UPC Opt-Outs – A Cautionary Tale
You didn’t file an opt-out, but are you sure that no opt out has been filed? As we have found out, unauthorised UPC opt-outs do exist, and – whether filed intentionally or by accident – they are a headache for rights’ holders. In this article, we recount our hands-on experience of unauthorised UPC opt-outs, and what you need to do about them.
The Unified Patent Court (UPC) has introduced a new forum for enforcement of European Patents across 17 European Union states. As well as offering patent owners a centralised, one-stop-shop for patent infringement actions, it provides third parties with the possibility of seeking revocation of a European patent across those same 17 states simultaneously. When the new court opened on 1 June 2023, all existing European patents in force in those states automatically fell within the jurisdiction of the UPC unless their owner(s) had filed a formal ‘opt-out’ request with the UPC Registry during the preceding three-month ‘sunrise period’ that ended on 31 May 2023.
A valid opt-out allows a patent owner to prevent the UPC having jurisdiction in the event that a third party attempts to start a revocation action at the UPC. If a third party files a revocation action against an opted-out European patent, the patent owner has only one month to file a preliminary objection against the UPC’s competence to take jurisdiction and show that the European patent has been opted out (per Rule 19 of the Rules of Procedure of the Unified Patent Court). If the patent owner does not respond in time, the UPC will assume jurisdiction. Furthermore, we understand that it may at that point be too late to correct or re-file a deficient opt-out, again resulting in the revocation action being able to proceed before the UPC.
As far as we are aware, the UPC Registry does not conduct any substantive or clerical checks on opt-out submissions. That is perhaps not surprising given that over 500,000 European patents were opted out during the sunrise period. As soon as an opt out request has been filed, the publicly-available overview on the UPC Registry website will indicate the opt-out status of the relevant European patent (here: Opt-Out | Unified Patent Court (unified-patent-court.org)). The lack of checking may have resulted in some opt-out filings being formally deficient and/or ineffective. It opens the possibility of ‘unauthorised’ opt-outs being filed, intentionally or in error.
The large number of opt-outs recorded in the sunrise period was facilitated in part by an API provided by the UPC Registry, which European patent owners and IP service providers could use to file ‘bulk’ opt-out submissions for large numbers of European patents simultaneously. Service providers who were not UPC Representatives were able to file opt-out requests provided that they obtained an appropriate ‘mandate’ form authorising them to act on behalf of the patent owner(s). Throughout the sunrise period, the UPC provided a test portal alongside the live API portal, allowing API users to check their systems before filing formal opt-out requests. The API avoided the need to manually key-in details of individual European patents through the UPC Case Management System (CMS).
A spurious opt-out
In August 2023, we were made aware of a puzzling UPC opt-out that appeared to have some link to Abel + Imray. A company having no connection to our firm found that one of their European patents (which they had not yet intended to opt-out) was shown as having been opted-out on 1 March 2023. While opt-out documents are not automatically made available to the public, it is possible to check a few additional details via the CMS, and in this case it appeared that European patent in question had been opted out by one “Juan Abel & Imray” via an ‘API’. Concerned at this finding, the company contacted us to ask if we could shed some light on the situation.
It was immediately clear to us that this opt-out request was not filed by anyone in our firm, despite our name appearing on the documents. In an effort to better understand the situation, we contacted the UPC Registry service desk and also filed a formal request for access to the UPC opt-out documents (as provided for under Rule 37 of the Rules governing the Registry of the Unified Patent Court). The UPC Registrar granted access to the opt-out form relating to the European patent, on which we found a somewhat confusing array of details for the opt-out requester and the patent owner, almost all of which appeared to be entirely false. The UPC Registry service desk also provided us with a list of 12 other European patents opted out by the same user. Once we obtained access to the opt-out forms for those other European patents, we found the same apparently false details on each form. In a particularly bizarre twist, around half of the opt-out submissions were accompanied by a document purporting to be a mandate, which document was in fact a set of slides from a language school presentation. If nothing else, that document clearly underlines the absence of any verification of the documents filed with an opt-out request.
Despite the obvious formal and substantive deficiencies in these opt-outs, each European patent remains recorded on the UPC Register as opted-out. As far as we are aware, this can only be rectified by a UPC representative acting on behalf of the patent owner(s). We believe, and the UPC Registry has confirmed, that each owner would need to formally request removal of an unauthorised opt-out under Rule 5A of the Rules of Procedure of the Unified Patent Court. Once the unauthorised opt-out is removed, it will be possible for the patent owner(s) to file a genuine opt-out request on each case, if they wish. We have contacted the EPO representatives of each patent in the list provided to us by the UPC Registry to make them aware of the situation.
In the documents we were given access to, we identified the details of the service provider that we understand was responsible for these filings. They have indicated that the filings appear to have been made in error, although we have as yet received no explanation as to how our firm’s name appeared in the documents.
While we do believe that these opt-outs were filed in error, and not as a malicious act, it remains the case that investigating and resolving this matter has been and continues to be time-consuming and somewhat complicated, both for us and for the owners of the affected European patents.
This unfortunate incident (which fortunately affected ‘only’ 13 European patents, as far as we are aware) serves to highlight a number of practice points, for patent owners and professional representatives, and also for third parties.
Firstly, there really is no checking of opt-out documents by the UPC Registry. If you entrusted opt-out filings to a third party, be sure to obtain copies of the documents and check that the opt-out requests are correct and complete. In the case of a European patent, an opt-out request must be filed on behalf of all owners and indicate the owner(s) for each state in which the patent was granted. That should be the true owner(s), which may or may not match the owner(s) as recorded on national registers.
Secondly, if you have deliberately not opted-out certain European patents in your portfolio, you may wish to check that no opt-out has been recorded. If you do become aware that an unauthorised opt-out has been filed on one of your patents or applications and you wish to have it removed, you should make a request for removal of an unauthorised opt-out under Rule 5A of the Rules of Procedure of the Unified Patent Court. In particular, you should not request that the opt-out is withdrawn under Rule 5, as while this may also lead to the opt-out being removed, it will then very likely not be possible to decide to opt-out the patent or application in the future, should you wish to do so.
Thirdly, a patent recorded as opted-out may not have been effectively opted out. While some basic details are available through the CMS immediately, copies of opt-out forms and mandates can be requested provided that the requester provides a reason for seeking access. An explanatory note accompanying amendments made to the Rules governing the Registry of the Unified Patent Court on 31 July 2023 explicitly indicate that suitable reasons include a third party wishing to verify the validity of the opt-out of a patent before challenging it.
Finally, we take this opportunity to provide a reminder that an opt-out allows patent owners to object to the UPC assuming jurisdiction if a third party files a UPC revocation action. If the patent owner(s) fail to lodge a preliminary objection to the revocation action within the short one-month window from the revocation action being served, or if the opt-out is found to be ineffective and cannot be corrected, we understand that the UPC will allow revocation proceedings to go ahead.