Competence of the UPC

/in ,

In principle, from the entry into force of the Agreement, the Unified Patent Court (UPC) will have exclusive competence in civil proceedings relating to European patents, unitary patents, supplementary protection certificates for products protected by such patents and European patent applications. The scope of exclusive competence includes, inter alia, actions for actual or threatened infringement and related defenses, actions for a declaration of non-infringement, actions for provisional and protective measures, actions for injunctions, actions for damages, actions for revocation and counterclaims for a declaration of invalidity, and actions against decisions of the European Patent Office relating to administrative tasks.

For actions relating to patents or supplementary protection certificates that do not fall within the exclusive competence of the court, the Agreement states that national courts of the contracting member states continue to be competent.

During a transitional period of seven years from the entry into force of the Agreement, national courts and the UPC are on an equal footing, and during this phase there is therefore no primacy of the UPC.

In addition, until one month after the end of this transitional period at the latest (which can be extended by a further seven years), patent proprietors have the possibility to exclude the exclusive competence of the UPC by means of a so-called opt-out declaration. This declaration can be withdrawn and thus the exclusion of the competence of the UPC can be cancelled. There are no fees for the opt out declaration and it must be made by all patent proprietors jointly or by their representatives to the UPC’s office uniformly with effect for all states. Although it can be made at any time during the transitional period, it can no longer be made once legal proceedings relating to the patent have been instituted before the UPC. To take account of this circumstance, patent proprietors already have the possibility to make an opt-out declaration for their existing European patents and European patent applications during the so-called sunrise period before the entry into force of the Agreement and thus before such proceedings can be initiated by a third party. The start of this period will be announced by the authorities and will last approximately three months.

If the patent proprietor makes an opt-out declaration, the European patent in question will no longer fall within the jurisdiction of the UPC and any litigation concerning that patent will continue to be brought before the national courts.

Any unitary patent or bundle patent for which the patentee has not made use of the opt out declaration is subject to the jurisdiction of the UPC and must be heard by it.

 

Strategic considerations

/in

The agony of choice

The introduction of the unitary patent system paves ways for taking many different routes towards a European patent strategy.

Multiple different choices can be made with regard to the nature of the patent right and with regard to the jurisdiction.

With regard to the nature of the patent rights, the Unitary Patent (UP) will coexist with national patents and utility models as well as with traditional European bundle patents.

Regarding jurisdiction, traditional European bundle patents can be kept in the jurisdictions of the established national courts by means of the opt-out or can be made accessible to the new Unified Patent Court (UPC). However, UPs will be in the jurisdiction of the UPC and national patents and utility models will remain in the jurisdiction of the national courts.

The UP can be combined with national patents or utility models, which allows to have the same technology be handled by different jurisdictions for the same states.

The UP can also be combined with traditional European patents, such as UP for the participating EU member states and traditional EP patent for the non-participating EU member states and for non-EU EPC member states.

Instead of UPs, national and traditional European bundle patents remain available also for the participating EU member states.

On top of that, European divisional applications can be treated differently compared to their parent application, which allows for additional strategic options in terms of which patent right to choose and which jurisdiction to select for the same technology.

To shine some light on which patent right to choose, please note the following general information. However, the exact choice depends on the particular case and should be made only after obtaining personal legal advice.

National patents and utility models enable to have the technology treated within the established national courts also beyond the end of the transitional period after which all European patents would fall in the jurisdiction of the UPC, unless opted-out beforehand during the transitional period. The securing of access to the national courts be established via the national rights in parallel with European or Unitary patents by way of claiming priority, parallel national phase entries or parallel national filings.

