As the Unified Patent Court (UPC) has been in operation for a few months, we can look at the first statistics and evaluate how the new system will change the operating environment in Europe. Based on the figures, it seems that the patent proprietors do not need to be too worried of the risks of central revocation, but the increasing number of patents in force in Finland and in other small UPC-countries may increase patent risks.
Background
By default, the UPC has exclusive jurisdiction in respect of infringement and revocation actions concerning any European patent. A benefit to a patent proprietor is the possibility to centralized enforcement of the patent. A downside is the risk of centralized revocation of all the national validations of the patent. During a transitional period, the proprietor of a European patent can file an opt-out request, which means that the European patent will be excluded from the jurisdiction of the UPC and will remain in the jurisdiction of the national courts.
Unitary patents (UP) are European patents having a unitary effect in the 17 participating EU member states, including Finland. The unitary patents always belong to the jurisdiction of the UPC.
The Unified Patent Court has now been operating for over three months. During the same period, the European Patent Office has been registering unitary patents. The UPC has issued some orders relating to provisional measures, but not any final decisions relating to infringement and revocation actions. It is thus too early to say much about the case law of the new court. There are, however, statistics available to give some ideas of how the new system has been adopted by the users of the patent system.
Statistics
By the end of August 2023, approximately 490,000 opt-out requests had been filed. Opt-out requests can be filed for both granted patents and for pending applications. As there are approximately 800,000 European patents in force in the European Union and the number of pending European patent applications is approximately 450,000, it can be estimated that roughly half of the European patents have been opted out.
During the first three months of the operation of the UP/UPC system, the European Patent Office has granted approximately 35,000 patents. The number of requests for unitary effect has been over 8,000. As the time limit for filing the request is one month from the grant, requests for unitary effect can still be filed for some of the patents granted in August. It could thus be estimated that the share of unitary patents has been from 1/4 to 1/3 of the granted European patents. These figures can be compared to the number of granted European patents validated in Finland. During the last five years, on average 6,800 European patents, which is approximately 6 percent of the granted European patents, have been yearly validated in Finland. It is thus likely that the number of patents force in Finland will be in the future at least four to five times higher than now.
Given the large share of opt-outs, it seems that many patent proprietors have taken a careful approach to the new system and will wait to see how the new system functions. On the other hand, many applicants have been waiting for the broad geographical coverage of the unitary patent and are willing to take the risk of central revocation.
At the end of August, 35 infringement actions were pending before the UPC. Of these, 28 cases were pending before the local divisions in Germany and seven cases before other local divisions, including one case in Helsinki. Only six revocation actions were pending before the UPC, and in two of the cases there was also a related infringement action pending.
Before the start of the UPC, a major part of the patent litigation in Europe took place in Germany. Based on the initial figures, there seems to be no big change. The national German courts will be replaced to some extent by the local divisions of the UPC, but Germany will remain as an important location for patent proprietors.
Conclusion
Despite the large number of opt-outs, several hundreds of thousands of patents still belong to the jurisdiction of the UPC. As the number of pending revocation actions is very low, it could be concluded that the risk of central revocation is extremely small, unless there is a pending or imminent infringement action relating to the patent. However, one reason for the low number of revocation actions may be that the patents having a high risk of revocation have been opted out and only the low-risk patents remain in the UPC system.
It seems evident that the number of unitary patents will be much higher than the number of European patents currently validated in Finland. The number of patents in force in Finland will thus increase significantly. A similar trend will be seen in other smaller UPC-states, such as in Sweden, Denmark, and the Baltic states. Companies operating mainly in Finland or other small UPC-states thus need to consider the patent risks caused by the increasing number of patents.
