Guide to the Unified Patent Court (UPC)
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Set to commence full operation sometime between mid-to-late 2022 or early 2023, the Unified Patent Court, together with the European patent with unitary effect (unitary patent or UP), represents the biggest change in the European patent landscape in more than 40 years.
The UPC is a new, international court for patent litigation in Europe for states which are both members of the European Patent Convention and member states of the UPC Agreement. It is a single court, comprising both first and second instances, with multiple locations.
It is the product of years of discussions and negotiations that were aimed at the objective of providing a single litigation forum for patent disputes in Europe. To that end, it has procedures and rules that are based on a combination of different European practices.
The UPC will be the court for litigating European patents, whether or not as unitary patents, with effect broadly for member states of the European Union. This therefore necessarily excludes significant non-EU states like Switzerland, Turkey and Norway. Furthermore, although Spain and Poland are member states of the EU, they have not signed up to the UPC Agreement.
The UK, which was an original signatory of the UPC Agreement and indeed ratified the UPC in December 2016, has withdrawn its ratification of the UPC Agreement and from the UP. This means the UK courts will have exclusive jurisdiction over European patents designating the UK. Therefore, although there is a possibility of harmonisation for litigating patents across Europe with the UPC, at present European litigation remains somewhat fractured without unitary harmonisation.
This guide aims to set out the essential elements of the UPC system. We have published a separate guide to the unitary patent (see Guide to the unitary patent (UP)). In our view, while these two parts are inextricably linked, they are not co-extensive and confusion can arise between important aspects of each that are unrelated. We therefore recommend understanding each part separately before understanding the links between them.
It is impossible in a guide of this nature to deal with every detail of the UPC Agreement, the Rules of Procedure and the fees and cost rules. If you are contemplating using the system, or finding yourself litigating before the UPC, we can provide you with specific and detailed advice relating to your particular circumstances. Nevertheless, we hope this guide provides a useful and helpful summary of the system, how it works and what the implications may be for you.
The UPC is established by the Agreement on a Unified Patent Court (the UPC Agreement) which was signed on 19 February 2013 by 25 European countries.
In July 2020, following Brexit, the UK withdrew from the UPC Agreement leaving the following 24 countries:
- Czech Republic
The UPC Agreement forms the bedrock of the legislation that governs the UPC. The UPC Agreement states that the UPC shall base its decisions on:
- EU law (including the two European Union Regulations creating the UP);
- the UPC Agreement;
- the European Patent Convention (EPC);
- other international agreements applicable to patents and binding on all the participating member states (such as The Agreement on Trade-Related Aspects of Intellectual Property Rights or TRIPS); and
- national law.
Once it comes into force, the UPC Agreement takes effect in all signatory countries that have ratified the UPC Agreement. References in this guide to “contracting member states” are therefore to countries that have both signed and ratified the UPC Agreement. Member states within this group will increase in number as more signatories ratify the Agreement.
In addition to governing law, there are several important sets of rules that apply in the UPC, including the Rules of Procedure and various Decisions of the UPC Administrative Committee
Actions within the competence of the UPC
The UPC has competence for infringement actions, declarations of non-infringement, revocation actions, and related counterclaims concerning patents that fall within its jurisdiction. This includes all forms of relief and protective and/or preventative measures. The UPC also has competence to deal with claims arising from decisions of the European Patent Office (EPO) relating to its function as the granting and administrative body for UPs.
Regardless of the patent concerned, the UPC does not have competence for contractual disputes relating to patent licences or ownership – these remain the preserve of the national courts, and are governed by relevant national law.
Patents within the jurisdiction of the UPC
(a) European patent with unitary effect (unitary patent or UP)
UPs fall within the exclusive jurisdiction of the UPC, for disputes within its competence. All infringement and invalidity actions, and counterclaims, involving UPs must therefore be brought before the UPC.
(b) Conventional European patents
Conventional European patents validated in contracting member states (‘relevant conventional European patents’), also fall within the jurisdiction of the UPC, although the extent to which they do so will change over time and in particular will alter at the end of the transitional period.
