Strategic considerations - why opt-out or why not?

April 2015

Given that there is a right to opt-out of the UPC,1 should proprietors of classical European patents use it? This is of course a strategic question, which requires careful consideration of the consequences of opt-out. There are a number of issues to bear in mind. The most significant of these issues are explored below:

Revocation and injunction

A successful revocation action in one of the branches of the central division (or by counterclaim to an infringement action in a regional or local division) will have pan-European effect. However, in the first months of the UPC's operation, a patent may be revoked in fewer than the total 25 contracting Member States having ratified the UPC Agreement.2 The revocation of a classical European patent will only have effect in those countries that have ratified. As more countries ratify the UPC Agreement, the scope of the effect of UPC decisions will become accordingly greater.3

The analysis is the same in respect of enforcement. An injunction can only apply in those countries that are contracting and ratified Member States of the UPC.4 Nevertheless, even given the likely limitations of decisions in the early stages of the UPC's operation, the scope of application of the court's decision is extensive compared to the current system of national court decisions that are limited to national territory5 In particular, such decisions will cover the significant commercial markets of Germany, France and the UK from the outset. In the months after the UPC comes into force, this scope will grow to include most, if not all, of the contracting Member States, as they ratify.

The decision whether to opt out or not will hence mostly depend on the evaluation of the economic significance of the patent and its strength, i.e. the risk of its revocation. The more valuable a patent might be, the less the patent owner might feel inclined to face a risk of a negative decision – on infringement or revocation – by only one litigation under the UPC. Litigating country by country might considerably mitigate the procedural risks, but lead to significantly higher costs of litigation.

Fees and costs

pile of moneyNumerous important issues that remain unresolved will have a bearing on the success of the UPC. Principally, the costs associated with the unitary patent and UPC proceedings still need to be worked out and published (that is, the fee for validation, fees for renewal, fees for opting-out and court fees). There are presently no firm dates for decisions on any of these, but it is widely reported that the fees for renewal will be based on being competitive with the costs of validating a classical European patent in four or five countries, which represents the average number reported by the EPO.

Court fees, which will include fixed fees and value-based fees6 are likely to be particularly significant. Nonetheless, the potential costs of the UPC must be weighed against not only the fees that might be payable in several national courts, but also the costs of paying the legal teams running and managing the national actions. For classical European patent families covering several commercially very significant countries, the benefits in time and cost of using the UPC may be obvious. For other patents the cost benefits alone may not be so clear.

Basically, once the final cost scheme of the UPC will have been determined, the decision whether to opt out or not will in a lot of cases depend on the number of markets that are commercially relevant for the patentee and on a comparison of the costs under the UPC against the cost of singular protection in those markets.


Much has been said in commentaries of the 'safety first' approach of opting-out those patents that have particular commercial significance, but which might be perceived as vulnerable to a validity attack. The rationale for such a strategy is clear enough: it requires a third party who wishes to clear the way of classical European patents to do so in a number of parallel proceedings in the national courts. This spreads the patentee's risk, rather than risking a full loss of protection in all territories through one successful revocation action in the UPC. However, such a tactic may have limited application in some technology fields, such as electronics, where just one national revocation can diminish the commercial value of a patent family. But even for pharmaceuticals, where each patent designation in a family may be the only protection a product has in the respective Member States, this strategy could have downsides. In particular, opting-out some patent families, but not others, could be perceived by competitors as a demonstration that the proprietor lacks confidence in the strength of the patents concerned.

Therefore, whilst it may be reasonable to adopt the cautious approach of opting-out patents while the UPC is still being tested in its early stages, market perceptions of opt-out behaviour may need to be delicately managed as time moves on.


There will hardly be a clear-cut case whether to opt out or not. There are many different, sometimes contradicting, considerations which have to be thoroughly taken into account for each single patent. The risks and chances of a pan-European injunction and revocation risk, the economic importance and the strength of the patent as well as the costs of unitary protection and enforcement compared to the costs for national protection and litigation need to be carefully weighed up. Although this requires considerable efforts by the patent owner, it also allows a "fine-tuning" of the strategic necessities of each respective patent owner.

If you have any questions on this article or would like to propose a subject to be addressed by Synapse please contact us.

1 Art. 83 UPC Agreement.

2 The minimum number of Member States that must ratify the UPC Agreement for the court to come into force is 13, Art. 89 UPC Agreement.

3 Classical European patents designating non-contracting Member States, Spain and Poland, cannot be revoked in the UPC. Classical European patents designating EPC signatory countries that are not Member States are also not subject to the jurisdiction of the UPC.

4 Article 34 UPC Agreement states: "Decisions of the Court shall cover, in the case of a European patent, the territory of those Contracting Member States for which the European patent has effect."

5 Subject to circumstances in which cross-border preliminary injunctive relief is available: see Judgment in Solvay v Honeywell, C-616/10, EU:C:2012:445.

6 17th draft Rules of Procedure, rule 370.

glass chess pieces

Anja Lunze

Anja is a partner in the Patents group based in our Munich office.