Unified Patent Court: opt-out challenges

During the transitional period, which will last for seven years until 01 June 2030, the UPC will share jurisdiction over conventional European patents with respective national courts for those states that are member states of both the European Patent Convention (EPC) and the UPC. However, patent proprietors and applicants can, during this transitional period, opt out their granted European patents, published European patent applications, and supplementary protection certificates (SPCs), from the jurisdiction of the UPC, provided that an action has not already been started at the UPC in respect of the right to be opted-out.

For an opt-out to be valid, it must be submitted by the true proprietor(s) or applicant(s) of the right, or their representative. The true proprietor(s) or applicant(s) may not be the same as that registered before the EPO or before various national patent offices, and, indeed, the registered owner(s) is not actually relevant to the validity of the opt-out. Where there are joint proprietors or applicants, or where the ownership differs between different contracting states, the application must be made in the name of all owners.

Opt-out requests will be published by the UPC on the court’s website for all to see, without the UPC conducting any formal checks as to the validity of those opt-out requests. This means that all opt-out applications will be processed and published by the UPC, irrespective of whether or not they are valid.

This therefore opens up the possibility of challenges to the validity of opt-outs by third parties. According to the wording of Article 32 of the agreement on a Unified Patent Court (UPCA), the UPC has exclusive competence in respect of a number of actions relating to patents and SPCs, including but not limited to infringement, revocation, and award of injunctions, damages, or declarations of non-infringement. Challenges to the validity of opt-out requests are not mentioned in Article 32 of the UPCA, and so it may be expected that a standalone action in respect of the validity of an opt-out is not likely to be something that the UPC will countenance. It can therefore be expected that an opt-out challenge may be brought before the UPC as a first step of a larger action, such as a revocation action. If the opt-out challenge fails then the action is dismissed. However, if the opt-out challenge is successful, and the opt-out is found to be invalid, the patent or UPC is then pulled into jurisdiction of the UPC and the action may proceed from there.

While this does mean that frivolous or bad-faith challenges to the validity of opt-outs are unlikely in view of the costs associated with actions filed at the UPC, there is a very real chance that a third party may be able to bring an action at the UPC that first seeks invalidity of an opt-out. Therefore, simply filing an opt-out application, without first ensuring that it is filed in the name of the true proprietor(s)/applicant(s), is not enough to ensure that a patent, SPC, or published application will sit safely and indefinitely outside of the UPC’s jurisdiction. In view of this possibility of challenging the validity of an opt-out, it is advisable to ensure that the ownership of European patents, published applications, and SPCs is carefully reviewed before filing of an opt-out application.

Requests for corrections of opt-outs may also be filed by patent or SPC owners. For example, a request to correct (or withdraw) an opt-out may be filed if an error is noticed (for example, in respect of ownership), or if a third party opted out the patent or SPC without the consent or knowledge of the true owner. Any correction will only be effective from the date at which the UPC accepts the correction, and does not have retroactive effect. This means that if a revocation action is brought at the UPC in respect of an opted-out patent, which includes a challenge to the opt-out, and the owner at this stage realises that the opt-out was not requested in the name of the true owner(s) for all states, then it is too late to correct the opt-out. It is therefore necessary, where an error or out-of-date information in respect of the ownership of an opted-out patent, SPC, or published application is spotted, that a request for correction of that opt-out is filed as early as possible.