For EPC states not participating in the new unitary patent system, the traditional European bundle patent would still be the choice in parallel with national patent rights. The traditional European bundle patent is also the choice for the participating EU member states when the patent strategy is to be kept as in the past, namely validate in several EPC states and manage national parts of the European bundle patent individually. This may be the choice for important patents, for which products and/or license agreements are available. This choice is also cheaper than the UP when only up to 3 or 4 EPC states are to be validated and also makes sense when future dropping of individual national parts of a European patent is of interest. European bundle patents can be opted-out to avoid a combination of the disadvantages of the respective systems: Even though validation in several states has been performed, allowing for a central attack at the UPC and loss in all validation states at the same time by not opting out. Strong European bundle patents can be made subject to the UPC to contribute to jurisprudence of the UPC, while keeping the risk of a central revocation low.

The UP has the potential to save costs, because the costs associated with payment of renewal fees and validation for multiple validation states can be avoided. However, the UP will only bring cost savings if one would otherwise validate the European patent in four or more EPC states. The more states one normally validates and the longer the lifetime, the larger the cost saving are with the UP. However, no dropping of validation states is possible for the UP, so that the costs savings also come with a loss in some of the strategic options. The UP might provide cost savings in case litigation cases in several different countries are expected. However, the UP has the risk of a central attack and loss of the UP in all states at once.

Thus, national patents and utility models may be combined with European or Unitary patents, whereas the exact choice of the two types of European patent rights depends on various factors. We will be happy to advise you on finding the “right fit” to you.

 

Back to UPC overview

Costs and reimbursement in the new UPC system

/in ,

The parties to a proceeding must pay court fees for the proceeding. These shall be paid in advance unless otherwise specified in the Rules of Procedure. If a party has not paid the prescribed court fees, it may be excluded from further participation in the proceedings. The court fees for proceedings before the Unified Patent Court (UPC) consist of a fixed fee and a fee based on the value in dispute.

Court fees

For infringement actions and for actions for declaration of non-infringement, the fixed fee is EUR 11,000 and the fee depending on the value in dispute is between EUR 2,500 for a value in dispute of EUR 500,000 to EUR 750,000 and the maximum of EUR 325,000 for a value in dispute of EUR 50,000,000. The fixed fee for applications for interim measures and for nullity counterclaims is also EUR 11,000 each and the fixed fee for nullity actions is EUR 20,000. The upper limit for the fee dependent on the value in dispute for nullity counterclaims is EUR 20,000. The fixed fee for appeals is usually EUR 11,000.

Attorney fees

As in Germany, in proceedings before the UPC the costs of the legal dispute and other costs incurred by the prevailing party are generally reimbursed by the losing party. However, reimbursement only takes place up to a fixed upper limit if the costs are reasonable and appropriate and if there are no grounds of equity to the contrary. The upper limit of the costs to be reimbursed by the losing party in one instance is EUR 38,000 for a value in dispute of EUR 250,000 and EUR 2,000,000 for a value in dispute of more than EUR 50,000,000. In the event that a party is only partially successful or in the event of exceptional circumstances, the court may order that the costs be allocated on an equitable basis or that the parties bear their own costs. If a party has caused unnecessary costs to another party or to the court, it shall bear such costs itself.

Security deposits

In addition, at the request of the defendant, the court may order the plaintiff to provide reasonable security for the costs of the litigation and the defendant’s other costs.

 

Back to page Unitary Patent Court

German patents in the light of the UPC

/in ,

In addition to the European patent with unitary effect (unitary patent), which also develops protection in Germany, the existence of a national German property right remains, which will presumably play an even more important, flanking role in the future.

Partial elimination of the double protection prohibition

According to the previous regulation of the IntPatÜG concerning the European bundle patent, if the subject matter of a German patent is an invention for which a European bundle patent with the same priority has been granted to the same inventor or his legal successor with effect for the Federal Republic of Germany, then the German patent, to the extent that it protects the same invention as the European bundle patent, no longer has any effect from a certain point in time after the grant of the bundle patent (double protection prohibition).

