Once the Unified Patent Court (UPC) opens (expected to be on 1 June 2023), it will have joint jurisdiction (together with the national counts) over all existing and future granted European patents which are in force in at least one of the countries in which the UPC has jurisdiction, unless the patent is “opted-out”.
Any existing granted European patents can be opted out. For the duration of the transitonal period (currently 7 years from the start of the UPC; which could be extended to 14 years) any future granted European patent which is not validated with unitary effect (a “classical” European patent) can also be opted-out.
It is not possible to opt out a Unitary Patent, or any European patent where proceedings are pending before the UPC.
Opting-out removes the UPC’s jurisdiction over a European patent for the lifetime of the patent, unless the opt-out is withdrawn. Any European patent which is opted out can only be litigated in national courts, and not at the UPC.
Who can file an opt-out?
The current patent proprietor or applicant must file the opt-out, or their representative (who must be a registered representative before the UPC or a person authorised via a mandate).
The true patent proprietor or applicant may not be that recorded on the relevant patent register if there has been a subsequent transfer of ownership that has not been recorded. In this case, an additional declaration must be filed.
If there are joint proprietors/applicants, they must all agree to file the opt out. An exclusive licensee cannot file an opt-out.
When to file an opt-out?
For an existing European patent, the best time to file an opt-out will be during the so-called “sunrise period”, which is expected to start on 1 March 2023. This will ensure that the patent is opted-out before the UPC opens, as once the UPC opens action can be brought against a patent effectively trapping it in the UPC.
For a European patent application, an opt-out can be filed at any point whilst the application is pending.
How to opt-out?
The UPC is providing a Case Management System to allow opt-outs to be requested online. Opt-outs must be filed at the UPC (not at the EPO).
What about SPCs?
These need to be opted-out if the EP patent on which they are based is opted-out.
Can the opt-out be reversed?
Yes – a patent or application can be opted-out and then opted-in to the UPC at a later date, unless an action has already been brought before a national court. However, a patent or application cannot be opted-out twice, so a withdrawal of an opt-out is irreversible.
Is it worth opting-out?
Opting out will maintain the status-quo and avoids the possibility of a European patent being revoked by the UPC in many countries at once. For valuable patents it may be advisable to opt-out to avoid this, particularly since it is not yet known how the UPC will assess matters such as validity. If desired, a patent can always be opted-in again at a later date, although this will not be possible if national proceedings have begun in the meantime.
The main disadvantage of opting-out is potentially missing out on the option of enforcement in all UPC countries at once, which could be easier and cheaper than bringing action in multiple states.
In general, if cost reduction and the possibility of enforcement in many states at once outweighs the risk of central revocation, it may make sense not to opt-out, whereas if the risk of central revocation outweighs the benefits of cost reduction and possibility of enforcement in many states at once it may make sense to opt-out.
It is worth remembering that, depending on where they are validated, some European patents may not ever be subject to the UPC’s jurisdiction. For example, this would be the case if a patent was validated in the UK only. In this case an opt-out would not be needed.