Whether or not to opt out of the competence of the unified patent court: another issue for european patent owners

The Unified Patent Court will have exclusive competence for all European patents, as well as for supplementary protection certificates (SPCs) granted for a product protected by a European patent. If this exclusive competence is obligatory for European patents with unitary effect, it will be possible, during a transitional period, to opt out of the UPC’s exclusive competence for European patents not benefiting from the unitary effect. European patent owners should therefore start thinking about their opt-out strategy now.

Paris, April 1, 2022 – The Unified Patent Court (UPC) will come into force at the same time as the European patent with unitary effect that we have mentioned in previous articles1 .

This new jurisdiction will have exclusive competence for all European patents, as well as for supplementary protection certificates (SPCs) granted for a product protected by a European patent.
If this exclusive competence is obligatory for European patents with unitary effect, it will be possible, during a transitional period, to opt out of the UPC’s exclusive competence for European patents not benefiting from the unitary effect.

European patent owners should therefore start thinking about their opt-out strategy now.

What is at stake?

In the absence of an opt-out, litigation concerning a European patent, including infringement actions and invalidity actions, will have to be brought before the UPC.

The decisions rendered by the UCP will have effect on the entire territory of the participating Member States2 .

An action before the UPC should therefore be particularly advantageous for patent owners facing infringement in several participating Member States, since it will replace several parallel national actions that may have divergent results.

Conversely, if the European patent is invalidated as a result of an invalidity action, the owner will lose protection throughout the territory of the participating Member States.
It is therefore important to weigh the benefits and risks associated with the UPC’s competence over your European patent portfolio.

Some patent owners may choose to remove their European patents from the competence of the UPC until they have some visibility on the functioning of the UPC and the case law.
Once an opt-out has been registered, disputes must be brought before the competent national courts.

Which patents are concerned?

  • The following titles benefit from the possibility to opt out:
  • European patents that do not benefit from the unitary effect,
  • SPCs issued for a product protected by a European patent that does not benefit from unitary effect,
  • published European patent applications, provided that no action has already been initiated before the UPC.

A decision to opt out of the UPC’s competence for a European patent will necessarily apply to the SPC resulting from that patent. Conversely, a SPC cannot be opted-out if the patent from which it derives has not been opted-out.

When to register the opt-out?

It will be possible to notify a decision to opt out as early as 3 months before the entry into force of the Agreement, called the “sunrise period”, which could begin as of July 1st, 2022. 

The opt-out shall be notified up to 1 month before the end of a transitional period which shall last at least 7 years from the entry into force of the Agreement.

The opt-out will then be valid for the life of the patent, unless the owner later withdraws it, as explained below.

How to register the opt-out?

The opt-out must be notified to the Registry of the UPC, using an electronic form. It will not be subject to the payment of a fee.

Only the patent owner may notify the opt-out. In case of joint ownership, the notification must be presented by all the owners. Furthermore, in the case where a SPC and the European patent from which it derives do not have the same owners, the notification of the derogation for the SPC will have to be presented by the owner of the European patent and the owner of the SPC.

It should be noted that the Registry will not check whether the person notifying the opt-out is the real owner of the patent. In case of error, it will be possible to request a correction but this will lead to a new registration date of the opt-out, if no action before the UPC has been initiated by that date.

Is it possible to withdraw the opt-out?

The owner may withdraw the opt-out at any time, provided that no action has been brought before a national court on the basis of the European patent in question. 

This withdrawal is final: it will no longer be possible to opt out from the exclusive competence of the UPC.

What strategy to adopt?

Choosing not to opt-out from the exclusive competence of the UPC is to have confidence in this new jurisdiction.

As confidence is generally acquired with time, it would be understandable that some patent owners choose this exemption, in particular for their strategic patents, while the UPC makes its first decisions.

Undoubtedly, applicants should look at their existing portfolio and take advantage of the “sunrise period” to file an opt-out for their patents for which it is not possible to put in the hands of a totally new jurisdiction their validity in all countries.

Other strategies can be implemented in parallel for patent applications not yet granted, such as taking advantage of the coexistence of a European patent and its national priority (French for example), or filing one or more divisional applications, each divisional application and the parent application being able to be opted-out of the exclusive competence of the UPC or not.

Regimbeau’s teams are at your disposal to advise you in these strategic choices.

1 To date, the Agreement on a Unified Patent Court is scheduled to enter into force on October 1st, 2022.
2 On the date of entry into force, the participating Member States will be 17: Austria, Germany, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Italy, Luxembourg, Malta, the Netherlands, Portugal, Sweden, Lithuania, Latvia, Slovenia

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