A day out

Last Monday was a day out for me, or more precisely an opt-out day, according to the title of a conference that I attended. The conference was offered by the UJUB (Union pour la Juridiction Unifiée des Brevets), an association which is itself a gathering of a number of organizations: AACEIPI, AAPI, ACPI, AFEP, AFPPI, AIPPI, APEB, ASPI, etc. – and those are just the ones starting with letter A. So, quite a number of acronyms, in this society dedicated to promoting the future Unified Patent Court (UPC).

On the face of it, it may sound strange to spend an entire day discussing the opt-out, which is a very specific feature of the UPC system, basically addressed in one article of the Agreement and in one rule of the Rules of Procedure. But the truth is there was already a lot to be said on this narrow subject, which makes me think that we could spend many more days collectively diving into the subtleties of all the other UPC provisions. Another reason why the theme of this conference was a good idea is that whether or not to opt out European patents is probably the very first decision that all businesses need to make in view of the upcoming entry into force of the UPC.

The full webcast of the conference (in English) can be found on this website and the slides can be found here. Otherwise, here is a personal summary of the discussions which took place.

Main features of the opt-out.

After a welcome speech by Pierre Gattaz, president of MEDEF (and thus the “boss of bosses” as he is often nicknamed by journalists), the session started with a presentation by Edouard Treppoz, Professor at Université Jean Moulin in Lyon.

He explained that opting out is a possibility offered during the transitional period, per which the owner of a European patent may keep it out of the UPC system. In contrast, there is no opt-in, i.e. no way to make sure that a European patent will be tried by the UPC (and not national courts) – except by giving the European patent unitary effect.

Important features of the opt-out are that:

  • a European patent with unitary effect cannot be opted out;
  • the opt-out is necessarily valid for the entire bundle of national parts of a European patent;
  • also European patent applications can be opted out;
  • the opt-out on a patent extends to any SPC granted based on that patent;
  • if there are several co-owners, all of them must agree to the opt-out;
  • it is possible to withdraw an opt-out, but then it is no longer possible to opt out again.

What Mr. Treppoz called “preemptive strikes” could lock a European patent in or out of the UPC system, according to a terminology proposed later in the day by Pierre Véron:

  • a European patent which has not been opted out in due time gets “locked in” the UPC system (i.e. can no longer be opted out) if a third party launches an action relating to this patent in front of the UPC;
  • a European patent which has been opted out gets “locked out” of the UPC system (i.e. the opt-out can no longer be withdrawn) if a third party launches an action relating to this patent in front of a national court.

Then came the fun part in Mr. Treppoz’ speech, namely the possible ambiguities of the opt-out provision:

  • Which actions are concerned by an opt-out? Only those actions explicitly mentioned in article 83 of the Agreement, namely infringement actions and revocation actions, or also other actions on which the UPC normally has jurisdiction, such as an action for declaration of non-infringement? Mr. Treppoz thought the latter should be correct, in view of the CJEU case “Ship Tatry” C-406/92.
  • What is the duration of the opt-out? Until the end of the transitional period recited in Article 83 or for the entire lifetime of the patent? Again, the latter should be the right answer.
  • Does the opt-out exclude only the exclusivity of jurisdiction of the UPC, or does it wholly exclude the jurisdiction of the UPC? Mr. Treppoz was again in favor of the latter, in view of the overall context.
  • Last but not least, does the opt-out only relate to the jurisdiction of the UPC, or does it also exclude the application of the Agreement by national courts? The preparatory committee issued an interpretative note supporting the latter solution, i.e. in case of an opt-out national courts have to apply national law and not the Agreement. But Mr. Treppoz firmly disagreed with this approach. To him, it only makes sense if the opt-out is limited to jurisdiction and does not affect substantive patent law to be applied to the patent.

The latter point was certainly the most interesting and challenging one in Mr. Treppoz’ presentation. As a reminder, there are some differences between substantive patent law under the Agreement and national patent laws. The Bolar exemption is probably the most famous one, but reference was also made e.g. to the decompilation and interoperability exception of Article 27(k) of the Agreement.

What a day out should look like.
What a day out should look like.

The position of the industry.

Next up was a panel of three industry in-house patent attorneys and one outside patent attorney discussing opt-out strategies. Among the three industry speakers, one was from a pharmaceutical company (Sanofi), one from a telecom company (Ericsson) and one from an electrical engineering / mechanical engineering company (Robert Bosch).

Many in the audience were eager to learn details about the opt-out strategies of such major players but everyone’s expectations were somewhat quelled as (quite understandably) no precise road-map was unveiled. That said it was quite interesting to note that they all seemed to agree that:

  • some patents will be opted out but not the entire portfolio;
  • exactly which patents will be opted out has not yet been determined;
  • a flexible strategy is required as opposed to a plan set in stone once and for all.

All seemed to generally support the system and expressed the desire to influence UPC case law, while worrying about the risk of central revocation as well as uncertainties regarding e.g. the Bolar exemption, the extent of file wrapper estoppel, and the judges’ experience. Competitors’ behavior was also seen as an important factor in the decision making process.

Robert Bosch’ spokesman was probably the most candid one, as he explained that his company is considering opting out only a minority of European patents, and more precisely the most important ones in the portfolio, i.e. those for which enforcement is contemplated, which are already licensed or for which licensing is contemplated.

Opt-out in practice.

Pierre Véron, Neil Feinson (UKIPO) and Cristiano Morganti (form NetService, the company in charge of setting up the UPC IT system) then came on stage to discuss all practical details of opting out – which can be done only in electronic form with the UPC case management system.

