UPC Court of Appeal Decision on Opt-Out Withdrawals

This means that patent proprietors can now withdraw their opt-out even if the patent was subject to national proceedings that were started before 1 June.  Equally, implementers who thought that the UPC was not an option, may now find themselves under the competence of the UPC.  

Background

The UPC was established as the EU court with exclusive competence for most patent proceedings. However, during a transitional period of seven years from 1 June 2023, proceedings on traditional national patents can also be brought before national courts (Art 83 UPCA). Patent proprietors can opt out of the UPC’s competence and later withdraw this opt-out to submit to the competence of the UPC.

Court of Appeal Decision

On 12 November 2024, the UPC Court of Appeal issued a decision (UPC_CoA_489/2023) stating that the withdrawal of an opt-out is only affected by actions brought before a national court on or after 1 June 2023. National proceedings initiated before this date do not impact the withdrawal of an opt-out.

Case: Aim Sport Development v Supponor

• Context: The patent at issue was opted out as of 1 June 2023.
  
• Action: On 5 July 2023, Aim applied to withdraw the opt-out and lodged an infringement action and a request for provisional measures against Supponor in the UPC.
  
• Argument: Supponor contested the withdrawal, citing ongoing national proceedings in Germany since 2020 preventing Aim from withdrawing its opt-out.
  
• Court of First Instance: agreed with Supponor 
  
• Court of Appeal: did not agree with Supponor 

Court of Appeal’s Reasoning: 

• The Court of Appeal (CofA) held that Art. 83 UPCA relates to a transitional regime and “provides for parallel jurisdiction of the UPC and national courts only during the transitional period. Thereafter, cases within the jurisdiction of the UPC (as listed in Art. 32 UPCA), can only be brought before the UPC.”  
  
• The possibility to opt out only existed as from the start of the transitional period (i.e. 1 June 2023) and so the option to withdraw could only exist from the start of the transitional period. 
  
• The CoA did not see any convincing reason why an action brought before a national court prior to the transitional period should block the withdrawal of an opt-out.
  
• The Court of Appeal was therefore of the opinion that “the wording and context of Art. 83 UPCA lead to an interpretation of the phrase “Unless an action has already been brought before a national court” in Art. 83(4) as referring (only) to actions brought during the transitional period”.

Implications

According to DocketNavigator, to date over 630,000 patents have been opted out of the UPC’s competence.  But the majority of these opted-out patents are unlikely to be the subject of national proceedings that had been started before 1 June 2023.

The impact of this decision may be significant if it changes patent proprietors' decisions regarding the patents they have opted-out but which were the subject of national proceedings that had been started before 1 June 2023.

• Before: Patent proprietors who had opted-out a patent might have understood they couldn’t withdraw their opt-out if national proceedings had started before 1 June 2023.  Implementers might have understood that the UPC did not have competence and so any further revocation or infringement proceedings would have to be brought before national courts. 
  
• After: Patent proprietors can now reconsider and potentially withdraw their opt-out, bringing the patent under the UPC’s competence. If this were to happen, implementers may then be sued again centrally at the UPC. However, implementers will then have the benefit of a central revocation action if the patent proprietor withdraws the opt-out. 

Implementers may therefore find themselves faced with additional central infringement proceedings when they had previously thought national proceedings were the only options.  But they will have the new option of a central revocation action.  

Patent proprietors who regularly review their opt-out decisions now have an additional factor to consider. For those who do not, the status of their opted-out patents remains unchanged.