There are always two sides of the same coin – a brief polemic on the unitary patent system (from a Polish perspective)

In 2022 works related to the launch of the unitary patent system accelerated sharply. The institution of the European patent with unitary effect and the activity of the Unified Patent Court will affect not only those European Union Member States which undertook to construct the new system from scratch. Looking at the bigger picture, there is no doubt that changes introduced by entry into force of the UPCA will actually affect (to a greater or lesser degree) all in Europe.

In this situation, Hamlet’s question – “to be (inside new patent system) or not to be?” – takes on a slightly different meaning, especially from a perspective of Poland which acceded to the EU enhanced cooperation in creating unitary patent protection system, but to this day did not sign the UPCA. Two Polish patent attorneys who work in the same patent law firm see the answer to this question in a slightly different way. This two-voice discussion is part of a broader debate which has been ongoing for many years and which concerns even more fundamental question: does Europe actually needs the newly created patent system?

Does being absent in the UPCA system must necessarily mean that one is non-existent? – comments of Piotr Godlewski

The Agreement of 19 February 2013 which established the Preparatory Committee in relation to European patent with unitary effect and the Unified Patent Court (UPC) was signed by 24 European Union Member States. Among 27 current members of the European Union (as of 2022 the United Kingdom is no longer part of the community) three countries did not acceded to this Agreement: Croatia, Spain and Poland.

What is interesting, new regulations constituting the European patent with unitary effect and Unified Patent Court – the entry into force of which is scheduled for 2023 – shall be binding in 17 countries only among 24 countries that are mentioned above. Cyprus, Czech Republic, Greece, Hungary, Ireland, Romania and Slovakia did not yet ratified the UPCA (the question is: is it on purpose?).

This short numerical analysis is intended to show that there is no unanimity as to new institutions in the world of European patents. Assuming that all the EU Member States will speak in one voice should be described as far-reaching naivety.

Taking these numbers into consideration, one may ask if the decision of Poland on staying in the shadow should be regarded as a loss of an opportunity in shaping the new system? The answer may be yes, to some extent, since not being part of the new order right from the start of its functioning one may lose its influence on shaping it. This is included in the following opinion of Tomasz Gawliczek who considers absence of Poland in the new system as a potential “loss”.

However, in my view we should not talk about a loss in the first place, but rather about an opportunity created by a current situation. The absence of Poland in the UPCA system does not mean that the European patents with unitary effect will not finally – within certain time framework – be binding on our territory.

Although Poland did not sign the Agreement on a Unified Patent Court, it neither withdrew from enhanced cooperation mechanism (which, apart from UPCA, is composed of Union legal acts: Regulation (EU) No 1257/2012 of the European Parliament and of the Council of 17 December 2012 implementing enhanced cooperation in the area of the creation of unitary patent protection and Council Regulation (EU) No 1260/2012 implementing enhanced cooperation in the area of the creation of unitary patent protection). What is enhanced cooperation? It is a mechanism, envisaged in the European Union procedures, which enables states to choose to integrate to a larger extent in specific areas. Referring to the European patent with unitary effect and to the unified system of patent protection, Poland had the opportunity to take a position and influence the final shape of adopted regulations.

While remaining on the sidelines – even to a greater extent than 7 states already mentioned which still have not ratified the UPCA – Poland is not, however, as firm with its position as Spain which has not participated in enhanced cooperation from the beginning and has distanced itself from new institutions completely.

At this stage, no one knows if a stance taken by Poland may bring more positive results or more negative ones. Certainly, the stance taken by Poland is safe in that sense that it is always possible to accede to the UPCA system. Surely, a multitude of factors will influence the exact time of this accession.

A lot has already been written about doubts concerning new system as well as about positive aspects of new institutions which have been awaited by some for decades. However, only the actual numbers of pending revocation proceedings, “opt-out” motions submitted, lawsuits filed, translations submitted etc. will allow to assess if interests of all interested parties have been taken into account.

It is known that rulings issued at the beginning may determine further actions of the UPC and being absent in the system from the beginning, which is the case of Poland that excluded itself from the system, will deprive us of an influence on law making. However, it seems that there is no such jurisdiction in the world in which there is no evolution in adjudication and in my view, accordingly, this will also be the case of the UPC. The tenth, hundredth, and thousandth case shall influence the jurisprudence and at the same time guarantees, liberties and finally concerns of all those who act pursuant to patented technical solutions. The pending proceedings shall enable to evaluate what, from the commercial point of view, will be the influence on functioning of particular industry sectors and what will be the true effects of the proceedings concerning local (national) entities. Finally, it is the number of European patents with unitary effect being granted and in force that will show how big is the influence of the new system on local economies and if it brings more opportunities (by imposing more competition) or more risks (by reducing freedom of activity of SMEs which are less of innovative and more of reproducible character).

Each Member State of the European Union (apart from our common regulations and in some cases common currency) has its own history and experiences which influence also political decisions. This geopolitical factor – in particular taking into account the latest events beyond the Polish eastern border – may prove to be crucial. Regarding the evolving reality, Poland which is a border country of the European Union must decide, in a flexible manner, if and what instruments to use in order to gain as much as possible and lose as little as possible.

Almost a decade has passed since the last analysis was made which determined the position of businesses, politicians and the whole industrial property community in Poland. It is a long period of time during which a lot has changed. Therefore, a majority of concerns which were valid in relation to views presented in 2012/2013 now have lost their importance.

