Less than three weeks before the planned opening of the Unified Patent Court, a message has been published on its website as a reaction to problems with the content management system, which apparently isn’t able to cope with the growing inflow of opt-outs.
Proprietors who don’t want their patents to fall under the UPC need to opt out from its jurisdiction before the court goes live on 1 June 2023, in the so-called sunrise period, which started on 1 March 2023. How many opt-out requests have so far been filed is not clear. Around 25 April, the number was just over 30,000 (source) and, as the court writes, now that the opening date is getting closer, ever more requests are being filed. That things don’t go smoothly became clear, among others, in a comment below this Kluwer Patent Blog post, which read:
‘The CMS is an absolute disaster. The capacity of the system obviously is by far not large enough.
I was able to file one opt-out request today, after trying many times last Thursday and last Friday. At present, the CMS does not seem to work at all….
Does anyone know the bank account to which court fess have to be sent? I need to file a protective writ on June 1, 2023.’
Others complained the CMS was either terribly slow or not responsive at all and they hadn’t been able to file a single opt-out in a week, even if trying at night.
Until now, there has been no official communication from the UPC on the issue, but the message published today makes clear that many users have problems to file opt-outs, and the UPC is struggling to solve this:
As you are aware, we are getting close to the end of the sunrise period.
The resulting acceleration of the pace of opt-outs being filed during these last weeks means that the CMS is now under considerable pressure.
This pressure has caused a slowing down of its functionalities, sometimes even impeding the filing of opt-outs.
To ensure that users can proceed as planned, we, at the Court and together with our providers, are giving maximum attention to this capacity issue, working towards its improvement.
We understand that the delays that some may experience are triggering concern, which we are doing our best to address in the upcoming days. We will come back with further communication on this issue as soon as possible.’
The CMS has earlier been causing problems for the Unified Patent Court. The sunrise period was postponed from 1 January to 1 March because users weren’t able to get devices for safe access to the system. At the start of April a three day maintenance period was announced at the very last minute.
Please feel free to share your own experience with the CMS below this blogpost.
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It’s a trick to have as many patents falling under the UPC jurisdiction, which means possible money to finance the expensive salaries of the judges, as the 20.000EUR court fees are another sign that the UPC needs litigation to function.
The more litigation, the better! (but maybe not for society)
The large volume of opt-outs was foreseeable long in advance, as was the fact that many of them would be filed at the end of the sunrise period.
The UPC cannot – or should not – pretend to be taken by surprise in this respect.
Incompetence or deliberate choice to make opt-out as difficult as possible?
They will need to start accepting hard copies of opt out requests soon, since the CMS is not functioning, but there is no address to file those hard copies at on the UPC website!
We have filed a few requests this week on the CMS. All late at night, and even then it was only just possible to file them. I think those with APIs are using them to continually barrage the CMS with opt out requests, and leaving them running overnight, which means there is just no break for the CMS to catch up and start working properly.
Indeed, opt-out requests are only possible at 6am if you are lucky. At 7 am the system is already too slow.
On Wednesday and Thursday this week, we tried several times but it was not even possible to login.
A poorly designed system which actually blocks the Patentee from their right to opt-out.
If all the proprietors of patents which are being opted out are so scared of the new court system, presumably they have no trust that their patents are valid. Perhaps they would be better off abandoning them, or at least amending centrally.
@ Light Blue,
Where do you get that the proprietors of patents wanting to opt-out “have no trust that their patents are valid”? An examined patent is presumed valid until it is revoked or nullified.
The “new court system” can certainly be seen as scary, but more important, the litigation fees at the UPC are clearly way higher than for a national litigation or an opposition at the EPO (20000€ at the UPC, 880€ for an opposition), without even considering the lawyer’s fees.
Proprietors are certainly better off when their patents are dealt with centrally.
On the other hand, when one sees the complaints of the IPQC group, one can wonder about the quality of the patents granted by the EPO. Whether in opposition or in case of nullity, the chances that a patent is revoked or very limited are relatively high. The number of patents revoked is higher than the number of patents limited and more than double the number of oppositions rejected.
That the CMS is so easily overloaded can show two things: on the one hand, the amateurism of those having designed it, or on the other hand, that instructions have been given that opt-out has to be made as difficult as possible, so that there is a good workload for the UPC from day one. You have the choice. in any case, your argumentation fails to convince.
So, the question is: why would the patents be invalid? After all, the EPO has thoroughly examined the applications (from what I hear, at least for formal grounds of refusal).
“How many opt-out requests have so far been filed is not clear.”
CMS currently shows over 137,000 opt-out requests have been filed.
