What is the Unified Patent Court?.

With the  Unified Patent Court (UPC) expected to come into force before the end of 2022 or shortly thereafter, the question of infringement and the practicalities thereof is at the forefront of many applicants’ minds when considering whether to pursue unitary protection within Europe.

 

 

Territorial scope 


The Unified Patent Court (UPC) will have exclusive jurisdiction over Unitary Patents (UPs) and, subject to a transitional “opt-out”, existing and future (non-unitary) European patents in UPC-participating countries. The participating countries will be those EU member states which have agreed to establish UPs to provide single patents with a territorial scope which extends to each of said countries. The aim is to simplify the current European patent system which centralises examination but requires separate validation in each EPC member state.


Originally, the unitary patent system was intended to cover all EU member states, and in future this may be the case. However, a number of member states have not joined and at present show no interest in doing so; these member states being Spain, Poland and Croatia. Another noticeable absentee is the UK which, as a result of Brexit, is no longer part of the EU. Consequently, whilst the UK government had initially ratified the UPC Agreement, this ratification was later withdrawn such that the UK will not be a participating UP state.


The 24 UP participating EU member states are currently:


Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Hungary, Malta, the Netherlands, Portugal, Romania, Slovakia, Slovenia and Sweden.


It should be noted that unitary patents issued when the UPC first becomes available will not cover all of the 24 countries listed above, as not all of these countries have yet ratified the necessary legislation.


Competence/jurisdiction 

A key aspect of the UP is that a patentee can seek enforcement in all participating UP member states through a single action in one court system, and likewise, a defendant can deal with any action in a single forum with one counterclaim or revocation action.


This is in contrast to the current mechanism provided by the EPO for central revocation of European patents, namely EPO opposition. The main downside of opposition is that it is only available for a nine-month period following grant. After this period has expired the only option for revocation is to initiate separate revocation actions with the various national courts of those countries in which the European patent is validated; a costly and time consuming exercise. The UP system therefore provides a cost-effective and efficient means for enforcing or revoking patents across the whole UPC territory in a single action.


Infringement procedure for the UPC will be governed by the UPC Rules of Procedure. The rules allow parties some degree of choice as to venue. The general rule is that infringement actions will be heard by the Local or Regional Division covering the territory where the infringement occurred, or where the Defendant is resident, or where the Defendant resides outside the EU, by the Central Division. Revocation actions and applications for declarations of non-infringement will be dealt with by the Central Division. Parties may also agree between themselves to litigate in any Division, including the Central Division.



Remedies 

The final remedies available to the UPC are set out in the UPC Agreement and UPC Rules. These include:


  • granting freezing orders or seizure of property to prevent assets being removed in circumstances likely to endanger the recovery of damages;
  • orders for delivery up or destruction of infringing goods;
  • granting of permanent injunctions to prevent infringement;
  • revoking or amending a patent (in part or in whole); and
  • awarding damages and costs.


Damages for infringement will not be punitive, will be appropriate to the harm suffered, and will be assessed on the basis of restoring the injured party to the position they would have been in had the infringement not incurred.


In relation to costs, the general rule will be that the losing party shall pay the successful party’s reasonable and proportionate legal costs, including court fees, costs of representation, witnesses, experts and other expenses, although the amount of cost recovery will be capped according to a scale linked to the claim value.


In addition to the final remedies set out above, the Court will also have power to grant interim injunctions.



Similarities/differences with Irish/UK Courts/infringement

The UPC Rules which govern infringement procedure at the UPC incorporate a mixture of elements from existing European litigation systems. The result is a hybrid system, which incorporates features common to Europe and the UK.


The basic law for the UPC on validity and infringement is derived largely from the UPC Agreement itself and the European Patent Convention whilst also taking into account other international agreements and national laws where applicable. The effect of this on questions of validity (novelty and inventive step) is that the Court should follow the EPC and interpret that in a manner uniform across all participating Member States. The effect on infringement is that the UPC should apply a uniform interpretation.


For EU-based applicants the legal basis to which acts of infringement are to be judged is according to the national law of the EU country where said applicant was resident or had its principal place of business, or otherwise had any place of business, at the date of application. For Non-EU-based applicants, as a fallback position, the Court will apply German law. However, all participating states will have incorporated the UPC Agreement into their respective national law, such that the applicable law should be the same regardless of which country’s law officially applies.


In practice over time the UPC will build up its own jurisprudence on validity and infringement, which will be uniformly applied across the various divisions of the UPC.


One noticeable difference with respect to European and in particular UK courts, is the manner in which actions are brought. Typically in the UK for example, initial pleadings are relatively sparse and unsubstantiated with disclosure and supporting evidence being prepared and submitted later on. However, for UPC proceedings there is a heavy focus on detailed written procedure from the off with parties bringing an infringement/revocation action being required to set out their case in detail at an early stage of the proceedings. The aim of this frontloading of the procedure being to complete the trial within 12 months from the proceedings being commenced. An ambitious aim and it remains to be seen whether this will actually be feasible in practice as court proceedings anywhere are rarely as sprightly.


Summary


In terms of speed the UPC should offer a reasonably rapid decision on a case, within 12 months from commencing proceedings to judgment being the target. Further, since there is one set of proceedings (rather than multiple national proceedings as for an existing EP or an opted out EP during the transitional period), only one set of costs will be incurred. Thus the UPC provides both agility and cost effectiveness for infringement/revocation actions.


However, the UPC’s greatest strength is also its greatest weakness in that on the one hand it simplifies the European patent system by providing one unitary right across the majority of the EU but with the risk that if that right is revoked the revocation is applied across each of those EU states. Given this fact and the overall uncertainty surrounding the UPC, it is difficult to recommend from the off. This may change once the UPC has been in practice for a number of years but for now a wait and see approach would appear to be the sensible option.


This is the second article in FRKelly's series on the UP/UPC. You can read a breakdown of the Unitary Patent here. All future articles on these topics will be posted to this page. 

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