After many years of difficulties, the unitary patent (UP) and Unified Patent Court (UPC) will become a reality. This will definitely bring some changes in the European patent system, so now is already a time to start preparing.
Within the next few months, the owners of European patents will need to review their patents portfolios and make key decisions whether to opt-out from the jurisdiction of the new court and, if so, for which patents.
On 18 January 2022, Austria deposited its instrument of ratification of the Protocol on Provisional Application of the UPC Agreement and became the 13th member country that ratified this Protocol. This last ratification allowed the provisional application period (PAP) to begin from 19 January 2022. During the PAP, the technical and infrastructural preparations for the UPC will be made. The provisional application period is expected to last about eight months. When it is clear that the Court is functional, Germany will deposit its instrument of ratification of the UPCA, and the „sunrise period“ will start.
„Sunrise period“ will be a safe time of period during which applications to opt-out can be made 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: European patents (current and future) validated to participating EU Member States which have ratified the UPC Agreement and supplementary protection certificates (SPCs).
Article 83 of the UPC Agreement states that before the end of the seven years (which could be extended to 14 years) transitional period of the UPC, European patents, European patent applications, SPCs can be opted out from the jurisdiction of UPC. Opting out removes jurisdiction from the UPC and European patent applications, granted and validated European patents, SPC’s are revoked in separate actions in the national courts in the way they are revoked now.
Here it is worth mentioning that unitary patents are always subject to the jurisdiction of the UPC and cannot be opted-out.
Should I opt-out?
Proprietors of each European patent have two options:
- Do nothing (in 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.
The most important reason to opt-out would be to avoid a UPC revocation action. One action brought before the UPC’s Central Division could lead to the revocation of the patent in all countries of UPC where the patent is validated.
An opt-out is a declaration which states that patent owner does not want that his European Patent would be under the jurisdiction of the UPC. Opt-out request removes the risk of central revocation. The opted-out patent, and any (SPC) based on it, can be litigated only in the national courts where it has been validated in separate actions in the way it is done now.
Another reason why patent owners would consider opt-out possibility 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 also 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 will be able to opt back into the UPC if they have a change of mind. A European patent that has been opted out could “opted in” to the UPC later by withdrawing the original opt-out, as long as proceedings relating to the European Patent have not been started in any national court.
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 could be to file opting out requests for all patents (or at very least for those of relatively high value) at least in the initial few years of the system coming into effect, 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 be considered and prepared?
It will be required 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. It will be needed to indicate the actual proprietor of the patent or patent application however it may be situations where it may not be the proprietor currently named in the official register. Proprietors should check if their EPs are registered with the correct details. If the opt-out request is made in the wrong name, the opt-out request may be invalid, and the patent can still be attacked and revoked centrally 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.
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.
