I am party to a licence covering a European patent or a Unitary Patent. What do I have to consider?

Existing agreements may well (and ought to) specify which party has the right to direct patent prosecution and commence infringement proceedings. The relevant provisions could be construed as impliedly covering the allocation of roles under the UPC regime. However, they are unlikely to accommodate the following questions:

  • Is the licensee to be given the right to decide on whether to validate the European patent in the currently usual way (i.e. by validating in a number of member states individually) or as a Unitary Patent?
  • Is the licensee to be given the right to opt out?
  • Should opting in or opting out be the default position?
  • Opted out patents can be opted back into the UPC. Which mechanism is to be used for withdrawing the opt-out? Who is responsible for implementing it? 
  • If the licensee is given the right to decide on the way in which the patent is validated or given the right to opt out, should the licensee be obliged to at least consult the licensor?
  • Should the decision on the way in which the patent is validated or on opting out be a decision made jointly by the licensor and licensee? What fall-back position or resolution mechanism is appropriate should the parties not agree?
  • If a party to a licence has the right to exercise the opt-out to avoid the risk of the patent in question being revoked at the UPC, should it be able to do so without the other party’s consent, given that that other party may not want to take proceedings in the national courts?
  • Who will pay for ancillary expenses associated with opting out?
  • Who will pay for defending against invalidity attacks in national courts following opt-out, given that the cost associated with multiple invalidity defences is likely to exceed the cost of single proceedings at the Unified Patent Court?
  • If one party has the right to make any of these decisions should the other have the right to veto it under defined circumstances?

Of particular danger is the fact the, once proceedings have commenced (be that in national courts of the Unified Patent Court) the parties to the proceedings cannot change between the jurisdiction of the national courts or the Unified Patent Court. As such the party to the licence that decides on whether or not to opt out a European patent validated in a number of member states of the European Patent Convention can lock the other party or parties to the licence into an undesired litigation strategy or at least a strategy that has not previously been agreed. Existing licences should therefore be reviewed to see if any changes are required to accommodate the UP as soon as possible.

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