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UNIFIED PATENT COURT

UNIFIED PATENT COURT

The UK government announced in November 2016 that the UK will ratify the Unified Patent Court (UPC) Agreement.  This was a clear indication that the UK will participate in the UPC and European Unitary Patent (EUP).  In other words, the UK’s decision to leave the European Union on 23 June 2016 did not stop the UK wanting to participate in the UPC and EUP.

Germany and the UK are expected to ratify the UPC Agreement in mid-2017, so that the UPC Agreement then comes into force.  The UPC will then start work and the EUP would become available to European patent applicants three months after the Agreement comes into force.  The UPC Preparatory Committee expects the UPC to open its doors for business in December 2017 if both the UK and Germany ratify as expected.

This information sheet sets out briefly how the Unified Patent Court is expected to operate and our view of some of the possible advantages and disadvantages of the new Court.  It accompanies our information sheets relating to the EUP and the options for opting out of the UPC.  Please refer to these other sheets for more information.

Introduction to the Unified Patent Court

The UPC provides a single court for patent litigation across a number of European countries (the “participating member states”).  The UPC therefore allows one patent litigation action to have effect in several jurisdictions instead of conducting litigation in several national courts at the same time.

Which patents will fall within the jurisdiction of the UPC?

All patents granted by the EPO will fall within the jurisdiction of the UPC.  This includes both the new EUP and “traditional” European patents validated in the normal way.

For “traditional” European patents, the UPC will only have jurisdiction over the validated states that are also UPC participating states.  For example, a European patent validated in UK, France, Germany, Spain and Switzerland will fall under the jurisdiction of the UPC for the UK, France and Germany (as participating member states), but not for Spain or Switzerland.  Supplementary Protection Certificates (SPCs) in participating Member States will also fall under the jurisdiction of the UPC. See the table at the end of this information sheet for a list of current participating states.

However, the Applicants and proprietors of “traditional” European patents, applications and SPCs will be able to opt out of the UPC jurisdiction for at least the first 7 years during a transitional period.  An “opted out” patent will not fall under the jurisdiction of the UPC.  Instead, the opted out patent will fall under the jurisdiction of the national courts (as for current European patents).  The opt-out procedure will be important for anyone wishing to avoid the UPC in the early stages.  We have prepared a separate information sheet specifically on the opt-out procedure.

What type of actions will be available in the UPC?

Patent infringement and validity actions will be available in the UPC.

Infringement actions will be started in “local” or “regional” divisions.  A claimant has the option to issue proceedings in the local/regional division depending on the location of the alleged infringement or where the Defendant has a principal place of business (Art. 33(1) UPC Agreement).

Revocation actions will be started in the Central Division. The location of the Central Division Court is determined by the subject-matter.  The Central Division court will be in London for Life Sciences, Munich for Mechanical and Engineering, and Paris for Physics and Materials.

A counterclaim for revocation can be initiated when an infringement action is brought before the local or regional division.  Similarly, a counterclaim for infringement can be initiated in any local or regional division when a revocation action is pending at the central division.  Bifurcation of revocation and infringement actions is possible at the UPC under specific circumstances. However, bifurcation will occur after the written proceedings stage, and so it is thought that claim construction will be considered before bifurcation.

Procedure for Actions

There will be three procedural stages at the court of first instance:

(i) a written procedure;
(ii) an interim procedure; and
(iii) an oral hearing (i.e. a trial).

All three stages should be completed in around 12 to 15 months.  The timescale makes the UPC a faster revocation possibility than the EPO opposition procedure (especially at appeal stage).

Court Fees

The Court fees are to be set as fixed‑based fee for an infringement action at € 11,000 and the fixed‑based fee for a revocation action at € 20,000.  An additional value‑based fee is payable on cases with a value of more than € 500,000.  The consultation proposes a tiered fee structure, with the value-based fee equating to around 0.5 to 1 % of the value of the case.

The value of the action is judged by the judge-rapporteur taking into account the value as assessed by the parties.  The judge-rapporteur will make an order for the value during the interim procedure (after written procedure, but before the oral hearing).

Factors influencing the success of the UPC

There are several factors that will influence the success of the UPC.  These include:

  • the quality of the judges;
  • the procedural aspects working as intended;
  • the potential/minimisation for claim interpretation to differ across Local, Regional and Central Divisions, especially for bifurcated infringement and validity actions;
  • the potential/minimisation for substantive law to vary across Local, Regional and Central Divisions; and
  • the number of referrals to the Court of Justice of the European Union (CJEU).

These variables will be largely influenced by the successful operation of the Court of Appeal to ensure that:

  • the court procedure works as intended;
  • parties are held to their claim interpretation across infringement and validity actions;
  • uniform application of substantive law and claim interpretation (likely to be starting from Art. 69 EPC and its Protocol) and
  • minimising referrals to the CJEU.

Good staffing of the Court of Appeal will therefore be a big influence on the success of the UPC system.

As summary of some of the pros and cons of the system are given in the table below.


Pro 

Con

Single litigation action for “European” infringement (including the issuance of “pan-European” injunctions)

 

New and untested system – it may take a few cases before procedure is optimised and several years before there is an established body of case law.  As such, it will be difficult to predict chances of success/likely outcome of proceedings in the early years

 

Court will have pool of experienced IP judges from around Europe – the judges will initially be appointed on a part time basis so that the best national judges are able to serve both the UPC and the national courts

 

Central revocation action possible even after EPO opposition period has expired

 

Proprietors may gain early experience of the Court

 

 

Bifurcation of proceedings is possible, thus potentially leading to higher costs and different claim interpretation for validity and infringement.  To minimise the risk of divergent claim interpretation, bifurcation will only occur after the written proceedings have been concluded.

 

Proprietors can potentially shape early case law, and in particular may have an influence on a point of law that is currently unfavourable in national courts around Europe

 

 

Risk of forum shopping – there is a risk that the different local/regional divisions will take different approaches with respect to claim interpretation and substantive law. Thus some local/regional divisions may appear to be more, for example, patentee-friendly than others and result in forum shopping.  The Court of Appeal will need to function well to minimise any variations between different Divisions of the Court.

 

Existing EPs do not become “EUPs” by opting in to the UPC

A list of potential Participating Member States:

Countries that have ratified or must ratify (so will be Participating Member States) Countries that have not yet ratified
Austria Cyprus
Belgium Czech Republic
Bulgaria Estonia
Denmark Greece
France Hungary
Italy Ireland
Luxembourg Lithuania
Malta Latvia
Netherlands Romania
Portugal Slovenia
Sweden Slovakia
Finland Poland2
UK1 Spain2
Germany1 Croatia3

1: yet to ratify but required to ratify before the UPC comes into force

2: have indicated that they will not ratify before the UPC comes into force

3: Croatia only recently joined the EU and is entitled to accede the UPC Agreement, but has not done so yet

This information is simplified and must not be taken as a definitive statement of the law or practice.