The Conditional Revocation Counterclaim before the UPC

Who shapes a UPC case – and who ends it? Increasingly, the answer is: the parties.
Court of Appeal, order of 16 July 2026, UPC-CoA-40/2026 — Emboline v AorticLab (on appeal from LD Munich, 13 January 2026, UPC_CFI_628/2024).

How UPC proceedings are shaped, and how they end, is largely for the parties to decide. The Court imposes only two limits: it will not confirm an agreement whose content it does not know, and a patent cannot be revoked or limited by settlement.

Termination of Proceedings by Settlement

The principle of party disposition enshrined in Art. 76(1) and Art. 43 UPCA under which the Court may not award more than has been requested means that the parties may terminate their proceedings by settlement at any time. Contrary to what one might initially assume, this is also possible without applying for a decision of the Court confirming the settlement within the meaning of R. 365 RoP¹. Confirmation by the Court is therefore an option, not an obligation; its value lies in enforceability, since under Dreame v Dyson a decision confirming a settlement under R. 365.1 RoP may be enforced in the same way as a final decision of the Court². The parties must, however, disclose what they have agreed: Astellas requires particulars of the actual terms of the settlement, because 11.2 RoP calls for confirmation of those terms (1).

A point that often matters in practice is the confidentiality of the terms, in particular where the settlement is communicated to the Court under R. 365 RoP. Under Dreame (2), the details of the settlement are treated as confidential upon request under R. 365.2 RoP, the confirming decision is entered in the register subject to that reservation under R. 365.3 RoP, and a further order is required only under R. 262.6 RoP where a member of the public applies for access to the file. What is protected, however, is only the content, not the fact of settlement itself: that the parties have settled, and that the Court has confirmed this, becomes public through the entry in the register. A party wishing to avoid even that cannot opt for confirmation, but must proceed by way of withdrawal of the action under R. 265 RoP; the register will then show only the termination of the proceedings, and not a settlement. The price is forgoing direct enforceability under R. 365.1 RoP; the agreement remains purely contractual and must be enforced separately in the event of a dispute.

Independently of all this, the Agreement sets a substantive limit, and does so solely as regards the permissible content of a settlement: the Nordic-Baltic Regional Division held in Edwards v Meril that Art. 79 UPCA provides that a patent may not be revoked or limited by way of settlement (3). What remains permissible under R. 11.2 RoP is confirmation of an undertaking by the proprietor to limit the patent or to surrender it.

Withdrawal of the Action under R. 265 RoP

The requirements for terminating proceedings by withdrawal of the action were summarised by the Munich Local Division in NEC v TCL: withdrawal is available as long as no final decision has been given, and is inadmissible where the other party has a legitimate interest in a decision of the Court (4). Express consent of the opposing party is not required; under Bentley v Network Systems Technologies it suffices that an opportunity to comment was given and no objection was raised within the time limit (5). Final decision means a decision that has become res judicata, which is why the Court of Appeal clarified in Avago v Tesla that the application may also be made on appeal and becomes inadmissible only once the decision is final (6); it confirmed this in Lepu v Occlutech (7). Because applications to amend are merely ancillary, it also follows that withdrawal of the revocation counterclaim renders applications to amend the patent devoid of purpose. As a consequence, a patent revoked at first instance is revived where the appeal is withdrawn by way of settlement.

Conditional Revocation Counterclaim

That the parties determine not only the end of the proceedings but also their shape is illustrated by Emboline v AorticLab. The defendant had initially applied for revocation of the patent in its entirety under Art. 65(2) UPCA and R. 25 RoP with effect for all Contracting Member States in which it has effect, but then stated at the oral hearing that it would not pursue the counterclaim as filed, but would instead make it conditional upon a finding of infringement; because the Munich Local Division found no infringement, the condition was not met and the counterclaim was left undecided (8).

The Court of Appeal considers this approach permissible, reasoning by way of a balancing of interests: even though R. 263.3 RoP is not directly applicable, because it is not the claims but the action as a whole that is limited by the condition, the balance of interests corresponds to that under R. 263.3 RoP; as there is no provision governing the situation, that rule is to be applied by analogy, so that an unconditional request by the counterclaimant to make its counterclaim conditional upon a finding of infringement must be granted. Here too, therefore, it is the party’s request that determines the scope of the proceedings.

