The new EU patent system – what’s in it for SMEs?

One of the driving forces for the conception of this new system was that it should be of particular benefit to SMEs. It is intended to bring together elements of the patent system in Europe that are currently fragmented.

The UPC promises streamlined patent enforcement for owners and, on the flip-side, central revocation for third parties. The unitary patent gives the option for a single patent for en bloc coverage of up to 25 EU Member States.

However, as is so common with European legislation, something appears to have been lost in the implementation of the new law – various commentators are predicting the system will actually impact negatively on SMEs.

Issues such as court fees, translation costs, central revocation and renewal fees have the potential to deter SMEs rather than attract them, despite financial support provisions.

So how can SMEs embrace the new system, reap the benefits and avoid the pitfalls?

Plan ahead

Litigation takes time. It always needs money. Many SME innovators rightly consider litigation a thing best avoided, preferring instead to keep their patents as a passive deterrent to competitors. Nevertheless, you can be dragged into patent litigation whether you like it or not.

The new system will potentially make accessibility to EU easier and cheaper to your competitors. That could put you at greater risk of being sued for patent infringement, with consequences such as a pan-EU injunction on sale and production of your products.

For a patentee there may be important strategic considerations that require enforcement of patent rights to send out a strong message to the market and your competitors or to keep licensees happy.

Advanced litigation planning means that if it arises, a considered course can be taken without the need to make rushed decisions under the pressure of deadlines or looming costs.

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Consider specialist insurance

This goes hand-in-hand with a litigation strategy. We are all familiar with insurance in our personal lives. Perhaps lesser known yet also available is insurance for IP in the event of litigation

The potential costs of litigation – whether as a challenger trying to clear the way or as a patent owner defending your patent – are often the most significant deterrent to SMEs who are consequently missing out on the benefits of the patent system. Insurance against litigation is peace of mind worth considering, not just for in-house IP teams, but also for investors.

Assess the extent of your EU market

Deciding on a normal course of action for patent applications in your portfolio should fall into your overall IP strategy.

Few SMEs actually benefit from protection in all EU states. If so, a unitary patent can be a millstone around your neck. You can end up paying for more protection than you need, with no way of “pruning” your protection other than wholesale abandonment of your patent.

Such extensive protection may also attract more attention than you would like, thereby bringing about invalidity actions that could have been avoided.

If you decide that the UPC or the UP is not for you, the most straightforward way to avoid it is to file national patents. These will continue to be available and will be under the jurisdiction of national authorities.

Consider which EU countries are really relevant to your business, current and projected. If you are operating in the whole EU, the unitary patent could be a wise choice. On the other hand, if you are only operating in your local market, national patents might represent a cost saving and risk mitigation.

Continue on the next page for details on how risk assessment should be managed and why you need to be aware of rival firms’ IP.

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