Let us opt-out because an opt-in is always possible!

…is it that convenient…?

Numerous European patent owners adopted a strategy of opting out their entire portfolios from the jurisdiction of the Unified Patent Court (UPC), referring to the flexibility of a subsequent "opt-in" at any time. Despite acknowledging theoretical pitfalls in this approach, some believed these concerns would be practically negligible. However, the recent development in the UPC's local division in Helsinki has challenged these assumptions. So what happened?

To begin with, Article 83(4) of the UPCA (Unified Patent Court Agreement) reads:

"Unless an action has already been brought before a National Court, proprietors of Applicants for European patents or holders of supplementary protection certificates issued for a product protected by a European patent who made use of the opt-out in accordance with paragraph 3 shall be entitled to withdraw their opt-out [note: withdrawing the opt-out = “opt-in”] at any time."

In light of the "unless-clause" outlined in Article 83(4) of the Unified Patent Court Agreement (UPCA), the Helsinki Division of the UPC declined an injunction request filed by AIM Sport Vision AG. In this particular case, the patentee had chosen to opt out the relevant patent during the designated "sunrise period." Concurrently, national actions pertaining to the same patent had been initiated prior to the UPCA coming into effect on June 1, 2023.

The Helsinki Division has now determined that the initiation of national actions presented an impediment for the patentee to pursue an "opt-in" (i.e., to withdraw the opt-out). Notably, the timing of the national actions, filed prior to the UPCA's commencement on June 1, 2023, was deemed inconsequential by the Division. According to their interpretation, the UPCA provides clarity on this matter, expressly stating that no point in time is exempt from this condition, as specified in the literal wording: "unless an action has already been brought before a National Court."

Ultimately, the patentee found themselves locked into the "old system", effectively precluding any possibility of pursuing a new action within the Unified Patent Court (UPC).

And what can be learned from that?

First, also in practice, the "opt-in" is not guaranteed in all cases. Secondly, prior to opting out, careful consideration of i) the patent's history and ii) the potential for national court proceedings at any juncture is imperative. The Helsinki case serves as a cautionary example where the patentee inadvertently locked themselves to the “old system”, i.e. pure national jurisdiction. Regarding the latter consideration ii), any potential infringer, preferring the "old system," could adopt a similar strategy by initiating national revocation proceedings in any country covered by the opted-out European patent. Given the relatively low cost associated with commencing such proceedings in many "UPC countries", the corresponding risk appears to be significant. Consequently, patentees should meticulously evaluate each patent (application) on an individual basis before proceeding with the opt-out.

As a side note, it is reminded that the opt-out can also be "fatal" for parallel national patents (such as in Germany or France) which become ineffective in the moment when the European counterpart is opted-out.

In conclusion, we continue to advise the following procedure prior to opting out:

  • Reviewing the patent's history: Assess whether the patent has been previously subject to any national actions.
  • Analysing the likelihood of future national actions: Consider the potential for future national actions, such as revocation or declaratory actions, post-opt-out.
  • Reviewing national family members: Examine all national family members of the patent, ensuring awareness of potential gaps in protection at the national level after the opt-out, e.g. in France and Germany.

By diligently following these steps, patentees can make sound decisions and mitigate potential risks associated with the opt-out process.