UPC: First step – Opting-Out

The launch of the Unified Patent Court (UPC) has been waiting on Germany to formally ratify the UPC agreement.  That has now happened.

The court is set to begin operation on June 1, 2023.  Folks with European Patents will want to consider whether to file opt-outs for your patents (beginning March 1, 2023).  Some patentees with highly valuable patents will likely opt-out because the UPC rules allows competitors to challenge and invalidate the patents.  Unlike in the US IPR system, EPO opposition does not appear to create any estoppel against later UPC challenges.

14 thoughts on “UPC: First step – Opting-Out

    1. 1.2

      Even on the U.S.’s worst day, it has never been half so difficult to enforce here as it is in Europe.

          1. 1.2.1.1.1

            With his comment “infringers rejoice”, anon, Pro Say is indeed over-reacting.

            The UPC system allows the owner of a patent in Europe to get pan-European relief from infringement in one action before a single court. Up to now it has been separate infringement actions in separate national courts. There are by now 39 Member States in the European Patent Organisation. So, not much in that for infringers to celebrate.

            What Dennis is pointing out is the possibility of a corresponding single action, a counter-claim for pan-European revocation, in a so-far untested and perhaps maverick new court. It is that threat which might prompt pharma patent holders to opt their crown jewel patents out of the new system, eh Greg?

            But since 1978 there has been in Europe a mightily effective route for taking out a patent all over Europe. Just file an opposition at the EPO, eh Greg?

            In the old days, the outcome of opposition activity at the EPO was a 1/3, 1/3, 1/3 split. One third of opposed patents survived as granted (with an enhanced presumption of validity), one third were revoked, and the remaining third survived with narrower claims. Of the 5% or so patents issuing out of the EPO that got opposed, a vanishingly small portion were already involved in litigation. Why shouldn’t everybody rejoice about such a statistic, eh Greg? Is it not a sign of a system working as it should?

            But now, everything is up in the air because nobody knows yet what jurisprudence (on the validity of any asserted claim) the new courts will lay down. Will it apply EPO obviousness law? Nobody yet knows. The only people “rejoicing” are the equity partners of the big international law firms who will be doing the litigation at the pan-European UPC, for whom the more legal uncertainty there is the happier they get. More sport for the kings of patent litigation? You bet!

            The UPC was sold by the lobbyists to the pols as a system to allow European SME’s to leverage their patent rights. The way it has turned out, the very opposite is the case. Does that surprise any reader here?

            1. 1.2.1.1.1.1

              Max: “… the possibility of a corresponding single action, a counter-claim for pan-European revocation, in a so-far untested and perhaps maverick new court.”

              “The way it has turned out, the very opposite is the case.”

              ‘nuf said.

              Let the rejoicing begin.

              1. 1.2.1.1.1.1.2

                Pro, I don’t understand. Are you being sarcastic? In your imagination, who is it, who has reason to rejoice upon the entry into force of the UPC system? And why is it, that they will be rejoicing?

            2. 1.2.1.1.1.2

              Up to now it has been separate infringement actions in separate national courts. There are by now 39 Member States in the European Patent Organisation. So, not much in that for infringers to celebrate.

              Indeed, this is a good point. One reason why it has long been so much harder to enforce a patent in the E.U. than in the U.S. is that you can win one court case in the U.S. and get an injunction, while in Europe one must get one injunction in Germany, and another in France, and another in the U.K., and another in Italy, etc.

              By reducing the enforcement effort down to just one court, the new system may actually be a net benefit to patentees, rather than infringers. Pro Say is being too hasty in supposing that this new arrangement will—on balance—favor infringers.

              1. 1.2.1.1.1.2.1

                Another point is that the UPC offers a big saving on annual maintenance fees for those who register their EPO-granted patent all over Europe. That, Greg, is mainly the pharma industry. In other industries (say, medical devices, CII or the auto industry) it is more usual to register in only the three to five biggest European countries. If you can enjoin an infringer in Germany there isn’t enough left for the competitor to work the European market. For all these industries, there is no saving in annuity fee budget.

                And even in pharma, do you really have to litigate all over Europe? Suppose you speedily enforce your patent in Germany (or UK, or Netherlands). Does the infringer keep on infringing everywhere else, until restrained by a local court?

            3. 1.2.1.1.1.3

              Once again, MaxDrei – you miss as to your leading statement vis a vis Pro Say.

              It is NOT the mere comment of “infringer’s rejoice” that inures the notion of over-reacting, but merely that the “Old World” is somehow being corrupted by the downturn in US Gold Standard protection.

              The “Old World” is and always has been the bastion of the more feudal Sport of Kings patent systems.

              Your ‘advance’ of a single court DOES include some interesting comments along the lines of “unforeseen – not really – consequences,” for which I thank you. (perhaps you also miss the connection between Efficient Infringers and those that desire patent systems TO BE Sports of Kings…)

              1. 1.2.1.1.1.3.1

                anon, you assert that Old Europe “is and always has been” a place where acquisition and enforcement of patent rights is the Sport of Kings. It could be that Europe is not as bad as its reputation with you, at least as far as Europe’s three leading patent enforcement jurisdictions (Germany, Netherlands and England) are concerned. You remind me of a speech made to a conference I attended about 30 years ago, long before England reformed its civil litigation processes. The Chief General Counsel of a leading machine-manufacturer in Holland asserted that patent litigation costing one unit in NL would cost on everage 9 units in England and 30 in the USA. Since then, competition within Europe between courts and law firms for patent infringement business has reduced the cost ratio between England and an action on the European mainland to more like 2:1. And unlike in the USA, Europe has a “loser pays” rule. Germany has for ages now enjoyed its reputation as patent-friendly jurisdiction which will enjoin the accused infringer within a few months after the patent owner begins proceedings.

                Perhaps you were thinking that in Europe the Sport of Kings is the sport of infringing the patents of your competitors. But is that right? This expression you keep using, the “efficient infringer”. Nobody ever says it, as far as I know, to describe the behaviour of corporations competing in Europe.

                What’s your personal experience of the costs and difficulty of litigating a patent in Europe?

                1. Excellent last question — it’s been almost a dozen years since I was involved in a patent Pharma litigation battle (world wide, with many aspect throughout Europe).

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