What is the Unified Patent Court Opt-Out?

The Unified Patent Court Opt-Out

The new Unitary Patent system commenced on 1 June 2023 and with it came the Unified Patent Court (UPC) which has sole jurisdiction over Unitary Patents, at least for infringement and revocation actions. However, the UPC will for some years also have jurisdiction over many pre-existing and new European patents which have not been registered as Unitary Patents, unless the patent proprietor chooses to opt-out. In this article we discuss the opt-out, its effect and how to opt-out and withdraw the opt-out, and in a separate article we discuss the related question of whether to opt-out of the UPC.

The transitional period

A Unitary Patent covers various EU countries (currently 18 countries, the largest of which are France, Germany and Italy) and can be obtained by completing the European patent application procedure and then registering a granted European patent as a Unitary Patent. However, there are many pre-existing European patents covering the participating UPC countries which are not registered as Unitary Patents, and many more will be created as some applicants will anyway choose not to register a Unitary Patent but instead to validate their patent in some individual UPC countries (for example to validate their patent in France and Germany).

In time, the UPC will also take over jurisdiction from the national courts (e.g. the French Courts, the German courts) for these 'classical' European patents in the UPC countries. However, during an initial transitional period of 7 years - potentially to be extended to 14 years - both the national courts of the UPC countries (e.g. the French Courts, the German courts) and the UPC have jurisdiction for European patents in the UPC countries. This means that many European patents may be vulnerable to validity challenges in the newly created Unified Patent Court. Therefore, an opt-out is provided to enable patent proprietors to opt their pre-existing and new European patents out of the jurisdiction of the UPC. The facility to opt-out was available from the beginning of a 'sunrise period' before the UPC came into existence and will continue to be until the end of the 7 or 14 year transitional period. Patents which are opted out by the end of the transitional period may remain opted out for the rest of their terms. Thus, the proprietors of existing European patents, and European patents granted until the end of the transitional period may avoid the jurisdiction of the UPC should they wish to do so.

To be clear, this does not apply to European patents outside the UPC countries (e.g. in the UK, Switzerland or Spain) where only the national courts (e.g. the UK courts, the Swiss courts, the Spanish courts) retain jurisdiction nor to Unitary Patents, for which only the UPC has jurisdiction. This applies to existing and new European patents which designate one or more of the UPC countries (e.g. France, Germany, Italy, etc).

Opting out

In order to opt a European patent application out of the jurisdiction of the UPC, an application must be made to the UPC (not the European Patent Office). For the majority of cases this will be a fairly simple process involving the filing of a form. Nevertheless, there are some practical issues and exceptions. Applications to opt out will be examined and will not always be successful.

Firstly, it is not possible to opt a patent out if litigation of any type has commenced before the UPC.

Secondly, the opt out must be filed on behalf of the proprietor or proprietors of the European patent. If a patent has been transferred by the original proprietor (or joint proprietors), for example assigned, then the opt out must be filed on behalf of the new proprietor(s). However, the European patent register will likely not show the new proprietor(s), because it can only be updated for a limited period after grant and if that is the case a declaration must also be filed along with the form. If there are joint proprietors then they all must agree to the opt-out and they must appoint a common representative to do so. These issues may cause significant difficulties for some applicants and there is a risk of delay or of an opt-out not being valid. Accordingly, for any case where there are joint proprietors or there has been an unrecorded assignment, efforts to prepare for filing an opt out should be made well in advance.

Note that it is the patent proprietor(s) who must file a request for opt out. Licensees, even exclusive licensees, do not have the right to do so and must ask (or potentially demand, depending on the contractual position) the patent proprietors to approve the opt out. There is some risk of opt outs being filed by parties who are not authorised to do so.

Opt outs must relate to all European patent convention states for which a patent is granted (or which are designated in the case of a pending application). An opt out may be filed for a granted European patent or for a pending European patent application, before grant (although if an application is then registered as a Unitary Patent the opt out will be cancelled - Unitary Patents cannot be opted out).

If there is a supplementary patent certificate relating to the European patent, it should be listed in the application to opt out.

Withdrawing an opt out

Once filed, an application to withdraw the opt out may be filed at any time with the UPC provided that the patent has not been subject to any litigation in the national courts of participating countries.

It is expected that some patent proprietors will wish to opt their patents out of the jurisdiction of the UPC to avoid revocation actions being filed by third parties but that they may wish to use the UPC for enforcement. In this case, they may simply withdraw their opt out just before the filing of an infringement action.

An opt out may only be filed once

Once an opt out has been withdrawn, then a patent cannot be opted out for a second time. Patent proprietors do therefore have to think carefully before opting out or withdrawing their opt out.

Challenging an opt out or its withdrawal

The UPC rules of procedure specify that the proprietor of a patent (or applicant for a pending application) may file an objection to an unauthorised opt out or withdrawal of opt out. The UPC Registrar will decide the matter and their decision may be appealed.

If you have any questions about the UPC opt out or European patents generally please do not hesitate to contact us.