ARE YOUR AGREEMENTS READY FOR THE UPC?

Undoubtedly, we, IP specialists, have come across with many intriguing aspects of Unitary Patent (“UP”) and Unified Patent Court (“UPC”) system most recently as the system had gotten closer to come into effect. In due respect, I wonder if you have also considered, amongst others, the ramifications of this system over patent license agreements which are still in force or soon to be executed.

I’ve come across with an interesting article (https://lnkd.in/dM4wS8ax) in which patent license agreements have been taken into consideration from diversive perspectives of licensees and licensors in view of their strategic decisions with regard to European patents’ integration to UPC system or opting them out from this system.

The critical point hereby is the ability of the parties to control the opt-out system in accordance with the terms and conditions of the patent license agreement. In cases where there isn’t any explicit or implicit regulation under a patent license agreement regarding opt-out system, licensee shall abide by the licensor’s or the patent owner’s (co-owners’) unilateral decision to opt-out from the system in accordance with UPC Agreement despite the predicaments of the system such as the possibility of central revocation of the patent in all the member countries.

Hence, licensors and licensees would better envisage their rights in relation to patent enforcement in their licence agreements and revise those agreements, if necessary, in a way that will balance the mutual interests of the parties on any aspect of patent prosecution under UPC system. Respectively, it may be wise to envisage provisions under such agreement in which parties would consult eachother to agree upon the circumstances under which a request to opt-out or withdrawal from an opt-out decision or file for a UP can be made and who would be responsible for taking such action.

This issue will indispensably amount to heated debates between patent licensors/owners and licensees over the years as each decision to be given in due respect will certainly have a great impact on patent strategies of patent licensors/owners that will positively or adversely affect sustainability and profitability of those patents in question.