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Bulletins » UPC Court of Appeal clarifies when Opt-Outs can be validly withdrawn

Summary
In a decision dated 12 November 2024 the Court of Appeal (“CoA”) of the Unified Patent Court has clarified that Art. 83(4) UPCA must be understood to mean that an earlier opt-out cannot effectively be withdrawn if an action has been brought before the national court at any time during the transitional period (i.e. on or after 1 June 2023). Proceedings that were brought prior to the transitional period, whether still pending or not, do not stand in the way of an effective withdrawal of an opt-out.

Background
The case of AIM Sport Development AG vs. Supponor OY, Supponor Limited, Supponor SASU, Supponor Italia SRL, Supponor Espana SL (UPC_CoA_489/2023, UPC_CoA_500/2023) concerned the circumstances in which a UPC opt-out can be validly withdrawn. The CoA addressed the correct interpretation of Art. 83 UPCA. This article sets out details of a transitional regime (that will last at least 7 years from the commencement of the UPC on 1 June 2023) during which a parallel jurisdiction still applies between the UPC and national courts of the Contracting Member States.

In the present case AIM were the owner of a European patent which had been opted out on 12 May 2023. On 5 July 2023 AIM applied to withdraw this opt-out. On the same day AIM lodged an infringement action against Supponor, based on the patent at issue. Supponor contested the effectiveness of the withdrawal of the opt-out, based on the fact that there existed earlier national litigation in Germany relating to the patent.

The UPC’s Court of First Instance (“CFI”) held in an October 2023 decision that the UPC did not have competence over the patent at issue owing to its opt-out on 12 May 2023. In the view of the CFI the withdrawal of the opt-out on 5 July 2023 was ineffective due to the earlier German proceedings, commenced in 2020 and still pending before the German courts at the date of the opt-out and of the withdrawal. The CFI stated that the Art. 83(4) UPCA was “clear and unambiguous…The wording does not provide any limitation or restriction to the effect that it would only apply to previous national proceedings that have been initiated during the transitional regime after 1 June 2023”. They also considered that the wording of Rule 5.8 of the Rules of Procedure (“RoP”) confirmed the position.

However, the CFI’s conclusion has now been reversed by the CoA on appeal. Contrary to the view of the CFI, the CoA held that the meaning of Art. 83(4) UPC was “clear based on its wording read in the context of Art. 83 UPCA as a whole and considering its object and purpose”. In particular, 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. The CoA was of the view that Rule 5.8 RoP was not inconsistent with Art. 83(4) UPCA and would, in any case, be over-ruled by the “clear meaning of a higher-ranking provision of the UPCA”.

Implications
This Court of Appeal decision is a helpful clarification that valid withdrawals of UPC opt-outs will only be prevented by previous national litigation that was commenced during the transitional regime, i.e. on or after 1 June 2023. It also serves as a timely warning of how the UPC courts are still in the process of interpretating a new set of laws and rules – and at times coming to contrary positions. In particular, it is noteworthy that both the CFI and the CoA felt the meaning of Art. 83(4) UPC was clear despite coming to opposite views on its meaning.

Relevant sectors
Aerospace
  • Commercial aviation
  • Defence and security
  • Space and satellites
  • Unmanned aerial vehicles
Artificial Intelligence and Machine Learning
Automotive
  • Autonomous vehicles
  • Electric vehicles
  • Engines
Biotechnology
  • Antibody engineering
  • Antibody manufacture and formulation
  • Bioinformatics
  • Biosimilars
  • Drug delivery
  • Gene editing (e.g. CRISPR)
  • Genomic and molecular tools and methods
  • GM crops
  • Immuno-oncology (e.g. checkpoint inhibitors; modified T cells)
  • Next generation sequencing
  • Nucleic acid synthesis
  • Personalised medicine/disease biomarkers
  • Recombinant protein production and purification
  • Stem cell therapies
  • Supplementary protection certificates (SPCs)
  • Synthetic biology
  • Therapeutic antibodies
  • Vaccinology (e.g. viral vectors; mRNA vaccines)
  • Women’s health products
Chemicals
  • Agrochemicals
  • Catalysts
  • Dispersions and colloids
  • Lubricants
  • Polymers and plastics
Communications and Networks
  • Cloud computing
  • Internet of things (IOT)
  • Oceanography, marine
  • Wired and wireless networks
Computing and Software
  • Artificial intelligence and machine learning
  • Bioinformatics
  • Blockchain and distributed ledgers
  • Communications and networks
  • Computer games
  • Data and software security, cryptography and digital rights management (DRM)
  • Data management and storage, databases and data compression
  • Digital assistants, virtual assistants and software agents
  • Fintech and adtech
  • Machine vision
  • Metaverse, virtual reality (VR) and augmented reality (AR)
  • Motor capture
  • Multimedia, audio/video processing and animation
  • Natural language processing
  • Quantum computing
  • Robotic process automation
  • Search engines
  • Signal processing
  • Software applications and systems, mobile applications, user interfaces
Consumer Goods and Retail
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  • Health, fitness and sport
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  • Moda
  • Retail
Electronics and Electrical Devices
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  • Medical devices
  • Optics
  • Restaurants and bars
  • Robotics
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  • Travel and leisure
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Energy and Green Technologies
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Food and Beverage
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Industrial Manufacturing and Processing
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Materials
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Medical Devices and Diagnostics
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  • Digital health
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Pharmaceuticals
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  • Generic market entry
  • Medicinal chemistry
  • Methods of production and synthesis
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  • Pharmaceutical formulations
  • Pharmaceuticalsceutical formulations
  • Polymorphs
  • Small molecule pharmaceuticals
  • Supplementary protection certificates (SPCs)
Trade Marks
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  • Cosmetics and perfumery
  • Financial services
  • Mechanical engineering
  • Mechanical products
  • Services
  • Telecommunications
Relevant sectors