Knowledge & News

When does the sunrise period for opting out of the UPC start and what should be done in preparation for it?

20 June 2017

The Unified Patent Court (UPC) Agreement requires ratification by at least 13 participating states in order to come into force, including France, Germany and the UK. The current position is that 12 states including France have ratified, so everyone is looking to the UK and Germany to complete the process.

UK ratification of the UPC Agreement and Protocol has been delayed by the recent General Election. Given that none of the political parties with elected Members of Parliament has opposed ratification, there is no reason why ratification by the next UK government should not follow.

Ratification by Germany also looks likely to be delayed, due to a challenge being brought in the Federal Constitutional Court. The existence of this challenge came to light in June 2017 but the nature of the challenge has not been made public at the time of writing.

The UPC Preparatory Committee has now acknowledged that it will not be possible for the UPC to become operational in December 2017 as it had previously envisaged

While these delays introduce further uncertainty, applicants should still consider preparations in anticipation of the UPC becoming operational, and it will be prudent to consider that that will occur in the first quarter of 2018. From the point at which the UPC becomes operational, the UPC will have jurisdiction over the national validations of any European patent in one or more member states that have ratified the Agreement on a Unified Patent Court (UPCA). This means that the UPC will be competent to hear cases of infringement and/or validity in respect of patents granted in those member states, with the Court issuing a single ruling that will apply across each one of those member states. In practice, this means that from the day that the UPCA comes into effect, third parties will be able to apply for central revocation of European patents granted in those member states, even where the opposition period has long since expired, as well as seeking central declarations of non-infringement for acts taking place in those member states. Conversely, patentees owning those rights will be able to instigate one action for infringement in respect of acts carried out by third parties in all of those member states.

Opting out – avoiding the UPC altogether

For those patentees who do not wish their (non-unitary) patent rights to fall under the jurisdiction of the UPC – in other words, who wish to continue with the present system in which each national validation falls under the sole jurisdiction of that member state’s own national courts – there exists the opportunity to “opt out” of the UPC. The opt-out will take the form of an administrative process, in which the owner of the patent files a request at the EPO. (It is important to note that it is the actual owner of the patent, or their representative, who must file the request; the actual owner may of course differ from the registered proprietor as listed on the EPO patent register or relevant national registers, depending on how up-to-date the patent registers are – this point is discussed in more detail below). It is generally accepted that an opt-out will last for the lifetime of the patent (unless withdrawn).

If no opt-out, transitional enforcement in national courts still allowed

Following the entry into force of the UPCA, a transitional period of seven years (which may be extended to 14 years) will commence, during which time a national court of a (non-unitary) member state in which a European patent has been validated may still rule on patent infringement and/or validity in that member state, even if the proprietor has not filed an opt-out of the UPC in respect of the patent. So, during that transitional period, either the UPC or the national courts would have jurisdiction, with conflicts between them being subject to normal jurisdictional rules. Once the transitional period expires, the national courts will cease to have jurisdiction over any existing European patents for which the proprietor has not filed an explicit request to opt-out of the UPC.

Timing of litigation v opt-outs – the sunrise period

Importantly, a patentee will only be able to opt out of the UPC provided that a claim has not already been filed in respect of the patent at the UPC. This will apply immediately after the UPC becomes operational. Once a third party has filed a claim for central revocation or a central declaration of non-infringement, the patent will fall under the exclusive jurisdiction of the UPC. Thus, for owners of granted European patents who wish to ensure that their rights will remain solely under the jurisdiction of the national courts (and so will not be targets for central revocation, for example), it is advisable to file an opt-out in respect of those patents sooner, rather than later.

In order to allow patentees the chance to file opt-outs for their existing patents before the UPCA comes into effect (which would in turn place patentees at the risk of third parties filing claims in the UPC immediately the court becomes operational) a sunrise period is due to be implemented, during which time patent proprietors will be able to file requests to opt out, prior to commencement of the UPCA. The timing of the sunrise period (as currently expected) is illustrated in the timeline below (Figure 1).