According to the new regulation of the IntPatÜG of 2021, the double protection prohibition only applies to those European bundle patents for which an exclusion from the Unified Patent Court system has been validly declared (so-called “opt-out”), since the unitary patent does not itself provide for double protection in relation to national patents. However, if the declaration of exclusion is withdrawn (so-called “opt-in”), the double protection prohibition remains in force and the German national property right remains ineffective in the overlap of the scope of protection.

As a result, for all unitary patents and all European bundle patents for which no explicit exclusion from the new unitary patent court system has been declared, a national German patent granted after the start of the new system can also have effect in the overlap of the scope of protection alongside the European patent.

This opens up strategic advantages for owners.

Strategic advantages

At present, the new Unified Patent Court system for nullity actions and for infringement actions is associated with a great deal of uncertainty. For example, it is difficult to estimate the expected case law and the conduct of proceedings in the new Unified Patent Court system. In contrast, there is a proven national German system consisting of the Federal Patent Court and the District Courts, which have developed a solid and predictable case law over many years. For plaintiffs, this means an increased level of security. In addition, Germany has the largest market within Europe and the participating states of the Unitary Patent System.

Owners of a German national patent and a European patent can thus choose the system for an action and, especially at the beginning of the new unitary patent system, can fall back on a proven action system which covers the most economically relevant area of Europe.

In addition, a German national patent provides a valuable fall-back position in the event that the unitary patent is not upheld. If the worst comes to the worst, a German national patent thus offers the possibility for a German court to judge patentability (differently) than the UPC for the market in Germany on the basis of previous proven case law.

Advantages of parallel German application

In addition, the German patent system has two other special features.

First, a German patent application can be filed in parallel with a European patent application from an international patent application (PCT).

Furthermore, after filing a German patent application, a request for examination can be deferred for a maximum of 7 years after the filing date.

Thus, there is the possibility to let a German patent application rest at comparatively low office fees and to pursue a unitary patent in parallel. In case of failure of the European patent application or loss of the unitary patent or new findings justifying an amended scope of protection, an examination request for the German patent application could then be filed at a later date, thus continuing to cover a substantial part of Europe to a relevant extent.

Looking into the future, it should be added that after the discontinuation of the option of opting out after a transitional period of currently 7 years, it is intended that all European patents with or without unitary effect for the participating EU states will fall under the exclusive jurisdiction of the UPC and thus, at the latest, a German property right application will then be the only way to bring the invention under the proven jurisdiction of the German courts.

Thus, in view of the new unitary patent system, the German national patent is already gaining a strategic importance that should not be underestimated when deciding where to file an application, and applicants should be aware of this.

We will be happy to provide you with customized advice on the strategic options.

 

Back to page Unitary Patent

Opt-out

/in

With the entry into force of the Agreement on a Unified Patent Court (UPCA), the Unified Patent Court will have jurisdiction over actions for infringement or invalidity of classical bundle patents and a new unitary patent.

However, actions for infringement or for invalidity of a European bundle patent can be brought before the national courts as before during a transitional period of 7 years from the start of the Unified Patent Convention, which can be extended to a further 14 years.

Until one month before the end of this transitional period, the jurisdiction of the Unified Patent Court can be explicitly excluded for European bundle patents granted or filed before the start of the UPC or during the transitional period (so-called “opt-out”). In this case, the European bundle patent will be judicially treated like a classical bundle patent. The exclusion applies for the entire lifetime of the European patent and from the date of entry in the Unified Patent Register.

Thus, owners have the possibility to withdraw a classical bundle patent or a European patent application from the access of the new unitary patent system by an “opt-out”.

In order to declare the exclusion of a classical bundle patent or a European patent application, a corresponding communication must be submitted to the registry of the Unified Patent Court via the so-called “case magagement system”. The communication can even be filed before the Unified Patent Convention enters into force in the so-called “sunrise period”. The “sunrise period” lasts three to four months from the date on which the UPC enters into force. In this way, a bundle patent or a European patent application can be excluded from the unitary patent system even before the start of the unitary patent system.

