PETOŠEVIĆ

August 2022

Unitary Patent Package: What to Expect?

The ‘unitary patent package’ comprising the Unitary Patent (UP) and the Unified Patent Court (UPC) is expected to become a reality by early 2023. The implementation of this package will offer users a cost-effective option for broader patent protection and a more efficient dispute settlement mechanism across the participating EU countries. The system is meant to eliminate the complex and costly national validation procedures and legal uncertainties that plague the European patent litigation arena.

Background

On January 18, 2022, Austria deposited its instrument of ratification of the Protocol on Provisional Application of the Unified Patent Court (UPC) Agreement, becoming the thirteenth EU member state to do so and therefore triggering the Protocol’s entry into force.

This marked the start of the Provisional Application Period (PAP) and the birth of the UPC as an international organization. During the PAP, parts of the UPC Agreement and the UPC Statute will be applied provisionally, and the structural, organizational and financial functioning of the UPC will be prepared. Once the contracting states are confident that the Court is functional, Germany will deposit its instrument of ratification of the UPC Agreement, which will then enter into force on the first day of the fourth month after this date. This is expected to happen in early 2023.

Unitary Patent

The Unitary Patent will be a patent valid in all EU member states except Croatia, Poland and Spain which have not ratified the UPC Agreement. The unitary effect will be available to European patents granted by the European Patent Office (EPO) – European patent holders will be able to file, free of charge, a “request for unitary effect” with the EPO in order to obtain a UP.

While the EPO examines European patent applications centrally, a “classical” European patent is a bundle of national patents which must be validated and maintained separately in each country, which is a complex and expensive process. All post-grant administration for UPs, on the other hand, will be handled by the EPO – there will be one single renewal procedure, meaning only one renewal fee and one deadline.

UPs will co-exist with national patents and “classical“ European patents, and applicants and right holders will be able to choose the system of protection. Because UPs will not be valid in Croatia, Poland and Spain, and because patent strategies depend on different factors, it is likely that many right holders will keep a mixed portfolio of unitary, European and national patents.

Unified Patent Court

Currently national courts rule in cases of dispute relating to European patents since they are treated as national patents. Patent holders wishing to enforce their patents, as well as parties wishing to challenge existing patents, must initiate legal proceedings in each country separately, leading to multiple court disputes relating to the same patent in different EU member states. The establishment of the Unified Patent Court aims to remedy this lack of a single, integrated and specialized jurisdiction for patent disputes across the EU.

Once the UPC Agreement enters into force and a seven-year transitional period passes (which may be extended by additional seven years), the Unified Patent Court will have exclusive competence for the settlement of patent infringement and validity disputes in respect of both the UPs and the “classic” European patents. The national courts will no longer be competent for such disputes and patent holders will no longer need to litigate in numerous countries. The UPC’s decisions will apply across all participating states, which is expected to prevent contradictory court decisions regarding the same issues. Besides making patent litigation more accessible, it is also expected that patent law across the EU will eventually become harmonized.

The UPC will comprise a Court of First Instance, a Court of Appeal and a Registry. The central divisions of the Court of First Instance will be in Paris and Munich, while the participating countries will be able to set up a number of local and regional divisions. The Court of Appeal and a Registry of the UPC will be based in Luxembourg.

National courts will remain competent for actions that do not come within the exclusive competence of the UPC, e.g. cases relating to compulsory licensing.

Transitional Period

During the transitional period, which will start on the date of entry into force of the UPC Agreement, “classical“ European patent applicants and holders will be able to choose whether to initiate infringement and revocation actions before the UPC or before the national courts. The possibility to opt out of the UPC’s jurisdiction is available for any European patent granted, and any European patent application filed, before the end of the transitional period.

While the UPC will at first have parallel competence with national courts, the centralization of this jurisdiction after the transitional period is expected to simplify patent litigation and harmonize patent legislation across the EU. It remains to be seen how these numerous novelties will be implemented in practice.

By: Nada Milović and Predrag Anokić

For more information, please contact Nada Milović or Predrag Anokić at our Serbia office.

European Parliament Adopts Digital Services Package

On July 5, 2022, the European Parliament voted to adopt the Digital Services Act (DSA) and the Digital Markets Act (DMA) setting out a first comprehensive rulebook for online platforms. While the DSA aims to ensure user safety and transparency and accountability for online platforms, the DMA imposes a stringent regulatory regime on very large online platforms (so-called “gatekeepers”) in order to level the online playing field.

