The UPC - Nessie's Court

Posted on 4 April 2022

Nessie, our very own Loch Ness monster, has decided to apply to be a judge at the Unified Patent Court (UPC).

Where will you want to litigate your EP patents once her new court, the Unified Patent Court, opens? It is clear that all EP patents with unitary effect (unitary patents) will be litigated in the UPC. But what about those classic bundle EP patents?

Prior to any opt-out, infringement and revocation actions of classic bundle EP patents can be brought before national courts and before the UPC (shared competence) under Art 83(1) of the Unified Patent Court Agreement (UPCA) during a transition period of 7 years.

Prior to any opt-out, all other actions listed in Art 32 UPCA are subject to the exclusive jurisdiction of the UPC. The two articles are not worded in the same way but at least actions relating to provisional protection and prior use of EP applications are under the exclusive competence of the UPC, if no opt out is in place.

Opt-out

Opt-out can only be requested during the transition period (currently 7 years). Requesting registration of an opt out during the sunrise period before the UPC starts is also possible.

Opt-out brings every action listed in Art 32 UPCA as well as infringement and revocation within the competence of the national courts. Indeed, it removes the UPC as a competent court for all actions for ever (unless the opt-out is withdrawn).

In answer to a question about opt-out and exclusive competence, the Preparatory committee has posted this under its FAQs.

Does an opt-out under Article 83(3) UPCA affect only the exclusivity of jurisdiction?

Article 83(3) UPCA stipulates that "a proprietor ... shall have the possibility to opt out from the exclusive competence of the Court." In this regard the question has been raised whether the provision must be interpreted such that the opt-out refers only to the exclusive competence of the UPC, and whether in fact the opt-out results in shared competence of the UPC and national courts.

If the effect of an opt-out was limited to removing the exclusivity of the UPC's jurisdiction, Article 83(3) UPCA would, at least during the transitional period, have exactly the same effect as Article 83(1) UPCA, i.e. result in shared jurisdiction of the UPC and national courts and a choice of forum for the parties. Thus there would be no need for two different provisions in Article 83 (1) and (3). Therefore it was the legislator's intent with the opt-out to give an alternative to patent holders, allowing them to remove their patents entirely from any jurisdiction of the UPC.

Pros and Cons of Opt-out

By requesting an opt-out, patent owners can avoid a patent from being declared invalid by the UPC in all participating UPC member states. However, patent owners then do not have the opportunity to obtain an injunction for infringement of the patent in all participating UPC member states (which will in all likelihood have a pan-EU effect).

Withdrawal

If filed before the transition period ends, withdrawal of the opt-out brings infringement and revocation actions back within the shared competence of the UPC and national courts, and all other actions in Art 32 UPCA back within the exclusive competence of the UPCA. So, you have a choice of court for infringement and validity actions during the transition period. Once the transition period ends, every action lies within the exclusive competence of the UPC.

If filed after the transition period, withdrawal of the opt-out brings every action back within the exclusive competence of the UPC. Choice of court for infringement and validity, available under A83(1) UPC during the transition period, is gone.

Once the opt-out is withdrawn, it cannot be redone.

If an action has commenced in the UPC or a national court, the opt-out, or withdrawal of opt-out as applicable, is not available (Art 83(3) and 84(4) UPCA).

Being within the competence of the UPC is an advantage for patent owners when enforcing their patents but exposes those same patents to central revocation actions for all participating UPC member states. All your eggs are in one basket.

Judge Nessie is getting ready, are you?

Posted under:: #patentattorney; foreignassociates; IP; Unitary Patent; UPC

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