The proprietor can withdraw from the exclusion of general jurisdiction at any time and make the European bundle patent accessible to the new patent system again (so-called “opt- in”).

The condition for an exclusion of a European bundle patent from the unitary patent system is that no action has yet been brought before the Unified Patent Court. Against this background, it may be advisable for owners of classical bundle patents to withdraw bundle patents from the new unitary patent court system already during the “sunrise period” by an “opt-out”. If an action is to be brought before the Unified Patent Court at a later date, the owners can withdraw from an “opt-out” at any time by means of an “opt-in”.

We will be happy to provide you with customized advice on the strategic options!

 

Back to UPC overview

Jurisdiction of the UPC

/in ,

With regard to jurisdiction of the Unified Patent Court (UPC), a distinction must be made between the international jurisdiction of the UPC, the subject-matter jurisdiction, the jurisdiction in relation to courts of Member States with regard to non-unitary European patents, and the jurisdiction of the individual chambers of the Court of First Instance among themselves.

International jurisdiction

With regards to international jurisdiction, the most important aspect in practice is that a potential defendant does not have to be domiciled in a contracting member state in order to be brought as a defendant for patent infringement (unitary and non-unitary European patent) before the UPC. Instead, it is also sufficient that the patent infringement has occurred or has an effect in the territory of a contracting member state.

Subject-matter jurisdiction

With regard to subject-matter jurisdiction, the most important aspect in practice is that the UPC has jurisdiction for infringement actions, provisional measures (in particular injunctions, preservation of evidence, etc.; see the corresponding overview), actions for declaratory judgment of non-infringement and nullity (revocation) actions arising out of or against unitary patent(s) and non-unitary European patent(s) as well as SPCs relating thereto (however, with exceptions for non-unitary European patents during a transitional period, see below). The UPC also has jurisdiction if the defendant asserts the FRAND objection in infringement proceedings (in which case however the UPC must apply EU law and the case law of the ECJ and, if necessary, also refer questions on EU law thereto if necessary).

The UPC hears counterclaims for revocation regardless of whether an opposition to a (non-)unitary patent has been filed with the EPO. The UPC may conduct the revocation action in parallel or suspend the proceedings. However, if the EPO declares a patent invalid (with binding effect), this is also binding on the UPC.

Jurisdiction within UPC

All actions have to filed with the Court of First Instance. The decisions of the Court of First Instance may be appealed to the Court of Appeal. The Court of Appeal is also the last instance. The Court of First Instance is divided into the central division and the so-called local and regional divsions. The contracting member states each have one (or, in the case of Germany, four) local chamber(s); several contracting member states can also join together and form a joint regional chamber instead. As a rule, infringement actions have to be filed with the local or regional chambers and can only be filed with the central chamber in certain constellations. See the article on forum shopping for the options available.

Relation to national courts

National courts, on the other hand, will continue to have jurisdiction over disputes concerning the ownership of both unitary and non-unitary patents and employee invention rights thereto. Apart from that, national courts of course continue to have jurisdiction for actions re national patents and utility models.

In the case of non-unitary European patents, the patent proprietor can declare the so-called opt out three months before the UPC starts its operation (so-called sunrise period) until presumably seven years after this date (provided that the patent was also granted or applied for at least within this period and provided that no action concerning this bundle patent is pending before the UPC). If the opt out is declared and not withdrawn, this patent is permanently withdrawn from the jurisdiction of the UPC. As before, infringement proceedings and (after expiry of the opposition period) opposition proceedings are then to be conducted in the countries where the bundle patent is validated.

