Prepare yourself and be ready for the UPC
A. Casalonga (FR)
Where do we stand with the UPC Agreement ?
It is well known that the Agreement shall enter into force within 4 months from the date where at least 13 Contracting Member States, including France, Germany and the UK will have ratified the Agreement (article 89 UPCA).
At present (may 2018), 16 Contracting Member States, including France and the UK, have ratified. Ratification by the UK on 26 April 2018 is an important step toward entry into force of the UPC Agreement.
However Germany is still missing.
In the mean time, a Protocol on Provisional Application (PPA) has been drafted and should enter into force before the UPC Agreement. It was namely considered necessary to create the main organs of the UPC before entry into force of the Agreement.
The provisional Protocol will allow this to be made before effective entry into force of the UPCA. This is the case for example for the Registry, the Administrative Committee, the Advisory Committee, as well as the appointment of the judges
The total duration of the Protocol should be of 6 to 8 months, giving sufficient time for those preparations.
Only two Contracting Member States are lacking for an entry into force of the Protocol.
At present, the ratification process of the UPCA in Germany has been suspended, waiting for a decision of the German Constitutional Court. If the Court would accept to consider the arguments filed with the complaint, the delay could be more than 1 year.
If, on the contrary, the court would reject the complaint as inadmissible, without detailed study, Germany could ratify the UPC Agreement very quickly, as long as the provisional Protocol is in force as explained above.
However, it is probable, in that case, that Germany would delay the final step of ratification of the UPCA so as to allow entry into force of the Protocol first. It would namely be complicated if the UPCA would be ratified by Germany, triggering the 4 months period for effective entry into force while the Protocol would not be into force. The 4 months period would probably be too short to completely prepare all necessary organs of the UPC.
What should one do today so as to be prepared for any event?
Two points should be considered already now:
- Understanding and preparing the opt-out procedure
- Practicing the IT-Court Management System (ITCMS)
I. The opt-out procedure
During the entire transitional period (possibly extended), Article 83-3 provides for the possibility to opt-out from the exclusive competence of the Court. Contrary to Article 83-1 which concerns the normal transitional period and is limited to infringement actions and revocation actions, Article 83-3 clearly concerns the entire range of competence of the Unified Patent Court including therefore not only infringement actions and revocation actions but also other possible actions such actions for declaration of non-infringement or actions for provisional and protective measures and injunctions.
Of course, the opt-out possibilities provided by Article 83-3 do not apply to Unitary patents.
Which kind of right can an opt-out cover ?
The opt-out can relate to any published European patent application, any granted European patent (excluding Unitary patents), any supplementary protection certificate issued for a product protected by a European patent (excluding such supplementary protection certificates issued for a product protected by a Unitary patent).
The opt-out covers all Contracting Member States designated in the published European patent application or in the granted patent: it is not possible to limit the opt-out to only certain designated countries, unless a designation would have been positively withdrawn by the applicant before grant of the European patent.
A particular situation which must also be considered is the case where the same European patent or the same European patent application has different proprietors for different designated countries, as is authorized by the EPC (Articles 59 and 118 EPC as well as Rule 72 EPC).
In that case, a registered opt-out will nevertheless cover all designated countries. As a matter of fact, Rule 5-1(b), specifies that: "an Application for opt out is made in respect of all of the Contracting Member States for which the European patent has been granted or which have been designated in the patent application". This particular situation should be considered as similar to a co-ownership of the patent. Therefore, according to Rule 5-1(a), the opt-out application must, in that case, be lodged by all proprietors. Failure to do so will result in an invalidity of the registered opt-out.
Who can apply for an opt-out ?
Only the proprietor or applicant (all of them in case of multiple proprietors or applicants) can apply for an opt-out. It is not possible for a licensee to lodge an Application for opt-out. Even with the authorization of the proprietor, the exclusive licensee is not entitled to lodge an Application for opt-out.
If a licensee wishes to protect its activity by an opt-out, he will then have to contact the proprietor and ask him to lodge an Application for opt-out. The same is true for the case the licensee would like to withdraw an opt-out to be able to bring an action before the UPC.
