Neo Wireless GmbH Co. KG v. Toyota Motor Europe

This case concerns the interpretation of Article 83(3) of the Agreement on a Unified Patent Court (UPCA) regarding the validity of an opt-out from the jurisdiction of the Unified Patent Court (UPC).

Facts: Neo Wireless LLC (Neo USA) was the owner of European patent application EP 3876490 for all designated states. On 7 March 2023, Neo USA transferred the German part of the pending patent application to Neo Wireless GmbH & Co. KG (Neo) via an Assignment Agreement, while the other national parts remained with Neo USA. On 30 March 2023, Neo USA filed an opt-out for 'all EPC states,' but this application was not filed on behalf of Neo, and no consent from Neo was annexed. Neo itself did not file an opt-out application for the German part. The European patent EP 3876490 was granted on 17 May 2023. Toyota Motor Europe NV/SA then brought a revocation action against the German part of the patent held by Neo before the Central Division Paris of the UPC. Neo filed a preliminary objection challenging the UPC's competence based on the alleged valid opt-out. The Court of First Instance rejected this preliminary objection, holding the opt-out invalid because not all proprietors of all national parts had lodged the application as required by Rule 5.1(a) RoP. Neo appealed.

Arguments: Neo argued that the wording of Article 83(3) UPCA only requires 'a proprietor' or 'an applicant' to file an opt-out, and that one applicant could validly opt out the entire European patent. Neo further contended that Rule 5.1(a) RoP, which requires all proprietors to lodge the opt-out, should be disregarded because the UPCA prevails over the Rules of Procedure in case of conflict. Neo also argued that requiring consent from all proprietors would unduly impair its ownership rights by forcing it into the UPC system.

Toyota argued that the use of 'a' or 'an' in Article 83(3) UPCA merely acknowledges that a European patent can have more than one proprietor, and does not imply that any single proprietor can opt out the entire patent. Toyota contended that since an opt-out must be declared for a European patent as a whole, all proprietors of each national part must declare the opt-out. Toyota further argued that Rule 5 RoP does not contradict the UPCA but merely specifies procedural requirements.

Court's Reasoning: The Court of Appeal applied the general rule of interpretation for international treaties under Article 31(1) of the Vienna Convention on the Law of Treaties, interpreting Article 83(3) UPCA in good faith, in accordance with the ordinary meaning of its terms, in context, and in light of its object and purpose. The Court noted that under Article 2(2) EPC, a European patent has the effect of a national patent in each designated state, and a European patent application may be transferred per state separately, meaning 'a' European patent may be held by more than one proprietor. The Court found the word 'a' or 'an' in Article 83(3) UPCA to be ambiguous—it could indicate the singular (only one proprietor needed) or the capacity (any proprietor can file, meaning all proprietors must file). The use of the plural 'they shall notify' suggested multiple proprietors. The Court reasoned that the purpose of the opt-out is to allow proprietors to remain outside the UPC system, and if only one proprietor could opt out, it would force other proprietors into the UPC against their will, equally impairing their rights. The Court rejected Neo's argument that its ownership rights would be disproportionately impaired, noting that the UPC merely provides a new forum and does not interfere with property rights themselves. The Court concluded that Article 83(3) UPCA must be interpreted to require that a valid opt-out application be lodged by or on behalf of all proprietors of all national parts of a European patent, and that Rule 5.1(a) RoP is in conformity with this interpretation.

The Court of Appeal rejected the appeal, confirming that the opt-out declared by Neo USA alone was invalid because Neo (the proprietor of the German part) did not also lodge the opt-out application. The revocation action brought by Toyota was therefore allowed to proceed before the UPC.