During the transitional period, relevant conventional European patents can be litigated in either the UPC or national courts. It is also possible during this period to opt these patents out of the jurisdiction of the UPC completely (see the ‘opt-out’ below). At the end of the transitional period, any relevant conventional European patents that have not been opted out will fall within the exclusive jurisdiction of the UPC.
The 'opt-out' from the UPC
Article 83 of the UPC Agreement provides that relevant conventional European patents can, before the end of the transitional period of the UPC, be opted out from the UPC’s jurisdiction. This may be desirable for holders of business-critical patents that they do not wish to place at risk of central revocation. Key aspects of the opt-out are:
- The opt-out only applies to relevant conventional European patents – it has nothing to do with unitary patents which must be litigated in the UPC. So if you choose a UP, you automatically choose to litigate that patent in the UPC.
- Any relevant conventional European patent can be opted out provided it has not already been litigated before the UPC.
- Subject to any later opt-in (see below), once opted out a relevant conventional European patent will be opted out of the UPC for its entire life – the opt-out itself will therefore last beyond the end of the transitional period.
- European patent applications can also be opted out but any that become a UP after grant will automatically be opted back in to the UPC.
- The opt-out can be exercised from the commencement of the sunrise period (which will begin during the provisional application period, (see below) up to the end of the transitional period.
- It is possible also to apply to opt back in to the UPC but: this can only be done once; it is not possible to opt back out again, and opt-in will not be possible if the patent has been litigated before a national court.
- All relevant conventional European patents in a ‘bundle’ must be opted out together: it is not possible to split up different national validations of relevant conventional European patents and take different decisions regarding the opt-out.
- The opt-out can only be exercised by the true proprietor or applicant (see below). If there is more than one, all proprietors must agree. A declaration or mandate must be filed to confirm that the application is made by the person entitled to opt out, and on behalf of all relevant proprietors. If the declaration proves to be false or inaccurate, the opt-out will be invalid.
- Licensees cannot opt out.
- Where there are supplementary protection certificates (SPCs) attached to a patent, the two rights must be opted out together. It is therefore not possible to opt out an SPC without the relevant patent, and vice versa.
- The proprietorship rules therefore also mean that where an SPC and the relevant patent are in different ownership, all owners must agree to opt out.
- There is no official fee to opt out, or to opt back in. Associated costs relate to administrative time and any professional costs involved in the provision of advice relating to the opt-out, and any opt-out service used.
Given the implications of any false or inaccurate declaration or mandate (see point 8 above), it is essential to check the proprietorship position in advance, and seek any consents that may be necessary. There will be an assumption that the proprietor or applicant on the relevant national or EPO registers is the entity or person entitled to opt out. It is the true proprietor or applicant who has the right to opt out, however, so this needs to be checked as it may not be the same person as entered on the register. It may be sensible to try to correct any registers that are out of date, subject to costs considerations. If the application to opt out is made in the wrong name, it will be ineffective. Corrections can be made but the opt-out will not be back dated, which could cause problems.
Provisional application period
In order to enable the Administrative Committee of the UPC to complete the setting up process, there is a provisional application period during which final preparations can be completed but before the UPC is actually open for business. This period commenced on 19 January 2022 and is expected to end sometime in late 2022 or early 2023, to be decided by the Administrative Committee.
A particularly important aspect of the provisional application period is that it will be possible to file opt-out requests during a sunrise period, which is likely to commence three months before the start of the UPC. The start of the sunrise period is expected to be towards the end of 2022.
Opt-outs registered in the sunrise period will be effective at the formal commencement date of the UPC. Patents opted out in this way will be safe from a central invalidity challenge, effective from the UPC commencement date.
Patent holders wishing to take advantage of this option should make sure they take all necessary steps to file their opt-out requests in good time before the end of the provisional application period, to allow for any possible delays caused by a rush to file opt-outs at the last minute.
