The UPC makes it possible to enforce, attack and defend a patent before one single court with effect in all participating member states. The UPC has jurisdiction over not only UPs but also existing EPs, pending EP/UP applications and SPCs. During a transitional period of 7 years (which may be extended for up to a further 7 years), claimants will have a choice of jurisdiction and may choose to bring an action for infringement or revocation of traditional EPs in either the UPC or before national courts. Following the expiry of the transitional period, the UPC will have exclusive jurisdiction over UPs and traditional EPs (and any associated SPCs).
Unless a proprietor chooses to opt-out its existing EPs / pending applications from the jurisdiction of the UPC system during the transitional period (see more on which below), those patents will be subject to the jurisdiction of the UPC and its new procedural rules and the proprietor may be sued for revocation of its EPs or sue for infringement before the UPC at any time after the court system became operational on 1 June 2023.
Given the dual jurisdiction in relation to EPs during the transitional period (assuming no opt-out), it is possible that actions involving the same EP may be brought before both national courts and the UPC. For example, a patentee could sue one alleged infringer in a national court in respect of the relevant national designation of an EP and sue a different alleged infringer for infringement of the same EP in the UPC in respect of all or some of the national EU contracting state designations of the EP. Alternatively, a patentee could sue for infringement of an EP in a national court and the defendant could choose to bring a central revocation action in relation to the same patent in the UPC (albeit that complex questions may arise in these circumstances regarding the scope of the cause of action and the extent to which the principle of lis pendens under Article 29 of the Recast Brussels Regulation has a blocking effect on the UPC action).
The UPC is comprised of a Court of First Instance and a Court of Appeal with a Patent Mediation and Arbitration Centre available for parties to explore amicable settlement of disputes. If an issue on EU law arises, either court may request a preliminary ruling by the Court of Justice of the European Union.
The Court of First Instance consists of Local, Regional and Central Divisions where cases are heard by a panel of at least three legally qualified judges. Each participating member state has the right to set up one or multiple Local Divisions (e.g., Germany has four—in Munich, Dusseldorf, Mannheim and Hamburg). Some member states have chosen to establish a Regional Division with another or several other member states. For example, a Regional Division has been established for Sweden and the Baltic States in Stockholm (the Nordic-Baltic Division).
The Central Division is divided into three sections based in Paris, Munich, and Milan. Prior to the UK’s withdrawal from the UPC following its exit from the EU, the third section (now in Milan) was to be located in London. The Milan Section will deal with patents falling into section A of the International Patent Classification (IPC) of the World Intellectual Property Organisation (WIPO), relating to human necessities (without SPCs). The Paris Seat will deal with sections B, D, E, G, and H relating to respectively performing operations, transporting; textiles, paper; fixed constructions; physics; and electricity, as well as SPCs. The Munich Section will deal with sections C and F relating to respectively chemistry, metallurgy (without SPCs); and mechanical engineering, lighting, heating, weapons, and blasting.
Local and Regional Divisions have competence to handle infringement actions and grant provisional or protective measures. Most infringement actions will be brought before the Local or Regional Divisions where either the infringement is alleged to have occurred or where a defendant is domiciled. If neither of these apply, the proceedings may be brought before the Central Division.
The Central Division has competence to handle revocation or declaration of non-infringement actions although revocation actions may also be brought before Local or Regional Divisions as a counterclaim to a pending infringement action. In these circumstances the Local or Regional Division has the option to either: (i) refer both actions to the Central Division (with the agreement of the parties); (ii) refer the counterclaim for revocation to the Central Division and either proceed with the infringement proceedings or (if it is deemed that there is a high likelihood of the revocation action succeeding) stay the infringement action pending the outcome of the revocation action; or (iii) proceed with both the action for infringement and the counterclaim for revocation.
Any appeals against decisions of the Court of First Instance are to be referred to the Court of Appeal, which is based in Luxembourg. Appeals are to be heard by a panel of five judges comprising three legally qualified judges and two technically qualified judges with experience in the relevant field of technology.
