On June 1, 2023, the new patent system for the unitary protection of inventions in the EU was launched. Companies can now apply for patent applications with unitary effect in currently 17 participating EU countries (EPC states). In addition, patent disputes based on ordinary European patents and Unitary Patents can now be conducted in a centralized manner before the Unified Patent Court. it is already becoming apparent that the new patent system will offer far-reaching opportunities for the medical devices industry as well.
In the field of medical technology, the protection of innovation is key. Research and development incur high costs, which are likely to have risen even further recently due to the mandatory requirements of the Medical Devices Regulation (VO (EU) 2017/745). Therefore, it is all the more important for innovative companies in the sector to be able to protect their valuable inventions and, if necessary, successfully enforce them against competitors.
Until now, European patents could only be validated and maintained individually in the desired member states. Depending on the number of states, the cost of validating a patent can quickly add up over the years. Similar to the centralized CE marking, with the unitary patent, uniform protection for all 17 participating EU countries can now be achieved simultaneously in the EPG states with just one application. This can lead to significant savings in terms of validation costs. In addition, European patents can still be applied for and granted in the EU countries not participating in the unitary patent system. The same applies to the 17 EPC states. For companies seeking patent protection, the selection spectrum has thus become significantly broader.
The Unified Patent Court has also opened up another strategic option for patent litigation in Europe. Classic European patents that have not been withdrawn from the jurisdiction of the new court by their owner and unitary patents can now each be enforced or challenged in one proceeding with equal effect for several European countries. For patent owners, this offers an efficient way to quickly enforce their claims across countries.
Sharp rise in patent applications in medical technology.
A look at the figures shows just how much potential the new patent system holds for the industry: The number of patent applications in the field of medical technology has risen significantly in recent years - by a full 50% since 2010.
With 15,321 European patent applications in 2021 (source: European Patent Office, as of July 26, 2023), the medical technology sector ranks second among the technology sectors with the highest number of applications, directly after the digital communications sector with 15,400 applications.
The German medical technology sector, which most recently generated more than 40 percent of industry sales in the EU (source: "The German Medical Technology Industry," SPECTARIS Yearbook 2022/2023), recorded the second strongest growth in European patent applications (plus 8.1% in 2021 compared to 2020).
In view of the high filing figures, it is likely that patent disputes in the medical technology sector will continue to be fought out frequently in Europe in the future.
New court already attracting proceedings
The new Unified Patent Court is expected to grow rapidly in importance given the advantages it offers companies. Just a few weeks after its launch, companies from the medical technology sector have already filed actions with the Unified Patent Court. Of a total of 29 publicly registered cases, five are from the medical technology sector (as of July 31, 2023). In particular, the German local chamber in Munich, where three of the five lawsuits were filed, is a popular port of call for companies in the medical technology sector.
The global patent dispute between DexCom Inc. and various Abbott Group companies, which was initially filed in both the U.S., U.K. and Germany and is now expanding to the Unified Patent Court, could generate a lot of interest. According to the court record, DexCom has filed two infringement suits against Abbott before local chambers in Paris and Munich, each with an amount in dispute estimated by the plaintiff at €4 million. In this case, the parties are litigating on the basis of two European patents (EP 3 797 685 and EP 3 435 866) that protect certain technologies that can be used for glucose monitoring devices.
High amounts in dispute in the medical technology sector
The amounts in dispute in the medical technology cases already pending before the Unified Patent Court are also not insignificant. The value in dispute in two main proceedings brought by Edwards Lifesciences Corporation for EP 2 628 464 ("Prosthetic valve") and EP 3 646 825 ("A system comprising a prosthetic valve and a delivery catheter") each amounts to €8 million.
With an average value in dispute of EUR 4 million for the five proceedings registered to date, medical technology is the technical field with the second highest average value in dispute.
Only in the field of biotechnology and pharmaceuticals (bio/pharm) have higher median amounts in dispute been reported (€7.5 million). Medical technology is followed by electrical engineering (median €1.0 million) and mechanical engineering (median €1.4 million). The highest amounts in dispute to date, €100 million each, were reported for lawsuits between companies of the Sanofi Group, Regeneron Pharmaceuticals Inc. and Amgen Inc. by EP 3 666 797 ("Antigen binding proteins to proprotein convertase subtilisin kexin type 9 (PCSK9)"). Such high amounts in dispute can probably be explained above all by the fact that the Unified Patent Court is able to decide for more than just one country.
In view of the large territorial scope, disputes before the Unified Patent Court can therefore have extremely high economic relevance for the parties concerned. Companies should therefore already decide when filing their future patent applications whether or not they want to go before the new court. While the patent proprietor of classical European patents has a choice - depending on the individual circumstances of the case - during the (renewable) seven-year transitional period whether to enforce these patents in the new system or not, there is no such choice for unitary patents. The latter can only be enforced before the new court and can only be challenged there by way of an action for nullity.
The decision on the type of patent application is therefore likely to depend essentially on how many strategic options the applicant wishes to keep open in case of doubt. In this context, European patents have the advantage that, once they have been withdrawn from the jurisdiction of the Unified Patent Court, they can also be reintroduced under certain conditions. Depending on the individual case, this can result in strategically valuable options.
High economic importance requires appropriate preparation
Against the background of the booming German medical technology market and the steadily increasing number of patent applications, the new court system offers new opportunities for the medical technology industry. On the one hand, it is characterized by its large territorial reach. On the other hand, proceedings can be conducted quite quickly there. For example, infringement proceedings in the first instance could be concluded within 12 to 14 months, even if the court has to rule on the legal status of the patent in dispute at the same time in the case of an invalidity counterclaim. This offers opportunities for rapid cross-border conflict resolution. Many different national proceedings, which can sometimes lead to divergent decisions in the individual jurisdictions, are thus avoided.
In cases of particular urgency, temporary injunctions can also be applied for. These often play a role if, for example, patent infringements are imminent in the context of trade fair appearances and rapid action is required to prevent such infringements. The new court can issue such injunctions not only within a very short time, but also without hearing the affected party in advance. And the enforcement of titles is also to be made easier. In the future, the prevailing party will only have to enforce a single title, which will apply equally to the various EPC states for which the patent was asserted.
In view of these advantages, it is not surprising that the first proceedings are already pending before the new court. The number of proceedings suggests that the court will enjoy increasing popularity in the future. Medical technology manufacturers should therefore familiarize themselves with the new system - if they have not already done so - so that they can make the best possible use of it when it comes to securing their own market position. The main thing here is to prepare the legal arguments thoroughly and have the necessary evidence to hand. This is because, in view of the speed with which proceedings are conducted, the parties' deadlines for submitting briefs are extremely short. It is also important to know the legal basis in order to avoid pitfalls and to conduct proceedings successfully.