It is advisable to provide specific clauses in a licensing agreement for organizing these opt-out options which are not available to the licensees in the same way as infringement actions.
A further difficulty may arise when the person lodging an application for opt-out is not the proprietor or applicant recorded in the register of the European Patent Office or the relevant national patent office. This may be the case when the European patent application or the granted European patent has been assigned by the initial applicant or proprietor to another person and none of the parties has registered the assignment.
Rule 5-1(a) in conjunction with Rules 8-5(a) and (b), solves this difficulty by providing that it is sufficient to show that the person lodging the application for opt-out is "entitled to be registered" as applicant of the European patent application or proprietor of the European patent under the law of the Contracting Member State in which the European patent has been validated. It must be reminded that, for countries like France, Germany or United Kingdom, where the validation does not require any translation, payment of renewal fees is equivalent to validation.
Consequently, when lodging an Application for opt-out, it will be sufficient (and required according to Rule 5-3(e)), to file a declaration stating that the person lodging the Application is "entitled to be registered in the national patent register". Since the European patent usually designates several European countries, the declaration should precisely indicate that this entitlement relates to all designated states. Otherwise, it could be argued that the declaration is insufficient.
The specific situation of supplementary patent certificates (SPC):
If an SPC was granted before the Application for opt-out or the Application to withdraw an opt-out, the Application for opt-out must be made both by the proprietor of the European patent and by the holder of the SPC, if different from the proprietor. The holder of the SPC may for example be a licensee.
If the SPC is granted after the opt-out has been registered, the opt-out will apply automatically also to the SPC. The holder of the SPC, if different from the proprietor of the European patent, will have to simply accept the decision of the proprietor of the European patent (see Rule 5-2(a).
The basic principle for opt-out and withdrawal of opt-out, relating to supplementary patent certificates (SPC), is that they follow the European patent to which they relate.
Therefore, an Application for opt-out or an Application to withdraw an opt-out, shall extend to any supplementary patent certificate (SPC) based on the European patent (Rule 5-2). It is not possible to opt-out for an SPC corresponding only to some parts of a European patent (for example to some claims of a patent) while keeping another SPC without opt-out.
Of course, no opt-out can be obtained for a supplementary patent certificate based on a Unitary patent.
When to apply for an opt-out ?
An application for opt-out may be lodged at any time after a European patent application has been published. It is possible to lodge an Application for opt-out as long as the patent is in force and even 5 years after its expiry since the status of limitation for an infringement action is of 5 years and a revocation action may still be filed within this time period.
However, in all cases, the application for opt-out must be lodged before the last day of the transitional period provided in Article 83 of the Agreement.
It is not possible to lodge an Application for opt-out before publication of a European patent application. This has no practical consequences, since it is not possible for a third party to engage a revocation action before the Unified Patent Court as long as the patent is not granted.
An opt-out Application must also be lodged before any action is engaged at the UPC (Rule 5-7). Such action may relate to the patent application (for compensation derived from provisional protection) or to the patent which is the object of the Application for opt-out. It may also relate to any supplementary patent certificate based on that patent, for example an action for a declaration of invalidity of any supplementary patent certificate based on the European patent. (Rule 5-2)
If a third party has filed a revocation action or an action for a declaration of non infringement before the central division of the Court, an opt-out is not anymore possible and will be automatically ineffective.
How to apply for an opt-out ?
Rule 5-3 lists the necessary content of an Application for opt-out:
Name, postal address and electronic address of each proprietor or applicant of the European patent or application and of the holder of any supplementary protection certificate, details and number of the patent or patent application (one Application for opt-out is required for each patent; a list of patents and patent applications may however be indicated when using the IT system of the UPC), details and number of any supplementary patent certificate.
If the Application is not lodged directly by the proprietor or applicant of the European patent or application but by a representative acting on behalf of said proprietor or applicant, the name, postal address and electronic address of this representative must also be indicated.
If the representative is a lawyer or a European patent attorney with an appropriate qualification, as defined in Article 48 of the Agreement, no specific mandate or authorisation should be required when lodging the Application to opt-out.
