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CIPA Seminar: Getting Practical with European Patents & the UPC – Episode 2

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IMG_8533-1Last week IPcopy watched the second webinar in the CIPA UP/UPC series “Getting Practical with European Patents & the UPC – Episode 2 – managing the knowns and the unknowns of the ‘opt-out’” which was presented again by Pippa Allen. IPcopy’s post on the first webinar can be found here.

The subject of the second webinar was the opt-out and the presentation covered the legal basis for the opt-out as well as the pros and cons of opting a classically validated European patent out of the competence of the Unified Patent Court (UPC).

Opting out a classical EP patent from the UPC is seen as essentially preserving the status quo as far as a patent owner is concerned since an opted out EP patent is regarded as no longer being within the competence of the UPC. Assessments of the UPC may therefore tend to play up the risk of central revocation without providing much in the way of a counter point of view.

The second CIPA webinar however looked to provide a more balanced assessment of the UPC and also of the option of requesting unitary effect for EP patents that grant after the unitary patent system comes into force.

UP/UPC recap

The webinar started with a speedy run through of the speculated timetable, the terminology of the unitary patent system and the legal basis for the opt-out. If you want to skip the recap, please click here.

IPcopy has covered many of these points before so won’t go into too much detail. However, on the issue of the entry into force date for the unitary patent system Pippa’s slides highlighted a date range of April to June 2018. IPcopy notes that a lot will depend on how quickly the new government picks up on the UK ratification process following the General Election. There is only a small window of opportunity to progress ratification before parliament goes on summer recess.

The unitary patent system will come with its own terminology. EP patents granting after the entry into force may be validated in a number of EPC states as currently happens (a “classical European patent”). However, additionally there will be an opportunity to request that the granted European patent has unitary effect in the territories covered by the unitary patent system (a “unitary patent”). In practice, this may mean that a patent owner ends up with a unitary patent and a bundle of nationally validated EP(X) patents (e.g. EP(UP) + EP(ES), EP(NO)).

As far as the UPC and the opt-out is concerned classically validated EP patents may be “not opted out” (by default all classical EP patents will be in this position), “opted out” (where an opt-out request has been filed) or “opt out withdrawn” (where an opt out request has been filed and subsequently withdrawn). It was noted that there may therefore be potential for confusing clients with this new terminology unless it is used carefully and consistently.

To (maybe) confuse things further there are a number of different terms used to refer to countries that are participating in the various parts of the unitary patent system and the EPC. So, the EPO uses “member states” to refer to the 38 countries of the European Patent Organisation, whereas the UPC Agreement refers to “member states” to mean a member of the European Union and “contracting member state” to mean an (EU) member state that is party to the UPC Agreement (Spain for example is a “member state” but not a “contracting member state”. The UK is currently both a “member state” and “contracting member state” until Brexit occurs). Finally, countries that are part of the enhanced cooperation regulations (1257/2012 and 1260/2012) are referred to as “participating member states”. To misquote Yoda: “Confused? You will be”.

Considering the new Court, Pippa noted that speculation was that the UPC could be pro-patentee in the early years which could presumably factor into a patent owner’s decision whether to opt-out or not. The Court holds the promise of improving the speed and quality of enforcement.

On the basics of the opt-out procedure, Pippa noted that the opt-out effect derives from Article 83 of the UPC Agreement. Proprietor/applicant/holders of classical EP patents may opt-out granted patents, applications and SPCs from the jurisdiction of the UPC*. The ability to opt-out will only exist during a transitional phase of the UPC (7 or 14 years from entry into force) and will only take effect when entered onto the UPC register (this is an important point to note. If the opt-out request contains an error then the patent will not be opted-out until the error is corrected and the corrected opt-out entered on the register).  As a caveat to this, opt-out requests can only be filed if no action has already commenced or concluded in the UPC (Rule 5(6) Rules of Procedure).

Requests to withdraw an opt-out for an EP patent follow a similar set of rules with the  caveat now being that the opt-out request cannot be withdrawn if an action has commenced or concluded in a national court (Rule 5(8)).

Where a European patent application has been opted out before grant then the opt-out will be automatically withdrawn if unitary effect is requested (Rule 5(9)).

There can be only one opt-out and one withdrawal of an opt-out per patent – so no hokey-cokey opt-outs (Rule 5(10)).

Opt-out requests can be registered via the Case Management System of the UPC which is available in beta here to play around with. According to rule 5 of the rules of procedure a declaration is needed that the opt-out is being lodged by someone entitled to be registered on the national register. This declaration is visible in the current build of the CMS but, as Pippa pointed out, the way that the declaration is currently phrased may place liability for the accuracy of the declaration on the representative rather than the patent owner. This is something that hopefully will be changed.

Opt-outs may be filed during a sunrise period before the entry into force date of the unitary patent system. The sunrise period may, factoring in the UK election-induced delay, begin early next year.

For the avoidance of doubt it is noted that unitary patents cannot be opted out from the UPC and all references within this document to the opt-out process are in relation to traditionally validated EP patents (“classical EP patents”).

Knowns and unknowns

The webinar then moved onto the business of breaking down what we know about the system and what we don’t know and trying to encourage us to think about reasons to use the UPC as well as reasons to think about opting out of the system.

