Unified Patent Court / Five things you need to know about licensing and co-ownership

Five things you need to know about licensing and co-ownership

1.  Opting-out
A licensee, whether or not an exclusive licensee, has an interest in whether the patent is subject to the jurisdiction of the UPC. He may want to have it kept out of the system, to avoid it being vulnerable to a central invalidity attack. Equally, he may want to be able to prevent opting-out, so as to keep the benefits of a pan-European injunction. Most existing license agreements will not contain a provision that entitles the licensee to influence the decision whether to opt-out. Existing license agreements may need to be amended to include such rights for the licensee.

2. Power to enforce
Under the UPC system, exclusive licensees will automatically be authorized to enforce a patent without the patentee's consent, unless provided otherwise in the license agreement. Non-exclusive licensees, on the other hand, are not entitled to enforce a patent on their own, unless they have expressly obtained the right to do so.

3. Potential gaming to avoid invalidity counterclaim in Local Division
An alleged infringer who is sued by a licensee before a Local Division is obliged to bring separate revocation proceedings against the patentee before the Central Division. If this bifurcation exception – which is generally agreed to be an odd rule – will be adopted in the final UPC Agreement, it can be used as a tactical move in litigation.

4. Assignment or licensing of a Unitary Patent may sometimes take place without consent from the co-owner
The nationality of the applicants of a Unitary Patent will determine which (national) law will apply to the Unitary Patent as an item of property. Where there are two applicants, it is the nationality of the first-named applicant which takes precedence. Since national law in Europe differs on issues such as the ability of co-owners to assign or license their rights without the consent of the other, it is of relevance which of the co-owners is mentioned first. For example, if the first-named co-owner is German (or neither of the co-owners is European), German law is applicable. Under German law, each joint owner can sell its rights to the Unitary Patent without the consent of the other joint owner. If the first-named co-owner is English, however, other rules apply.  Similarly, if the first-named co-owner is French, either co-owner can license out a Unitary Patent without the consent of the other joint owner. If the first-named co-owner is Dutch, this is not possible.

5. All co-owners need to consent to opting-out
The decision to opt-out from the UPC system needs to be taken by all co-owners of a European patent. If there is no consent , by default the patent can be centrally enforced and attacked.