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UPC Opt Outs: Portfolio Strategy

By Greg Sharp, Partner and Matthew Howell, Partner

We considered the factors which may help you decide whether to opt out an individual patent in our earlier blog. However, there is also a wider question of opt out strategy across your EP portfolio.  

There are three basic strategies available: 

  1. Opt out all of your EP cases; 
  2. Do NOT opt out any EP cases; or 
  3. A hybrid approach, opting out selected cases.  

A blanket strategy which is the same for every patent strategy will provide the opportunities and risks mentioned in our earlier blog universally across your entire European portfolio. However, there are other considerations will also be relevant when looking at portfolio-wide strategy, particularly if you are considering taking a hybrid approach to your opt-outs: 

  • Stronger patents, such as those which have survived an EPO opposition, may be at lower risk of central revocation in the UPC than weaker patents. You might choose to opt out any patents which you consider to be more vulnerable to revocation to make this process more difficult for your competitors. 
  • The technology fields of your patents are also relevant. Pharma and biotech patents are often more valuable and geographically broader than those in the engineering or electronics fields and are therefore attacked more regularly. If your business operates in more than one technical field, then you might choose to take a different approach for patents in different areas – for example, keeping your high value medical patents away from the UPC using opt outs, while reducing costs and admin burden by leaving your engineering patents in. 
  • UPC infringement actions will provide the greatest cost benefit if your EP patent is validated in lots of UPC countries. If you only validate in a small number of UPC states, then the potential savings compared to separate national enforcement may be more limited when weighed against the risk of central revocation. You might choose leave patents with broader geographic scope in the UPC and opt out others with narrower scope. 
  • How many patents do you have? If you are smaller company with fewer patents, each individual patent may be more valuable to you so protecting them all via opt out could make sense. If you are a larger business with hundreds or thousands of patents, then the loss of one patent in a central revocation in the UPC may be less worrying, and the administrative burden of opting out will be very high. 
  • Opt outs will be on the public record so a hybrid strategy may inadvertently reveal or at least imply sensitive commercial information. For example, if you only opt out a small number of patents from a large portfolio, your competitors may infer that those are your most valuable patents or those you consider to be weakest. In contrast, if you take a blanket strategy of opting out (or not) every patent in your portfolio, then your competitors can glean far less information. 

This is for general information only and does not constitute legal advice. Should you require advice on this or any other topic then please contact or your usual Haseltine Lake Kempner advisor.

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