Strategic considerations

Strategic considerations that should be assessed in the run-up to the Unitary Patent System.

1. Define opt-out strategy and prepare to opt-out for the sunrise period (contemplated to start in September 2017)

  • Advantages to opting-out from the jurisdiction of UPC
    • Avoid the unpredictability of first UPC decisions. 
    • Avoid the risk of revocation in all Contracting Member States in a very short time frame. 
    • Avoid conflict with pending EPO proceedings (stays of proceedings uncertain before the UPC).
  • Benefits of staying in (i.e., benefits of not opting out of jurisdiction of UPC)
    • Exceptions with respect to patent infringement may not apply (e.g. Bolar exemption). 
    • Influence on the new system, judges and first UPC decisions. 
    • Avoid the risk of inconsistency between national decisions regarding national parts of European Patents. 
    • Avoid launching proceedings in each country to obtain injunction and related costs.
  • See FAQ 7 for further information on the opt-out

2. Portfolio management considerations: should you obtain Unitary Patents, European Patents or national patents?

  • If you intend to obtain patent protection for five or more Participating Member States, choosing a Unitary Patent is likely to be cheaper than the traditional European Patent bundle of patents. But then it will be “UPC only”.
  • One of the key questions is to assess whether or not the added value of obtaining protection in more Participating Member States is worth the extra fees. If not, filing a European Patent and using the UPC (not opting out) could be a good option.
  • The advantage of a protection within all Participating Member States and the vulnerability to central revocation should be weighed against each other. For patents considered as “crown jewels”, filing European Patents (and opting-out) and national patents may complicate and delay competitors’ actions.
  • Applicable law should be taken into consideration in relation to the Unitary Patent as an item of property:
    • Laws of the Participating EU Member State in which the applicant of the patent either had its residence or principal place of business on the date of filing of the patent application or had a place of business on the date of filing of the EP application.
    • In case of co-ownership, the applicable law is the law of the Participating Member State in which the co-owner first listed on the application form has its residence or principal place of business on the date of filing of the patent application.
    • If the applicant has no residence or place of business within the territory of the Participating Member States, German law will apply (German law being the law of the Member State where the EPO is headquartered).
      • e.g. law applicable to the capacity of a person to represent a company and sign an opt-out on its behalf.

3. Review/amend licence agreements and take Unitary Patent System into account in new license agreements

1. Key points to consider for licence agreements concerning European Patents:

  • Possibility for (exclusive) licensees to opt-out European Patents.
  • Right of exclusive licensee to bring infringement actions.
  • Possibility for a non-exclusive licensee to bring infringement actions.
  • Possibility for patent proprietor to join proceedings brought by the licensee.

2. Key points to consider for licence agreements concerning Unitary Patents:

  • Unitary Patents can be licensed for all or part of the Participating Member States.
  • Parties are free to choose applicable law (but validity, the legal effect, consequences of registrations, etc are subject to the law applicable to the patent as an item of property).

4. Review/amend co-ownership agreements and take Unitary Patent System into account in new co-ownership agreements

When there are multiple owners of a (European or Unitary) patent, the following issues should be considered:

1. The rights of co-owners of a Unitary Patent.

  • Right to bring infringement actions and right to grant licences are determined by the national law applicable to the Unitary Patent as an object of property.
  • Rules relating to co-ownership differ from country to country and co-owners need to take this into account when drafting their contract.

2. Revocation action

  • If there are different owners of a European Patent in different countries, any application for its revocation must, under the UPC, be brought against all of them.
  • This needs to be anticipated in the contract (including costs issues).

3. Opt-out

  • Under the 18th Draft Rules of Procedure of the UPC, an opt-out for a European Patent must be declared by all owners.
  • Opting-out is no longer possible if one of the owners of a national part of the European Patent has brought an action before the UPC.
  • Opting-in is no longer possible if one of the owners of a national part of the European Patent has brought an action in a national court.
  • Need to agree on a common opt-out and litigation strategy in the contract.

4. Applicable law to the patent as an object of property

  • The applicable law is the law of the Participating Member State in which the co-owner first listed on the application form has his residence or principal place of business on the date of filing of the patent application.
  • This needs to be anticipated when filing the patent application.

5. Anticipate possibility of bringing or defending actions before the UPC

Contact the UPC taskforce for guidance on bringing or defending actions before the UPC.