Key Trends and Takeaways from the First 18 Months of the UPC

The Unified Patent Court (UPC) has seen substantial activity since opening its doors on 1 June 2023, with an expanding caseload of more than 500 cases filed. As the pan-European forum hit its 18-month milestone, hundreds of decisions and orders have already been published. 

While many of the early decisions dealt with procedural issues and preliminary measures, the first decisions on the merits of first-instance proceedings have been issued over the past few months. It is also clear the UPC’s Court of Appeal is shaping the law more and more. 

This article will provide an overview of the latest UPC statistics and overall trends, followed by a discussion of certain topics being addressed in the first decisions on the merits, such as indirect infringement, prior use rights, international jurisdiction, the burning question how the UPC approaches the assessment of inventive step and other legal aspects.

Recent UPC statistics and trends 

Constantly growing caseload 

Despite initial uncertainties regarding how patentees would respond to this new venue for European patent litigation, the rapidly increasing case numbers following its launch has clearly demonstrated that litigants are eager to utilise it. This trend has continued ever since, with the UPC Court of First Instance having received a total of 538 cases by the end of October 2024. 

Out of these 538 cases, 206 were infringement actions and 224 were counterclaims for revocation, while only 50 independent revocation actions were filed. In addition, 52 applications for provisional measures, preserving evidence, and orders for inspection were registered, while only a few cases relate to declaration of non-infringement and other actions, including one request for damages. 

These numbers clearly indicate that the UPC is a highly attractive forum for patentees asserting their patents against potential infringers.

Continued focus on German UPC Divisions

Litigants have been particularly drawn to German UPC Divisions right from the start. As of the end of October 2024, German Local Divisions handled a total number of 382 cases. Within Germany, the Local Division Munich is leading with 189 proceedings in total. France ranks second among the UPC Member States with a total number of 79 cases, followed by the Netherlands with 21 cases. It will be interesting to observe whether the focus on German Divisions will continue over course of time and whether the rising case numbers will lead to further appointments of UPC judges.

The popularity of the German divisions resembles the general trend in European patent litigation, where Germany has been leading the annual case count for years. However, the specialised German national patent courts also noted a decline in the numbers of newly filed national patent lawsuits in 2023 compared to the previous years. Whether this is related to the opening of the UPC is, however, hard to say, since the new court only opened in the summer of 2023, while the reasons for the overall 2023 decrease of case figures could be manifold. 

Certain downward trends of the total number of German national patent litigation cases had already been monitored in previous years. It will thus be interesting to see whether the decreasing trend of German national patent litigation case numbers has continued in 2024 when the annual court statistics are published and whether the raising UPC cases will also have an impact on the numbers of national patent litigation cases in other UPC Member States. 

Electronic cases dominate UPC proceedings

When looking at the represented technologies, electricity-related cases (International Patent Classification (IPC) Class H) dominate the landscape in UPC proceedings by far, with approximately 39% of all cases, followed by human necessities (IPC Class A) with approximately 32%, and ranking third are cases relating to performing operations/transportation (IPC class B) representing approximately 10% of all cases. 

Pharmaceutical cases at the UPC

However, the pharmaceutical sector, known for its high-stakes cases in national patent disputes, had – as expected – a rather slow start. Only one major litigation was kicked off in the first month of the UPC in the Munich Local and Central Divisions, being part of the Europe-wide dispute Amgen v Regeneron and Sanofi regarding the cholesterol-lowering drugs Repatha and Praluent.

Over the last seven months, a slight growth in pharmaceutical cases including biosimilars was observed. The first patent infringement disputes between branded pharma companies (Sanofi) against generic companies (Dr. Reddy’s Laboratories, Stada, Accord Healthcare, and Zentiva) arose between March and May 2024 before the Local Division Munich relating to Sanofi’s chemotherapy drug Jevtana (cabazitaxel). Additionally, Alexion Pharmaceutical requested two preliminary injunctions against Amgen and SamsungBioepis in March 2024 before the Local Division Hamburg. 

This marked the starting point for patent disputes over biosimilars. Alexion’s patent relates to the treatment of patients with paroxysmal nocturnal haemoglobinuria using eculizumab. Two further preliminary injunction applications followed in April 2024, being filed by Novartis and Genentech before the Local Division Düsseldorf against Celltrion, targeting biosimilars to Xolair (omalizumab), which are serving to treat, among others, certain forms of asthma. Finally, in August 2024, GlaxoSmithKline lodged an infringement action against Pfizer over an RSV vaccine patent (claiming antigens used in a vaccine against respiratory syncytial virus) at the Local Division Düsseldorf.

