By Mario Pozzi and Federico Caruso

Time is ticking for the Unified Patent Court (UPC) becoming a reality. Owners of European patents must now decide about opting out of the jurisdiction of the UPC.

Next steps before UPC enters into force
On 19 January 2022, Austria finalised its ratification of the Protocol on Provisional Application of the UPC (so called “PPA”), triggering the beginning of final preparations for the system’s entry into force.
As things stand, the end of 2022 or beginning of 2023 appears to be the likely timing for the Unitary Patent Package to finally take off, probably with 17 member States on board, the remaining 7 to join them in due course (note that 24 out of 27 EU member states are part of the UPC).
From then on, granted European Patents, pending applications and related supplementary protection certificates (SPCs) will fall within the exclusive jurisdiction of the UPC, both for actions concerning validity/revocation and enforcement – unless those granted patents, pending applications and SPCs are opted out.

What does opting out mean?
Since the UPC is a brand-new system, the UPC Agreement provides for a seven-year transitional period (that can be extended for seven more years) during which owners of “classic” European patents (i.e. European patents without unitary effect), European patent applications and related SPCs can choose to exclude such rights from the jurisdiction of the UPC and therefore to enforce and defend them before national courts. In other words: litigation options for an opted-out European patent/patent application/SPC remain, for the patent’s entire duration, the same as they were before the UPC’s take-off.

How can I opt out my traditional European patent/patent application/SPC?
Opt-out requests have to be filed electronically through the UPC Case Management System (available only in Beta version for testing purposes at the time of writing). Once the request is accepted by the Registry, the European patent in question is excluded from UPC jurisdiction.

Can I opt back in?
The UPC Agreement allows patent owners to withdraw the opt-out, thus subjecting their classic European patent/patent application/SPC to the jurisdiction of the UPC.
However, if the UPC is seized with an action concerning the patent before an application to opt out has appeared on the Register, that action must continue before the UPC and the opt-out is denied. Likewise, if an action against an opted-out patent has been filed before a national court, it is not possible to withdraw the opt-out and, consequently, the national court will maintain its jurisdiction over the national portion of the opted-out patent.
Therefore, right holders should decide whether or not to opt their patents out as soon as possible, in order to avoid the risk of leaving the decision in the hands of a competitor willing to bring a court action.

Does the sunrise (period) look like morning in your eyes?
It will be possible to opt out starting three months before the entry into force of the UPC Agreement. This so-called “sunrise period” is intended to allow patent owners to avoid the risk of having their traditional European patent/patent application/SPC subjected to litigation before the UPC right upon the entry into force of the UPC Agreement.

In a nutshell
Opting out prevents a competitor from obtaining the revocation of an opted-out traditional European patent/patent application/SPC in one fell swoop in a number of EU member States. Similarly, it avoids having to face a single infringement judgement.
On the other hand, opting out of the UPC jurisdiction bars the owner of an opted-out traditional right from enforcing it before the UPC (through both interim proceedings and proceedings on the merits) in the territories of a number of EU member states in one fell swoop.

To opt out or not to opt out, that is the question
Deciding whether or not to opt out (or to opt back in) can have a crucial impact on the enforcement and defence strategy of a classic European patent. Key factors to be considered include the strength of the patent, its importance within the owner’s portfolio, the number of countries in which it is actually exploited and the presence of aggressive competitors.

Please contact authors Mario Pozzi and Federico Caruso for specific advice.
All SIB LEX attorneys-at-law are qualified to represent clients before the Unified Patent Court.