And yet it can already be announced that the UPC is an absolute success and those having opted out will regret their move!
With 137 000 opt-out requests, imagine what the UPC could have earned with an opt-out fee as originally foreseen!
It would not have been necessary to make opt-out more complicated so as to get a minimum of workload for the UPC!
Is there a figure know on the number of requests for unitary effect?
the various bodies of the UPC only foresaw 50,000 opt-out (see https://www.unified-patent-court.org/sites/default/files/upc_documents/bc_04_23022022.pdf point 2.3.7 the number of opt-outs in the budget, since even if the request for an opt-out is not subject to a fee, the court still has to pay to NET SERVICE 2 EUR for each opt-out)
then it does not seem odd that at over than 137k opt-out two weeks before the end of the sunrise period, the system may suffer from overload.
Shall we take a bet?
One of the first actions of the Admistrative Committee will be the setting up of a fee for opt-out. Rather than a fee for opt=out a fee for opt-in should be levied!
It is interesting to note that the representation cost amount to half the translation costs.
In view of the high number of op-outs, the representation costs might have to be increased.
It will most probably not help much to get more SMEs to opt-in!
It is nice to finally have our troubles acknowledged by the UPC and it’s IT team. After several attempt to reach the UPC IT team (only to receive a standard message that they will not respond to individual inquiries), I decided to contact the Italian company behind the CMS directly.
They assured me that they were closely monitoring the status of the CMS and that they noted a rise in applications in the ‘last few days’. However, in their ‘close monitoring’, they somehow failed to acknowledge that I had already been complaining to them for over two weeks about similar problems. And I am sure I am not the only one.
On saturday, I received an update that changes have been implemented that should speed up the CMS. Unfortunately, this morning, it is business as usual; endless saving bars, time-outs and failed applications that can not be re-opened.
Good luck everyone! We will need it.
There appear to be three main drivers for opting-out:-
Finance – those with a portfolio extending across only a couple of UPC countries see little merit in paying high fees for supranational litigation when national litigation may be more focussed; so why not opt-out and remove the risk of central attack.
Fear – the unknown is always of concern, so let someone else find out if it is dangerous before you risk it yourself.
FOMO – fear of missing out. Everyone else seems to be opting out – they must know something – so why don’t I opt-out?
It would be interesting to know how many opt-outs are the result of rational assessment; and how many are the result of nervous reaction. There is the basis of a research project here for some student of economics.
Well, I think that it is very rational to opt-out of a system that is under high risk of legal challenges with respect to its legality.
Still to this day it is not officially known to the public what will be the solution to the London problem. One can only guess that some questionable amendments of the UPCA will be made by the Administrative Committee very early in the morning of June 1st, which will then raise questions to their legality as well. Not to mention the question if the UPCA is in force at all, depending on the question if the UK inclusion is required or not, not even to mention the question if the UK withdrawal was effective or not.
Which are the benefits that would be worth to take such risks that everything implodes completely or partially, resulting in substantial losses caused by the investments for supporting the UPCA in an IP strategy of an enterprise or research organisation? Let others play with that UPC and wait how this all develops in the coming years appears to be the only rationale position for someone who is not blinded by all these false allegations and ignoring of facts (the expectation of only 50000 opt-outs for the planning of the budget and IT needs is just one of the very obvious problems). Even an IP strategy with some gambling component with respect to the UPC cannot afford to risk all patents, meaning that at least a partial opt-out is unavoidable also for UPC supporters.
The financial argument does really hold in view of the average of validations of granted European patents in UPC member states, i.e. 3-5. Not only is the procedural fee level very high at the UPC, but when adding the fees for representation, it means that the IP budget will have to be increased drastically with respect to the present level. This is probably also beyond reach of some not so small firms and certainly of most SMEs.
Fear of the unknown is also a valid argument. The withdrawal of the UK is anything but certain as the UPC does not contain an exit or withdrawal cause. Furthermore, the silence about the fate of the London section does not bode well. Any solution to this problem, which is known since 2016 in general, and 2018 in particular, has to be legally tight. What has been suggested up to now is not resisting a serious scrutiny. If there is a miracle solution, we should have heard of it by now.
When the EPO opened in 1978/79 there were also fears about the unknown system. The number of applications in steady state was originally set at 40 000/year. In view of the oil crisis in the early 70s, it was reduced to 30 000. The EPO became a success story and the fears were dissipated quite rapidly. To reasons were at the basis of this success. Firstly, the whole system was on sound legal grounds. Secondly the quality of the work delivered pushed the applicants to adopt the new system. It might well be that the UPC is able to deliver quality decisions, but they will be hampered by the shaky legal foundations of the system.
