10 days and counting until the UPC opens for business - what is the opt-out take up now?
Written By
Of Counsel
UK
I am a British and European patent attorney in our Intellectual Property group in London. I am involved with UK patent infringement actions relating to standard essential patents (SEPs), FRAND setting litigation and globally coordinated litigation, as well as SEP essentiality reviews and valuation. I am also authorised to represent clients before the Unified Patent Court (UPC) that opened in Europe in June 2023.
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There are only 10 days left of the 'sunrise period' before the long-awaited Unified Patent Court (UPC) opens its doors for business in Europe on 1 June 2023.
The ‘sunrise period' is the period before 1 June 2023 during which patent applicants and proprietors alike can choose to ‘opt-out’ their European patent rights from the jurisdiction of the UPC before that court comes into existence.
Prior to the start of the sunrise period, many predicted that ‘opt-out’ rates would be high. It was thought that patent proprietors and applicants would in general want to avoid, at least initially, the uncertainty of the UPC as an entirely new court, particularly since it is possible later on to withdraw any opt-out request that has been filed.
The early data published on opt-out numbers did not support this prediction however, with the number of opt-outs filed being much lower than had been anticipated.
With the start of the UPC and the end of the sunrise period only 10 days away, we have taken another look at the opt-out data (up to the early hours of Monday 22 May 2023) to assess whether there was any merit to the early predictions regarding opt-out rates or whether these would prove to be misguided.
It seems fairly clear that the end of the sunrise period has focused minds. As shown below, there has been a flurry of opt-out activity within the past couple of weeks, with an exponential look to the opt-out trend. As of this morning, nearly 250000 cases have been opted out of the UPC.
As can be seen below, 63% of the opt-outs filed since the start of the sunrise period have been filed in the last two-week period of 8 to 21 May 2023.
The recent data represents a significant up-lift in opt-out rates, with perhaps an indication that early predictions regarding opt-outs may not be as misguided as they first appeared in the nascent weeks of the sunrise period.
With current trends, it looks like there may be a significant number of further opt-outs filed in the coming days. The forecasting we have run (based on the opt-out data alone) suggests that around 330,000 cases will be opted out by the end of the sunrise period. This perhaps is a conservative forecast given it is anticipated that some large bulk opt-outs are being finalised for filing shortly before the end of the sunrise period.
It will be interesting to see the opt-out activity in the final 10 days of the sunrise period and what impacts this has on the final opt-out statistics. We suspect it is likely to be a very busy period for those filing opt-outs, with reported issues with the UPC Case Management System (CMS) opt-out systems creating further headaches for those wishing to get last minute opt-outs filed.
Based on our calculations, it seems that the total number of patent rights opted out of the UPC’s jurisdictions as of 22 May 2023 is approximately 6% of all European patent applications ever published. This may not seem a lot but is it the 6% that would be litigated?