If the opt out is not declared, plaintiffs have a right of choice with respect to bundle patents whether to go before a national court or before the UPC. At present, it is still disputed in the literature to which types of proceedings this right of choice extends (only infringement and nullity actions or also negative declaratory actions and provisional measures) and to what extent the exercise of this right of choice blocks the possibility to go before the respective other court. It is predominantly assumed that subsequent proceedings which territorially do not have the same subject matter as earlier proceedings remain possible or that the respective territory is to be excluded (e.g. if an infringement action is brought before the UPC, invalidity counterclaims can still be brought before national courts; if an infringement action is brought before a national court, an infringement action concerning the remaining validations can be brought before the EPC, etc.). However, it remains to be seen how the UPC and the national courts will position themselves in this regard.

 

Back to page Unitary Patent Court

Applicability and enforcement of decisions of the UPC

/in ,

Decisions of the UPC are directly applicable in all contracting member states. Decisions based on non-unitary European patents are of course only applicable in member states in which the patent is validated at the time of the decision. Still, in both cases, the territorial applicability goes beyond individual states, making cross-border injunctions the norm.

Provisional enforceability

Furthermore, already decisions of the first instance of the UPC are enforceable and their enforcement can only be predicated on a bond. The appeal court can stay the enforceability at its discretion. However, it has to be noted that enforcement of first instance decisions can incur claims to damages for the defendant, in case the decision is overruled on appeal.

A decision can be enforced as soon as it has been served to the defendant (and enforcement has been formally announced).

Delivery by email

Service delays are not to be expected as defendants have to supply an email address for service (and risk a default judgement if they fail to do so).

Translations are only required insofar as enforcement measures have to be taken by the authorities of the member states (see below). However, in this case translations have to made for every respective state.

Penalty payments

In case the defendant does not comply with an injunction or an order to render information, the UPC can impose penalty payments (which are to be payed to the UPC). The collection of such payments and other monetary claims (in particular damages and reimbursement of costs) however has to be done nationally together with the competent authorities in the respective states, and under the applicable national rules with regards to scope. For example, Germany allows for seizure of property, bank accounts and claims against third parties.

 

Back to page Unitary Patent Court

Forum Shopping

/in ,

In the context of actions for infringement before the Unified Patent Court (UPC), forum shopping means the possibility for a plaintiff to choose a particular division out of several competent divisions for his action.

Reasons for forum shopping

Reasons for choosing one division over another are based on the wiggle room and discretion that the rules on procedure and material laws governing the UPC provide the judges with, which can result in (statistically significant) differences between the divisions in how they decide on various issues and how they conduct the proceedings. Examples would be: win/loss ratio; how often court experts are appointed; how often counterclaims for revocation are referred to the central chamber and a corresponding infringement action is stayed; how often infringement actions are stayed in light of pending opposition proceedings before the EPO; how often local chambers request technically qualified judges in infringement actions; chances for success of applications for provisional measures.

Forum shopping at UPC

The rules governing the UPC allow forum shopping to a certain extent. Actions for infringement can be brought before a local and regional division of a contracting member state if infringement takes place in said state (e.g. sale of goods). Further, actions for infringement can be brought before a local and regional division of a contracting member state if defendant has its seat in said state. In case the defendant does not have its seat on the territory of any contracting member state, the action can also be brought before the central division. In case a contracting member state has several local divisions (for now only Germany, with four divisions), an action can be brought before any of these divisions (in case infringement takes place on the territory of that state).

For example: a defendant has its seat in Austria, infringement takes place in Germany, Italy and France. The action for infringement can then be brought be before the one of the local divisions in Vienna, Munich, Dusseldorf, Mannheim, Hamburg, Milan and Paris.

Since the divisions of the UPC, in principle, render decisions for the territories of all contracting member states (see the corresponding article), plaintiffs can take advantage of the peculiarities of the divisions in cases where several divisions are competent (as in the above example).

 

Back to page Unitary Patent Court

Provisional measures and orders

/in ,

In patent infringement proceedings before the Unified Patent Court (UPC) a claimant can, in particular, be awarded claims to injunction, information and damages as well as recall and destruction. However, the rules governing the UPC provide provisional measures and orders which can be applied for before or besides main infringement proceedings. “Provisional” means that decisions of the court can be obtained quicker than in main proceedings, but are only preliminary, meaning that they can be overruled in case of a differing result in the main proceedings.