Even if a solution is pushed through a short notice, for instance when the UPC is opening, it is not sure at all that that it will be legally viable. It will be interesting to see how decisions of the central division can be enforced in the contracting states. They will only be enforceable is the UPC is a court as defined in Art 6(1) ECHR. A mere reference to the Brussels/Lugano conventions does not appear sufficient.
FOMO is not a valid argument. All interested parties have heard about the system for a while and could weigh out the pros and cons. What would be interesting would be to know the geographic origin of the proprietor’s opting out. It would be interesting to know how many proprietors having their seat inside or outside the UPCA member states are opting out. For non-European proprietors, an opt-out appears less interesting as the UPC has opened a single door for litigation within the UPCA member states. This figure is to be seen in comparison to the fact that barely 30% of the granted European patents are held by proprietors having their seat in UPCA member states.
This information seems more interesting than having an idea about the number of opt-outs due to an allegedly nervous reaction.
Of course, what jumps out at any patent attorney in private practice, leading a busy like dominated by a list of due dates, in which the hottest dates get the highest priority, is this:
“….now that the opening date is getting closer, ever more requests are being filed. ”
What else would any private practice patent attorney in their right mind have expected? There have been cut-off dates in the past. What happened, for example, when the USA changed from First to Invent to First to File? Did the number of new patent applications rise steadily, peaking in the last few days before the cut-off date?
Two weeks left. How big an effect is FOMO going to have, when word of the mass opt out spreads?
As the due date gets ever closer, will the rate of increase of request filing rise linearly? Or, gosh, will it rise exponentially?
Or will the published number not rise at all, but only because CMS is already at peak capacity?
The decision for strong authentication was clearly taken too late in September 2022 and without considering the consequences for the users and for the UPC itself. I am clearly in favour of digital signatures and the like, but: with this “strong authentication” the goal of controlled access to the CMS has not been achieved for conceptual reasons, on the contrary: whoever has the key based on a SmartCard certificate (the key can be downloaded after logging into the CMS) can access the CMS
– without having the SmartCard
– without having to use a PIN, and
– without the presence of the person holding this SmartCard!
This is a technical point of view.
The legal point of view: Why do all those who do not participate in the UPC have to go through this extremely complicated procedure?
In the first place the UP and in the second place the UPC is a brilliant concept, the now visible implementation with the RoPs and the CMS and the behaviour of the Registrar in early April 2023 could unfortunately give this concept a de facto death blow.
The issue of a Central Division London has not really been addressed yet; this issue has been pending since 2016!
What a shame that this brilliant concept has been so poorly implemented.
“The issue of a Central Division London has not really been addressed yet”
Has it now? Is it legal?
What do you mean with “hoever has the key based on a SmartCard certificate”- the API key?
I agree with some of the comments made previously, some cases are opted out because others are doing it (there must be a reason why they do it, even if i don’t understand why they must be a valid reason).
Some others do it because their non-participating state law firms, e.g. some of the UK firms seem to advise by default to opt out (is it a fear to lose the impact of a UK decision? Side remark the UK is amongst the costliest countries for patent litigation). A side comment, although it does not cost any money to opt out cases, having it done by an external firm is generating some income (I don’t think this would be a living income).
Regardless of the business cases of the patent portfolio, some clients and representatives tend to opt out of a massive number of patents.
In my opinion, being given an opportunity to have a new court setting should be embraced. Today some types of patents in some countries despite going through opposition and appeal are still found by some national courts invalid, maybe the UPC could fix this “bias”. For those cases where invalidity predictability is almost a given in national court, why not try the UPC courts.
A Lot of people seem to be outraged about the number of patents having been opted out. Most of these patents will probably never be litigated in the first place, whether they had stayed in UPC or were opted out. Having opted out those patents does not necessarily mean that the true owner will not withdraw the opt out to litigate before the UPC either.
The alleged high fee cost of UPC litigation complain, I found it very strange argument as in most instance even where a small court fees is asked for the legal cost of representation is rarely in 10’000s EUR but more around 50’000 EUR and for the cases that are being litigated in more than one jurisdiction properly around 100’000 EUR is needed.
As patent attorneys, we know that the prosecution of a patent may have “reasonable” cost but high cost will come when it comes to enforcement. Maybe someone could share what could be the percentage of the overall litigation cost of UPC vs the UPC court fees. What might be true is that the representative costs acting before the UPC may be higher than any national court. The amount of work required in a short time may require a team working on the cases, instead of a single attorney. This is with the understanding that the hourly rate of the representatives will not change either.
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