A mandate for lodging the Application to opt-out is required and must be lodged with the Application if the Application is lodged on behalf of the proprietor or applicant of the European patent or application by a person who does not fulfils the requirements of Article 48 of the Agreement (see § 16 below).
If the person lodging the Application is not, at the time the Application is lodged, the registered proprietor on the relevant patent register i.e. on the national patent register of each designated States (in the case of an application for opt-out concerning a granted European patent) or on the European patent register, (in the case of an application for opt-out concerning a pending European patent application), a declaration must be lodged according to which the person lodging the Application is entitled, at the time the Application is lodged, to be registered as proprietor on all the relevant patent registers.
In case of several proprietors or applicants, a declaration is required for each proprietor or applicant.
If the Application to opt-out is lodged by a representative on behalf of the proprietor or applicant, the declaration may be made by the representative.
Of course, in that case the representative making the declaration engages his or her responsibility. It may me safer for the representative to have each proprietor or applicant execute the declaration.
In practice, the Application must be made on line using the specific official form of the Case Management System (CMS).
No court fee is required.
Period of effectiveness of an opt-out
When the UPC Agreement is in force, the legal effect of an opt-out begins with the entry on the Register. If a correction is lodged with the Register to amend the indications which have been lodged initially, the opt-out is only effective from the date of entry of the correction in the Registry.
If the opt-out relates to a granted patent and if the opt-out is not withdrawn, its legal effect ends only at expiry of the patent and 5 years after this expiry since an action for financial compensation can be engaged within the 5 years of the period of limitation.
If an opt-out relates to a published European patent application, the legal effect of the opt-out also begins with the entry on the Register.
The opt-out registered for a patent application will automatically continue with the corresponding granted patent as long as the patentee does not request a Unitary patent.
If a Unitary patent is requested, an opt-out which had been registered for the pending European patent application, will automatically be deemed as withdrawn. It is not necessary for the patentee to inform the Registry: In practice, the EPO is automatically informing the UPC Registry via the UPC IT Case Management System (ITCMS)
The effects of an opt-out:
According to the Drafting Committee, Art 83 of the Agreement together with Rule 5 must be interpreted in such a way that an opt-out registered for a given patent application or patent, forbids to bring any action concerning this patent application or patent before the UPC. Third parties have to file several revocation actions before national courts if the European patent designates more than one Contracting Member State.
The withdrawal of an opt-out
Rule 5-8 provides for the possibility to withdraw an opt-out which has been registered with respect to a patent or a patent application. The withdrawal shall apply compulsorily to all Contracting Member States. It shall also apply to any supplementary patent certificate based on the European patent. The withdrawal has to be made by lodging at the Register a specific Application to withdraw. Only the proprietor or applicant is allowed to lodge such specific Application to withdraw.
No fee is required for withdrawing an opt-out.
The Application to withdraw may be lodged at any time during the entire period of effectiveness of the opt-out, except if an action has already been brought before a national court, as stated in Art 83-4 of the Agreement. The same applies in the case this national court action is terminated, as expressly mentioned in Rule 5-9. In such a case, the Application to withdraw is ineffective even if it has been entered into the Registry. The action before the national court must be any action over which the UPC has jurisdiction: it can be an action for infringement, an action for declaration of non infringement, a revocation action, an action for provisional measures and injunction, an action relating to the use of an invention before grant of the patent or to the right based on prior use of the invention.
Other actions relating to patents and supplementary patent certificates, over which the Unified Patent Court has no jurisdiction, may have been engaged or terminated before a national court without preventing an Application to withdraw of being effective: for example actions to claim property of a patent or actions relating to the scope and validity of patent licenses or assignment agreements.
The requirements for the Application to withdraw an opt-out are the same as for requesting an opt-out.
The Application to withdraw must contain the same indications as an Application to opt-out.
Effects of the withdrawal
The withdrawal of an opt-out is effective from the date of entry in the register. Therefore, from that date, the exclusive competence of the UPC is fully restored and any action concerning the European patent must be brought before the Unified Patent Court and not any more before a national court.
