Patent-heavy businesses optimistic ahead of new European court launch next year

A year before the Unified Patent Court (UPC) is set to launch, considerably more patent-heavy businesses believe the UPC will benefit their company (80 per cent) compared to only 36 per cent of those with small portfolios, according to a survey by Allen & Overy.

The Unified Patent Court will have competence in respect of European patents and European patents with unitary effect and has 25 contracting member states.

Across all those surveyed, however, just over half (51 per cent) of businesses say the UPC will benefit them, down from three quarters (74 per cent) in 2014.

The findings highlight that businesses with significant IP exposure are better prepared, with senior management assessing the opportunities and risks the UPC presents and taking a more commercially pragmatic approach as the UPC becomes a reality.

It is, perhaps, no surprise that businesses with larger portfolios (over 500 patents) are better prepared, but with just one year to go even these businesses are yet to decide whether to opt out or leave in 44 per cent of their patent portfolios on average.

This rises to 53 per cent for smaller portfolio companies (less than 50 patents) and climbs to 63 per cent for mid-sized portfolios (50-499 patents). This should be a concern for senior management at any patent-reliant business; especially given respondents say the possibility of their patents being centrally revoked is the major source of uncertainty within the new system.

Joachim Feldges, partner at Allen & Overy in Munich, said: “Businesses across Europe need to wake up to the new reality the UPC will bring to their markets. Being blocked from the biggest consumer market in the world is a real risk for some businesses and something that senior management everywhere should be actively engaging with.

“Having worked with a large number of clients and seen the effort that needs to go into making a well-informed decision on how to approach the UPC, it is a real concern for us that one-third (35 per cent) of businesses have still not moved past the early stages of preparation.”

The research also shows that attitudes toward the UPC do tend to vary between countries. UK businesses are far more positive about the UPC, with 76 per cent saying it would benefit them, compared to only 22 per cent and 38 per cent in France and Germany respectively. This is in contrast to two years ago when the UK was the least optimistic, with 63 per cent saying it would benefit them, behind both France (91 per cent) and Germany (80 per cent).

The reason for this sentiment reversal is probably less national than structural. In the UK, there tends to be more companies with large patent portfolios than France and Germany and larger businesses are expected to benefit more from the UPC.