What is Opting-out?

All European patents with unitary effect (that is, Unitary Patents) must use the UPC for infringement or invalidity proceedings. This is not the case for European patents that are validated in a participating Member State, whether granted before or after the UPC comes into force.

For a transitional period of at least seven years, such nationally validated European patents (and any Supplementary Protection Certificates based on such patents) will fall within both the jurisdiction of the national courts of the relevant Member States, as well as the UPC.

OPTING-OUT OF THE UPC

However, for nationally validated European patents (and any SPCs based on the patent) it is also possible to “opt-out” of the UPC by filing an opt-out request. The opt-out request can be filed at any time up to one month before the end of a transitional period, which will last for an initial period of seven years and may be extended for up to a further seven years. The filing of an opt-out request will have the effect that any infringement or invalidity proceedings must be handled by the national courts, just as they are now, and it will not be possible to start such proceedings before the UPC. The application to opt-out a nationally validated European Patent extends automatically to all SPCs based on the patent, and moreover if any SPC is granted after the application to opt-out, the opt-out automatically takes effect on the SPC when the SPC grants.

It is important to note that any request to opt-out a nationally validated European patent (together with any SPCs) must be made before any proceedings are started at the UPC. For example, if invalidity proceedings are started at the UPC by a third party before an opt-out request is filed, it will no longer be possible to opt-out of the UPC and the European patent (and any SPCs) will be within the UPC system for the remaining lifetime of the patent.

WHAT HAPPENS TO EUROPEAN PATENTS IF YOU DECIDE TO OPT-OUT OF THE UPC?

If a nationally validated European patent is opted-out, this prevents a central invalidity attack on the patent at the UPC. A successful central invalidity attack at the UPC would have the effect of revoking the patent in all member states of the UPC and opting-out prevents the possibility of this.

An opt-out request can be withdrawn later. That is, it is possible to opt back in to the UPC. This can be done at any time but only if infringement or revocation proceedings have not been started at any time in a national court. This includes any proceedings that were finished or withdrawn before the UPC came into effect. If a European patent (and any SPCs) is opted back in to the UPC, it is not then possible to opt-out again. In other words, it is only possible to opt-out once.

WHAT IS THE UPC SUNRISE PERIOD?

There will be a sunrise period before the UPC comes into effect that runs for three months plus the remainder of the month when the relevant legal requirements to ratify the UPC are completed.

This sunrise period can be used to opt-out nationally validated European patents before the UPC takes effect. Opting-out during the sunrise period will have the effect that invalidity actions cannot be started at the UPC immediately when the UPC comes into effect. Nationally validated European patents (and any SPCs) can also be opted-out at any time after the UPC takes effect up to one month before expiry of the seven-year transitional period (unless proceedings have been started before the UPC).

After the seven-year transitional period (which may be extended by up to a further seven years), all nationally validated European patents (and any SPCs) that have not been opted-out, must use the UPC. This will include any nationally validated European patents granted on applications filed after the expiry of the transitional period (and any SPCs based on them).

It will also be possible to opt-out published European patent applications while they are still pending. The result of this will be that it will not be possible to use the UPC to centrally invalidate national validations of the European patent for participating member states when it is granted. However, it will still be possible to oppose granted European patents (and Unitary Patents) at the EPO.

The decision of whether or not to opt-out should be factored in to the ongoing management of a portfolio of European patents.

For further information, please speak to your usual contact at Potter Clarkson, or email one of our dedicated UPC team.