When an action filed before the UPC shortly after the withdrawal of an opt-out, relates also to compensation or damages, the Court shall nevertheless apply the UPC Agreement to determine the damages compensating infringement acts occurred when the opt-out was effective. (i.e. before the withdrawal of the opt-out).
The withdrawal of an opt-out is a non reversible step. As a matter of fact, according to Rule 5-10, after an effective withdrawal of an opt-out for a given patent or patent application, a new opting out is not anymore possible for this same patent or patent application.
Representation is not compulsory for lodging an Application for opt-out or an Application to withdraw an opt-out or any Application for correction.
However, the Application for opt-out or to withdraw an opt-out may be lodged on behalf of the patent proprietor or the owner of the patent application by an appointed representative who may be any person.
Rule 5-4 specifies three categories of such persons:
In a first category are representatives defined in Article 48 of the UPC Agreement, i.e. lawyers authorized to practice before a court of an UPC Contracting Member State or European Patent Attorneys with appropriate qualifications such as the European Patent Litigation Certificate as defined in Article 48(2) of the Agreement. Those representatives may be appointed to lodge an Application to opt-out or an Application to withdraw an opt-out and no specific mandate or authorisation should be required therefore as indicated in Rule 5(3)(b)(i).
In a second category are European Patent Attorneys as defined in the EPC or lawyers qualified in an EPC Contracting State, entitled to act as professional representatives in patent matters and having their place of business in that State (Article 134(8)EPC).
In a third category are any other persons, including lawyers qualified in a country outside the EPC countries and national patent attorneys.
All representatives belonging to the second and third categories must provide a specific mandate from the proprietor of the European patent or applicant, authorizing the lodging of the Application to opt-out as indicated in Rule 5(3)(b)(ii) and this mandate is to be lodged together with the Application. The same applies for an Application to withdraw an opt-out.
Specific provisions before entry into force of the Agreement
According to the provisions of the Protocol on Provisional Application (PPA) of October 2015, certain parts of the UPC Agreement will come into force beforehand. This is the case for the Registry.
Therefore, as provided in Rule 5-13, it is possible to lodge an Application for opt-out and have it accepted by the Registry during a sunrise period, before entry into force of the UPC Agreement.
It seems that the Registrar, before accepting such an Application, will not inform the person having lodged the Application of any missing or incorrect requirement. Self checking is therefore important since it is always possible to lodge a correction with the Registry.
All Applications for opt-out duly registered before entry into force of the UPC Agreement will be treated as entered in the Registry on the date of entry into force of the Agreement.
Thanks to this provision, applicants of European patent applications as well as proprietors of European patents already granted have the possibility of subjecting their patent applications and patents to an opt-out as provided in Article 83-3 of the Agreement from the date of entry into force of said Agreement.
For example, a patent proprietor wishing to avoid a revocation action filed by a third party before the UPC against a certain patent, has the possibility to opt out this specific patent before entry into force of the Agreement.
In view of the broad wording of Rule 5-12, it seems possible, during the sunrise period, to lodge an Application to withdraw an opt-out already provisionally registered before entry into force of the Agreement. The previous application to opt-out is namely only effectively registered on the date of entry into force of the Agreement. Before that date, this opt-out does not legally exist.
All Applications filed during the sunrise period must be considered as purely provisional. Consequently, if an Application to withdraw an opt-out already provisionally registered, is lodged during the sunrise period, it will still be possible to lodge a new Application for opt-out concerning the same patent. And this new application for opt-out can be lodged before expiry of the sunrise period or afterwards, when the UPC Agreement has come into force.
This is an exception to the normal situation, according to which a new application for opt-out made after an Application to withdraw is not possible.
II. The ITCMS
All procedural steps before the UPC will have to be performed through the IT system of the Court, the so-called Court Management System (CMS).
It is already possible to access to the ITCMS by logging on the Web site of the UPC.
At present, unfortunately only a few training possibilities are opened.
Those are the registration of a representative and the Applications for opt-out and withdrawal of opt-out.
Nevertheless, it is advisable to prepare and lodge Applications on the ITCMS already now, so as to gain experience of the system.