UJUB’s UPC Opt-out Day


An Opt-out Day with a Mock Trial was organised to great success by UJUB* at MEDEF’s offices in Paris on 6 June 2016.  The purpose of the day was to explore the operation of the opt-out of classical European patents from the Unified Patent Court (UPC) regime under Article 83 of the UPC Agreement, as well as to hold a mock hearing of a Preliminary objection to test the procedural rules for opting out.

Operation of the opt-out

The morning session focused on the law and mechanism of the opt-out of classical European patents.  Opting out is possible during the transitional period under Article 83 of the UPC Agreement, and also in the preceding provisional application (‘sunrise’) period.

Professor Édouard Treppoz explained the legal consequences of the opt-out regime, with some interesting thoughts on whether an opt-out would be limited to an opt-out from the competence of the Court or also from the Agreement’s applicable law regime.  The question arises because Article 83(3) (which provides for opt-outs) specifically refers to being able to “opt out from the exclusive competence of the Court”.  Noting some differences in substantive patent law between that in the UPC Agreement and French law, including the little known (outside France of course) extra-atmospheric space defence to infringement in Article L613-5(e) of the CPI (the French IP Code),  Professor Treppoz suggested that the uncertainty created real concerns.

Pierre Véron provided an overview of the operation of the rules for opting out contained in Rule 5 of the 18th draft of the Rules of Procedure, whilst warning that the final version of the rules would need to be checked for any changes regarding the requirements for an effective opt-out.  He stressed the need for all legal proprietors to participate in the opt-out application, not just registered proprietors.  Maitre Véron also raised concerns that it appeared that an opt-out (and withdrawal of an opt out) could not be effected even after an action in the ‘other court’ has concluded, which could lead to malicious revocation actions being filed and then abandoned whilst fixing the patentee with a less preferred jurisdiction.

Neil Feinson, coordinator of the UPC Preparatory Committee’s IT Working Group, and Cristiano Morganti of NetService, the IT providers for the UPC case management system, gave an overview of the still-evolving UPC IT system, including the online opt-out form.  Manual and bulk opt-outs will be possible through the web interface, and an API is being made available to allow a machine interface opt-out application for patentees with large numbers of patents.   At present, security will involve two-factor authentication, involving an email address (and password), and mobile phone number (with some form of PIN sent by SMS).  Whilst the Working Group shares concerns of future users re introducing greater security features, the intention is to keep up-front verification automated and relatively instantaneous in order to keep costs down, bearing in mind that no opt-out fee is being charged.

The IT Working Group is currently working towards the sunrise period coming into effect on 31 October 2016.  Alexander Ramsay, Chair of the Preparatory Committee, provided a state of the nation address on final preparations for the UPC itself.  Whilst exact timings for the start of the sunrise period and the UPC opening its doors for business depend on the speed of remaining ratifications, he was pleased to note that with the recent ratification by Bulgaria there was only one more ratification required in addition to the two mandatory ratifications by the UK and Germany.  The Preparatory Committee expected to wrap up its business either at its next meeting scheduled for 30 June, or in a worst case scenario at the final meeting scheduled for October.  The sunrise period was still expected to come into force in late autumn 2016 with the UPC to start operations in spring 2017.  The Committee was currently in the process of recruiting judges, with an expectation that about 35-45 legally qualified judges and about 50 technically qualified judges would have been appointed by the start.  All of the technically qualified judges will start part time, as will most of the legally qualified judges, with flexibility built in by either increasing the case load of the part time appointments or by means of a reserve list.

The Mock Trial

The afternoon took on a more light-hearted tone, as an amusing fact pattern concocted by Pierre Véron was litigated by Emmanuel Gougé and Kevin Cordina on the part of the two co-owners of the patent and Guillaume de la Bigne and Wouter Pors for the party having sought revocation of the patent before the UPC Central Division.   Marie Courboulay presided as Judge Rapporteur with Sarah Boucris as Registrar.  In summary, the patentees raised a Preliminary objection (under Rule 19) to the revocation action, claiming that the UPC did not have jurisdiction as a result of the prior opt-out of the patent in suit under Article 83.  The arguments focused on whether the provisions in Rule 5 had been complied with so as to give effect to the purported opt-out.  The arguments centred on three issues:

  1. Whether an application in the name of one of the corporate proprietors but with the wrong address, being the address of a prior proprietor that was now defunct (and which had had the same name as the existing proprietor), was compliant with Rule 5(3)(a).
  2. Whether the ability to file a correction of an opt-out application under Rule 5(6) can extend to addition of a co-proprietor that was not included in the original application.
  3. Whether the individual filing the opt-out had capacity to do so on behalf of both co-proprietors.

Judge Courboulay held that the first two issues did not preclude the opt-out being effective, albeit that the opt-out would only take effect from the date of registration of the second co-proprietor.  However, on the third issue the patentees had not adequately demonstrated that the individual who filed the initial application and correction had legal authority to do so.  In this case, the individual was a junior employee of one of the two co-proprietors, being the personal assistant of the IP director.  The Rules of Procedure are silent on who can file an opt-out application on the part of a legal person, and the Judge held that it was a matter of national law concerning the legal person(s) in question (in this case both companies were incorporated under the laws of the fictional country of Ruritania).  Although the patentees had provided some evidence that the two proprietors intended that the patent be opted out, the patentees had not provided sufficient evidence that the personal assistant had adequate legal capacity under the corporate laws of Ruritania to act on behalf of the two companies.  The opt-out was therefore declared ineffective.

Opt-out strategies

Attendees were also treated to a round table panel discuss on opt-out strategies, including representatives from the pharmaceutical industry (Marie Catillon of Sanofi), telecommunications industry (Fredrik Egrelius  of Ericsson) and mechanical industry (Joachim Bee of Robert  Bosch), as well private practice (Blandine Tarrère of Santarelli).  All industry representatives indicated that strategies were still evolving, particularly due to uncertainty about the identity of the judges and also how judges would address particular issues facing their respective industries, such as SPCs, the Bolar-type exemption and relief in relation to standard essential patents.  However, no one company intended to operate entirely outside or within the UPC, and decisions on which patents to opt out would be determined on a patent-by-patent or product-by-product basis.

For those unable to attend the day, a video recording is available to view at http://www.opinews.com/ujub/, which includes links to the presentations and the mock trial documents.

*The French UJUB (Union pour la Juridiction unifiée du brevet/Union for the Unified Patent Court) is an association founded in Paris by all French professionals interested in the success of the UPC.

Gregory Bacon


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