- Owners of European patent rights (both pending and granted patents) need to decide, in respect of each right individually, whether to opt out of the Unified Patent Court ("UPC") system.
- If a patent is not opted out of the UPC system, that patent can in future be asserted in respect of multiple countries in a single court proceeding. Equally, however, the patent can be invalidated in a single proceeding.
- Opting out preserves the status quo of national jurisdiction, but an opted-out patent cannot take advantage of the centralised benefits of the UPC system.
What is the opt-out?
The UPC opens for business on 1 June 2023. At that point, European patent rights (including patent rights resulting from the validation of a patent granted by the European Patent Office) will, by default, become subject to the authority of the UPC (in parallel with national court jurisdiction) in a large number of EU Member States.
However, any European patent right can be opted out of the UPC, and then will remain only under national jurisdiction, for its lifetime (see How does the opt-out work?).
Can I request an opt-out now?
There is a “sunrise period” operating from 1 March 2023 until the UPC opens, during which opt-out requests can be filed. These opt-out requests will take legal effect when the UPC opens. We recommend getting requests in as soon as possible to avoid last-minute rushes.
Why opt out?
Using the UPC, a third party can, via a single revocation proceeding, seek to revoke the patent in all UPC Participating States in which the patent is in force. Opting out therefore prevents a third party from revoking your patent for multiple countries in a single proceeding – anyone seeking to challenge your European patent will either have to do so within 9 months of grant using the continuing European Patent Office’s Opposition process or, thereafter, apply to individual national courts, as is currently the case.
Why might I not opt out?
The UPC will enable you to assert your patent in multiple EU Member States in a single court proceeding. This possibility is not available for an opted-out patent.
For any application that grants after 1 June 2023 that is not opted out, you will be entitled to a Unitary Patent. This may be a cost-effective option when considering renewal fees.
What is the latest date for opt out?
The possibility to opt-out will remain in place for at least seven years after the UPC opens. This is the so-called "Transition Period" and it may be extended.
For a given patent right, an opt-out can only happen if no UPC proceeding has been started in respect of that patent right. Even if an attempt at revocation at the UPC is unsuccessful, that patent cannot then be opted out. Therefore, while it is possible to opt-out after the UPC opens on 1 June 2023, we recommend that if you decide to opt out any rights (particularly granted patents), this should be done during the sunrise period.
Can I change my mind?
An opt-out can be reversed by withdrawing the opt-out. However, this option will not be available if a patent has been litigated nationally. Also, be aware that withdrawal of opt-out can only be done once, so if you opt out a patent and then opt it back in, the patent cannot be opted out again.
Similarly, if you decide now not to opt-out, it will not be possible to apply to opt-out a patent if a UPC proceeding has been started in respect of that patent right.
Do I need to decide now for my entire portfolio?
In view of the opportunities and risks that are set out above, we recommend reviewing your European patent portfolio and filing any opt-out requests during the sunrise period. It is more critical to make this decision in respect of granted patents because of the immediate risk mentioned above. For pending applications, the decision can be deferred right up until grant with little risk, because it is not generally possible to litigate a patent before grant.
You do not have to take the same approach for all of your European portfolio: you could consider a mixed approach, in which only a part of your portfolio is opted-out, and the rest are left within the remit of the UPC. Ultimately, though, you could opt out all, some, or none of your European patent rights.