In my view, close and flexible observation of the functioning of new system from the beginning, as well as learning from experience of neighbouring countries will enable Poland to undertake right decision. Obviously, if right from the beginning of the new system all 24 states that signed preparatory agreement had participated in it actively (finally there are 17 states), and if the United Kingdom had not left European Union, and finally if Poland had been the only one EU country which was excluded from the enhanced cooperation and completely had boycotted the constitution of new system, my opinion would surely have been different. Defining such an approach as an opportunity would not have been justified.

However, in a current situation I treat the position of Poland as an opportunity and it depends on smart political decisions and close and thorough analysis, as well as on data evaluation, whether we, as a country, seize this opportunity.

Do latecomers who are about to join UPCA may only gain? – responds Tomasz Gawliczek, PhD

Legal changes (especially those of systemic character) always bring questions about the associated consequences. Some outcomes may be anticipated, but the real evaluation in this regard may be done only after some period of time. Thus, is it worth to wait for further development of events related to implementing the UPCA in order to be sure how this system will function in practice? Such a suggestion is made hereinabove by Piotr Godlewski. However, one cannot forget that the discussion which has taken place so far in Poland focused only on the issue whether to join the new system or not.

In this context it is worth to remind that participation in the European Union enhanced cooperation mechanism is of voluntary nature. Therefore, by acceding to it Poland – in a similar way as these other countries which had already signed the UPCA but still did not ratified this agreement – has undertook obligations related to achieving goals of this cooperation. Thus, the participation of Poland in this project has already been decided. Furthermore, the question asked today whether the accession of Poland to this new system should be finalised shall be replaced by the one on when exactly this accession should be finalised.

There is no doubt that the best solutions are frequently those that have already proven to be working. If the unitary patent system proves to be efficient and reliable in a longer term perspective (first revision of the UPCA regulations is to be made after seven years of entry into force of this agreement), then certainly the number of participants therein will be growing gradually. However, it must be taken into account that states acceding late to the UPCA will have to accept not only the already existing jurisprudence of the UPC but also the established ways of functioning of the Court. These are going to evolve constantly during the process of applying regulations of the whole unitary patent package, including implementing legal acts adopted in the meantime.

Moreover, states which will join the new system at a later date shall be covered by the “unitary effect” to a lesser extent than the incumbent participants. This results from an assumption made that there are different generations of the European patent with unitary effect. In this regard it may be expected that in these countries the role of national patent courts shall still be greater than the one of the UPC. Especially taking into account the form of transitional provisions and the fact that, giving the circumstances, relatively greater part of technical solutions will be protected on the territories of new Contracting Member States with classic European patent.

At the same time it must be underlined that absence of Poland in the system will not result in that the solutions adopted in unitary patent package will have no influence on Polish entrepreneurs which conduct businesses in other countries of the European Union. In case of an infringement of a European patent with unitary effect by them, instead of being sued in Poland – which would be the case if this country signed and ratified UPCA – they will be sued by the entitled entities before local divisions of the UPC in other countries of the European Union and this obviously increases the cost of conducting such litigation. Moreover, when the same patent is to be validated in Poland the litigation may be duplicated. Then, such a dispute will take place simultaneously before the patent court in Warsaw and before foreign local division of the UPC.

Among the arguments presented during discussion concerning the accession of Poland to the UPCA, especially these were underlined which pointed to multiplying the number of European patents valid in this country after the accession to the new system. However, one cannot forget that the nature of patent law can be reduced to the fact of stimulating the innovation factor and the investments related thereto. It seems that the role and meaning of patent protection is regarded in this way by states which are at the forefront of the peloton leading the functioning of new system. Lithuania, Latvia or Bulgaria – taking into account EPO statistics on for example number of European patents granted in 2021 for entities coming from these countries – could have more doubts concerning this issue than Poland although they do not articulate them.

Finally, the strategy of “expectation” which consist in observing how the new patent system works in practice and in acceding to this system at the later stage brings also some risk of a political nature. Sometimes it happens that postponement of taking decision leads to diminishing the importance of the matter which decision relates to or (in extreme cases) to completely marginalizing thereof in public debate. When seeing the dynamic progress of works related to launching of the UPC now Ireland wish to come back to the discussion on ratifying the UPCA. This constitutes a good example and confirms that it is the right moment to restart discussions on this subject in states that are still undecided.

Works on creating unitary patent system in Europe took almost 50 years. Expectation that completely alternative system will emerge next to this one based on the unitary patent package seems to be an idealistic approach, at least to some extent. We are all aware that the UPCA is not an exemplary solution, but it allows to realize at least some of the postulates that were presented for quite some time in the context of a need to increase European economy competitiveness with respect to other world economies. Thus, is it really the case that only observing the process of consolidation of Europe in relation to patent protection issues may bring greater benefits to the system outsiders than to its creators? Taking the above arguments into account it appears to me that the answer is for now unequivocal.

Do these different opinions must exclude each other?

Moderate scepticism and limited enthusiasm – these expressions provide the best description of the two positions in this general polemic related to solutions included in the unitary patent package. Although it is a subject for much longer discussion, we both agree on two important issues. Firstly, Europe is in need of a patent system reform. Secondly, only a substantial discussion in which different views are presented constitutes a good starting point to develop efficient solutions. Therefore we wish Europe, Poland and our readers exactly such substantial discussions on this issue.

Article by Piotr Godlewski and Tomasz Gawliczek, PhD.

Published on October 5, 2022, in The Patent Lawyer Magazine >>