After some twists and turns, the Europe-wide Unitary Patent (UP) and Unified Patent Court (UPC) appear to be on track to begin working in earnest this coming summer, thus posing some potentially difficult choices for intellectual property (IP) owners.

As discussed here earlier this year, currently, an inventor must apply for and enforce their patent rights in every geographical jurisdiction where they want protection, including each European country. In Europe, applicants file their patent applications at a central European Patent Office and then “validate” their patent in each European state, with additional costs for each such country. Likewise, in litigation, the patent owner must file suit in each jurisdiction where they seek remedies, an arrangement that multiplies cost and complexity.

For years, European IP policymakers have sought to unify the continent’s fractious patent regime, finally achieving a breakthrough in January 2022, when Austria became the 13th and decisive European country to ratify the UP/UPC agreement—a process that many had believed to be imperiled by Brexit. Since then, three additional countries have ratified the pact (only Croatia, Poland, and Spain have formally declined to participate). And in October, the new court formally announced its new judges.

The new regime was originally slated to take effect in April 2023, but just this past Monday, the UPC announced its inauguration would endure a delay until June 2023 because of technical and security issues. Specifically, in justifying the two-month setback, the court explained that

the additional time is intended to allow future users to prepare themselves for the strong authentication which will be required to access the Case Management System (CMS) and to sign documents. Users will need to equip themselves with both, a client authentication (hard device) and a qualified electronic signature.

The short delay now gives European patent owners some additional time to consider whether they want to participate in the new system. As set forth above, the benefits of the UP/UPC are manifest: A single, concentrated address for obtaining and enforcing a patent will conserve considerable time, energy, and money.

However, some potential downsides remain to “opting out” of the traditional European patent system, which all owners of currently existing European patents must formally do to prevent their IP from being subject to the new regime. For one, it would preclude coverage in non-EU states such as Norway, Switzerland, and the UK and the EU countries that have declined to ratify the agreement (or have not yet done so).

In addition, as three practitioners at Womble Bond Dickinson observed in a November article, “A single action before the UPC has the potential to lead to a total loss of patent rights in all Member States,” which represents “a particularly risky proposition given that the UPC is a new, untested body, and it remains to be seen how various litigation strategies may or may not be effective with the UPC.” In other words, if a patent owner files suit against a potential infringer on a Europe-wide basis and the UPC finds their patent either not infringed or invalid, that ruling will be binding throughout all UPC countries.

This “all-or-nothing” approach does, in fact, present some potentially heightened risk for IP owners. Yet this is the case, too, for owners of American patents, who put their patents on the line throughout the United States when they sue in any single federal court. There may be instances in which a European patent owner believes they would fare better in, say, a French court than a Spanish one. But all things being equal, focusing on a single, centralized, Europe-wide address for enforcing that European patent owner’s rights would seem to make sense.

As the UP and UPC continue to mature, however, some of these theories will be tested, and IP owners should carefully consider their options.

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