UPC confirms rules on proprietors opting out of the UPC’s jurisdiction

In their dispute with Neo Wireless, Toyota challenged the validity of the opt-out of Neo Wireless’ European patent. Before the proceedings, Neo Wireless LLC (Neo USA) transferred the German part of the patent to Neo GmbH and subsequently filed an opt-out without naming Neo GmbH. Recently, the UPC Court of Appeal (Neo Wireless GmbH & Co KG v Toyota Motor Europe; UPC_CoA_79/2024) ruled that the opt-out was invalid because it wasn't lodged by all proprietors of all national parts of the patent, as required by Art. 83(3) of the UPC Agreement and Rule 5.1(a) of the Rules of Procedure. 

Art. 83(3) UPCA and Rule 5.1(a) RoP require collective action by all patent proprietors to ensure consistency and prevent a single proprietor from unilaterally affecting the legal standing of the entire patent. The Court found that Neo USA's opt-out was invalid because it was not filed with the consent or participation of Neo GmbH. The court commented that rationale behind this article and rule was that allowing a single proprietor to opt-out would contravene the legislative intent and disrupt the default jurisdictional regime of the UPC, which aims to centralise patent litigation unless a valid collective opt-out is executed​. 

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