Potential market size for Unitary Patents is 25% larger than for US patents and 90% larger than for traditional European patents
As you might already know, a European patent application is examined by the European Patent Office (EPO). If a patent is granted, it does not result in a patent that is valid in the whole of Europe. Instead, the patentee needs to validate the patent in each state where protection is to be obtained, resulting in a bundle of national patents. This of course means several fees to be paid to the national patent offices, costs for translations of the patent text, and in some cases a need to use different national agents. In addition to this, each national patent has to be renewed annually.
Due to the costs involved, many patentees choose to protect their innovation in just a few countries, maybe four or five, leaving their innovation completely unprotected in the rest of Europe and available for exploitation by their competitors.
In the Unitary Patent system, which will hopefully be up and running at the beginning of 2017, the patent application is still examined by the EPO. If a patent is granted and unitary effect is requested, the patent becomes a true European patent. The term unitary effect means that the patent is valid in all participating member states. Presently, approximately 25 states have undertaken to join the Unitary Patent.
Looking at the potential market sizes for a US patent, a traditional European patent and a Unitary Patent, it is interesting to compare populations. The three most common states in which a traditional European patent is validated are France, Germany, and United Kingdom, which in total have a population of about 210 million (1). The US has about 320 million inhabitants, while the member states of the Unitary Patent have a total population of 400 million. In other words, a Unitary Patent may provide an exclusive right to an innovation on a 25% larger market than a US patent and a 90% larger market than a traditional European patent.
1 International Monetary Fund, 2014