Business Law & Compliance

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

5 Mins

Do your risk assessment

The unitary patent will cover EU countries that are currently not very popular for patent owners to seek protection in. This brings the risk that companies not currently in conflict may find themselves on either side of an infringement action.

More than ever, it is important to go through a due diligence exercise when launching a new product or entering a new market. Being aware of the patent rights of others allows you to be prepared and take remedial steps to avoid patent infringement.

Be proactive about your competitors’ IP

Having a strategy which allows you to assess what your competitors are patenting, and mapping this to your product development pipeline can help you deal more efficiently with freedom-to-operate issues.

The UPC will be costly – at least as costly as a current national litigation. If the UPC all sounds too expensive and risky, remember that it will still be possible to oppose a European patent centrally in the EPO opposition procedure.

EPO oppositions have many benefits for third parties trying to clear the way for a new product or for a new market. An EPO opposition, if successful, allows a third party to get a problem patent revoked or limited in all countries that are signed up to the European patent convention. This means a freedom-to-operate issue can be dealt with for all of the EU countries that will take part in the UPC.

Moreover, the official fees for an opposition at the EPO are significantly lower than the fees for launching a revocation action at the UPC (€785 for an opposition at the EPO compared to €20,000 for a revocation action at the UPC). While the losing side pays the costs under the UPC, at the EPO each side pays their own costs.

Having an IP strategy is not just for tech giants

Choose your forum

There will be a transitional regime of at least seven years at the opening of the UPC. SMEs can make use of this by choosing the most suitable forum for any patent disputes. For example, if a European patent is in the way, but only the UK part of it is really a problem, it will still be possible to use cheaper national routes to knock out the patent.

For example, options such as revocation proceedings before the UKIPO are a cheaper alternative to the UK court systems – and will be much cheaper than the UPC.

On the other hand, if your business plan involves a product launch in multiple EU countries, a single revocation action at the UPC could be an attractive new possibility, actually saving on legal costs and the significant time commitments involved in knocking out several patents in multiple jurisdictions. SMEs benefit from fee reductions at the UPC, so that it will be a viable forum for businesses of all sizes.

Take it seriously

Set up an IP steering committee. If you have little or no in-house IP capability, then ask your patent attorney to be involved. Organise regular meetings, set up a standing agenda, and agree an IP budget.

An IP steering committee can get involved in the in-depth analysis and planning, while giving high-level, simple, actionable guidance to your board.

Not only will this help you clear a pathway through the IP jungle, but it should help you align your IP strategy with your business plan. Company boards and investors don’t like surprises – this will be your best way of keeping life predictable.

Peter Finnie is a partner at Gill Jennings & Every LLP.  If you would like to discuss any of these issues, then call us to book a consultation with one of our attorneys.

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