The UPC Agreement provides for a transitional period during which the UPC will share jurisdiction with national courts for relevant conventional European patents.
The end of the transitional period also marks the end of the time during which applications to opt out can be made (in fact, they must be lodged no later than one month before the end of the transitional period).
Article 83 of the UPC Agreement provides that the transitional period will last for seven years from the commencement of the UPC which, based on estimates at the time of writing, means that it will end in around July 2029.
However, the UPC Agreement also provides that there will be a consultation with users after five years of operation of the UPC, as a result of which the transitional period could be extended by up to a further seven years (so possibly up to July 2036).
The UPC comprises first and second instance courts, together with a Registry and an Arbitration and Mediation Centre.
The First Instance of the UPC is made up of Local, Regional and Central Divisions.
Local and Regional Divisions primarily have competence for infringement actions, with or without invalidity counterclaims. The Central Division primarily has competence for invalidity actions, with or without an infringement counterclaim. It also has competence for actions for a declaration of non-infringement.
Any contracting member state may host a Local Division. Many will do so and indeed some may be able to host more than one (for example, Germany). The number and locations of these may vary over time.
Some contracting member states have joined or may join together to host a Regional Division rather than have their own individual Local Divisions. These will function in essentially the same way as Local Divisions.
The Central Division has three branches, which were originally to be located in Paris; London; and Munich. The withdrawal of the UK has meant the branch located in London will have to be relocated or absorbed by the other two locations of Paris and Munich.
Second Instance – Court of Appeal
The UPC has a Court of Appeal, with a single location in Luxembourg.
The UPC has a central Registry, based in Paris, with sub-registries at each division. The Registry is responsible for the administration of all proceedings, including service of all documents (which should be filed at the Registry, not sent directly between the parties).
Mediation and Arbitration Centre
The UPC has a Mediation and Arbitration Centre, located in Lisbon and Ljubljana. This has its own rules and procedures. Parties have no duty to use alternative dispute resolution (ADR) although they will be encouraged to do so, whether using the UPC Mediation and Arbitration Centre, or any other independent service located in a number of contracting member states.
Where to start a case
Except where the parties have specifically agreed on a particular division for their case, the following sets out where various UPC actions should be brought.
Actions for infringement should be brought before the Local or Regional Division in either:
- The contracting member state in which the infringement occurred; or
- The contracting member state where the defendant (or one of them, if multiple defendants) has its residence or principal place of business or, in the absence of either of these, its place of business.
An action for infringement can be brought in the Central Division where either:
- The defendant has its residence, principal place of business or, in the absence of either of these, its place of business outside the territory of the contracting member states; or
- The contracting member state concerned (for the purposes of (a) or (b) above) does not have a Local Division or participate in a Regional Division.
An action against multiple defendants can be brought only where the defendants have a commercial relationship and the case relates to the same infringement.
Counterclaims for revocation or a declaration of non-infringement must be brought before the same division as the infringement action to which they relate.
The jurisdiction rules provide the potential for choice of UPC division in many infringement cases, in particular where there may be multi-country infringement and/or multi-defendant litigation.
Revocation actions and actions for a declaration of non-infringement
The Central Division has jurisdiction for actions for revocation or for a declaration of non-infringement. Such actions should be brought before the relevant branch of the Central Division, based on technology.
|To be confirmed||Paris||Munich|
|(A) Human necessities.||(B) Performing operations; transporting.||(F) Mechanical engineering; lighting; heating; weapons; blasting.|
|(C) Chemistry.||(D) Textiles; paper.|
|(E) Fixed constructions.|
Transfer of actions between divisions and miscellaneous rules on choice of forum
Actions may be transferred or otherwise moved from one division to another, or brought in a division that is outside the principal rules, in a number of circumstances, including:
- Where the parties agree that an action may be brought before the division of their choice.
- Where a Local Division decides to transfer all or part of a case to the Central Division when a revocation counterclaim is brought in an infringement action.