Of greater practical importance is what the Court clarifies as to the further course of proceedings:

The counterclaimant may appeal against the failure to decide its counterclaim; it has a legitimate interest despite the non-decision having been in accordance with its own request, because if the finding of non-infringement were set aside the condition would be met, and the first-instance finding that it had not occurred would have to be set aside.
It may make the appeal conditional under 220.1(a) RoP upon the infringement claimant lodging an appeal; if no appeal is lodged within the time limit under R. 224 RoP, the conditional appeal is deemed not to have been lodged.
On appeal the counterclaim remains conditional unless and until the counterclaimant applies to remove the condition; such an application requires leave under 263 RoP by analogy and R. 222.2 RoP.
If the condition is met by a finding of infringement by the Court of Appeal, that Court will as a rule not remit the counterclaim but decide it itself under 75(1) UPCA and R. 242.2(b) RoP.

The case also illustrates the pitfalls. AorticLab had not appealed against the failure to decide, and the time limit under R. 224.1(a) RoP had expired; because the position was clarified only by this order, the Court points to re-establishment of rights under R. 320 RoP. The costs consequences remain open: the Munich Local Division had regarded the costs of the counterclaim as unnecessary where the condition was not met and imposed them on AorticLab under Art. 69(3) UPCA; the Court of Appeal recites this without correcting the costs decision.

Practical Consequences

Claimant side: before seeking confirmation of a settlement, weigh enforceability against discretion – confirmation protects the terms but makes the settlement as such visible in the register; only withdrawal avoids that as well.
Defendant side: apply formally for the condition attaching to the counterclaim; a party that makes its counterclaim conditional and prevails on non-infringement should also lodge a (conditional) appeal against the non-decision as a precaution, and factor in the costs risk of the undecided counterclaim.
Settlement on appeal: bear in mind that withdrawal of the revocation counterclaim renders the applications to amend devoid of purpose and that a patent revoked at first instance is
Enforcement pending appeal: expect that it may have to be unwound: under NanoString v 10x Genomics, setting aside a preliminary injunction generally has retroactive effect and removes the basis for any subsequent penalty payment decision (9).

The line of authority is thus increasingly clear: the parties decide on the shape and the end of the proceedings, and the Court confirms, protects and enforces their agreement. Whether the costs burden attaching to the conditional revocation counterclaim will survive review by the panel remains to be seen.

Footnotes

(1) CD Munich, order of 23 July 2024, UPC_CFI_75/2023 and UPC_CFI_80/2023 Astellas v Healios; also on R. 365.1 in conjunction with R. 11.2 RoP.
(2) LD Munich, decision of 28 May 2026, UPC_CFI_962/2026 Dreame v Dyson; also on 365.2, R. 365.3 and R. 262.6 RoP.
(3) Nordic-Baltic RD, order of 21 July 2025 Edwards Lifesciences v Meril Lifesciences and others.
(4) LD Munich, order of 17 January 2025 NEC v TCL Deutschland and others.
(5) Order of 14 January 2025 Bentley Motors v Network Systems Technologies.
(6) Court of Appeal, order of 15 January 2025 Avago v Tesla Germany and others, headnote (withdrawal on appeal; applications to amend become devoid of purpose); likewise order of 24 January 2025, UPC_CoA_505/2024 DexCom v Abbott.
(7) Court of Appeal, order of 6 May 2026, UPC_CoA_900/2025 Lepu Medical v Occlutech.
(8) Court of Appeal, order of 16 July 2026, UPC-CoA-40/2026 Emboline v AorticLab, paras. 2 and 4; decision under appeal: LD Munich of 13 January 2026, UPC_CFI_628/2024.
(9) Court of Appeal, order of 10 December 2024 NanoString Technologies v 10x Genomics.

Who shapes a UPC case – and who ends it? Increasingly, the answer is: the parties. Court of Appeal, order of 16 July 2026, UPC-CoA-40/2026 — Emboline v AorticLab (on appeal from LD Munich, 13 January 2026, UPC_CFI_628/2024).