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 This declaration can be withdrawn and thus the exclusion of the competence of the UPC can be cancelled.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.

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.

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).

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.

The UPC system offers a variety of enforcement measures, including the issuance of preliminary and permanent injunctions, damage awards and orders to render information and account. The following provides for a short overview of some o these available measures:

1. Injunctions

 Where there is infringement, and where the patent is found to be valid, the UPC will have the competence to grant a permanent injunction, which (in the case of a Unitary Patent) then covers the territory of all UPC member states at the time the Unitary Patent has been granted. In case of a bundle (EP) patent, which has not been opted out of the system, the injunction will have a more limited effect, namely in those countries, where the EP patent has been validated and maintained. Unlike in some EU states, such as Germany, the UPC are likely to exercise some limited discretion whether to grant an injunction in each individual case, in particular with regard to the principles of proportionality. There likely will be differences between the local divisions as to what extent such discretion will be applied, so that forum shopping is likely to be driven by this factor, at least in the initial phase of the system.

The UPC can grant the possibility to provisionally enforce the injunction even while an appeal is still pending. For this, the UPC may order a security to be provided by the right holder prior to enforcement of any parts of the first instance decision, including the injunction. In any case, a preliminary enforcement will subject the right holder to possible damage claims, if the decision is later revoked on appeal. 

2. Damage Claims

While the availability of an injunction will likely lead to many settlements, which may include damages, after a successful trial, the UPC also has the competence to grant damage claims and to set out a damage award that covers all sales in the territory of all UPC member states.

The UPC has the possibility to decide on infringement and damages in the same judgement, or to rule on damages at a later stage, either based on the parties’ submissions, or after defendant has laid open its books. Damages will be oriented at economic factors such as lost profit and unfair profits made by infringer, but also other factors such as the moral prejudice cased to the injured party by the infringement. It can be expected that an appropriate royalty payment, set out as a lump sum for the past infringing use, will be the most common method of calculation. 

3. Evidence Proceedings

The UPC agreements stipulate that a party alleging a statement of fact that is contested by the other party, must produce available evidence. Conversely, a statement of fact that is not specifically contested by any party shall be held to be true as between the parties. To bring the necessary evidence, the UPC allows for a large variety of means, including a hearing of the parties and/or witnesses, requests for information, production of documents, opinions by experts, inspections, comparative tests or experiments and affidavits. 

While it is generally upon the parties to obtain and produce the required evidence, the UPC may order the adverse party or a third party to produce evidence, provided that evidence lies in the control of the other party or third party and that their confidentiality interests are acknowledged and safeguarded. 

The UPC may also issue an order to inspect premises and to gather evidence. Such measures may include the physical seizure of the infringing products, and, in appropriate cases, the materials used in the production and/or the distribution of those products and the documents relating thereto as well as the inspection of premises. To obtain such order, the right holder has to present reasonably available evidence to support its infringement claim. In order to guarantee the full effectiveness of this measure, and if necessary, the order can be obtained ex-parte (i.e. without hearing the other party first). 

4. Provisional Measures

 The UPC may grant provisional injunctions to prevent any imminent infringement or to prohibit the continuation of an alleged infringement. The UPC may also order seizure or delivery up of allegedly infringing products and precautionary seizure of the alleged infringer’s property.

To grant any such measures, the UPC may require the right holder to furnish reasonable evidence to demonstrate with a reasonable degree of certainty that the patent is valid and infringed. It is not clear yet, whether the UPC will apply a presumption of validity or what is required to rebut such presumption. In general, the UPC will weigh up the interests of the parties prior to granting or refusing injunctions and will deny the measure if there is unreasonable delay in seeking the provisional measures.

The UPC may invite the defendant to object to the application for provisional measures and it may hold an oral hearing to which it may summon either both parties or only the applicant. If necessary, and particularly where any delay is likely to cause irreparable harm, the UPC  may also order provisional and protective measures ex parte, i.e. without hearing the defendant. If the UPC rejects ex parte measures, the applicant may withdraw the application and request that it remains confidential. To mitigate the risk of ex parte measures, defendant may file a protective letter. A protective letter is valid for an extendable period of 6 months and shall be forwarded to the panel or judge appointed to decide on provisional measures in relation to the patent covered by the protective letter.