Unified Patent Court

Unified Patent Court


Podcast

The start of the UPC is almost upon us… or is it? CIPA’s Unitary Patent and Unified Patent Court experts Caelia Bryn-Jacobsen and Leythem Wall join Lee and Gwilym on Two IPs In A Pod to talk all about the upcoming changes, what it means for UK attorneys and how they can continue to be involved with filing in Europe.

Listen here.


Introduction

The European Patent system has been operating since 1979 and allows you to obtain a patent in up to 38 countries through a single application to the European Patent Office (“EPO”). While this provides a single harmonised patent granting procedure, post grant litigation and enforcement procedures can differ quite widely across the different European states.

As a result, the cost of litigating patents granted by the EPO across multiple jursidictions can be high and, due to divergences in national laws and court systems, the outcomes can vary in different countries for the same European patent.

As a way to centralise patent litigation in Europe, a new court system, the Unified Patent Court (UPC), will come into effect, possibly as early as October 2022.  The UPC will deal with existing and future European patents, and also Unitary Patents which become available when the UPC comes into force. For further information on the Unitary Patent, please see CIPA’s Unitary Patent Guidance [1].

All existing and future European patents and Unitary Patents will automatically be ‘opted in’ to the UPC system, hence it is essential for all owners of European patents and European patent applications to understand how the UPC will function and to consider whether they wish to be part of the new system.

The present booklet sets out the basic features of the Unified Patent Court and provides information on the factors which need to be taken into acount in deciding whether you should use the UPC. However, it does not provide a complete guide [2] to the new system. If you require further information, please contact your patent attorney. If you do not have a patent attorney, please contact CIPA.


The Concept

The concept of the Unified Patent Court was that there should be a single court to deal with infringement and validity of patents granted by the EPO, covering all the 27 countries in the EU. This has not been fully achieved as, when the system will come into force, only 17 [3] of the EU countries will be covered.

However, most of the commercially important states of the EU are included. While Unitary Patents cannot be opted out of the UPC system, there will be a transitional period after the UPC begins during which European patents (i.e. currently granted or those granted in the future by the EPO which are not selected as Unitary Patents) can be opted out of the UPC system for their lifetime.


The Structure

The UPC will comprise a Court of First Instance, a Court of Appeal and a Registry.

The Court of First Instance will be composed of a central division (with its seat in Paris and a section in Munich) and several local and regional divisions [4]. The Court of Appeal will be located in Luxembourg. Every UPC contracting member state may set up a local division, or together with one or more other states a regional division of the Court of First Instance. Lisbon and Ljubliana will share a patent arbitration and mediation centre.

In general, infringement actions and actions for provisional and protective measures and injunctions will be before the local or regional division hosted by the UPC state where the infringement has occurred, or where the defendant is domiciled.

Revocation actions and actions for declarations of non-infringement will be before the central division. The central division may also handle infringement and other actions where there is no local or regional division for the relevant state.

The central division in Paris will handle cases with patents relating to Classification Sections B (performing operations; transporting), D (textiles; paper), E (fixed constructions), G (physics) and H (electricity), based on the International Patent Classification of the World Intellectual Property Organisation (WIPO)[1].

The central division in Munich will handle Classification Section F (mechanical engineering). Patent cases in Classification Sections A (human necessities) and C (chemistry, including pharmaceuticals) will be shared between Paris and Munich until an additional central division location is chosen.


The Judges

There will be both legally qualified and technically qualified judges who are nationals of UPC contracting states. They will have experience in patent litigation and command at least one official language of the European Patent Office (EPO)i.e. English, French or German.

Legally qualified judges will be qualified for appointment to judicial offices in a UPC state. Technically qualified judges will have a university degree and expertise in a field of technology, as well as knowledge of civil law and procedure relevant to patent litigation.

Typically, the Court of First Instance will have a panel of three judges per case. The Court of Appeal will have five judges (three legally qualified and two technically qualified). Any panel of UPC judges will have a multinational composition.


Language and Procedure

Local divisions may designate an official language of the hosting state or an official language of the EPO (i.e. English, French or German) for its proceedings [2]. The language of proceedings in the central division will be the language of the patent (i.e. English, French or German). The language of proceedings before the Court of Appeal will be the language of proceedings before the Court of First Instance.

Substantive proceedings before the UPC will comprise three stages: written, interim and oral procedures. For both infringement and validity, the UPC will aim to hold an oral hearing at first instance within one year. The UPC will aim to issue the written decision within 6 weeks of the oral hearing i.e. a total of less than 14 months. Complex actions may take more time. An appeal may be filed within two months of service of the first instance decision.