- Where the parties agree to transfer.
- Where a revocation action is pending before the Central Division and an infringement claim is then brought before a Local or Regional Division (in which case, the defendant in that latter claim can choose to continue the action for revocation in the Central Division or commence a counterclaim in the Local or Regional Division).
- Where an action for a declaration of non-infringement is pending before the Central Division and an infringement action is then brought before a Local or Regional Division (in which case the action for a declaration will be stayed).
- Where more than one action is pending before different panels (whether in different divisions or not) concerning the same patent, the relevant panels of the UPC may agree that the two actions shall be heard together.
Local or Regional Divisions
The language of the proceedings before the Local or Regional Divisions will be:
- one or other of the official languages of the contracting member state hosting the division, or the official language designated by the contracting member states sharing a Regional Division; or
- to the extent designated by the relevant division, one or other of the official languages of the EPO (English, French or German).
Alternatively, in circumstances where the parties and panel agree, and/or where the panel of the relevant division believes it to be fair and convenient to do so taking into account the circumstances in particular of the defendant, the language of the patent may be used. This may be particularly important where defendants are sued in a division which uses an entirely unfamiliar language.
It is likely that English will be the actual or an optional language in the majority if not all divisions of the UPC. However, care should be taken when selecting a language and a division, having regard to the likely impact of using what may be a second or even third language of the participants, judges and representatives.
The language of proceedings in the Central Division will be the language of the patent.
Court of Appeal
The language of proceedings in the Court of Appeal will be the language used in the First Instance Division from which the appeal comes, subject to alternative agreement by the parties in which case an alternative language may be used, including the language of the patent.
Parties must be represented before the UPC – there is no possibility for individuals to appear in person.
Any lawyer authorised to practise before a court of a contracting member state will be able to represent parties before the UPC.
In addition, parties may be represented by European patent attorneys who have appropriate qualifications. These will include the new European Patent Litigation Certificate, awarded specifically for the UPC, as well as a number of other qualifications that will enable a significant number of existing European patent attorneys to qualify as representatives.
Accordingly, UK based European patent attorneys will be able to act as representatives before the UPC, there currently being no nationality or residence requirement to act as a representative.
The UPC is something of a hybrid, incorporating patent office or patent tribunal practices and approaches that are not seen in national courts. The judicial panel at First Instance in particular is likely always to include a technical judge (who will be a senior European patent attorney or former patent office tribunal member). Further, most of the procedure and briefing will be in writing, and the statements of case will require a substantial amount of technical content.
The UPC is a court of law. The legal judges will always of course also be the majority, whichever division is hearing the case. The procedure, rules (including jurisdiction), evidence, and remedy approaches are all aspects that come from court processes, and differ significantly from EPO or other patent office procedures.
Bearing all of that in mind, the best approach in anything other than the simplest case is likely to be to arrange representation that comprises a mixture of European patent attorneys and lawyers experienced in patent litigation.
There are two kinds of judge in the UPC – legal and technical. Legal judges will be individuals eligible to sit as judges in their national courts, and will typically be experienced national judges. They will have experience and/or training in patent litigation.
Technical judges will have a technical degree and demonstrable expertise in a particular field. They are likely to be senior European patent attorneys or former members of patent office tribunals.
In all proceedings, a judge-rapporteur will be appointed from among the legal judges on the relevant panel. The judge-rapporteur will manage the case, particularly in the interim procedure (as explained in the ‘Overview of Proceedings’ section of this guide).
In the context of varying linguistic skills and backgrounds of the UPC judges, it will be crucial to tailor submissions according to the nationalities of the judges on each panel and be mindful of the different approaches that may be required. This may be particularly important in the early days of the UPC in divisions which may have a majority of ‘local’ judges – there is likely to be an understandable element of ‘local flavour’ in proceedings in these divisions, at least to begin with.
Local and Regional Divisions
The Local and Regional Divisions will generally sit in panels of three legally qualified judges. A technical judge may be added to the panel, and will be if invalidity is in issue. Most cases are therefore likely to have a technical judge.
