The case, AIM Sport Development AG v. Supponor OY, involved AIM withdrawing an opt-out after national court proceedings had begun in Germany.
The Court ruled that patents with pre-UPC national court actions can still withdraw their opt-out, allowing access to the UPC. This overturned a prior ruling by the Helsinki Local Division, enabling further UPC proceedings in the case and providing clarity for patent holders navigating the UPC's jurisdiction.
Important decision on the competence of the UPC (by Dr.-Ing. Michael Wallinger)
In its decision of 12 November 2024 in the case of AIM Sport Development AG v. Supponor OY (UPC_CoA_489/2023), the Second Panel of the Court of Appeal has clarified an important question regarding the application of Art. 83 UPCA and extended the competence of the UPC to numerous European patents that previously appeared to be excluded from the competence of the UPC.
The decision concerns the application of Art. 83(4) UPCA, which reads as follows
(4) Unless an action has already been brought before a national court, proprietors of or applicants for European patents or holders of supplementary protection certificates issued for a product protected by a European patent who made use of the opt-out in accordance with paragraph 3 shall be entitled to withdraw their opt-out at any moment. In this event they shall notify the Registry accordingly. The withdrawal of the opt-out shall take effect upon its entry into the register.
Even before the launch of the UPC, there were discussions on how to understand the phrase "unless an action has already been brought before a national court". According to the first view, any national action, regardless of when it was brought, precluded the withdrawal of the opt-out under Art. 83 (4) UPCA. According to the second view, only those national actions are relevant to Art. 83 (4) UPCA that were brought after the commencement of the UPC on 1 June 2023.
The decision is based on the following facts: AIM brought an infringement action before the Helsinki Local Division against Supponor for infringement of patent EP3 295 663, which was granted by the EPO on 29 May 2019. The patent relates to a system and method for digitally overwriting an image with another image. In practice, the system is used to customise the perimeter advertising during the broadcast of a football match for the country to which the match is broadcast. A viewer in China will see a different perimeter ad to a viewer in Germany.
On 12 May 2023, AIM declared the opt-out for the patent. On 5 July 2023, AIM withdrew the opt-out and applied to the Helsinki District Court for interim measures against Supponor.
On 4 April 2022 the District Court of Munich had already ruled on an action brought by AIM based on this patent and the appeal was still pending in 2023. In addition, a revocation action against the patent was filed with the German Federal Patent Court, which ruled on 10 November 2022. An appeal against this decision is also pending before the German Federal Supreme Court.
Supponor has filed a preliminary objection challenging the jurisdiction of the UPC in accordance with the first opinion referred to above. As this patent has already been the subject of national court proceedings in Germany, the opt-out declaration under Art. 83(4) UPCA can no longer be withdrawn. AIM had argued against this according to the second opinion. The local chamber in Helsinki followed the first opinion and, in its decision of 20 October 2023 (CFl_214/2023), found that the UPC did not have jurisdiction.
This created a dilemma for potential UPC plaintiffs. During the sunrise period, many had filed opt-out declarations for their "battle-tested" patents as a precautionary measure to avoid exposing them to the risk of an invalidity challenge before the UPC. Following the decision of the Helsinki Local Division, it no longer seemed possible to use these patents before the UPC. The only way out of this dilemma was to have a divisional application pending. If there were none, the path to the UPC seemed blocked for these patents.
The decision of the Court of Appeal has now changed this.
In its very detailed reasoned decision, the Second Panel of the Court of Appeal examines the time limits referred to in Art. 83(4) UPCA and comes to the conclusion that the article, as its title suggests, only concerns the transitional period. The court explained that the purpose of this was to prevent the patentee from abusing the jurisdiction rules by first bringing an action before the national court and then withdrawing the opt-out in order to bring an action before the UPC. This would create the risk of divergent decisions. However, this abuse would only be possible once the UPCA has entered into force. Furthermore, it is not right to use a decision to file a national action, which the patentee has filed long before the entry into force of the UPCA, as a reason to exclude the patentee from access to the UPC for the duration of the transitional period following an opt-out declaration. The transitional regime itself and the possibility of opting out were created to avoid an abrupt transition from the national system to the UPC system and to give patent holders the opportunity to observe the work of the new court and to gain confidence in its work. Hence the possibility to withdraw an opt-out. There is nothing in the wording of Article 83(4) UPCA to suggest that it was intended to deprive patentees who had filed national actions before the entry into force of the UPCA of this possibility. Nor is there any other consideration that would justify such an interpretation. The withdrawal of an opt-out declaration under Art. 83 (4) UPC is therefore possible in cases where national proceedings have been instituted before 1 June 2023, but not in cases where national proceedings have been instituted after the entry into force of the UPC on 1 June 2023.
Upon AIM's appeal, the Helsinki Local Division decision was overturned and further proceedings in this case before the Local Division were ordered.
Dr.-Ing. Michael Wallinger
