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Getting ready for the UPC: expected start mid-2022

In a recent announcement, the Preparatory Committee for the Unified Patent Court set out an expected timeline for the start of the Unified Patent Court (UPC), which is expected to be mid-2022. The first step will be Germany's ratification of the Protocol on the Provisional Application of the UPC Agreement (PAP – protocol).

Since the German federal president has signed the ratification bill which was promulgated on 12 August 2021, the final step required for the UPC to come into existence is for two other member states to ratify the PAP-protocol and then for Germany to deposit its instrument of ratification.

The PAP is the final phase of the UPC and once it enters into force, other practical aspects such as budget and IT systems will need to be completed. This is all part of the preparatory work, which once considered to be in a fit state, will allow the UPC to start.

Why is this important?

Recall that the UPC is the court where unitary patents selected through the conventional European patent system will be litigated. However the UPC is also the court where existing European patents must be litigated, where countries validated for that European patent are also member states of the UPC.

As part of the transitional provisions (Article 83 of the UPC regulation), an owner of a European patent can opt out of the UPC provided that no infringement or revocation proceedings have started before the UPC. The opt-out is only available within a transitional period of seven years from the start of the UPC.

A patent owner who opts-out of the UPC can opt back in at any time provided proceedings have not started before a national court.

Why opt out?

As the name suggests, the UPC is a unified court system for enforcing or revoking patents granted by the EPO in all member states that are members of the UPC.

That means that a decision by one court will apply for all validated states of the European patent where the validated state is a member state of the UPC. In other words if you lose one you lose in all but of course if you win in one you win in all.

The potential of the UPC is therefore very attractive; enforcement across at least sixteen member states of the UPCA. On the other hand, revocation will result in a loss in all member states of the UPC. Some may therefore see this lack of judgment diversity as a disadvantage.

Patent owners are seized with the task of assessing whether the European patents protecting the technology on which their business is based would be better served by enforcement in a single court, the UPC, or in multiple national courts using the existing system. Of course, enforcing in multiple national courts or defending in multiple national courts is likely to be more expensive. Patent owners with a large portfolio should therefore consider whether to opt some or all of their cases out of the UPC.

The withdrawal of the UK from the UPC now provides a different dynamic to the opt-out question. The withdrawal of the UK from the UPC means that existing European patents validated in the UK must be enforced in the UK courts. A typical selection of states for validating a European patent for electronics and mechanical technologies is UK, Germany and France covering 50% of the population and 55% of the economic activity in Europe. For this example, not opting out of the UPC now means that court proceedings will be in two jurisdictions - UK and the UPC - rather than all three, perhaps reducing the significance of the opt-out question.

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