Monday, 4 August 2014

Unitary patent rules - more reasons to be wary

Another draft of the Rules for the Unitary Patent has been leaked[1].

It should be noted that the Select Committee issued a communiqué indicating that these rules had been agreed “in principle”[2] and so these are not necessarily the final rules but provide a good guide.

The Rules are relatively simple, and it appears that in “normal” circumstances should prove no problem to those seeking unitary effect for their European patents.

However, there are a number of issues where wariness is advisable. Among these are:-

Rule 5


This rule is straightforward in most cases, but an issue arises in respect of multiple proprietors where there are different proprietors for different states [In the following, where applicant A is proprietor for countries α, and applicant B for countries β, and α + β = all participating Member States].

Since the unitary patent is a unitary instrument that has uniform effect in all participating Member States and “… may only be limited, transferred or revoked, or lapse, in respect of all the participating Member States.[3]” it appears implicit (but is certainly not explicit) that it cannot come into existence with different proprietors in different states.  Otherwise why would the Regulation permit split ownership at the outset yet forbid the creation of split ownership?

The explanatory notes to the proposed rules indicate that the Common Representative (normally the first named applicant[4]) will be able to request unitary effect where there are different proprietors for different states.

If the result of requesting unitary effect is that the ownership becomes unitary, then there is an implicit cross-assignment between the different owners to achieve the result that applicants A and B are joint proprietors for all of countries α and β. Ownership of the unitary patent as an object of property will normally have to be assessed according to the law of the first named applicant[5]. So in requesting unitary effect it will have to be assessed whether it is legal for Applicant A to unilaterally assign a share in his rights in countries α to B; and more problematically, whether it is legal for Applicant A to unilaterally assign a share in applicant B’s rights in countries β to A.

This appears extremely messy, and difficult.

Conclusion


Until there are court rulings from the UPC (and CJEU, and perhaps under Article 7 UP Regulation, national courts) indicating it safe for unitary effect to be requested where there are different proprietors for different states; it would appear advisable that assignment takes place and is recorded prior to requesting unitary effect.

Rules 6, 7, and 22


The notes to the Rules indicate that they place the “substantive” requirements of the rules in Rule 5, and the “formal” requirements of the Rules in Rule 6. Among these “formal” requirements are:-
  •         that the request for unitary effect be filed no later than one month after publication of the mention of grant
  •          the request for unitary effect shall be filed in writing in the language of the proceedings
  •          the request shall contain a translation of the European patent as required under Article 6, paragraph 1, Regulation (EU) No 1260/2012.

Articles 9(1)(g) and (h) UP Regulation states that the EPO has the task:-
  • (g) to ensure that a request for unitary effect by a proprietor of a European patent is submitted in the language of the proceedings as defined in Article 14(3) of the EPC no later than one month after the mention of the grant is published in the European Patent Bulletin;
  • (h) to ensure that the unitary effect is indicated in the Register for unitary patent protection, where a request for unitary effect has been filed and, during the transitional period provided for in Article 6 of Regulation (EU) No 1260/2012, has been submitted together with the translations referred to in that Article, and that the EPO is informed of any limitations, licences, transfers or revocations of European patents with unitary effect

The language “to ensure” implies that the three mentioned requirements are more than formal and indeed appears to indicate that they are conditions to be met for unitary protection to be granted.  The three conditions appear to be given equal weight.

It is interesting therefore that Rule 7 treats the conditions differently, providing an extension of time mechanism for the second and third conditions, but not for the first. It is also interesting that Rule 22 permits re-establishment of the first condition.  There appears to be no basis in the UP Regulation for providing for re-establishment of rights.

Conclusion


The legal basis for providing extension of times and reinstatement for mandatory conditions set out in the UP Regulation appears dubious. If any errors arise in requesting unitary effect, it may be safer to use the national route (even with the added validation costs that implies) until such time as the UPC (and CJEU?) have ruled on the legality of these provisions.

Rule 13


The payment of renewal fees appears straightforward, but calculation of the time limit for payment on extension does not. Explanatory note 8 to this Rule states that:-
The six-month period for the payment of a renewal fee with additional fee expires on the last day of the sixth month after the due date (pursuant to Rule 13(2)) and not on the day of that month corresponding in number to the due date (see Rule 131(4) EPC applying mutatis mutandis under Rule 202)(g)).
Leaving aside the point that Rule 131(4) EPC does not say that, and that the practice relied on comes from an interpretation of the corresponding EPC 1973 rule in one case J 4/91 (which amusingly discussed the effect on potential Community patents): it is not immediately apparent that this method of calculation complies with EU law. Calculation of time limits in EU matters requires that:-
If, in a period expressed in months or in years, the day on which it should expire does not occur in the last month, the period shall end with the expiry of the last hour of the last day of that month[6];          
This does not automatically extend all dates to the last day of the month.

Conclusion


Particular care will need to be taken with renewing unitary patents on extension.

Rule 16(n)


This rule addresses recordal of declarations of surrender. What a declaration of surrender means is uncertain and may depend on the applicable national law as it is a property right that is being surrendered, and so Article 7 UP Regulation applies.

Conclusion


If you see a declaration of surrender, it may not mean the patent is dead.

Rule 20


Various EPC rules are adopted “mutatis mutandis”. What the effect will be is open to interpretation.

Conclusion


Great care will be needed in working out what is meant; and conclusions drawn from EPO practice may not necessarily apply.


Overall conclusion

Although the Rules lean heavily on EPC practice, they do not necessarily mean the same, since a unitary patent is an EU instrument and EU law must prevail.

This does not mean that unitary effect should not be sought: just that care will be required.


[1] http://www.bristowsupc.com/assets/files/Draft%20Unitary%20Patent%20rules%20-%20June%202014.PDF
[2] http://www.epo.org/about-us/organisation/communiques.html#a7
[3] Article 3(2) UP Regulation (EU) 1257/2012
[4] Rule 151 EPC and Rule 20(2)(l) draft UP Rules
[5] Article 7(2) UP Regulation (EU) 1257/2012
[6] Regulation 1182/71

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