Introduction

When a company faces patent infringement risks in Europe, challenging the validity of the patent in question is often one of the primary strategies considered by businesses venturing overseas. However, with the implementation of the Agreement on a Unified Patent Court (UPCA), deciding on the appropriate procedure to challenge the validity of a European patent with unitary effect (Unitary Patent or UP) has become a complex decision requiring significant expertise. This decision involves various considerations such as the grounds for challenge, costs, timing, duration, location, and scope of effect. This article provides basic information and preliminary advice on the two main procedures for challenging the validity of a European Unitary Patent: Opposition at the European Patent Office (EPO Opposition) and Request for Revocation at the Unified Patent Court (UPC Revocation).

I. EPO Opposition

According to the European Patent Convention (EPC), EPO Opposition is an administrative procedure that can be initiated by anyone within nine months of the grant of the European patent in question. Additionally, a party facing patent infringement litigation or a party warned of patent infringement and initiating a non-infringement lawsuit can join an ongoing EPO Opposition within three months of the lawsuit or warning. This provision allows companies to use so-called "straw men" to initiate oppositions, providing a strategic advantage. For many Chinese companies facing patent infringement risks but hesitant to proactively file an opposition, joining an ongoing opposition is a valuable tool to consider.

The grounds for EPO Opposition are outlined in Article 100 of the EPC, including issues of patentability under Articles 52-57, sufficiency of disclosure under Article 83, and added matter under Article 123. The opposition process is primarily conducted in writing, but oral proceedings can be requested and are typically held online. The hearings can take place in Munich, Berlin, or The Hague. Decisions can be appealed to the EPO Board of Appeal, and the effective decision applies to all EPC member states where the patent is in force. The official fees for EPO Opposition are relatively low, with an opposition fee of 880 euros and an appeal fee of 2925 euros, payable by the party initiating the procedure. The median duration of EPO Opposition, as of 2022, is approximately 20 months. According to the EPO's 2022 Annual Report, 33% of opposition cases result in the invalidation of patent claims, and 40% lead to modifications (generally meaning a reduction in the scope of protection). Furthermore, the report reveals a high appeal rate of 45%, with 35% of these appeals resulting in the revocation or modification of the opposition decision. Thus, filing an EPO Opposition can significantly challenge the validity of a patent, creating uncertainty for the patent holder for about two years.

II. UPC Revocation

UPC Revocation is a civil procedure that can be initiated by any party related to the patent at any time after the grant of the European patent, regardless of any ongoing EPO Opposition. The grounds for UPC Revocation include those applicable to EPO Opposition, as well as issues of obvious clerical errors under Article 139 of the EPC and prior rights in UPCA member states under Article 3 of EU Regulation No. 1257/2012.

The UPC Revocation process, as outlined in Article 52 of the UPCA, includes written proceedings, interim meetings, and oral hearings. Decisions can be appealed to the Court of Appeal in Luxembourg, and the effective decision applies to all UPC member states, currently 17, potentially expanding to 24. The official fees for UPC Revocation are 20,000 euros for both the revocation and appeal, payable by the losing party within a specified limit. The duration of UPC Revocation is significantly shorter than EPO Opposition, with a first-instance judgment typically made within 9-10 months of filing the revocation request or initiation of the procedure.

Two key features of UPC Revocation are important for Chinese companies to note:

Division of Technical Fields by Courts: According to Article 33 of the UPCA, revocation applications involving patents in technical fields B (Operations, Transport), D (Textiles, Paper), E (Fixed Constructions), G (Physics), and H (Electricity) are generally heard by the UPC Central Division in Paris. Those in fields C (Chemistry, Metallurgy) and F (Mechanical Engineering, Lighting, Heating, Weapons, Explosives) are heard in Munich, and those in field A (Human Necessities) in Milan. As of April 2024, Paris and Munich have accepted 28 and 4 UPC Revocations, respectively.

Counterclaims by Patent Holders: Patent holders can initiate counterclaims for revocation during infringement litigation in the same court.

(Caption: A single European Patent (EP) can take effect in 39 EPO member states. Source: EPO official website, Unitary Patent | Epo.org)

(Caption: A single Unitary Patent (UP) currently takes effect in 17 European countries. Source: EPO official website, Unitary Patent | Epo.org)

III. How to Choose?

After reviewing the overview of EPO Opposition and UPC Revocation, let us consider a business scenario: a competitor's patent is about to be or has recently been granted by the EPO as a European Unitary Patent, posing a certain level of negative impact on the reader's company or its clients' business in relevant European countries. The reader's company possesses prior art evidence sufficient to invalidate the relevant claims of the patent in question. In this context, the author offers the following advice on choosing between EPO Opposition and UPC Revocation.

If the impact of the patent on the reader's company or clients is minimal, or if the patent's defects are primarily formal, it is recommended to choose EPO Opposition. This option is cost-effective and preserves the possibility of filing a UPC Revocation, presenting a dilemma for the patent holder regarding the cost-benefit analysis of their enforcement actions. If the likelihood of success is high based on available evidence, or if there is an urgent need for legal certainty, UPC Revocation is advised. Although choosing UPC Revocation involves higher economic costs, a significant portion may be recoverable from the losing party, or the legal procedure costs are relatively minor compared to the broader commercial legal environment. Therefore, directly initiating UPC Revocation is more advantageous.

Additionally, if the main grounds for challenging the European Unitary Patent involve prior rights within UPCA member states, only UPC Revocation is appropriate, as the EPO does not review such grounds. Of course, if the patent poses a significant threat to the reader's company or clients, it is recommended to pursue both EPO Opposition and UPC Revocation. In such a case, a fierce battle is inevitable between the challenger and the patent holder, and it is crucial to engage experienced European patent attorneys and/or agents for comprehensive professional representation.

To avoid becoming entangled in such intense patent disputes prematurely, the author urges Chinese companies venturing into the European market to pay early attention to the rules of the European Unitary Patent market. With the help of domestic professional lawyers, companies should learn and apply these rules, establish connections with European patent professionals, and be prepared for potential challenges.