Possible Reasons Why You Might Want to Opt Out of the UPC

1. Flexibility for litigation is paramount

An injunction in all jurisdictions in which your patent is validated, which will be available at the UPC, may not be required. You may wish to pick and choose where you enforce your national validations of an EP patent. You may wish to enforce the validations differently in different countries.

2. The patent is critical to your business

If the patent covers a core part of a commercially important technology, the financial consequences of central revocation by the UPC across all validated jurisdictions are likely to be much greater.

3. The patent is likely to be litigated

If the patent is likely to be litigated or attacked by third parties, it may be better to opt out to avoid the possibility of central revocation by the UPC, particularly if the validity of the patent is perceived not to be strong.

4. Your competitors are based in one or a small number of European countries

If your or your competitor’s key commercial activities concern only a small number of countries, it may be less expensive and faster to litigate in only those countries.

5. You are comfortable opting out national validations of EP patents

There is no fee for opting out the patents. In many cases, it will be easy to identify the valuable and important patents.

6. You are happy to leave the development of the UPC to others

If you are not concerned with taking an active role in the early development of UPC case law and procedural matters, opting out may be a better choice.

7. The UPC will be a fledgling system

The uncertainty over the quality of judgments, procedure and availability of tools such as cross-examination and disclosure in the new system may favour a “wait and see” approach. Witnesses and experts will not necessarily be cross examined. Disclosure (discovery in the US) will not be automatic or as extensive in the UPC as it is in the UK. You can always withdraw the opt-out once the quality of the UPC has been proved, assuming the patent has not been the subject of national litigation by the time you wish to do so.

8. The patent is licensed to different parties in different countries

It can be simpler to licence different national validations of an EP patent to different parties. As discussed above, problems may arise if a unitary patent is licensed to different parties in different countries. For instance, if a unitary patent is being licensed to different parties in the UK and Germany, a licensee in the UK where the patent is not being infringed may balk at the risk of the patent being revoked centrally (i.e. including in the UK) by the UPC while being enforced by the different licensee in Germany. The UPC can be avoided by opting out the national validations of an EP patent.

9. Your patent is a basic patent from which SPCs stem

SPCs (Supplementary Protection Certificates) cover marketed pharmaceutical products and are usually highly valuable. The legal framework governing SPCs is complex. Litigating SPCs in the national courts may therefore be more predictable, and may offer a better spread of risk.

 

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