This piece has been authored by Pritam Kumar and Priya Kumari, Student, National Law University Ranchi
Abstract
In the wake of the Unitary Patent Package, which would bring a single system for conferring unitary effects to patents for the Member States of the European Union, it is essential to analyse its prospects and pitfalls. The system would remedy the limitation of territoriality in cross-border disputes, which eventually lead to multiple litigations in the patent. At an adverse level, it would lead to conflicting decisions, ultimately rendering all the invested time and money in vein. The article shall attempt to comprehensively under the Unitary Patent Package applicable to the members of the European Union.
Introduction
Article 27(1) of the TRIPs Agreement provides the minimum standards to protect an invention in the technology field. Such inventions are protected under patents if they are new, non-obvious and useful. Patents accommodated within the international intellectual property system are protected under the principle of territoriality and national treatment.
By the principle of territoriality, the rights conferred with the patents are jurisdictionally restricted to the nation where it is filed and granted. It essentially means that any violation of the right committed within the territory where such patent right is granted can only invoke the jurisdiction of the domestic court. Moreover, such an exclusive right is not enforceable outside the periphery of the country by virtue of the sovereignty of the States. Furthermore, the laws in force in that nation are only applicable to such exclusive rights.
It is significant to note that although patents are territorial rights, they act as an asset with global character. Especially with the world adapting to digital evolution, infringement of patents need not only limit to the territory where such right is granted. This, in essence, raises the question of determining the application of the law. The conundrum of the same where the two foreigners with territorial rights are in dispute invokes the domain of private international law and leads to cross-border dispute.
TRIPs provides only a minimum adherence framework. Imperatively, the national legislations where the case is filed shall be the applicable law for any dispute (lex fori) and it shall apply equally with no less favourable treatment to the Foreign IP right holder. The member nations are therefore required to equally treat the foreigners at par with its citizens and other foreigners vis-à-vis such exclusive rights.
The Apple-Samsung conflict concerning the infringement of patents and the protection of the same sought in various national courts because of the territoriality of the exclusive right is a pertinent example illustrating the need of harmonised laws on a patent. This led to the conflict of decisions from the several national courts where they pursued the cross-border patent litigation and, subsequently, adhered to negotiation.
The stance of Cross-border disputes in Europe and the Need of a Unitary Patent System
The European Patent Convention came into effect in 1977. It provided a common system of law for granting European Patents to the Contracting States. The European Patent Organisation was conferred the administrative and financial autonomy to grant the patent to the inventions. These patents are called the European Patents.
The Convention, not being a European Union instrument, has been reported to achieve a harmonisation of the European patent providing a substantive law. It has achieved harmonisation of the territorial difference of patent rights by a single procedure of application where equal and uniform treatment of such rights will be rendered in all the contracting states. Besides the existence of European Parents, the general national patents obtained on individual applications to each nation also parallelly exist.
However, for patent litigation involving counterclaim on the validity of the patent, these European Patents will subside to prioritize national laws. It is because, under the Brussels Recast Regulation, the member states are given the exclusive jurisdiction to decide the matter. It is significant to note that such counterclaims are common in infringement of patent rights which per se afloat the principle of territoriality nonetheless.
European Patent only advantageous to the extent that they did give a single procedure to apply for patents and their subsequent national treatment in the contracting states. Nonetheless, the rights are a bundle of national rights and the European Patent only served as a binding component. It reduced the cost of patents and other transactional costs in the process. However, the conflict of decisions that would emerge because of cross-border patent litigation, especially in disputes involving questions of validity, was unaddressed.
To address the same, the European Union (EU) has ambitiously come up with the “Unitary Patent Package” to facilitate ‘enhanced cooperation’ among the member states of the EU who had ratified the Unitary Patent Court Agreement (UPCA). It excludes Spain, Croatia and Poland, who had opted out of the same.
The Unitary Patent system streamlines all the disputes pertaining to cross-border patent disputes in the Unitary Patent Court. The Unitary Patent Court have the jurisdiction to hear disputes involving both infringement and validity of patents after the amendment made to the Brussels Regulation to accommodate the Unitary Patent Court under the meaning of ‘jurisdiction’.
The European Patents on request of the patent holder, would subsequently be given the unitary effect that would allow it to be treated uniformly in all the 25 Contracting States as Unitary Patent and would co-exist with the national and European Patents.
This would provide a suitable platform for resolving cross-border disputes by streamlining the conflicting decisions of the national courts in a single procedure and rendering neutral decisions irrespective of the nationality resonating with the structure of commercial arbitration. The Unitary Patent Court (UPC) system officially started operating on June 1, 2023 and its formal ratification of Germany to the European Union in January 2021. UPC holds exclusive competence for infringement and validity actions for unitary patents and supplementary protection certificates based on them and national courts will still handle national patents and SPCs, potentially leading to parallel proceedings on similar subject matter, The success of the UPC system will depend on effective cooperation, harmonization, and clear interpretation of EU patent law across all courts involved.
Post-Brexit Stance of United Kingdom vis-à-vis UPCA
United Kingdom has clarified its stance of withdrawing from the UPC Agreement consistent with its decision to exit the EU in a parliamentary statement. It is plausible that the withdrawal of the UK might dilute the effectiveness of the Unitary Patent System. This is because the UK has had a robust Patent Regime and the member states of the EU not being able to invoke the jurisdiction of the UK under the Unitary patent might diminish the vitality of Unitary Patents.
However, on the other hand, the withdrawal from the said system would imply the prevalence of the national patent system where patent disputes are adjudicated by the UK Courts as well as can apply for patents under the European Patent Office. It would keep the cost of patent litigation higher than that of the UPC Agreement. Nonetheless, any significant impact on the economy of the UK is not imminent in the short term.
On the other hand, the UK will be open to litigation with the member states under the Unitary Patent System in case of infringement under its existing patent regime.
Conclusion
It is imperative that a harmonization of patents is a need of the hour. In particular, to cut down boisterous expenses and corresponding complexities in filing and litigation of patents. Nevertheless, a harmonised system of a patent would reduce the capacity of domestic policies to control the economic and industrial scenario of the nation. It would be risky for a single system to exist since any adversity would have a significant effect on all the nations complying with the uniform system. Nonetheless, it is a step forward to simplifying cross-border patent enforcement in the ever-growing globalized world.