José Pfizer, 4SC AG
© 4SC AG

"We have mixed feelings..."

Unitary Patent: Ingve Stjerna, plaintiff before the Federal Constitutional Court, argues that the UPC system does not deliver on its promise to make European patents cheaper and more affordable to Small and Medium-sized Enterprises (SMEs). European Biotechnology asked José Pfizer, Head of Intellectual Property at 4SC AG, to address the issue from the perspective of a German SME. 

EuroBiotech_ If your company had the choice, would you seek a unified patent or a bundle patent?

Pfizer_ From our perspective at 4SC this cannot be answered in a general way, and it will be necessary to weigh the possible costs for each individual case against the risk of an attack on the patent. The more important and valuable a specific patent is to the company, the more the “old” European patent, i.e. the bundle patent, is the preferable option. The potentially higher costs upon grant and validation could be justified, since it can be assumed that a unitary patent will be a more attractive target for attacks via nullity suits than a bundle patent. For existing patents, we will certainly opt out and thus decide against the applicability of the provisions of the Unified Patent Court. The official fees and translations have already been paid upon validation in the EPC contracting states. This means that – in cases where the patent is in force in many contracting states – annual renewal fees are the only remaining higher cost in comparison to the unitary patent. In our opinion, however, such additional costs are certainly acceptable in exchange for avoiding the aforementioned potential weaknesses of the unitary patent.

EuroBiotech_ Do you agree with the claim that the unitary patent and UPC would be disadvantagous to SMEs?

Pfizer_ In general, unitary patents can be expected to be more vulnerable, as the threshold for nullity suits is reduced in view of the comparably low office fees and the centralised procedure. The costs of a nullity procedure are, of course, generally easier to bear for large companies than for SMEs, especially since the reimbursement of lawyers’ costs (for the party winning the case) is capped. Large companies clearly have longer staying power and are able to accommodate additional costs for lawyers’ fees in their budgets. For SMEs, this also increases the pressure to seek an early settlement in order to minimise the risk of incurring further costs. This is, of course, exacerbated by the legal uncertainty associated with the Unified Patent Court, as it is currently impossible to foresee which school of law future decisions will follow, and whether the judges in each individual case will have the necessary experience. The same applies in principle to infringement proceedings, except that the legal uncertainty is even greater here, since lawsuits can be brought before local or regional chambers that have previously handled only few patent disputes. SMEs may also become a particularly attractive target for suits by patent trolls before local or regional chambers, since, as mentioned above, they are more likely to settle than bigger players.

EuroBiotech_ Do you think costs for filing and/or litigation of a patent will be cheaper or more expensive under the unitary patent system than under the existing system?

Pfizer_ Costs associated with patent grant and validation are clearly dependent on the strategy the respective company usually applies. For companies that usually choose only a few countries, the uniform patent is potentially somewhat more expensive. On the other hand, biotech companies that usually validate in many or all EU countries will save substantially on grant and validation costs, in particular because translations become unnecessary. However, for the above-mentioned reasons, we anticipate  that the expected increase in litigation proceedings will likely lead to significantly higher overall costs. The initial savings upon grant would then quickly be eaten up and the overall financial risk increases significantly. We are therefore currently looking at the upcoming advent of the unitary patent with mixed feelings.

(First published in European Biotechnology, Autumn Edition 2017)