The Unified Patent court agreement (UPCA) has been ratified in 2014 by both Denmark and Sweden, so even if the actual advent of the unitary patent and UPC is still some way off, potential patent rights holders in the two countries should already now prepare for the new regime.
The coming into force of the UPCA – presumably in early 2016 – will bring about many changes to the patent system in Europe. Most importantly, the unitary patent will provide enforceable protection of IP rights in all the participating EU member states based on a single EP application without the costly and cumbersome validation and translation requirements associated with the present, nationally enforced “bundle patents”.
Enforcement of patent rights based on the unitary patent will take place via the UPC, which will have exclusive, centralized jurisdiction not only over unitary patents, but also over “regular” European patents (EPs) and supplementary protection certificates (SPCs) in those EU countries which have ratified the UPCA (Art. 3 UPCA).
The UPCA allows for a transitional period of at least seven years (Art. 83 UPCA). During this time, rights holders can choose to “opt out” of the exclusive competence of the UPC and stay with the “bundle patents” solution, provided that no action has already been brought before the UPC. This potential problem can even be prevented by opting out of the still pending EP application, so that the ensuing patent is automatically “opted out” from the unitary system at grant.
The opt-out will remain in effect until the patent expires unless the rights holder decides to “opt back in” again, i.e. to withdraw his “opt-out” application and accept the unitary patent solution. This choice should be made carefully, however, as there is no possibility of opting out of a Unitary Patent and reverting to the “bundle patent” situation (Rule 5.11 of the Rules of Procedure of the UPC (RoP), currently available in draft number 16).
It is foreseen that many cautious rights holders will choose to opt out since it can be seen as a “free ride” (apart from a fee), since Art. 83(4) UPCA allows European patentees, applicants or holders of SPCs who make use of the opt-out to change their minds under certain circumstances. They are thus “entitled to withdraw their opt-out at any moment”, but only if no action has already been brought before a national court.
The rights holder’s strategic decision to opt back in again once a central attack on a presumed infringer is desired can thus be blocked if just one of the bundle patents resulting from the opt-out has been “pinned out” by an action brought before a national court. At the present time the legal provisions for the UPCA transition period are far from clarified, and thus how much or how little will constitute “an action” is not certain. It is also not known what the effect will be if said action is completely overcome by the rights holder – will he/she then be allowed to opt back in?
In conclusion, present and future rights holders in Europe should be very careful when choosing to strategically opt out of the UPCA, as they can be outsmarted and prevented from opting back in again by a just as strategic pin-out by a competitor.
Michael Bech Sommer, European Patent Attorney