The Digital Services Act regulates the obligations of digital service providers, such as social media and online marketplaces, which act as intermediaries in their role of connecting consumers with goods, services and content. The Act has introduced:

• New measures against illegal content and a new set of obligations for online platforms to act quickly while protecting users’ rights online;
• Increased transparency and accountability measures, such as providing information on content moderation and the algorithms used for recommending the content or products; users will also be able to contest the online platforms’ content moderation decisions;
• The obligation to identify and check users that are offering products or services; this will help track down rogue traders and protect online shoppers against counterfeit and dangerous products; and
• Bans on certain types of targeted advertising and misleading practices aimed at manipulating users’ choices.

The obligations will be enforced by the European Commission (EC), which will be responsible for platforms and search engines with more than 45 million monthly users, and by the EU member states, which will be responsible for any smaller platforms.

The Digital Markets Act regulates the activities of the so-called “gatekeepers” (platforms whose dominant online position makes them difficult for users to avoid) by implementing rules that create fairer conditions for both businesses and end users.

The online platforms designated as gatekeepers will have to:

• Ensure end users can easily stop the installation of pre-loaded software;
• Allow users to unsubscribe from core platform services as easily as they can subscribe to them;
• Refrain from processing users’ data for targeted advertising without their explicit consent;
• Allow third parties to inter-operate with the gatekeeper’s own services;
• Refrain from promoting their own products or services more favorably than third parties’; and
• Allow business users to access their data in the gatekeeper’s platform, to promote their own offers and to conclude contracts with end users outside the gatekeeper’s platform.

The EC will be the sole enforcer of the rules laid down in the DMA, and will cooperate closely with the competition authorities and courts in the EU Member States. In case of non-compliance, the EC will be able to impose fines of up to 10% of the gatekeeper’s total annual turnover, or 20% in cases of repeated non-compliance. Private damages can be enforced directly in national courts.

The DSA and the DMA will enter into force 20 days after their adoption by the European Council and their publication in the Official Journal. The DSA will become applicable across the EU 15 months from its entry into force or starting January 1, 2024, whichever comes later. It will however become applicable earlier for very large online platforms – four months after they have been designated as such by the EC. The DMA will become applicable six months from its entry into force. Gatekeepers will have to comply with the DMA within six months from being designated as such.

By: Nada Milović

For more information, please contact Nada Milović at our Serbia office.

Montenegro to Join EPO on October 1, 2022

Montenegro is due to become the 39th member state of the European Patent Organisation (EPO) on October 1, 2022, after depositing its instrument of accession to the European Patent Convention (EPC) on July 15, 2022.

By adopting the Law on Ratification of the Convention on the Grant of European Patents, which entered into force in Montenegro earlier this year, the country fulfilled basic conditions for becoming a full EPO member.

It has been possible to extend European patents to Montenegro since March 1, 2010, after Montenegro signed the Co-operation and Extension Agreement with the EPO.

Prepared by: Djurdja Krivokapić

For more information, please contact montenegro@petosevic.com.

Hungarian Customs Detain Fake Apparel

The Hungarian National Tax and Customs Administration officials recently detained counterfeit apparel items and manufacturing equipment while inspecting a warehouse on the outskirts of the city Nyíregyháza in northeastern Hungary.

The goods are estimated to be worth approximately EUR 310,000 (USD 310,500).

Prepared by: Erika Farkas

For more information, please contact hungary@petosevic.com.

Who’s Who Legal Recognizes Four PETOŠEVIĆ Practitioners

The Who’s Who Legal 2022 edition was recently published recognizing four PETOŠEVIĆ practitioners:

Aura Campeanu, Head of Office – Romania – Global Leader,  Recommended for Trademarks
Slobodan Petošević, Group Executive Chairman and CEO – Global Leader,  Recommended for Trademarks
Anamarija Stančić Petrović, PETOŠEVIĆ Brussels Representative – Global Leader, Recommended for Trademarks and Copyright
Mihajlo Zatezalo, Regional Manager – Western Balkans – Global Leader,  Recommended for Trademarks

Who’s Who Legal is a widely recognized organization that identifies world’s leading legal professionals from over 150 jurisdictions in multiple areas of business law.

For more information and to read testimonials about PETOŠEVIĆ and our team, please visit our Rankings page.