The UPC - Opt-out dangers: lessons from limitation; dual jurisdiction complexities
This Kat continues to think about the Unitary Patent and the Unified Patent Court. It just won’t go away, and he fears that there will be no escaping the topic for years to come. Indeed he thinks there may be a UPC Rule developing: “When two or more European patent practitioners are gathered together for any purpose, the UPC will end up being discussed sooner or later”. Anyway, for today he has two sets of thoughts, one set are his own, and one set has been sent to him by Katfriend Dr. Ulrich Blumenröder of Grünecker Kinkeldey Stockmair & Schwanhäusser.
Rule 5 of the 15th Draft of the Rules of Procedure (concerning the ability to opt out of the Unified Patent Court System) contains in Paragraph 1 the following seemingly innocuous statement “Where the patent or application is owned by two or more proprietors, all proprietors shall lodge the Application.” It is clear from this, and from Article 83 of the UPC Agreement “a proprietor … shall have the possibility to opt out from the exclusive competence of the Court” that the opt-out request must be filed by the proprietor or all of the proprietors. Presumably therefore the request shall have to demonstrate that they are indeed the proprietor of the patent. Presumably also the Registry (or, if all goes to plan, during the sunrise period, the EPO) will have to check that the requester is indeed the proprietor of the patent.
If the case is a pending application then the requester corresponding to the registered proprietor at the EPO should suffice. But what about after grant? After the opposition period (and any opposition) is over, the EPO will not record changes to the patent proprietor. If there has been a change, the proprietor is faced with the potentially onerous task of demonstrating their entitlement to file the opt-out request.
Something similar happens in a limitation application, which has an analogous problem. EPO Form 2380 offers the following possibilities to the applicant:
It will be seen that any change from the status as granted requires evidence. Assembling and providing this evidence for even a single patent, even more so for an entire portfolio, could represent a costly and time-consuming task.
But there lurk here more hidden dangers, because the proprietor may have rights in more territories than bargained for. The European patent is automatically valid in all territories that do not require translation, and the patent remains valid for that territory until it lapses for non-payment of renewal fee. A patent that is granted in English that the patentee *thinks* he is validating in, say, UK, France, Germany, Spain and Italy, gives rights in Ireland, Luxembourg, Malta, Monaco, Switzerland and Liechtenstein without any action. Suppose then shortly after grant the patent is assigned, for the territories that the patentee *thinks* he has. Then suppose the patentee at grant is dissolved. The new owner can show ownership of the European patent in UK, France, Germany, Spain and Italy. Will the opt-out request be refused because he cannot show ownership in the phantom countries just mentioned? (It seems appropriate to refer to phantom countries, not only because we are so close to halloween.) This Kat recalls Luxembourg as being one of the few pre-London agreement countries not to have any translation formalities, so this may be named the “Luxembourg problem”. For how long will the Registry consider that these phantom rights exist? The initial deadline for paying the first renewal fee due after grant? The extended deadline with surcharge? The restoration period? If the UK is such a phantom designation, the restoration period is 19 months, so patents stay revivable for a very long time.
Dr Blumenröder has been mew-sing about areas of unclarity and infelicity in the opt-out himself. His thoughts on the topics can be accessed here, beginning with the cautionary admonition “While on its face everything seems to be easy (“You file an opt-out with the UPC and you are out”), many aspects are unclear.”
Moreover, following this Kat’s post on some matters relating to the dual competence of the UPC and national courts for non-opted out patents during the transitional period, Dr Blumenröder kindly drew the IPKat’s attention to his thoughts on this topic as well – with an equally ominous beginning “The exclusive jurisdiction of the UPC is not as exclusive as it appears.” In this paper he considers the various complexities of how the jurisdictions may overlap.
If you have taken the trouble to grapple with all of these issues, then you will probably want to read the third paper in the trilogy as well.
At the moment this Kat feels that the number of issues of concern is increasing only in proportion to the amount of time spent thinking about the matter, and will not be surprised to find more aspects to worry about over the next few months.
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| Kat with evidence |
If the case is a pending application then the requester corresponding to the registered proprietor at the EPO should suffice. But what about after grant? After the opposition period (and any opposition) is over, the EPO will not record changes to the patent proprietor. If there has been a change, the proprietor is faced with the potentially onerous task of demonstrating their entitlement to file the opt-out request.
Something similar happens in a limitation application, which has an analogous problem. EPO Form 2380 offers the following possibilities to the applicant:
the above-mentioned patent proprietor, whose name is entered in the European Patent Register, is still the proprietor of the above-mentioned European patent.
there has been a change in the name of the patent proprietor whose name is entered in the European Patent Register. Supporting evidence is enclosed. This person is still the proprietor of the above-mentioned European patent.
the requester(s) became proprietor(s) of the above-mentioned European patent by a transfer of rights.
Supporting evidence is enclosed:
• recent excerpts of the relevant national registers and/or
• other means of evidence.
It will be seen that any change from the status as granted requires evidence. Assembling and providing this evidence for even a single patent, even more so for an entire portfolio, could represent a costly and time-consuming task.
But there lurk here more hidden dangers, because the proprietor may have rights in more territories than bargained for. The European patent is automatically valid in all territories that do not require translation, and the patent remains valid for that territory until it lapses for non-payment of renewal fee. A patent that is granted in English that the patentee *thinks* he is validating in, say, UK, France, Germany, Spain and Italy, gives rights in Ireland, Luxembourg, Malta, Monaco, Switzerland and Liechtenstein without any action. Suppose then shortly after grant the patent is assigned, for the territories that the patentee *thinks* he has. Then suppose the patentee at grant is dissolved. The new owner can show ownership of the European patent in UK, France, Germany, Spain and Italy. Will the opt-out request be refused because he cannot show ownership in the phantom countries just mentioned? (It seems appropriate to refer to phantom countries, not only because we are so close to halloween.) This Kat recalls Luxembourg as being one of the few pre-London agreement countries not to have any translation formalities, so this may be named the “Luxembourg problem”. For how long will the Registry consider that these phantom rights exist? The initial deadline for paying the first renewal fee due after grant? The extended deadline with surcharge? The restoration period? If the UK is such a phantom designation, the restoration period is 19 months, so patents stay revivable for a very long time.
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| Dr Blumenröder |
Moreover, following this Kat’s post on some matters relating to the dual competence of the UPC and national courts for non-opted out patents during the transitional period, Dr Blumenröder kindly drew the IPKat’s attention to his thoughts on this topic as well – with an equally ominous beginning “The exclusive jurisdiction of the UPC is not as exclusive as it appears.” In this paper he considers the various complexities of how the jurisdictions may overlap.
If you have taken the trouble to grapple with all of these issues, then you will probably want to read the third paper in the trilogy as well.
At the moment this Kat feels that the number of issues of concern is increasing only in proportion to the amount of time spent thinking about the matter, and will not be surprised to find more aspects to worry about over the next few months.
