pursuant to Article 83.4 of the UPCA it will be possible to withdraw such an opt-out at any time, provided that no action has been brought before a national court.
Once the application to withdraw an opt-out is registered, it should not be possible to again opt-out, according to the current draft rules of procedure of the Unified Patent Court (Rule 5 No 10 of the 18th draft).
Costs
According to Rule 370 of Procedure which deals with Court Fees and Recoverable Costs voted on 25th February 2016, there would be no official fee to opt-out, or to withdraw the opt-out .
Consequences of the opt-out
Advantages of the UPC – [Opt-out would not create an advantage]
The UPC will include technical Judges that are likely to have a better understanding of technically complex inventions and a better reasoning on patent infringement. The new Court will by definition avoid the contradictory decisions that may appear before different national courts regarding infringement.
Moreover, in case of multiple infringements in several European countries, a single action can be brought before the UPC and will have effect over all UPCA member states. Choosing the UPC will, then, significantly reduce the litigation costs in comparison with several litigations to be carried out in many countries.
Disadvantages of the UPC – [Opt-out would be preferable]
With the UPC, a European patent can be revoked in all states by a single decision. This will allow third parties or suspected infringers to efficiently challenge the validity, during the whole life time of the patents.
Moreover, the lack of feedback or case law from the UPC may make the UPC choice risky as we do not know yet the position that will be taken by the court, in particular in view of the validity of patents. Also, UPC rules and procedures are untried; it will take several years to achieve consistency in decisions.
Another element to take into account where making the choice to opt-out patents is that all proprietors of all designations of a European patent, in all states who have signed the UPC Agreement, must agree to opt out. The first complication that may arise from this rule is to identify the true proprietors of the patent, which will not necessarily be the registered proprietors, especially when patents have been assigned from a third party. Ownership should be checked, although there is no necessity to update/correct registers. The second one is the necessity for all the proprietors to join the opt-out request.
Also, if infringement is concentrated in a unique or a small number of countries, the UPC costs may be greater than proceedings before the corresponding national courts.