UPC: Jurisdiction and “Opt-out” – Intellectual Property

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Once the Unified Patent Court (UPC) comes into force, and after the transitional period of 7 years (at least), the court system will have exclusive jurisdiction over UPs and all designated EPs for participating EU Member States (unless these EPs were chosen outside its jurisdiction). The UPC will also be competent for supplementary protection certificates (CCP), unless they have been the subject of an opt-out or if it is a CCP from an opt-out EP. (which are automatically deemed to have been opted out). However, during the transition period, there will be a dual jurisdiction regime in relation to non-excluded European patents, under which cases can be brought either before the JUB or before a national court concerning particular actions.

WHICH ACTION GOES WHERE IN THE UPC?

  • Infringement claims may be filed at the local/regional divisions where the infringement occurs

  • Actions for nullity must be brought before the central chamber unless they are brought as a counterclaim where they can be heard with the action for infringement or transmitted to the central chamber by the court seized of the action for infringement.

  • The central division also has exclusive jurisdiction over declarations of non-infringement

OPT OUT:

When: During the first seven years from the entry into force of the UPC agreement (UPCA), an opt-out from the jurisdiction of the UPC is available for EPs (this transitional period can be extended by 7 years additional – after an evaluation after five years).

Once all the criteria for the UPCA to become effective are met, there are four months left before it can become effective and the UPC can start operating. During this period, it is proposed that there will be a “sunrise” period during which EPs and current relevant EP applications, and SPCs can register an opt-out from the EPOUPC system, before it become a reality. Currently, this period should start 3 months before the start of the UPC (see EPO FAQ here).

Holders will be able to withdraw EP applications (as well as EPs already granted) and then “opt back” (withdraw the opt-out) when the EP comes to issue or whenever they decide (although if national procedures have been initiated with regard to a European patent opt-out, this opt-out cannot be subsequently withdrawn). UP applications cannot be withdrawn at any time and are under the exclusive jurisdiction of UPC.

SPCs for excluded EPs will automatically be excluded. Alternatively, the SPCs can be removed separately (but this must be done by the PE owner).

Owners: The opt-out applies to all EP designations (as does the opt-out withdrawal) and all holders of EP designations must opt ​​out together.

Effect: Opt-outs are effective for all designations of an EP. Once withdrawn, the UPC has no jurisdiction over the EP and the EP must be judged nationally (under national law). The opt-out is effective for the lifetime of the patent and beyond, for example for disputes based on now expired rights or on a subsequent SPC. The holder is free to withdraw, unless an action has already been brought before a national court. Once the opt-out has been withdrawn, there is no longer any possibility of opt-out.

Holders can refuse EP requests (as well as already granted EPs) and then register (withdraw the opt-out) if they decide to do so after the grant or if they wish to obtain a UP at the grant (for which there is no opt-out option).

Strategically, holders can consider opting out initially to prevent their patent from being dragged into the UPC system by a revocation action, and then withdrawing the opt-out when a UPC action seems more attractive to their goals (such as the pan-European application).

NO WITHDRAWAL:

Effect: If a patent holder has not opted for the JUB system, his EP will nevertheless be subject to the dual jurisdiction of the JUB and the national courts for the duration of the transitional period (initially 7 years, possibly up to 14 years) :

  • The UPC has jurisdiction over all UPs (no opt-out available) and for EPs (unless opt-out) and SPCs (unless opt-out or if the SPC comes from an unsubscribed EP)

  • During the transition period, national courts also have jurisdiction over EPs, even if they are not excluded, with regard to infringement and revocation proceedings (and infringement and invalidity of SPCs)

During the transition period, the patent holder can then choose not to participate in the JUB system until an action has already been brought before the JUB. However, once a UPC court is seized of an action, the EP cannot be withdrawn, just as once a national court is seized of an action in relation to an EP, the holder cannot withdraw his opt-out.

To learn more about the factors to consider when opting out or not, see our article “What should influence your decision to withdraw from UPC?” published in Managing Intellectual Property magazine.

Following the publication of the UPC Rules on Court Fees (see our electronic newsletter), it is clear that there will be no costs for excluding a European patent from the jurisdiction of the JUB, nor for reinstating it again. This seems to have paved the way for the massive patent opt-out.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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