This article is the third in our 2022 series, “Trends in Cell, Tissue, and Gene Therapies,” which aims to help you stay informed about the broad array of legal and regulatory issues affecting companies operating in the regenerative medicine space.

What is the UPC?

The UPC is a supranational court whose decisions will have direct effect in all 17 countries that have ratified the Unified Patent Court Agreement (UPCA), including Germany, the Netherlands, France, and Italy. The UPC’s jurisdiction will encompass the classical European Patents for designated participating EU Member States (so long they are not “opted out”) as well as the newly created European Patent with Unitary Effect (Unitary Patent or EP-UE).

The UPC will be competent for, inter alia, patent validity and infringement cases for the mentioned patents and aims to provide a more streamlined and consistent approach to patent litigation where one decision will have effect in all participating Member States.

What is the Unitary Patent?

With the entry into force of the new UPC system, the new Unitary Patent also becomes available. The Unitary Patent is a European Patent that enjoys protection in all participating (currently 17) EU Member States at a fee equivalent to the fees for a classical European Patent for only four countries. Therefore, an applicant for a European Patent may choose, once the decision to grant a patent has been made, to obtain a classical European Patent for either a selected number of countries within the territory of the participating Member States, or one Unitary Patent covering the territory of all participating Member States. If the applicant decides to obtain a Unitary Patent for the participating Member States, the applicant can additionally obtain a classical European patent for those EU member states that do not participate in the UPC system (currently Spain, Poland, and Croatia) and for those territories that are not members of the European Union but are members of the European Patent Convention (EPC, e.g., United Kingdom, Norway, and Switzerland).

When will the UPCA enter into force?

After significant delays, the UPC is now set to pick up work in late 2022 or the first half of 2023. The remaining preparatory work is currently in a Provisional Application Phase (PAP), which started 19 January 2022. The PAP is intended to ensure that the UPC will be able to function immediately after the entry into force of the UPCA. The PAP is expected to last six to eight months, but may also take longer. After all preparatory work is done, Germany, as the “gatekeeper” of the system, will deposit its ratification documents, which will start the “sunrise period” and bring about the entry into force of the UPC system about three months later.

Why is it important for CTGT companies to act now?

It is especially important to have the upcoming UPC on the radar now, because all presently existing classical European Patents will automatically fall under the jurisdiction of the UPC unless they are opted out. Due to the fact that every new system bears uncertainties and there is no case-law/experience with the judges and quality of the judgments, patent proprietors have the chance, during an initial transitional period of seven years, to “opt-out” their classical European Patents from the jurisdiction of the UPC, which means that the national courts remain competent for litigations on such “opted out” patents.

Consequently, CTGT companies are now faced with three elementary questions:

1. Should existing classical European Patents be “opted-out” of the jurisdiction of the UPC?
2. Should the opt-out also be declared for classical European Patents that are still currently in the application phase?
3. How should patent portfolios be structured in the future?

The first question requires urgent attention, because an “opt-out” is no longer possible as soon as an action is brought before the Unitary Patent Court with regard to a particular European Patent.

Therefore, CTGT companies should determine now whether they would like to declare an “opt-out” for some or all of their existing European Patents. This decision has significant consequences, and the risk that competitors will try to take advantage of unprepared companies, especially in disruptive industry sectors, is substantial.

Why Hogan Lovells?

We are one of the very few firms that has patent litigators in virtually all major European jurisdictions who have significant experience in working on cross-border litigation in multinational teams. For this reason, we are exceptionally well positioned to guide you through the challenges and opportunities that come with the new Unitary Patent and the UPC system. We do not only defend, we help you create and grow. We are with you from the initial idea to the global roll-out. For companies working at the intersection of complex technologies, such as cell, tissue, and gene therapies, we are the team for you.

Authored by Benedikt Dellen, Anna-Katharina Friese, and Christian Stoll

This article is the third in our 2022 series, “Trends in Cell, Tissue, and Gene Therapies,” which aims to help you stay informed about the broad array of legal and regulatory issues affecting companies operating in the regenerative medicine space. From clinical studies, to obtaining patents, to scaling up manufacturing, our global team will discuss novel issues arising in all parts of the world, including unique deal-making, litigation, and inspections concerns for CTGT companies. Ensure you are subscribed to Hogan Lovells Engage to receive these new insights weekly!