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Opting out of the UPC: the “transition period” and “sunrise period”

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The key consideration for applicants and holders of European patents and SPCs is whether to opt out their patents and SPCs from the jurisdiction of the UPC.

There will be a “transition period” during which applicants or holders of European patents applied for or granted prior to the end of the transitional period have the option to opt out of the UPC, provided an action has not already been brought before the UPC. The transitional period is seven years, but this may be extended by another seven years. After the end of the transition period, it will no longer be possible to opt out patents from the UPC.

A key milestone for opting-out patents from the UPC is the “sunrise period”, which will begin three months from the start date of the UPC. This is designed for patent holders and applicants to take action to opt out their patents before the UPC goes live.

Once a patent has been opted out of the UPC it is possible to opt back in, however a second opt-out is not permitted. The opt-out will remain in force for the lifetime of the patent.

The opt-out concerns the European patent and all national patents derived from it, validated in contracting member states.

Where a patent has been opted-out, the opt-out automatically extends to an SPC based on the opted-out patent.  Where the patent has expired, the expired patent can be opted-out and this will automatically extend to the SPC based on the opted-out expired patent.

Where there are multiple applicants or patent holders, all parties will have to act in common to exercise the opt-out.  For SPCs, where there has been an assignment so that the holder of the SPC is different from the patent holder, both the SPC holder and the patent holder must act in common to exercise the opt-out.

It is important to note that unitary patents and SPCs based on unitary patents cannot be opted out of the UPC.

Considerations for holders of European patents and applicants for European patents

The key consideration for holders and applicants is whether to opt out from the UPC. Now is the time to review existing patent portfolios and pending applications and make that decision. Once the “sunrise period” begins we anticipate demand will be high among clients wishing to opt-out their patents and patent applications from the UPC before it goes live.

Ensuring an effective opt-out

If you wish to opt-out, it is important to ensure that the opt-out is effective.

For an opt-out to be effective, the opt-out must be filed in the name(s) of the “true owner(s)”.  The true owner(s) is the person(s) entitled to be registered as the patent holder or applicant, regardless of whether they are recorded as such on the EPO or national registers.  As mentioned above, where there are multiple applicants or patent holders, all parties will have to act in common to exercise the opt-out.

In most cases, the true owner(s) will simply be the proprietor(s)/applicant(s) shown on the EPO or national registers.

However, careful consideration is needed where there has been a change in ownership.

For example, where an assignment of a granted European patent has only been recorded in some granted countries but not others, then the opt-out must still be filed in the name of the true owner(s), but the opt-out must be filed with a declaration that the listed parties are the true owner(s).

In addition to this, the opt-out must be made for all states for which the European patent was validated.  One interpretation is that the opt-out should also be made for all states for which the European patent was granted or were designated in the application, not only in respect of UPC participating member states and not only in respect of validated states, but also those in which the European patent was not validated or may have since lapsed.  Where an assignment has occurred, we suggest identifying the true owners for each designated state by reviewing the chain of title for all states in which the patent was granted.  If the assignment only refers to the validated countries of the European patent, we suggest that the opt-out names not only the assignee, but also the owner of the European patent in the non-validated countries, even though the European patent will have lapsed in those countries.

Failure to file the opt-out in the correct name(s) could result in the opt-out being invalid, which could result in that European patent unwantedly being under the UPC jurisdiction.

To ensure an effective opt-out, we recommend having a full appraisal of any changes in ownership now, before the sunrise period begins, so that we can ensure the correct documentation is completed.  Please contact your usual Forresters attorney for further advice on this.