The EU's new patent system: How are Norwegian businesses affected?

What is the UPC?

The UPC will henceforth decide all patent disputes concerning a unitary patent in the same legal proceeding, with effect for all EU countries participating in the scheme. The UPC will also be able to resolve disputes regarding regular European patents (EP patents), which many Norwegian businesses currently hold – unless the patent has been opted out of the system. The UPC will be a relevant forum for parties seeking a single enforcement decision for all participating member states, and it is expected that decisions will be made from day one.

What does it mean for Norwegian businesses?

Norway, along with the UK, Switzerland, and several EU countries, is not part of the UPC. Therefore, unitary patents will not have effect in Norway. Decisions from the UPC will also not have direct effect in Norway. However, the system could still have significant implications for Norwegian businesses, including:

• Norwegian businesses can apply for and be granted a unitary patent on the same terms as others.
• Norwegian businesses that hold a unitary patent, or for example, an EP patent validated in Germany and not opted out of the UPC, must enforce the patent in a UPC court.
• Norwegian businesses operating in the European market may be sued for patent infringement regarding such patents in the UPC.
• Norwegian businesses may need to defend against invalidity claims regarding their unitary patents or, for example, an EP patent validated in Germany, in the UPC.
• It is expected that Norwegian courts will place significant emphasis on decisions from the UPC, even though they are not formally binding.

I want out! Opt-out options

Patent holders can opt out of the UPC by withdrawing through opt-out rules. An opt-out means status quo, so lawsuits will continue to be conducted in national courts.

For existing European patents, opt-out can be notified within a transition period of seven years from 1 June 2023. However, it is not possible to opt out a patent if invalidity proceedings have already been filed against it under the UPC. For future European patents, the holder can choose to opt out of the UPC when it is granted.

Unresolved questions for Norwegian businesses and courts

The UPC has two instances. The court of first instance is in Paris, with a division in Munich and several local and regional divisions. The court of appeal will be located in Luxembourg. The UPC will have nearly the same jurisdiction as Norwegian courts. It can, among other things, decide cases regarding patent infringement, the validity of patents, interim injunctions, and claims for damages. The court can also decide on thorough procedural actions, such as obtaining evidence from parties and third parties.

In Norway, businesses and courts may face many new questions in the coming decades. For example, can evidence be obtained from Norwegian businesses in connection with a case being heard by the UPC? Can an interim injunction based on a unitary patent have effect in Norway? Can a business's revenue in Norway be included in the calculation of a claim for damages for infringement of a unitary patent? And last but not least; how much emphasis will Norwegian courts place on UPC decisions in infringement and validity cases?

Norwegian courts have gone quite far in harmonizing patent law with practices from the EPO's Boards of Appeal. Therefore, there is reason to believe that Norwegian courts will place similar emphasis on UPC practices as they develop.

Open opportunities

The UPC rules are relatively open, with many procedural variations and opportunities for tactical choices. There are mixed opinions on whether the new system will become a beautiful creation or a many-headed monster. The goal is for the UPC to become a leading patent enforcement system, to be efficient, and to create a good balance between the rights of patent holders and third parties.

This is a challenging exercise. The new system will hopefully contribute to more predictable and faster enforcement of patents in the EU. The reform is important for both large patent holders with nearly unlimited resources, for third parties, and not least for Norwegian businesses with activities in EU countries.