Figure 1: Timing of the sunrise period

As can be seen from Figure 1, patentees will have three months in which to opt out their patents, before the Court becomes operational. Patentees can of course continue to opt out after the Court becomes operational, provided a third party has not filed a claim in the UPC concerning the patent in question.
The UPC Preparatory Committee notes that the above timetable is “conditional and provided with the clear disclaimer that there are a number of factors that will dictate whether it is achievable. The most important factors in meeting these dates are the necessary ratifications of the UPCA and accession to the Protocol on Provisional Application. If these are not achieved the time-plan will be disrupted.”
What steps need to be taken in advance of the sunrise period?
First, patentees need to think carefully about the pros and cons of opting out of the UPC. An opt-out will need be requested in respect of each individual patent that the patentee wishes to avoid falling under the jurisdiction of the UPC; therefore, patentees will need to review their portfolios and determine how they wish to proceed in respect of each individual patent.
Secondly, for those patents for which it is desired to file an opt-out, patentees will need to ensure that it is the correct party filing the request for opt-out; this means ensuring that the rights in question are legally the property of the party filing the request to opt-out. Those parties filing the request will need to ensure that they can demonstrate a chain of title from the original rights holder to themselves. These two points will be considered in more detail below.
To opt out or “opt in”
Firstly, only one decision can be taken in the sunrise period – to opt out or not. If not, these patents (European patents validated in member states that have ratified the UPCA) can be considered “opted in”. (This is the sense we use this term in this article.)
For patentees who are keen to enforce their rights across Europe, and in particular, who will be looking to obtain injunctions on a pan-European basis, opting in will provide the opportunity to do so in one centralised action. Whilst the costs and administrative burden involved in using the UPC remain to be seen, it is reasonable to expect these should be less than that associated with handling multiple independent cases before the national courts in each state. Conversely, adopting a “business as usual” approach by opting out will provide security for applicants who do not wish their cases to fall under the jurisdiction of a new and untested court, particularly when the rulings issued by the court are so far reaching in terms of their geographical coverage.

We would advise that, to the full extent possible, applicants should review their portfolios on a case-by-case basis in advance of the sunrise period, and consider the merits of opting out versus in, in respect of each individual patent.
Filing the request to opt out
As currently envisaged, filing a request to opt out a particular patent will entail logging into a Case Management System specifically created for the UPC. Parties wishing to use this case management system will have to create an account to allow access and some level of verification of the user’s identity. The process of opting out is projected to be made possible through the simple entry of the European patent number in question. The user will then be asked to confirm that they have the authority to opt the patent out of the UPC, after which the opt-out will be logged on the system.
Notably, the Rules of Procedure of the UPC allow the patent proprietor or authorised representative to opt out a patent. In the absence of a definitive list of current patent proprietors, the system as currently envisaged will not restrict access to specific parties; this means that the onus will be on the party wishing to opt out the patent to ensure that they are, in fact, the legal owner of the patent and that the person filing the request to opt out the patent is properly authorised to act on the owner’s behalf.
There is a risk here that a party may file a request to opt out the patent on the basis that they do not wish the patent to be contested in the UPC, only to later find out that the opt-out is invalid as having not been filed by an authorised party. For example, it may later be shown that at the time of filing the request, the party was not the legal owner of the patent (for example, because the rights had not been validly assigned to that party), and/or because the person filing the request was not properly authorised to act on the patent owner’s behalf. In the absence of a “valid” opt-out, a third party might then still have the opportunity to file a claim in the UPC, thereby precluding any further opt-out from being filed, and so bringing the case under the sole jurisdiction of the UPC.  
In advance of the sunrise period, patentees are advised to review their portfolios and identify those patents for which they wish to file a request to opt out of the UPC. For these patents, checks will need to be made in order to ensure that the patentee can demonstrate that they are the legal owner of the rights – that is, that they can demonstrate proper chain of title. This will be especially important where the rights have been purchased or acquired from a third party. In addition, in the event that there are joint proprietors, it will be necessary for each one to join in the application to opt out of the UPC. The party filing the request to opt out needs to be able to demonstrate it is authorised to act on behalf of each one of those entities, and that those entities have each agreed to file the request.
Any patent licensees are well advised to contact the patent owners and check what the patent owner’s plans are in terms of the opt-out. It is conceivable that some patent owners, who have licensed their rights to others, may not have the patent in question at the top of their agenda, and so it is in the licensee’s interest to ensure that any necessary action is taken by the patent owner in a timely fashion.
As a matter of logistics, it is likely that the Case Management System will be flooded with requests to opt out during the sunrise period. Those wishing to file requests to opt out are, therefore, advised to do so as soon as the sunrise period commences, in order that they should be at the front of the queue. It would appear that the Case Management System will assume that a party filing a request to opt a patent out is entitled to do so if the party makes a corresponding declaration. Provisions have been made to correct opt-outs that have been incorrectly filed. However, patent proprietors are well advised to regularly check the status of their patents on the UPC register to ensure that any incorrect opt-outs are detected.
The sunrise period will provide a three-month window in which patentees can file requests to opt out of the UPC in respect of their existing granted European patents. By filing the opt-out request in the sunrise period, patentees can avoid the scenario in which a third party files a claim in the UPC shortly after the Court opens and thereby brings the patent in question under the sole jurisdiction of the UPC.
We recommend that patentees review their portfolios in advance of the sunrise period, and identify all patents for which they wish to request an opt-out once the sunrise period commences. We further advise that patentees carry out a due diligence exercise in ensuring they can demonstrate legal ownership of the patent(s), so as to ensure that any request to opt out the patent is validly filed during the sunrise period.


David Grant,
Senior Associate,
London (UK),
Chartered (UK) and European Patent Attorney

Thomas Prock,
London (UK),

Chartered (UK), German and European Patent Attorney

William Cook,
London (UK),
Solicitor (UK)

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