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UPC Opt Outs: Portfolio Strategy – Patent

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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

  • 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.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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