The Remedies

Pan European interim and final remedies will be available across the territory of the UPC states. Interim remedies include obtaining evidence, interim injunctions, asset freezing orders and security of costs. Following the substantive judgement, final remedies include damages, injunctions and destruction or delivery up of infringing goods, amongst others.


The Fees

The court fees will be a mixture of fixed and value based fees depending on the type of action. Infringement actions will have a fixed fee of €11,000 and a value based fee ranging from €2500 (cases exceeding €500,000 in value) up to €325,000 (cases exceeding €50 million in value). Revocation actions will have a fixed fee only of €20,000 [3].

Reductions of up to 40% in fees will be available for small and micro entities. Further reimbursements are available where the case is heard by a single judge (25%), or if the case is settled or withdrawn at an early stage (up to 60%).

Successful parties before the UPC will also be able to recover legal representation costs depending on the value of the case, ranging from €38,000  (cases up to an including €250,000 in value, to €2 million (cases exceeding €50 million in value) [4].


Representation

Parties can be represented by lawyers authorised to practise before a UPC contracting EU member state. Alternatively, parties may be represented by European patent attorneys (including UK European patent atorneys) with appropriate qualifications [5].


Opting Out

During at least the first seven years of the UPC, parties will be able to opt out European patents (and applications) from the jurisdiction of the UPC, unless an action has already been brought before the UPC against the European patent.

Parties will also be able to withdraw any opt out, unless an action has already been brought before a national court against the patent. It is not possible to opt out of the UPC again.

At the end of the transitional period, it will not be possible to opt out. All European patents which have not been opted out, and any future patents granted by the EPO, will be under the exclusive jursidiction of the UPC for UPC states. From the start of the UPC, Unitary Patents will be under its exclusive jurisdiction and cannot be opted out.

There is no official fee for opting out. However associated administrative costs and professional costs in relation to advising on opting out can be expected. The opt out or withdrawal of the opt out is only effective from when the request is registered, not necessarily the day it is submitted. Any error in an opt out request will mean the opt out is only effective from when the correction is registered. Also, an application to opt out or withdraw an opt out requires the consent of all owners of the patent.

In order to avoid being trapped in (or out of) the UPC, it is therefore vital to ensure opt out (or opt out withdrawal) requests are timely filed, contain no mistakes, and include consent of all owners. There will also be a ‘sunrise period’ in the three months before the UPC starts in which opt out requests can be submitted.

When deciding whether or not to opt out there are a number of considerations such as the value and strength of the European patent, and whether there is any associated history of litigation or challenges (e.g. EPO oppositions). The UPC will likely cost less than litigating a European patent nationally across multiple jursidictions and there will be costs recoverable if succesful. Remedies and provisional measures will apply across the territory of the UPC. There will be patent specialist judges and the UPC intends to deliver decisions swiftly.

However, being under the jurisdiction of the UPC means a European patent is at risk of a central revocation action. Unlike EPO oppositions, which must be filed within nine months of grant [6], UPC revocation actions can be filed at any time during the lifetime of the patent. If successful, this will result in revocation of the European or Unitary patent across the entire UPC territory.


Summary

The new UPC could be advantageous for your business. Whether it is will depend on your business plan. It is coming soon and so, before it comes into force, you need to be ready to deal with the issues which will arise, including whether or not to opt out. You will need to consider whether you are prepared to allow your patent to be litigated before this new court, especially if the patent is a key asset of your business. If you need help in making your decisions about this new system, please consult your patent attorney or contact CIPA.

[1] CIPA – Unitary Patent Guidance

[2] The UPC website provides more extensive information.

[3] At present, the countries in which the UPC will have jurisdiction are Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Sweden and Slovenia. The list is not closed. Other EU countries can join. Spain, Poland and Croatia are the only countries which at present have indicated that they will not participate in the system.

[4] At present, the only confirmed regional division will cover Estonia, Latvia, Lithuania and Sweden (‘Nordic-Baltic regional devision’). Local divisions have been officially confirmed by Austria, Belgium, Denmark, Finland, France, Germany, Italy, Netherlands, Slovenia and Portugal.

[5] https://www.epo.org/law-practice/unitary/upc.html

[6] www.wipo.int/classifications/ipc/en

[7] The majority of local divisions designate English as an available or the only language for its proceedings. The Nordic-Baltic regional division has designated English as the only language for its proceedings.

[8] https://www.unified-patent-court.org/sites/default/files/agreed_and_final_r370_subject_to_legal_scrubbing_to_secretariat.pdf

[9] https://www.unified-patent-court.org/sites/default/files/guidelines_for_court_fees_and_recoverable_costs.pdf  

[10] https://www.unified-patent-court.org/sites/default/files/ac_06_22022022_rev_e_0.pdf

[11] https://www.epo.org/applying/european/oppositions.html

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