CoA clarifies damages in Bhagat/Oerlikon

In Bhagat/Oerlikon (UPC_CoA_8/2025, decision of December 9, 2025), the CoA clarifies various aspects of the legal principles guiding damages under the UPC framework.

The status quo

In comparison to the US, damages have led a niche existence in European patent litigation. It has been speculated in the legal literature (Veron, GRUR 2021, 392) that this is not due to differences in legal principles, as the feared treble damages had not been applied in the most spectacular awards in the US. Rather, the differences seem to primarily stem from the fragmented enforcement of patent rights pre-UPC, and thus also the limited coverage of damages claims.

For this reason, there is an expectation among UPC practitioners that with the UPC’s coverage of 18 EU-member states (and more EPC countries via the BSH judgement of the ECJ), damages might leave their niche existence in Europe behind. Decisions on damages therefore catch the eye.

Bhagat/Oerlikon and the fundamentals of damages calculation at the UPC

In Bhagat/Oerlikon (UPC_CoA_8/2025, decision of 9 December 2025), the CoA clarifies various aspects of the legal principles guiding damages under the UPC framework.

On the outset, the decision makes us recall that Art. 68 UPCA is a verbatim implementation of  Art. 13 of the Enforcement directive, and thus already, in its wording, diverges from the German national approach on damages, which stipulates that the patent proprietor can claim damages based on one of the three calculation methods (license analogy, infringer’s profits, lost profits), which are mutually exclusive.

Art. 68 UPCA instead proposes two methods of calculation, whereby the first one merges infringer’s profits and lost profits into a composite method, and adds “moral prejudice caused to the injured party by the infringement”. The CoA has held that moral prejudice requires reputational harm, and it appears likely that standard infringement actions will not suffice to fulfill this requirement (cf. recitals 26 to 30). “Moral prejudice” will therefore likely only play a minor role in future damages calculations. Furthermore, the decision holds that offerings alone will in most scenarios not constitute grounds for damages, and that actual sales will be required (cf. recitals 18 to 22).

Principles of liability

A declaration that an infringer is liable for damages requires knowledge of an infringement or reasonable grounds to know (Art. 68 para 1 UPCA). The CoA aligns with most of the national courts and holds that if the infringer is a direct competitor of the patent proprietor, it has a de facto obligation to monitor its competitors patent rights (recitals 23 to 25). This will have the likely result that competitors will be liable for damages in case of an infringement, regardless of whether they were aware of the respective patent or not, and that only downstream businesses like distributors might be able to argue that they had no reason to know of the respective patent (and are therefore not liable for damages).

For patent proprietors it is now important to recognize that under the UPC framework, infringers will in most scenarios be held liable for damages, and that the calculation of these damages is more flexible than under national frameworks. The UPC is therefore shaping up to be an ideal place for not only pursuing injunctions, but also damages.