As Unitary Patents are now being granted what should a would-be licensor (or licensee) know about licensing a Unitary Patent (UP)?  In this next article in our series of articles about the IP transactions aspects of UPs, we will highlight some of the peculiarities and considerations for licensing UPs including (a) applicable law, (b) standing to enforce or defend a UP in litigation, (b) additional prosecution and maintenance issues to consider, and (d) availability of licences of right and compulsory licensing.

The law relating to licensing Unitary Patents

The law applying to the licensing of UPs combines specific new European Regulations and familiar existing national laws based on the governing law of the relevant UP as an object of property.  This creates some interesting new issues for practitioners.

For example, Article 3(2) of the UP Regulation[1] makes it clear that UPs can be licensed and that the territory granted to the licensee may be the whole or part of the Member States covered by the relevant UP (unlike assignments of UPs which cannot be divided by participating Member States).  However, when considering licensing a UP, the governing law of that UP as an object of property may also be relevant (for more on this concept see our article on UP due diligence).  If, for example, the relevant UP is co-owned and is governed by French law it should be possible for one co-owner to grant a non-exclusive licence without the consent of the other co-owner(s).  If, however, the relevant UP is governed by German law the consent of all co-owners will be needed even to grant a non-exclusive licence.

Bringing actions as a licensee

Article 47 of the Agreement on a Unified Patent Court (UPCA)[2] defines the parties that are entitled to bring actions before the Unified Patent Court (UPC).  They are the patent proprietor, the holder of an exclusive licence (unless the licence agreement provides otherwise and after giving prior notice to the patent proprietor) and the holder of non-exclusive licence in so far as expressly permitted by the licence agreement and provided that the patent proprietor is given prior notice. Actions made be before the UPC in relation to infringement and invalidity of the UP.

Whilst it’s generally the case in Europe that exclusive licensees can have legal standing to bring enforcement action, it’s less common that this is also the case for non-exclusive licensees.  Accordingly, we recommend that UP licences (whether exclusive or non-exclusive) include comprehensive provisions relating to the enforcement (and defence) of the licensed UPs, in particular around the standing of the parties to do so.

The object of property rules may be relevant when bringing an infringement action in the UPC because the acts will infringe a patent will be judged by the law governing the allegedly infringed patent.  Practically, this may be a moot point because of the alignment between infringement law across UP countries but in theory at least, there could be an act which would infringe a French patent but not a German patent and so there may be some benefit in considering the nationality of your patents as part of your patent filing strategy.

Actions relating to the licence of a UP

As above, the UPC will not hear disputes relating to the scope or enforcement of licences.  These will, as now, be heard in national courts – if the licence contains a jurisdiction clause, in the courts specified in the jurisdiction clause.  There were cases prior to the UP in which courts must decide disputes relating to licences of foreign IP rights so we expect national courts to already have strategies to address this issue but it may be interesting to see how courts deal with licensing these unitary rights.

Prosecution and maintenance

When a licence is granted to a pending European Patent application the licensor and licensee will need to agree who is responsible for certain prosecution activities relating to the UP. This will include specifying which party is entitled to determine whether the application should be designated as a UP or as a classical EP. Indeed, if a classical EP is selected, then the parties will have a further decision point – whether to opt the EP out of the jurisdiction of the UPC.

Other issues relating to maintenance of the patent which should be agreed and documented in the licence agreement include identifying the party responsible for renewal fee payment.

Compulsory licensing and licences of right

UP owners may make their UPs available for licences of right through a scheme administered by the EPO.  If a UP owner offers licences of right for its patents, it will be required to file a statement with the EPO. The statement will state that the owner is prepared to allow any person to use their invention as a licensee in return for appropriate consideration. A licence obtained under this system of licences of rights will be treated as a contractual licence.  The statement, that licences of rights are available, will be entered into the UP register by the EPO free of charge. The EPO has a dedicated form for recording these statements.

The benefit to a patentee of making their patent available through this licence of right scheme is primarily financial. The renewal fees for a UP which is offered under a licence of right will be reduced by 15%. Note that a UP owner cannot offer a patent as available to a licence of right if (a) an exclusive licence is recorded in UP register against that patent, or (b) if a request for the recording of such a licence or an exclusive licence is pending before the EPO (12(3) UP Regulation).

What should I be doing?

Take a moment to consider your licensing arrangements for UPs.  This may help to ensure that you are not unwittingly forced into an undesirable position by a licensee or licensor.  Consider your preferred approach or approaches to the following questions and, if necessary, open a dialogue with the parties involved in existing arrangements and adapt templates for future use:

• Identify the national law applicable to the relevant UP: what are the “default” rules for licences under that national law, i.e. can one co-owner freely license the patent, are there any requirements about the form of the licence?
• Consider who has responsibility for prosecution and maintenance of the UP:
  • Is it appropriate for a licensee to take on responsibility for maintenance of the UP (e.g. payment of renewal fees)? If a UP is licensed to different licensees for different territories, but there is a single renewal to be paid, allocating responsibility will be extremely important.
  • Should a licensee who has been responsible for prosecution of a European patent application also have the power to choose between a UP and conventional European patent on grant, and whether or not to opt out/in a European patent to the jurisdiction of the UPC?
  • Should a licensor be able to unilaterally opt out a European patent to shelter it from potential central revocation actions at the UPC without consent from licensees who may prefer having the option of central enforcement?
• Does the licence expressly allow the licensee to bring infringement proceedings (or if not, does the licence expressly prevent the licensee from doing so)?

Please let our Transactions Team know if you need any advice on the licensing of UPs and/or assistance preparing licence agreements that include UPs.

Footnotes

[1] 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.

[2] 2013/C 175/01