How the Unitary Patent Changes the Calculus of Patenting in Europe

“It can no longer be said that patenting in Europe is for the well-heeled applicant. In fact, now it is so cheap that not filing in Europe amounts to patent malpractice.”

unitary patentBy now, unless you live in a total IP blackout zone, you’ve heard about the Unitary Patent and Unified Patent Court (UPC). Your friends in Europe, particularly, have been insistent on informing you, whether you want to know or not, with daily (if not hourly) email blasts, since January of this year. But most of what they tell you misses the forest for the trees. Here’s why.

A Patent’s Purpose

Let’s begin at the beginning. Aside from your client telling you to, why do you file a patent application? The only answer is: it is a hedge as to the future. The reason for that is that you and they have no way of knowing at the time of filing whether this will be the “next big thing” or just another “thing”. You might say or even believe that filing an application is about “protection” or potential “revenue”. But it isn’t. For either of those to become possible, you must first get the patent (years away) and then have the budget and be prepared to enforce it (many thousands of dollars away). So, a patent filing is about hedging the possibility of these things at some point in the future. Preserving the possibility of having a “seat at the table” of the future brought to us by the innovators of today. This is the simple truth: The sweet spot for patent value is 10-15 years out from initial filing.

Okay, how do we get from here to there at minimal cost? That should be your application filing strategy in a nutshell. There is, obviously, more nuance, and it will vary depending on technology, but in short form that is it or ought to be it.

The Calculus

So, how do you then hedge in the patent filing space when you are coming out of the United States? Well, file a U.S. application or applications. This “hedge” creates “patent pending” status for +/- 8 billion people around the globe via the Paris Convention for 12 months. Once the application is written, the filing fees charged by the United States Patent and Trademark Office (USPTO) are around $2,000. Cheap. Then file a Patent Cooperation Treaty (PCT) application. With over 155 member countries, and fees on the order of $3,500 to $5,000, this extends the hedge for another 18 months for those +/- 8 billion people. Again, cheap. So, we’re 30 months into our 10-year journey to value. We’ve spent under $ 10,000 in fees for our patent “hedge”. Now what?

Well, look around the world at the various centers of macro level economic activity and population. You have Europe, you have China, you have India, and you have South America. (Note: you also have Africa and Southeast Asia. But those involve other topics and papers and strategies! Stay tuned….) Fortunately, China and India are single countries, and filings there are cheap in context for the populations and economic activity covered. South America can be broken down depending on your aims, but go with Brazil, alone, and you’ve got half of the total population of the continent and most of the concentrated economic activity. Okay, done. But, what about Europe? Lots of people and lots of economic activity. But, with countries spread from Iceland to Turkey and from the Artic Circle to the Mediterranean, with borders and patent offices and courts in each one, what to do?

This Changes Everything

Until the advent of the Unitary Patent, in Europe there was only one choice: choose an amalgam of individual countries for potential protection and enforcement, pay large up-front fees for translation in some countries, along with endless attorney fees for validation/registration/extension, and then keep paying for the hedge each year with costly annuities (and more endless attorney fees). It is a rich man’s game. The Unitary Patent changes everything.

As before, proceed to Europe post-PCT via the European Patent Office (EPO). If you’ve made good choices, i.e., used the EPO as the International Searching Authority (ISA), and possibly even done PCT Chapter II with a good outcome, you can zip through the EPO quite rapidly and at very low cost.  Then, when finished, or almost finished, at the time of the grant decision at the EPO, choose to go with the Unitary Patent. With the Unitary Patent, you have instant rights in 17 countries (initially) for almost no cost. To make this choice only requires a single submission, along with only a single translation and zero “official fees”. Done. Plus, when it comes time to enforce, you have a single court, the UPC (which goes live on June 1, 2023), that can enforce your rights across those same 17 countries. No more border-to-border enforcement across Europe. Wow. And the Unitary Patent annuity is paid to but a single entity (the EPO)! One reminder, one payment, one attorney fee! Wow again. But here is the biggest “Wow” of all: the total for the annuities for the first seven years is about 1,600 Euro total! For a U.S. patent, the annuities through 7.5 years are $5,700. That’s right, almost triple what it will cost for the Unitary Patent in Europe.

So, from the foregoing, what have our friends in Europe missed with their email blasts about the Unitary Patent? What they’ve missed is that now getting a pan-Europe, 17-country patent is as cheap as getting a single U.S. patent! And then it gets cheaper. It can no longer be said that patenting in Europe is for the well-heeled applicant. In fact, now it is so cheap that not filing in Europe amounts to patent malpractice. You cover as many people and as much economic activity for less money right out of the gate. As more countries join, the advantages and leverage only grow. Patenting in Europe via the Unitary Patent is a game changer. It confers rights like never before at a trivial cost, especially in the early years. This choice and this filing is now what everyone emerging from the United States must do, bar some big pharma players, because it is a very inexpensive hedge. And,after-all, that is what filing patent applications is all about.

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Author: iqoncept

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Join the Discussion

2 comments so far.

  • [Avatar for Gabriele Kretschmann]
    Gabriele Kretschmann
    April 14, 2023 06:05 am

    One tip: An easy way to determine the costs for a Unitary Patent and to compare it with national validations is via the Gowling WLG UPCalculator, available here: https://gowlingwlg.com/en/up-calculator/

  • [Avatar for Max Drei]
    Max Drei
    April 14, 2023 05:14 am

    Thoughts that occur:

    1. The UP/UPC doesn’t change anything prior to issue by the EPO. So costs up to issue remain unchanged.
    2. At the EPO, using a cascade of divisionals, you can keep rights pending for 20 years, until you see which way the market is running. All in all, for “hedging”, nothing has changed.
    3. While pharma validates issuing EP’s all over Europe, engineering validates only in the top 3 to 5 countries. Heck, if you stop your competitor making, selling or importing into DE, FR, GB and NL, what’s left for them? Renewal fees for the UP are set at about equal to paying for four or five national Patent Offices in Europe. In EPC land, national courts increasingly watch each other and come to the same conclusions. See the recent pemetrexed case. So, choose your national court, get out of it the result you want. Your adversary will very likely then settle, if they haven’t already settled long before then.
    4. Indeed, pharma looks set to opt its important issuing patents out of the UPC, lest it lose (to non-infringement or pan-European revocation by a maverick UPC panel ) a crown jewel in one pan-European action at the as yet unknown UPC.
    5. But yes, if the UP/UPC sees off its doubters and detractors, it is a game-changer. Mind you, under it, patent litigation in Europe will be something one can contemplate only with the employment of the top multi-national, world-class, patent litigation specialist law firm. They it was, who lobbied for the supra-national UP system, drove it into law, and wrote the implementing rules and regulations for the court, and they are not known for their altruism. The extreme tightness of time limits, for example, are breath-taking (not that you will have any time to attempt to draw breath).

    6. Getting to issue was always cheap in Europe. The cost of litigating your patent in Europe was proportionate to the value of the patent. Under the UPC, the cost of litigating in Europe is going to be unavoidably high.

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