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UPC opt-out or stay
UPC: opt-out or stay?
2022 06 22

After many years of difficulties, the unitary patent (UP) and Unified Patent Court (UPC) becomes a reality. This will definitely bring some changes in the European patent system. Now is already the time to start preparing.

 

Within the next few months, the owners of European patents will need to review their patents portfolios. They will also make key decisions whether to opt-out from the jurisdiction of the new court. If so, for which patents.

 

“Sunrise period” of UPC

On 18 January 2022, Austria deposited its instrument of ratification of the Protocol on Provisional Application of the UPC Agreement. It became the 13th member country that ratified this Protocol. This last ratification allowed the provisional application period (PAP) with its technical and infrastructural preparations to begin from 19 January 2022. The provisional application period will last about eight months. When it is clear that the Court is functional, Germany will deposit its instrument of ratification of the UPCA. The „sunrise period“ will start. That will be a safe time to opt-out before the UPC becomes operative. This period will last for three to four months.

 

What is opt-out?

 

UPC will have jurisdiction over all European patent applications. That is European patents (current and future) that have ratified the UPC Agreement and supplementary protection certificates (SPCs).

 

Before the end of the seven years transitional period, European patents, their applications and SPCs can opt-out. You can extend the period to 14 years (Article 83 of the UPC Agreement). Opting out removes jurisdiction from the UPC. Then European patent applications, granted and validated European patents, SPC’s revoke in separate actions in the national courts.

 

It is worth mentioning that unitary patents are always subject to the jurisdiction of the UPC. You cannot opt-out from them.

 

2 options: opt-out or stay

 

Proprietors of each European patent have two options:

 

  1. Do nothing. This way, their European patents will fall under the jurisdiction of the UPC, and the UPC will have joint jurisdiction over European patent, together with the national courts.
  2. Opt-out of the UPC.

 

Should I opt-out from UPC or should I stay?

Avoiding UPC revocation action

The most important reason to opt-out would be to avoid a UPC revocation action. If you bring one action before the UPC’s Central Division, it could lead to the revocation of the patent. It would take place in all countries of UPC that validate the patent.

 

An opt-out is a declaration. It states that a patent owner does not want his European Patent under the jurisdiction of the UPC. Opt-out request removes the risk of central revocation. Only national courts can litigate a patent that opts-out and any (SPC) based on it. They validate in separate actions.

 

 

How predictable is the brand new UPC?

Another reason to consider opt-out is the unpredictability of the new UPC system. No one knows how the UPC will function in practice. Judges of UPC will be new and it will be a lack of case law. Additionally, there is uncertainty in forecasting costs, time, and outcomes of litigation.

 

On the other hand, if the patent owner is the one initiating litigation, then staying within the jurisdiction of the UPC may be advantageous. However, opting-out the patent is not a permanent decision. Patent proprietors can opt back into the UPC if they want. An opted-out European patent could “opt in” to the UPC later. You can do that by withdrawing the original opt-out. It works as long as proceedings relating to the European Patent have not started in any national court.

 

UPC opt-out or stay: Conclusion

There is no single solution and several factors to consider in deciding whether to opt-out of the UPC for European Patents. Still, one of the tactics is to file opting out requests for all patents at least in the initial few years of the system coming into effect. Or, at very least, for those patents of relatively high value. Then, if the patent owner wishes to, enforce a EP in the UPC- opt-in immediately before filing an action in UPC.

 

What else should I consider and how should I prepare?

 

You have to indicate the number of the patent or patent application to be opted out and the proprietor of the patent or patent application in opt-out request. Moreover, you need to indicate the actual proprietor of the patent or patent application. Proprietors should check if they registered their EPs with the correct details. That is because it may not be the current proprietor in the official register. If the opt-out request is made in the wrong name, the opt-out request may be invalid. Then the patent can still face an attack and revocation in UPC.

 

If a European patent belongs to several owners, it can only be opted out of the jurisdiction of the UPC if all the owners agree to the opt-out. So it is essential to contact other co-owners as soon as possible and receive their opinion about opt-out. If op-out is desired, collect required documentation and prepare a jointly signed authorization for the person who will submit the opt-out application.

 

No possibility to opt-out

Opting-out is not possible if some action is already brought before the UPC. Thus, it would be recommended to file opt-out requests during the sunrise period. This period would grant patent owners time to opt-out before competitors have the chance to initiate a revocation action before the UPC.

 

It is quite a lot of preparatory work before the UPC comes into force, so we advise that patentees begin preparing for the sunrise period now. Patent holders should review their patent portfolios before the sunrise period starts to ensure that there is sufficient time to conduct the review, carefully examine proprietorship status, deal with any queries that are raised, and make relevant decisions.

 

UPC opt-out or stay: Contact us

Our European patent attorneys, patent attorneys, and lawyers have experience in prosecution and litigation. They are ready to help regarding opt-out requests or any other UP/UPC service.

 

 

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