Mr. Véron insisted that:

  • A licensee cannot file an opt-out declaration. Special provisions should be included in license agreements to make sure that there is no bad surprise for the licensee.
  • Patent owners who are not registered as such on patent registers can file an opt-out together with a declaration of proprietorship.
  • The opt-out will be effective immediately as the process is entirely automated so that the declaration instantly appears on the opt-out register. However, if an opt-out declaration is defective because a mistake has been made, the opt-out enters into force when the mistake is corrected.

Some thoughts were offered regarding the sunrise period, i.e. the period of time before the actual entry into force of the Agreement and of the UPC system when it will already be possible to opt patents out – in order to avoid a surge of abovementioned preemptive strikes on day 1 of the UPC. One possibility would be for the sunrise period to start at the time of the 13th ratification of the Agreement which triggers a 3-month clock until entry into force. But the decision has not been made yet.

Practically speaking, people will be able to opt out patents manually on the UPC case management system. Alternatively, it will be possible to opt out large numbers of patents in bulk using a machine interface.

Concerns have been recently expressed regarding the security of the system, especially with respect to possible unauthorized / malicious opt-outs. At present, the system requires a valid email address and a valid cell phone number in order to properly identify users. Other, more sophisticated safeguards can be contemplated but could be too complex and expensive to implement, bearing in mind that the opt-out will finally be free, which apparently implies that it is supposed to cost as little as possible (especially in terms of staffing) for the UPC.

Mr. Morganti attempted a live demonstration of an opt-out on the beta version of the case management system. And guess what… It did not work. Apparently the wifi was to blame. Ahem, if computer systems worked properly we would know it, right? (Sorry for this comment, but I have a score to settle with my own laptop).

Alexander Ramsay, chairman of the Preparatory Committee of the UPC closed the morning session with a speech which was more political than purely technical. At that point of time, the elephant in the room was addressed – namely the Brexit. Mr. Ramsay stated that, while he was convinced that the UK would remain in the EU, if this were not the case then the UPC should nevertheless move forward. He also expressed the view that we would have to find a way to keep the UK on board. A question was asked about whether a plan or timeline was already under preparation in the event of a Brexit, and he answered that there was none that he was willing to share.

Don’t mock the opt-out.

The main event of the afternoon was a mock trial. Two teams of attorneys-at-law and patent attorneys pleaded in front of a judge-rapporteur played by Marie Courboulay, the senior presiding judge of the 3rd chamber of the Paris Tribunal de grande instance (TGI) – an IP-only chamber which in particular handles all patent matters in this country.

The script involved the opt-out of a patent and a claim for revocation of this very patent in front of the UPC. The defendants filed a preliminary objection to the effect that the UPC had no jurisdiction due to the opt-out. The main issue at stake was whether the opt-out had been correctly performed or not. In fact, many problems were noted by the claimant: the secretary who had filled in the form had erroneously ticked the box “no” when answering the question “is the applicant a company/firm“; she had indicated a wrong address for the first patent owner (so that there was allegedly a doubt as to exactly which company was meant); the second patent owner was not mentioned in the initial opt-out and was added only later; and there were discussions as to who was entitled to declare what on behalf of the patent owners.

A lot to deal with indeed. An informal poll after the pleadings showed that the majority of the audience was in favor of finding the opt-out invalid, and this happened to be consistent with Ms. Courboulay’s verdict. She explained that, although most of the errors that had been made could be considered as inconsequential, there was a fundamental issue of representation, since the secretary who filled in and signed the opt-out form was not allowed to act on behalf of the two companies, as a matter of national law.

An interesting outcome and a serious warning to all stakeholders that they should pay close attention to the actual implementation of their opt-out strategy – especially because the opt-out process is purely declaratory, with no actual control or verification by the administration.

By way of conclusion, Ms. Courboulay supported a recently made suggestion per which, during a certain initial period, the judge rapporteur should refer all important matters to the full court so as to allow case law to develop quickly in order to improve legal certainty.


A final debate involved representatives from various associations making up the UJUB meta-association.

Most remarkable were the statistics mentioned by the representative from LES France, which showed huge discrepancies in the current European patent litigation landscape from country from country as well as depending on the field of technology: for instance, the win rate of infringement actions in life sciences in Germany was said to be 80%, whereas that of infringement actions in chemistry in the Netherlands was said to be 18% only. Another example was the higher validity rate in France than in the UK and Germany in the field of electrical engineering and mechanical engineering. This was not directly related to the opt-out theme but very interesting indeed.

Last but not least, a couple of words were said during the day regarding the possible location of the UPC in Paris. Although nothing is official yet, my understanding is that the Palais de justice on the Ile de la cité (where the TGI and the Cour d’appel are currently located, together with countless other courts) would be the winner.

My personal view is that this would be a bad idea. This is a gorgeous historical place, great for sightseeing, but it is uncomfortable. The acoustics in particular are dreadful and I seriously doubt whether the building can be adapted to the requirements of a modern and multinational court such as the UPC. Hopefully there is still time for the authorities to reconsider.

2 thoughts on “A day out”

  1. Even though i have already been told that a free advice is only worth what it costs, i take the opportunity of asking here a short question relative to the opt out:
    Who is the “person entitled to be registered as applicant” of Rule 8?

    Is it the person entitled to exercise the right to the patent mentioned in A60 EPC (i.e. the inventor) and his successor in title, if any?
    Is it the person who has filed the request for grant of the EP patent application (i.e. the applicant, see R143(1)(f) EPC) and his successor in title, if any ?

    This may be relevant in case where there is a missing assignment anywhere between the inventor and the applicant, which is not so uncommon…

    1. Good question, but I would not dare to provide a short answer here – especially for free ;-). How R.8 will be applied in case there is a claim for ownership (or co-ownership) pending somewhere will indeed be interesting to see.

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