UPC: Jurisdiction and opt-out

After the transitional period (of at least 7 years), as well as having exclusive jurisdiction over unitary patents, the UPC will have exclusive jurisdiction over all EPs designated to UPC participating EU Member States (unless these EPs have been opted out of its jurisdiction). The UPC will also have jurisdiction over supplementary protection certificates (SPCs), unless they have been opted out or are an SPC originating from an opted out EP (such SPCs are automatically deemed to be opted out). 

However, during the transitional period, there will be a parallel jurisdiction arrangement in relation to non-opted out European patents whereby cases can be brought in either the UPC or a national court in relation to particular actions.

WHAT ACTION GOES WHERE IN THE UPC?

• Infringement claims can be brought in the local/regional divisions of the UPC where the infringement has occurred or where the defendant is located
• Revocation actions must be brought before the central division unless brought as a counterclaim where they can be heard with the infringement action or transferred to the central division by the panel hearing the infringement action
• The central division also has exclusive jurisdiction over declarations of non-infringement

OPT-OUT:

• When: During the first seven years from the UPC Agreement (UPCA) (from 1 June 2023), an opt-out from the UPC's jurisdiction is available for EPs (this transitional period may be extended by a further 7 years – following an assessment after five years).
  
  Proprietors are able to opt-out EPs coming to grant, as well as EPs already granted, and then withdraw the opt-out ("opt back in") whenever they decide they want to take advantage of the UPC system (although if national proceedings have been commenced in relation to an opted out EP, that opt-out cannot subsequently be withdrawn). UP applications cannot be opted out at all and are under the exclusive jurisdiction of the UPC.
  
  SPCs for opted out EPs will automatically be have opted out status. Otherwise SPCs can be opted out separately (but this must be done by the EP proprietor).
   
• Proprietors: Opt-out is for all designations of EP (as is withdrawal of opt-out) and all proprietors of all the EP designations must agree to opt-out.
   
• Effect: Opt-outs are effective for all the designations of an EP. Once the EP is opted out, the UPC has no jurisdiction over the EP and the EP must be litigated nationally. The opt-out is effective for the lifetime of the patent and beyond eg for litigation based on rights now expired or a subsequent SPC. The proprietor is free to opt back in, unless an action has already been brought before a national court. Once the opt-out is withdrawn, there is no further opportunity to opt-out.
  
  Proprietors can opt-out EP applications (as well as EPs already granted) and then opt back in (withdraw the opt-out) if they so decide post grant or if they wish to obtain a UP at grant (for which there is no opt-out option).
  
  ​Strategically, proprietors may consider opting out initially to prevent their patent being drawn into the UPC system by a revocation action, and then withdrawing the opt-out when a UPC action looks more attractive for their purposes (such as pan-EU enforcement).
   
• NOT OPTING OUT:
   
• Effect: If a patentee has not opted out of the UPC system its EP will nevertheless be subject to the parallel jurisdiction of both the UPC and national courts for the duration of the transitional period (7 years initially, potentially extending to 14):
  
  The UPC has jurisdiction over all UPs (no opt-out available) and for EPs (unless opted out) and SPCs (unless opted out or the SPC originates from an opted-out EP)
  
  During the transitional period, national courts also have jurisdiction in relation to EPs, even if not opted out, in relation to infringement and revocation proceedings (and SPC infringement  and validity)
  
  Within the transitional period, the patentee can subsequently choose to opt-out of the UPC system as long as proceedings have not already been brought before the UPC. However, once a UPC court is seized of an action, the EP cannot be opted out, just as once a national court is seized of an action in relation to an EP, the proprietor cannot withdraw an opt-out.
   
• There will be no fee for opting a European patent out of the jurisdiction of the UPC, nor any for opting it back in again (withdrawing the opt-out). 
• For more on jurisdiction and opt-out including the factors to consider when opting out or not doing so, and issues on ownership and licensing, see our series of feature articles published in PLC Magazine's March and April editions 2022 and shared in pdf form on our IP blog here.
• SEE MORE ON OUR UPC AND UP HUB
  • Hub home page & How we can help
  • The UPC & UP – an introduction
  • UPC court structure
  • UPC: Jurisdiction and opt-out
  • Which states are in the UPC and where will a UP have effect
  • The UPC Rules of Procedure
  • How to get a UP 
  • UPC Court fees
  • Impact of UPC and UP on patent portfolios, co-ownership and licensing
  • UPC: mediation and arbitration
  • Key documents (legislation and agreements)
  • Costs