Where there are panels of judges, they will be international such that not all will come from the same contracting member state (or, in the case of a Regional Division, not all will come from the countries participating in that division). However, some Local Divisions may have a majority of ‘local’ judges – these will be divisions in countries with a large average number of patent cases over a qualifying period. Thus the Local Divisions in at least Germany will have a majority of local legal judges, and probably a few others.
The Central Division will sit in a panel of two legal judges and one technical judge. The legal judges will come from different contracting member states.
In any case at first instance (Local, Regional or Central Divisions), the parties can agree to have a case heard by a single judge.
Court of Appeal
The Court of Appeal will sit in panels of five judges; three legal and two technical. The three legal judges will come from different contracting member states.
|Local Division*||Regional Division*||Central Division*||Court of Appeal|
|Number of legal judges||3||3||2||3|
|Technical judge?||Probably 1||Probably 1||1||2|
|Nationality of legal judges||Mixed but majority of ‘local’ judges in some divisions||Mixed but majority from countries participating in the division||Mixed||Mixed|
*Possibility for case to be heard by a single judge.
Overview of proceedings
Substantive proceedings at First Instance
Substantive proceedings before the UPC comprise three stages: written, interim and oral procedures.
For a case at First Instance, an action is commenced by filing either a Statement of Claim or a Statement for Revocation, as appropriate. These must be quite detailed, and contain all the facts, evidence, argument and propositions of law relied upon. Claims and documents must be filed (electronically) at the Registry of the UPC, which will be responsible for service on defendants (and generally on the parties throughout the course of an action).
A defendant will have three months to file its Defence (and possible Counterclaim), which must be similarly detailed. After this, there will be an opportunity for subsequent rounds of written pleadings by both parties. These steps comprise the written procedure.
Once the written procedure closes, the next stage is the interim procedure. During this stage, the judge-rapporteur will make a number of directions in order to prepare for the oral procedure (see below). This may include the parties attending an interim conference. This part of the action is to provide clarification on certain points, produce further evidence and consider the roles of experts and/or experiments. The interim procedure should be completed within three months of the end of the written procedure.
Once the interim procedure is completed, the action will move on to the oral procedure. The judge-rapporteur will summon the parties to an oral hearing about two months after the close of the interim procedure. The UPC will endeavour to limit the duration of the oral hearing to one day although it could be longer in appropriate cases. The oral hearing will include the oral submissions of the parties together with the examination of any experts or witnesses, although there may be a separate witness hearing in addition.
The written judgment should be provided within six weeks of the hearing. It is also intended that first instance proceedings should be concluded within no more than about a year from commencement.
At any stage of the procedure, the UPC may propose that the parties liaise with the Mediation and Arbitration Centre (or any other appropriate alternative dispute resolution service or process) in order to explore the possibility of settlement. This is most likely to be recommended by the judge-rapporteur during the interim procedure.
Parties may apply for interim orders and remedies at various stages of the case, or indeed before an action commences (for example, to obtain an asset freezing order or evidence preservation order). These proceedings will typically follow a written and oral procedure, and in appropriate cases an oral hearing.
Appeals may be brought against both procedural and substantive decisions of any First Instance division of the UPC. Procedural appeals may be frequent, and important, in the early days of the UPC in order that a harmonised procedure is encouraged in all Local and Regional Divisions. Appeals can also be brought against damages and costs decisions.
There are also three stages in appeal proceedings: written, interim and oral. They are broadly similar to those in first instance proceedings (with much shortened timescales for procedural appeals).
A successful claimant is entitled to commence an application to determine damages (and possibly seek an interim award of damages). Such an application, if contested by the unsuccessful defendant, will follow a similar three stage approach to that in First Instance substantive proceedings but with such reduced timetable as the judge-rapporteur may order.
