The UNIFIED PATENT COURT
- The UPC Is made up of a court of first instance and a court of appeal
- The court of first instance has divisions located around Europe, including Helsinki.
- The court of appeal is based in Luxembourg.
- There will also be arbitration and mediation centers in Portugal and Slovenia.
- The Court of Justice of the EU will be a supplementary court for preliminary rulings.
FEES & RECOVERABLE COSTS
OPT-OUT
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- What is the Opt-Out?
- Opt-out allows a patent holder to exclude their European patent(s) or European patents with unitary effect from the jurisdiction of the Unified Patent Court (UPC), meaning the case will be handled by national courts instead of the UPC.
- When Can You Opt-Out?
- Opt-out can be requested during the transitional period (up to 7 years after the UPC starts, i.e., until 2028, with an option to extend).
- The opt-out applies only to European patents (not Unitary Patents).
- How to Opt-Out?
- The patent holder submits an opt-out request to the UPC Registry, and the patent is removed from UPC jurisdiction.
- Opt-out is effective once registered in the UPC Registry and cannot be undone without specific conditions.
- Scope of the Opt-Out:
- One opt-out applies to all current patents in the portfolio (i.e., the opt-out is granted for the entire European patent family).
- Once an opt-out is recorded, the patent will be subject to national court litigation instead of the UPC.
- Revoking an Opt-Out:
- If a party has opted out, they can reverse the opt-out (i.e., return the patent to the UPC system) before any national court action is taken.
- Revocation is only possible if no national court action has been initiated, otherwise, the opt-out remains in effect.
- Risks of Opting-Out:
- Limited Enforcement: Patents opted out are not subject to the streamlined enforcement and cross-border reach of the UPC.
- Loss of Unitary Effect: If a patent holder opts out of the UPC and then loses national litigation, the patent’s protection can only be enforced in the individual jurisdictions.
- Benefits of Opting-Out:
- Familiarity with National Courts: Some patent holders prefer national courts, especially when they are more experienced with local legal systems.
- Avoid UPC Uncertainty: If concerned about UPC processes or unsure of its consistency, opt-out provides a safety net in national courts.
- Limitations:
- Unitary Patents: Cannot opt out as they fall under the exclusive jurisdiction of the UPC.
- Time-Frame: Opting-out is only available during the transitional period (until 2028 or extended).
- Opt-Out Timing:
- The opt-out must be requested before any action is taken at the UPC or in national courts.
- After an action is initiated at the UPC or national level, the opt-out is no longer valid.
- Transitional Period:
- The opt-out can be used for a 7-year transitional period, and it can be extended for another 7 years.
- After the transitional period, opting out will no longer be possible, and all European patents will fall under UPC jurisdiction by default.
- What is the Opt-Out?
IMPACT ON LICENSE
OPT-OUT / OPT-IN AND LICENSING
- If licenses have been granted, you can choose to opt out if a royalty is required while at least one licensed patent remains active. In some cases, the ability to avoid central revocation might be more beneficial than the option to enforce it centrally.
- Once litigation begins in either the UPC or a national court, the forum becomes fixed for the duration of the patent’s life.
IMPACT ON PATENT PROSECUTION MANAGEMENT CLAUSES
- Check co – ownership of EU Patents / applications/ SPC and negotiate:
- Carefully draft future joint ownership agreements to ensure that appropriate processes are in place for managing opt-out/ opt-in and unitary effect decisions.