Following the adoption of Law 81/2024 for the ratification of the Agreement on a Unified Patent Court (UPCA), Romania is set to become the 18th participant in the Unified Patent Court (UPC) and the first state to join after the original group of 17 ratifying states. Romania's membership has an effective date of September 1, 2024, aligning the country's patent law with the European Union framework and tendencies.
According to Article 3 of Law 81/2024, the national authorities responsible for monitoring the implementation of the UPCA are the Ministry of Economy, Entrepreneurship and Tourism and the Ministry of Justice. Article 2(2) of the same law states that both ministries will also manage Romania's financial contributions after the entry into force of the Agreement. Relevant legislative amendments have already been passed by the Romanian parliament, whereby a referendum will not be required, unlike in the Republic of Ireland.
Streamlining litigation procedures
The main benefits Romania gains from UPC membership arise in the area of patent litigation. Since local courts hear few new cases annually, specialist patent courts would be of great help in resolving these Intellectual Property (IP) disputes. Patent-related litigation typically stretches over long periods of time due to its high level of complexity and precise industrial contexts, requiring the involvement of IP practitioners and patent attorneys with extensive technical knowledge. Judges in local courts may be less acquainted with patent law or not have a technical background or skillset, meaning the process often becomes cumbersome, with outcomes delayed because courts must turn to external experts.
In addition to being great news for the judicial system, the ratification is a welcome development for major innovators. Chief among these are pharmaceutical and medical device companies, which, as prominent industries in the country, hold the top spot for validating European Patents (EPs) in Romania, as well as the chemical and automotive sectors, which are also substantially represented.
Economic effects
According to Article 7(3) of the UPCA, a local division is established on the territory of a Contracting Member State at its request and in accordance with the Statute of the Unified Patent Court. Romania has not submitted such a request to establish a local division, but this initiative will, in all likelihood, be considered as the practicalities of ratification unfold over time.
From an economic point of view, Romania joining the UPC provides strong opportunities for inbound foreign investment and a boost to national innovation, besides strengthening international trading relationships with foreign partners. It is not hard to imagine that this move will make the country a more attractive market for all patent holders.
Currently, for the purposes of validation in Romania, EP holders need to translate the full patent specification into the official language and pay national validation fees. This process will soon have a simpler alternative, as the unitary effect conferred by UPC membership will also be available for Romania as a jurisdiction. If elected by patent holders, this option will relieve them of the need to pay national validation fees and, moreover, present them with an opportunity to decrease the total amount of patent annuities otherwise payable for maintaining a large(r) portfolio, including Romanian validations.
Expanded cost-saving potential
The UPC is facilitating the introduction of these advantages for Romania before its ratification goes into effect by offering a "delayed unitary effect," as was seen prior to the launch of the UPC itself on June 1, 2023. Notwithstanding that the official period for requesting unitary effect (one month after the grant date of an EP) already applies to Romania, the grant of this effect can be delayed until after September 1, 2024, so as to include the country in the extended coverage. However, it should be noted that the unitary effect already requested and in force for granted EPs will not retroactively include Romania.
The European Patent Office (EPO) highlights the potential lifetime cost savings the Unitary Patent (UP) route offers – both with and without targeted EP supplementation. For a maintenance period of 10 years, the average duration of an EP, and inclusive of external fees, the estimated savings compared to an EP validated and maintained in four states are:
- 29% for a UP-only approach (- €2,859)
- 16% for a UP with an EP validated in the United Kingdom (- €1,606)
- 12% for a UP with an EP validated in Switzerland (- €1,176)
(Numbers accurate as of the time of writing)
It is important to remember that these figures do not account for a 30% discount on the main patent grant procedural fees offered by the EPO to individuals, micro-enterprises, non-profits, universities and public research organizations.
Unitary effect under the UPCA offers interesting perspectives and commercial opportunities for all EP holders. For patentees with low validation activity, budgetary concerns and / or unfavorable cost-benefit analyses of commercial activity in smaller validation states could be alleviated. This is due to the fact that unitary effect enables the extension of geographical coverage at the least additional expense and complication. For EP holders engaged in extensive validation activity, there is a clear cost and complexity reduction, but this opportunity should be carefully assessed with reference to the centralized attack mechanism created by the UPCA.
The novelty of the UPC, which celebrated its first birthday on June 1 this year, means that both EP holders and IP representatives are still monitoring the evolution of these various factors very closely, and we will continue analyzing how the UPC influences trends in post-grant behavior and litigation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.