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The UPC will be a new court system with exclusive jurisdiction over Unitary Patents and the national validations of granted European Patents in the participating states. However, the exclusive jurisdiction will not start immediately. There will be an initial seven year transitional period during which national validations can be litigated in either the national courts or the UPC, and during which the national validations of a granted European Patent can be opted out of the UPC's jurisdiction entirely for the life of the patent.
The UPC agreement sets out that it will have a Central Division currently located in Paris, Munich and London and also Local/Regional Divisions across the EU. Following the UK Government’s withdrawal of its UPC ratification, it is expected that the Central Division intended to be in London will be relocated, possibly to Italy or the Netherlands. At present, Local Divisions have been confirmed in Germany and Italy, and a Nordic-Baltic Regional Division will be based in Stockholm (covering Sweden, Lithuania, Estonia and Latvia). A number of further Local Divisions are expected, including Local Divisions in France, the Netherlands and Belgium. The UPC will have a Court of Appeal located in Luxembourg.
The division of the UPC where an infringement action can be brought depends on the location of the defendant or infringement and the technology sector. An infringement action can be brought at the Local/Regional Division in the state the defendant is based or in any state where infringement has taken place. If there is no Local/Regional Division in the relevant state, the action can be brought at the Central Division.
In many cases, different infringing acts may occur in different EU states, which will in practice give a Patentee a choice of which division of the UPC to bring the action in.
The Central Division will hear all revocation actions or actions for declarations of non-infringement. The Central Division based in London was due to handle chemical, metallurgical and life sciences cases, the Central Division based in Munich will handle mechanical engineering cases and the Central Division based in Paris will handle other cases including software and physics.
If an infringement or revocation action is initiated before the Central Division, then the Patentee can either counterclaim for infringement before the Central Division (in which case infringement and validity will be heard together) or before the relevant Local Division (in which case infringement and validity will be considered separately, unless the Local Division refers the counterclaim to the Central Division). If an infringement action is initiated before a Local/Regional Division and invalidity is counterclaimed, the Local/Regional Division has three options: 1) proceed with both infringement and validity; 2) proceed with the infringement action and refer the counterclaim for invalidity to the Central Division; or 3) refer both infringement and validity to the Central Division.
The language of proceedings in a Local/Regional Division will be one of the official languages of the Local/Regional Division. It may, though, be possible to switch to the language in which the patent was granted (either English, German or French). For the Central Division and Court of Appeal, the language of proceedings will be the language in which the patent was granted or the language of the first instance proceedings.
The UPC will be judged by patent judges of the contracting member states. A panel of three judges, two legal and one technical, will generally preside over each first instance case and the panel will be composed of at least one judge from the state in which the action is brought. Five judges from different member states will preside over Appeals.
Opting out merely requires filing a request to the UPC, assuming no litigation has started in the UPC already. There is no official fee payable. The applicant(s)/proprietor(s) of the European Patent (i.e. all the national validations in the participating states) or their patent attorney can make the request. To be effective an opt-out must be authorised by all the applicant(s)/proprietor(s).
Under the jurisdiction of the UPC, there is a risk of central revocation. Generally speaking, absent other considerations, filing an opt-out appears to give patentees most flexibility whilst minimising risk. There is always the possibility of opting back into the jurisdiction of the UPC for enforcement, but in the meantime for an opted out patent there is no risk of a central revocation action being initiated at the UPC.
If you opt out, you can withdraw the opt-out at any time assuming no litigation has started in the national courts already. However, once an opt-out has been withdrawn it will not be possible to opt out again.
Many people are taking the view that there is little disadvantage to initially opting out their entire patent portfolio, on the basis that they can always opt back in later, for example to bring an infringement action at the UPC. However, reasons for not opting out at all include the administrative and cost burden of doing so or perhaps an interest in developing the case law of the UPC.
During an initial 7 year transitional period, you can opt out at any time after publication of a European Patent application or after grant of a European Patent application, unless litigation in relation to the patent (any national validation) has already been brought before the UPC. It will not be possible to opt out after the end of the transitional period.
For more information please contact Martin Jackson