Language of UPC proceedings
Proceedings before Local Divisions are generally to be held in the official language of the state hosting the relevant division, although it is open to member states to permit the use of other languages as the language of proceedings. States may also designate one or more of the official languages of the EPO as their language of proceedings. In the Regional Divisions, the participating member states are free to decide on any EU language to be the language of proceedings (English is the designated language of proceedings in the Nordic-Baltic Division). At the Central Division, the language of proceedings is to be the language in which the patent was granted (for the majority of EPs this is English).
If a case is appealed, the Court of Appeal will hear the case in the language that was used in proceedings before the Court of First Instance unless the parties agree otherwise.
Cost of UPC proceedings
The court fees for the UPC are made up of a fixed fee combined with an additional value-based fee when the value of the case exceeds €500,000. The fixed fees vary according to the procedure and action filed and SMEs benefit from a reduction in their court fees.
Proceedings in the UPC
Jurisdiction and causes of action
The UPC has international jurisdiction under the Brussels Regulation and the Lugano Convention. Article 32 UPCA sets out the types of action over which the UPC has exclusive jurisdiction, which include all causes of action which would normally be available to a claimant to bring in national courts except for certain actions relating to licences, inventorship and compensation for employee inventions, which national courts retain jurisdiction over.
In principle, the UPC operates a non-bifurcated system (as the UK courts do) whereby decisions on infringement and revocation are decided in the same court during the same proceedings. However, as explained above, there are certain scenarios where proceedings can still be bifurcated by being split between the Local or Regional Division on the one hand and the Central Division on the other:
- In the case of an infringement action, the Local or Regional Division can decide to either proceed with the infringement action and a subsequent counterclaim for revocation or refer the counterclaim for revocation to the Central Division.
- A revocation action brought first must be brought before the Central Division. A subsequent infringement action based on the patent with a pending revocation action against it may be brought before any competent division of the UPC, which includes a Local or Regional Division. It will then be for the Local or Regional Division to decide whether it wants to hear the validity side of the dispute, in which case it may require that the revocation be moved from the Central Division.
UPC decisions relating to both UPs and traditional EPs have pan-European effect—injunctions (including preliminary injunctions) will be valid in all participating EU member states and decisions establishing the invalidity of a patent will result in the patent being invalidated in all participating member states.
Procedure for bringing an action
As with most national courts, there are different procedures for bringing actions in the UPC depending on what the cause of action is. Information on the procedural steps for bringing a claim are found in the UPCA and in greater detail in the UPC Rules of Procedure (UPC Rules). The UPC Rules are akin to the Civil Procedure Rules (CPR), which govern court procedure in England and Wales.
The UPC Rules provide that the procedure before the Court of First Instance consists of a written, an interim and an oral procedure. Proceedings will be front loaded meaning most arguments will be set out in written briefs as in continental style proceedings. The UPC Rules do not provide for disclosure but the UPC Divisions have other powers to obtain / preserve evidence. Witness or expert testimony may play a part in proceedings, but is unlikely to play as central a role as in common law countries such as the UK. However, it is likely to carry more weight than it does in civil law countries such as Germany, France and the Netherlands. Hearings are meant to be short and should not take more than a day.
Proceedings are to be conducted in such a way that allows the final oral hearing at first instance to be take place within one year of proceedings being issued. All briefs and court documents are to be filed electronically using an e-filing and case management system that has been set up at all participating Local, Regional and Central Divisions and the Court of Appeal.
The UPCA establishes the Patent Mediation and Arbitration Centre (PMAC), located in Ljubljana and Lisbon. The PMAC is a venue for parties to explore settlement in a consistent and formalised manner, and will support settlement discussions in relation to both EPs and UPs.
Whilst the PMAC has its own rules of procedure, the UPCA and UPC Rules contain provisions which enable the UPC to propose the parties engage in settlement discussions at any stage of the proceedings. Indeed, the UPCA requires judges at interim hearings to explore the possibility of settlement with the parties. The UPC Rules allow for a stay of proceedings during mediation, including a stay of any applicable limitation period.
Parties may request that the court confirms a settlement agreement or an arbitration award. If confirmed by the court, such an agreement or award can be enforced in the same way as a final court decision.