2025 Week 12
There used to be a great rule-of-thumb for reading the headlines of certain British newspapers: if the headline was posed as a controversial question, then the answer to the question is no. For anyone looking for quick answers, the same rule might apply to the headings below.
This week we review a few cases from the UPC where the court has stepped up to give some clear and sharp guidance on various points. A couple of the decisions even amount to a slap on the wrist. These are signs that the UPC is confidently growing into its role.
Should the UPC disappear in a puff of logic?
No-one likes to be told that they have no right to exist. In Dolby v Roku, the UPC Local Division Munich grappled with arguments questioning the legitimacy of the UPC itself.
Dolby had sued Roku for infringement of EP 3490258 B2. Roku filed a preliminary objection, arguing against the jurisdiction of the UPC. Normally, such an objection would be based on arguments such as parallel proceedings in another court, the patent being opted out from the UPC, that the language of the proceedings is wrong, or that the action had been started in the wrong division of the UPC.
But Roku went much further than this. They argued that the UPC Agreement (UPCA) is incompatible with EU law. Their broadest point was that the basic EU treaties do not foresee or allow an international court such as the UPC, which was set up by agreement between only some member states of the EU. Actually, this point originally had some merit. Back when the UPCA was being drafted, the CJEU issued an opinion in 2011, declaring that the draft UPCA was incompatible with EU law.
In view of this problem, the draft agreement was changed to insert what are now Articles 20-23 UPCA. These provide a mechanism to ensure that the UPC Contracting Member States are responsible for actions of the UPC and that damages can be sought for failure to follow EU law. There is also an express mention that the UPC is a court of the Contracting Member States and requiring the UPC to seek preliminary rulings on EU law from the CJEU. A further change was made elsewhere, which was to amend the EU Brussels Regulation on jurisdiction explicitly to refer to the UPC.
Roku argued that these changes did not cure the original defect. Their view was that the UPC should disappear in a puff of logic.
An outcome of Roku’s argument would be that the UPC should not be entitled to make a referral to the CJEU to give any rulings. Acknowledging the irony, Roku nevertheless requested a referral to the CJEU to decide this point.
The Local Division in effect replied to say that the UPCA itself must be assumed to establish some valid jurisdiction, and the role of the UPC is to apply the UPCA. The arguments raised by Roku did not show that there was a fact, specific to this case, that would mean that the UPC did not have jurisdiction. The court also decided that a referral to the CJEU was not necessary.
Roku raised some additional novel arguments. Following Brexit, the UPCA was amended to replace London with Milan as one of the locations of the UPC Central Division. Roku argued that this should not have been done and that the change had affected the available pool of judges, to the detriment of parties litigating at the UPC. This argument did not fly either.
Realistically, there was no way that a UPC Local Division would be able to agree with these objections from Roku. Instead, it seems that the case is being set up for an appeal with a view to persuading the UPC Court of Appeal to check these basic questions (again) with the CJEU. So we will see what happens with that.
Do you need an authorisation to withdraw an opt-out?
In a case with the same defendant, exactly the same arguments about compatibility with EU law were raised in Sun Patent Trust v Roku, with the same outcome.
However, there was one additional point. The patent EP 3200463 B1 had been opted out and the opt-out had then been withdrawn. Roku argued that the withdrawal of the opt-out should have been accompanied by evidence that the UPC representative was authorised to take that step.
Helpfully for UPC representatives everywhere, the court dismissed this argument. A UPC representative can withdraw an opt-out on instruction from their client and they can do this without submitting evidence of authorisation. If this needs confirming, this can be done later, using witness statements.
Can a Chinese company avoid having to provide security for costs?
In JingAo Solar v Chint Solar, the defendant requested that the claimant should provide security for costs, i.e. a payment into court or a bank guarantee to cover the defendant’s legal costs if the defendant ultimately wins the UPC litigation.
The court acknowledged that it would be discriminatory if the mere fact that the claimant is Chinese would be enough to trigger this result. However, short-cutting the usual discussion about the actual financial position of the claimant, the court noted that there have been significant problems for the UPC in ensuring service on Chinese companies, despite China being a party to the Hague Service Convention. So the court decided:
With regard to a country that fails to fulfil its obligations under the Hague Service Convention, it has to be assumed that an order for reimbursement of costs by the UPC may not be enforceable in this country or just in an unduly burdensome way.
…and ordered the claimant to provide € 200,000 as security for costs.
Should you ambush the other side with new arguments raised at the UPC oral hearing?
Tridonic v CUPOWER was an action for infringement of EP 2011218 B1 with a counterclaim for revocation.
The defendants filed their counterclaim for revocation based on various prior art documents and raised objections of lack of novelty and lack of inventive step. Specifically, the defendants argued that claim 7 lacked novelty over any one of: D3, D4, D6, D8. They also argued that claim 7 lacked inventive step over D5, D7, D9, D10, D12.
For the first time in the proceedings, at the oral hearing, the defendants alleged lack of novelty over D7 and lack of inventive step based on D3 and D4. The prior art documents were clearly filed in time, and so the question for the court was whether the arguments were raised too late.
In the view of the court, the defendants should have raised these new arguments at the latest in their reply to the claimant’s defence to the counterclaim for revocation.
It seems that the new arguments may have been prompted by a preliminary summary of the case by the court at the beginning of the oral hearing. Maybe this prompted a new line of thought for the attorneys in the courtroom.
However, the court decided that raising new arguments in the oral hearing, apparently aiming for a surprise or ambush effect, should not be permitted. Such a strategy, they said, is “alien to the Rules of Procedure”. The essential arguments must be introduced into the proceedings as early as possible.