Proceedings for recovery of costs
A successful party may commence a proceeding for the recovery of costs by filing an application which includes the necessary particulars of costs incurred. If contested by the unsuccessful party, that party will have the opportunity to comment in writing on the costs requested. The judge-rapporteur will decide on the costs to be awarded, in writing.
A wide range of interim remedies are possible in the UPC, including:
- Preservation and obtaining of evidence (by inspection procedures similar to saisie-contrefaçon or production of documents similar to limited discovery).
- Interim injunctions.
- Asset freezing orders.
- Security for costs.
Following the substantive judgment, final remedies will include:
- Damages or an account of profits (which will be determined in a separate proceeding following trial and appeal, if not agreed).
- Interim award of damages pending full assessment.
- Injunctions (which will be discretionary but likely to be widely granted – note there are no eBay-type rules on injunctions in the UPC).
- Destruction or delivery-up of infringing goods and/or materials or implements concerned.
- Recall from channels of commerce.
- Publication of judgment.
- If the patent is revoked, an order for revocation.
- Costs recovery (see 'UPC court fees and cost recovery' below).
UPC court fees and cost recovery
The UPC court fees and cost recovery rules should be taken into account at the commencement of any action in the UPC, and when taking any further step in proceedings. The fees are relatively substantial and because a losing party may be liable for the costs of the successful party, the costs and fee risk should be borne in mind. The position in the UPC is different from that in a number of national courts.
Court fees in the UPC are a mixture of fixed and value-based fees.
All actions and interim applications in the UPC will attract a fixed fee. For substantive proceedings, these range from around €3,000 for a damages proceeding, to €20,000 for a revocation proceeding. For interim applications, fixed fees range from €350 for inspection or preservation applications, to €11,000 for an application for an interim injunction.
In addition, certain substantive proceedings will attract value-based fees, where the value of the proceeding exceeds €500,000. These value-based fees range from €2500 for cases exceeding €500,000 but less than €750,000, up to €325,000 for cases exceeding €50m in value.
Proceedings that incur a value-based fee include:
- Infringement actions.
- Infringement counterclaims.
- Actions for a declaration of non-infringement.
- Applications to determine damages.
Revocation actions and counterclaims for revocation do not attract a value-based fee. A revocation counterclaim will attract the same fee as the infringement action in which it is filed, up to a cap of €20,000 (which is the fixed fee for a revocation action).
There will be fee reductions of around 40% for small and micro entities, as well as further reimbursements where a single judge hears the case or where the case is settled or withdrawn early.
Legal costs and fee recovery
The UPC operates a basic ‘loser pays’ principle. Article 69 of the UPC Agreement provides that reasonable and proportionate costs and other expenses of the successful party will be borne by the unsuccessful party (unless fairness requires otherwise), up to certain limits.
The UPC Rules on Court Fees and Recoverable Costs provide for a scale of recoverable cost limits that apply to representation costs only (meaning legal representation). These limits are based on value and range from €38,000 for a case up to and including €250,000 in value, to €2m for cases exceeding €50m in value. These limits may be raised in exceptional cases, or lowered if an applicable cap may threaten the economic existence of a party.
Court fees should be recoverable in full, and third party costs (such as expert fees) are not capped, so will be recoverable to the extent they have been necessarily and reasonably incurred.
Unreasonable or unnecessary costs will be borne by the party which incurred them, regardless of outcome.
Relationship with opposition
Opposition proceedings will remain possible for conventional European patents and UPs. They can run in parallel with UPC proceedings.
Proceedings before the UPC will not be stayed where there are opposition or limitation proceedings, save where a decision in the opposition or other proceedings may be expected to be given rapidly. This is different from the position before some national courts, where a stay may be likely if there is an opposition pending.
Opposition is likely to remain a popular option because it will be cheaper than proceedings in the UPC, and will of course address conventional European patents validated in EPC states such as the UK, which is not a party to the UPC.
The UPC is therefore a further option for central invalidation proceedings, for the contracting member states, and one that will be available throughout the life of the patent, not just the first nine months after grant.