Provisional measures and orders can be put in three categories:

Categories of provisional measures

1st Category – temporary order regarding main suit

The first category would be measures which preliminary and partially award claims, namely an injunction (with the respective consequences in case of a breach) and seizure of potentially infringing products.

2nd Category – order preparing main proceeding

The second category would be orders which allow a potential claimant to assess the chances of success of an infringement action, namely orders for inspection, e.g. the inspection of a potentially infringing machine together with a court-appointed expert.

3rd Category – safeguards for monetary claims

The third category would be measures with which monetary claims from an (future) infringement proceeding, in particular claims to damages and reimbursement of costs, can be secured through the seizure of assets.

Provisional measures and orders can be applied for before or besides main infringement proceedings. However, if no main action is initiated, defendant can demand that a main action is initiated or provisional decisions by the court be lifted alternatively.

Timeline of the procedure

The duration of the proceedings re provisional measures and orders can vary between hours or days and weeks or months. This primarily depends on whether the court gives the defendant the possibility to reply to an application for such measures in writing and whether an oral hearing is scheduled. This in turn is primarily dependent on the degree with which infringement and validity can be assumed and how urgent the measures are for the applicant (can he e.g. claim that without a quick decision he would incur heavy and irreparable damages?).

Protective letters

Potential defendants can deposit a protective letter at the court, meaning a written summary of their presumed defense. A protective letter thereby ensures that the court hears the defense and thus rejects the application (or at least gives the defendant the chance for further submissions) if a defendant assumes that such an application could be filed.

 

Back to page Unitary Patent Court

UPC: Case management and proceedings

/in ,

The written procedure of the, in practice, most important proceedings, actions for infringement of patents together with counterclaims for revocation and applications to amend, is illustrated in the Rules of Procedure:

Graphic

The following additions should be noted:

Other procedures

Preliminary objections regarding competence of the court and procedural language must be raised within one month after service of the infringement action.

The chart further does not show the ability of the court to stay proceedings. In practice, relevant grounds for a stay of the proceedings can be separate actions for revocation before the central division (for which the three-month deadline, which applies to counterclaims for revocation, does not apply) and/or opposition proceedings before the EPO. Also of relevance are cases in which a local division refers a counterclaim for revocation to the central division and stays the infringement action (instead of continuing it).

Deadlines

Furthermore, the deadlines shown in the chart are not binding, but can be extended given a respective application from a party. One example would be the case where defendant argues that he cannot meet the three-month deadline for the counterclaim for revocation (e.g. because the prior art search is extensive) and does not want to be referred to a separate claim for revocation.

The written procedure is followed by the interim procedure, which is scheduled to take three months. The oral hearing shall be held after the interim procedure is closed. Ideally, the whole proceedings will take no longer than 9 to 11 months.

Interim Procedure

In the interim procedure, the court prepares the oral hearing. Together with the parties it discusses whether witnesses or court experts should be summoned. Regarding the latter, the parties can make suggestions on whom to choose and what questions to ask. After the written expert opinion has been issued, the parties can also make comments thereto.

During the written procedure, the court can manage the case, e.g., by ordering the parties to submit relevant evidence.

Decisions by the court can be appealed. The appeal proceedings mirror the proceedings in first instance, with the main difference being that for the most part no further facts re infringement and prior art can be submitted. The parties therefore have to rely on the facts and prior art presented in the first instance. Consequently, in the written procedure, each party can usually make only one submission (instead of two or three). Ideally, the appeal proceedings will therefore also take no longer than one year, meaning that a final and binding decision can be expected no later than two years in total.

 

Back to page Unitary Patent Court

Menu

Informations

Legal Areas

© Copyright 2022– BOEHMERT & BOEHMERT