The UPC - opting out

Now that the Unified Patent Court Agreement (UPCA) has entered into force, patents granted by the EPO will – by default – be subject to both the jurisdiction of the Unified Patents Court (UPC) and the relevant national courts.

Dual jurisdiction brings patentees both the opportunity for central enforcement and the risk of central revocation.

 

There is an understandable amount of caution about the UPC and for European Patents with a unitary effect (“Unitary Patents”) more generally. To assuage some of these concerns, there is a transitional period during which it is possible, for traditional European patents and European patent applications, to “opt-out” of the jurisdiction of the Unified Patent Court. The transitional period will last at least 7 years (effective from 1 June 2023), following which it may be extended for a further 7 years.

Background

Owners of European patent applications now have two main choices as to the type of patent rights they obtain once their patent application is granted.

Option one is to obtain a unitary patent. This results in a unitary patent right covering the territories of all countries which have ratified the UPCA when the request for unitary effect is registered (i.e. the countries in which the UPCA has taken effect at the date of registration of unitary effect by the EPO). These countries will be referred to in this article as “UPC-participating countries”.  In addition, the European patent can be separately validated in any countries which have not ratified the UPC agreement or have chosen not to take part in the Unitary patent system (“non UPC-participating countries”), resulting in separate classical (or “bundle”) patent rights in each of these countries.

Option two is to choose not to obtain a unitary patent. In this case, the patent owner separately validates the patent in each country in which protection is desired and obtains a separate patent right in each of these countries.  This more closely matches the system which currently operates for European patents.

What is an opt-out? Are opt-outs relevant to me?

Opt-outs are relevant to all European patents for which no Unitary patent has been obtained. This means European patent applications which are granted now the Unitary patent system has come into force, and for which option two (above) is chosen.

Thus, opt-outs are relevant to owners of all pending European patent applications.

By default, when the Unitary patent system came into effect, all already granted European patents, in each UPC-participating jurisdiction in which the European patent is validated, became subject to the shared jurisdiction of both the Unified Patent Court and the national courts of that jurisdiction, unless an opt-out was filed. This means that both the patentee and third parties will have the choice to bring litigation relating to the patent before either the UPC or before the national court of any UPC-participating country in which the patent is validated.

This default position applies also to pending European patent applications as soon as they grant, if the owner of the patent application chooses not to obtain a Unitary patent (option 2). 

An opt-out is the mechanism by which an applicant of a European Patent Application is able (during the transitional period) to withdraw their patent or application from the jurisdiction of the Unified Patent Court. As noted above, it is only possible to file an opt-out for European applications that do not have a unitary effect. For unitary patents, the UPC will always have sole jurisdiction.

What is the effect of filing an opt-out?

If an opt-out is filed, then the European Patent will be treated as a “traditional” (or “bundle”) European patent, meaning that litigation in relation to the European patent will fall under the exclusive competence of the national courts of the countries in which the patent is validated, both for UPC-participating countries and non UPC-participating countries.

When can an opt-out be filed?

Opt-outs can be filed for any published European patent application up to the time of grant. Once a Unitary Patent is granted, it cannot be opted-out.

It is also to be noted that opt-outs are only an option during the transitional period. At present, it is planned that opt-outs can be filed up until “one month before expiry of the transitional period” (Article 83 (3) UPCA). The transitional period will last for at least seven years from the date of entry into force of the Agreement (Article 83 (1) UPCA); i.e., 1 June 2023. It is possible that this transitional period may be extended.

Can I withdraw an opt-out?

Yes, it is possible to opt back into the jurisdiction of the Unified Patent Court by withdrawing the opt-out (Article 83(4) UPCA).  However, this is only possible provided that no litigation relating to the European patent has been brought before a national court of any UPC-participating country. Once any such litigation has been started, the option to withdraw the opt-out is irrevocably lost.

Furthermore, it is to be noted that it is only possible to opt out once (Rule 5(10) RoP UPC). Thus, if you have previously opted-out, but subsequently chosen to opt-in, you will not be permitted to opt-out again.

How do I lodge an opt-out?

An opt-out is requested by lodging an application to opt-out with the Registry of the UPC.

An electronic case management system has been created, and all applications to opt-out must be filed electronically through this system.

When will the opt-out take effect?

The Registrar of the UPC will enter the Application to opt out in the Register as soon as practicable.

If the request meets all requirements of the Rules, it will be deemed to take effect upon the date of entry in the register.

Who is eligible to lodge an opt-out?

The proprietor of a granted European patent or the applicant of a pending European patent application may lodge the application to opt out. Their registered representative may also lodge the application on their behalf.

If there is more than one applicant or more than one proprietor, all must lodge the application to opt out.

If a European patent has different owners in different jurisdictions in which it is validated, all owners must lodge the application to opt-out together, including owners of parts of the European patent covering non-UPC participating jurisdictions (Rule 5.1(a) RoP UPC).

For a granted European patent, the application to opt-out must be made wholesale in respect of all UPC-participating countries in which the European patent is validated; an opt-out cannot be filed in respect of only a subset of countries.

If an application or patent has been assigned to a new owner, the new owner may lodge an application to opt-out even before it has been recorded in the register of the European patent office or relevant national state register(s) as the new owner (Rule 5.1(a) RoP UPC), provided that a declaration is filed by the new owner that they are entitled to be registered as the owner (Rule 5.3(e) and Rule 8.5 RoP UPC).

An opt-out illegitimately lodged by an owner can be challenged on the grounds that it is an unauthorized opt out.

All of the above applies correspondingly to applications to withdraw an opt-out.

How can an unauthorized application to opt-out or application to withdraw an opt-out be challenged?

The applicant of a patent application or proprietor of a patent may lodge an application to remove entry of an unauthorized application to opt out or an unauthorized application to withdraw an opt-out (Rule 5A RoP UPC).

If you have any questions about opting out your patents from the jurisdiction of the UPC, or about the UPC more generally, please get in touch with us at elkfife@elkfife.com – we will be happy to advise you.