Many companies in Europe are embracing the concept of the Unified Patent Court but drugmakers, while positive, are not rushing in to opt-in patents on their big products just yet.

That is one of the key points made in research published by international legal practice Allen & Overy which demonstrates “surprising support” for the UPC. Once it comes into force, it will be possible to obtain a European patent ensuring uniform protection for an invention across 25 member states on a one-stop shop basis.

The Allen & Overy report, which is based on the views of 152 respondents, notes that “despite the faltering reception [it] has received from companies across the globe, its impact is likely to be significant”. The UPC will offer patentees “the ability to obtain broader remedies than those currently on offer in the USA, with a larger customer base impacted and injunctions that are easier, cheaper and quicker to obtain”. Costs are estimated to be at least five times lower than in the USA.

The lawyers argue that these advantages alone mean there is likely to be a shift towards the UPC “as a forum of choice to rival the USA for major patent disputes”. This is further supported by the majority of respondents indicating they will file unitary patents, as opposed to classic European or national patents, under the new system.

Almost three-quarters (74%) of those responsible for overseeing preparations for the new system expect it to be positive for their company, the report notes, and only 15% think it will have negative consequences. On whether to opt in or out of the new system during its seven-year transition period, the majority of respondents are undecided on the bulk of their portfolio (68% on average).

Close to half (49%) said they would definitely opt in at least some of their patents, while only 15% say they would definitely opt out some. Where businesses have made a decision to opt in, about 24% of their portfolio on average, they are deciding to opt in their most valuable, or crown jewel, patents.

However, the Allen & Overy report does note only 13% of those responsible for preparations say their senior management “are fully engaged on the issue and appreciate the potential implications”. One consequence could see businesses “lose exclusivity for their products, or worse still, have their business or products locked out of the entire continent”.

Life sciences view

In terms of the 48 life sciences respondents, 75% think the UPC will benefit their company, as opposed to 8% who think not. In terms of the biggest challenges, 79% say getting clear answers about how the new system will work in practice and 63% are concerned  about getting enough resource internally to audit their patent portfolios.

Nicola Dagg, global head of IP litigation at Allen & Overy, said the survey shows that Europe’s UPC “is likely to be a forum of choice to rival the USA for major patent disputes”. She told PharmaTimes that she appreciates drugmakers “may be more conservative on opting-in their key patents for blockbuster products, at least initially. They won’t want to put these very high value patents at risk whilst uncertainties remain in the new system”.

However, Ms Dagg added that “they may find that their competitors drag them into the UPC and they need to prepare for that scenario. Life sciences companies, like our other interviewees, generally expect that the new system will be positive for them and appreciate that they need to engage strategically with the changes now”.