For opted out European patents, as noted above, the status quo will be preserved – national courts will have jurisdiction, court decisions will be on a “per validation” basis, the territory covered will be the selected validation states and renewals will be paid to the selected validated states.

For unitary patents everything will be under the new system – the UPC will have jurisdiction, court decisions will have a central effect, the territory covered will be the contracting member states of the UPC and renewal will be paid centrally to the EPO.

Classically validated EP patents (either not-opted out or opt-out withdrawn) will fall between the above two positions. The territories covered for these patents will be the selected validation states and renewals will still be due to the national states but the UPC will have jurisdiction and, for any action taken in the UPC, the decision will have central effect.

UPC World

Once the unitary patent system comes into effect then a new jurisdiction (the UPC), a new EPO division (to deal with unitary patents) and a new register will pop into existence. For a transitional period this new arrangement will sit and co-exist alongside the current European patent system.

For classical EP patents that are not opted out it will possible to bring infringement or revocation action in either the UPC or the national courts which, depending on the case in question, may have the possibility of catching either the patent owner or a third party on the hop. For opted-out classical EP patents, actions will be limited to the national courts.

As a result of the co-existence of the current EP legal landscape with the unitary patent system and as a result of the way the UPC Agreement was set up there will be a tangle of applicable law to consider – national law, EU law, the EPC and the UPCA itself.

Pros and cons

The pros and cons of the unitary patent system were then considered.

On the pro side of the argument it was noted that the UPC provides a means for centrally enforcing EP(UP)s and classical EP patents that have not been opted-out. This avoids the need to run piecemeal actions within the territory of the UPC. For unitary patents there is the convenience of a single renewal fee which, for more than 4 territories, is also a cost effective means of obtaining protection throughout the contracting member states of the UPC. The unitary patent option may also reduce the complexity and cost of the grant process by enabling a patent owner to gain unitary protection through a single request compared to the need to instruct multiple validations.

The con side of the coin uses exactly the same arguments but just presents them from a different point of view.  Central enforcement is countered with central revocation and the single renewal fee is countered with the lack of the option to selectively drop validations. Piecemeal enforcement is, on the con side,  now a bonus since a bundle of nationally validated EP patents are no longer vulnerable to central attack.

Other points to consider when looking at the UPC are the fact that UK judges may pop up in non-UK local divisions of the UPC and the UPCA exemptions from infringement are slightly more favourable than under some national systems. Additionally the UPC provides enforcement options that may not be available nationally, e.g. saisie.

For patent portfolios that have only been validated in one or two contracting member states (e.g. EP(UK), EP(ES), EP(CH) and maybe EP(FR)) then the risk of central revocation is low or absent because there are only one or two patents within the bundle that will fall within the jurisdiction of the UPC.


The common view may be that opting out is the safe option and the uncertainty of the new Court may regarded as  too much to risk. However, the decision is likely to be deserving of deeper thought with the client’s headline concerns of cost, convenience and territorial scope being factors for consideration.

The next CIPA UP/UPC seminar is on 30 May 2017 on the subject of “What will the UPC landscape look like?“.

Mark Richardson 17 May 2017

*IPcopy notes that the interpretation of Article 83 of the UPC Agreement was touched upon during the webinar. Simply put the wording of the UPC Agreement is not as clear as it could be and there has been some discussion in the past exactly when the UPC would have jurisdiction over EP patents and what the terms “Exclusive competence” and “co-extensive jurisdiction” mean. IPcopy won’t go into these issues here but points the reader to the UPC website (see FAQs) which highlights the current interpretation of the UPCA.

Further information:

UPC Agreement
Main website: Unified Patent Court website https://www.unified-patent-court.org/ 
Agreement – https://www.unified-patent-court.org/sites/default/files/upc-agreement.pdf

Regulation (EU) No. 1257/2012
Main website: Access to European Law website http://eur-lex.europa.eu/ 
Regulation – http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32012R1257&from=EN

Regulation (EU) No 1260/2012

Draft Rules relating to Unitary Patent Protection (Implementation at EPO of Regulations 1257, 1260)
Main website: EPO https://www.epo.org/
Draft Rules – http://documents.epo.org/projects/babylon/eponet.nsf/0/658AE58124AC70DBC1257DB10028B3D4/$File/e_draft_rules_unitary_patent.pdf

From Unified Patent Court website (https://www.unified-patent-court.org/ )

18th Draft Rules of Procedure of the Unified Patent Court
Rules – https://www.unified-patent-court.org/sites/default/files/upc_rules_of_procedure_18th_draft_15_march_2017_final_clear.pdf

Rules on Court Fees (Proposal of Preparatory Committee for UPC)
Rules on court fees and recoverable costs – https://www.unified-patent-court.org/news/17th-preparatory-committee-30-june-2016

Rules on EPLC and other Appropriate Qualifications (Draft Decision of Administration Committee)
Main website: Unified Patent Court website https://www.unified-patent-court.org/
EPLC Rules – https://www.unified-patent-court.org/news/european-patent-litigation-certificate-revised

1 Comment

  1. Gamma says:

    One (additional) positive thing of the UP/UPC could be to make the cross-border problematic that is relevant for many method type claims, e.g. computer implemented inventions, medical claims, or in chemistry obsolete. From this perspective It is however regrettable to have only a limited number of EP member states in the UPC.

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