As recently reported, the Unified Patent Court (UPC) will likely soon come into being and will provide a new legal forum in Europe for infringement and validity proceedings. Whilst it may be intuitive that the newly created Unitary Patent (which will become available at the same time as the UPC) should fall within the jurisdiction of the new Court, it may come as a surprise to some that European patents that have been ‘classically' validated in UPC member states should also fall within the competence of the UPC.

However, while the UPC will be the only available forum for unitary patents, patent proprietors will be able to choose whether to keep their bundles of classically validated European patents within the exclusive competence of the national European courts (opting out of the UPC), or allow them to fall within the jurisdiction of the UPC (‘opting in' to the UPC).

It is anticipated that the UPC will finally open its doors in late 2022 or early 2023. However, patent proprietors should start thinking now about whether they wish their existing validations of granted European patents to fall within the jurisdiction of the UPC or, alternatively, if they wish to opt out their patents. For those proprietors who wish to opt out, now is also the time to consider what practical steps they need to be taking in order to do so.

Why opt out?

For a transition period (of 7 years, extendible to 14) after the UPC comes into effect, European patents validated in UPC member states will fall within the competence of both the UPC and the national courts. This means that patent proprietors and challengers will have a new choice of forum for bringing infringement or validity actions.

Since the UPC provides a central forum for European patents across all participating member states, its availability provides unique advantages and disadvantages. For example, central litigation may mean reduced costs as compared to pursuing multiple actions across different European countries. On the other hand, the same centralisation brings with it the risk of a central revocation of a bundle of national patent rights derived from a European patent following a single validity challenge at the UPC.

Patent proprietors may understandably be reluctant to expose their valuable properties to a new and untested court. To maintain a degree of certainty, patentees may wish to take steps to opt out patents from the UPC system. By opting out a European patent, all national parts of that Patent will be removed from the competence of the UPC; national courts will instead retain exclusive competence over the respective national parts of that opted out patent (i.e. in the same manner as for the current system for European patents).

Opting out – the practicalities

It should be noted that when the UPC comes into effect, European Patents are not opted out by default - an explicit request must be made. It will be possible to file this request online. Whilst bulk opt-out of large numbers of rights in a single process is possible, it is advisable for dedicated software (that is currently in development) to be used to do so safely. Below are some important practicalities to consider:

When the opt out can be filed

The opt out can be filed during the transition period, and prior to one month before the expiry of that transition period. Additionally, the opt out can be filed before the transition period, during the “sunrise period”. This is a period lasting about 3 – 4 months immediately before the UPC comes into effect. The sunrise period will begin as soon as Germany deposits its instrument of ratification, which is likely to be in late 2022.

It is important to note that if a European patent that has not been opted out becomes the subject of an action before the UPC, that European patent can no longer be opted out. The draft Rules of Procedure require that opt outs be entered onto a UPC register before they become effective, and also that entry onto that register will follow some form of examination of formal requirements. Therefore, if opt outs are desired, it is strongly recommended that requests be filed early in the sunrise period to ensure the opt outs are on the register (and thus in effect) by the time the UPC enters into force.

Content of the opt out request

The opt out needs to identify the number of the patent or patent application to be opted out, as well as the proprietor of the patent or patent application.

Importantly, this must be the actual proprietor of the patent or patent application, which may or may not be the proprietor currently named on the official register(s). If an opt out is filed in the name of a non-entitled proprietor, then that opt out may later be deemed invalid and the patent vulnerable to a central revocation action before the UPC.

Who can file the opt out

Proprietors can file the opt outs themselves, or they can do so through a representative (e.g. a European Patent Attorney). Marks & Clerk LLP will be able to assist you in preparing the necessary documentation and filing all opt outs on your behalf.

Duration of the opt out

An opt out, once registered, will last for the entire lifetime of the patent (even after the expiry of the transition period).

However, patent proprietors will be able to opt back into the UPC if they have a change of mind. This is done by explicitly withdrawing the opt out. However, this withdrawal is not possible if an action has been taken in a national court, and if the opt out is withdrawn, it is not possible to opt out again.

Preparing for the sunrise period

While there is still much preparatory work to do before the UPC comes into force, we advise that patentees begin preparing for the sunrise period now.

This is for at least the reason that many patentees are likely to want to opt-out their patents during the sunrise period. We can therefore expect a high volume of opt-out requests being filed and processed during this time.

In order to safeguard against potential administrative and technical delays, we recommend that patentees begin their opt out preparations as soon as possible with the aim of prompt filing of opt out applications as soon as the sunrise period begins.

Importantly, these preparations should include:

  1. conducting reviews of existing portfolios and identifying which properties are to be opted
  2. carefully examination of proprietorship status, and confirming any chain of title, for properties to be opted out.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.