Although the slow start in pharma disputes reflected the initial prediction by many experts that pharma patentees would be reluctant to risk a revocation of their crown-jewel patents in up to – currently – 18 European UPC Member States, the recent growth in case numbers indicates that pharmaceutical companies are at least starting to test this new venue. This will hopefully help to shape the law, also reflecting the specificities of the pharmaceutical sector. Depending on the outcome of the court’s decisions, further pharmaceutical innovators might follow this recent trend to assert at least a part of their patents in Europe before the UPC.

First decisions on the merits

After nearly one and a half years, the UPC has issued the first decisions on the merits. Some of the most discussed aspects in infringement decisions concerned questions such as indirect patent infringement, requirements for proving a prior use right, the UPC’s jurisdiction in case of pending national proceedings and the application of the Gillette defence. 

The Central Divisions have also issued their first judgments in standalone revocation actions. Legal practitioners had been waiting eagerly for the UPC to clarify how to assess validity and, in particular, inventive step. One of the key questions was whether the UPC would apply the well-established “problem-solution” approach of the EPO or create its own framework. 

Indirect patent infringement 

On 3 July 2024, the Local Division Düsseldorf issued the first permanent injunction ever in a case on the merits concerning sanitation bathtub devices (Kaldewei v Bette) for seven UPC Member States. In its reasoning, the court discussed indirect (contributory) infringement. The judges held that for indirect infringement, a double territorial connection is required. This means that the offer and/or delivery must take place in the relevant territory and must also serve to use the invention in that territory (“Same Country Approach”). 

As the patent-in-suit was a classic European bundle patent without unitary effect, the judges also raised the question whether it would be sufficient if the offer and/or delivery takes place in one UPC Member State and is intended for direct use of the invention in another (“UPC Territory Approach”) or whether all acts must take place in the same country. However, this question was left unanswered since the prerequisites of the Same Country Approach were met in that case. It will thus be important for litigants to monitor how this question will be decided when the factual basis differs.

Prior use right 

In the same case, the court also dismissed Bette’s prior use defence. Bette had failed to prove a prior use right for each of the UPC Member States under their national requirements. The court interpreted Art. 28 of the UPC Agreement – which addresses the prior use right – requiring a defendant to demonstrate the existence of the alleged prior use right for each of the UPC Members States under the respective national laws. The court emphasised that the UPC regulations do not provide for a European right of prior use but refer to the respective national laws. This sets the bar high for defendants if they want to rely on a prior use right. They should therefore be well prepared to be able to submit the required evidence for each of the relevant UPC territories.

International jurisdiction and lis pendens

In the revocation action against EP 2 794 928 brought in NanoString Technologies Europe Limited v President and Fellows of Harvard College, the Central Division Munich had to decide, among other things, how to handle UPC proceedings in the event of parallel national revocation proceedings. 

On 29 July 2022, the German subsidiary of NanoString had filed a national revocation action against the German part of EP ’928 with the German Federal Patent Court, leading to a revocation on 7 May 2024. This decision was appealed before the Federal Court of Justice. 

The UPC revocation action was filed on 27 July 2023. NanoString requested the revocation of EP ’928 in its entirety for the UPC territories Germany, France and the Netherlands. The defendant lodged a preliminary objection challenging the jurisdiction of the UPC in view of the parallel German nullity proceedings (lis pendens). The court intended to deal with the preliminary objection in the main proceedings, but it was withdrawn at the oral hearing. While both parties agreed that the UPC proceedings should continue, the Central Division Munich held it must assess out of its own motion whether it has international jurisdiction when this is required under Union law. 

In its reasoning the Central Division Munich referred to a recent ruling of the Court of Appeal in another case (Mala Technologies v Nokia Technologies, order of  17 September 2024). There the Court of Appeal had addressed some of the legal requirements for the assessment of the international jurisdiction under the Brussels I Recast Regulation (BR) in a similar case with parallel pending national nullity proceedings. The Court of Appeal had clarified, that in the light of the objective and purpose of Art. 29 to 32 BR, Art. 71c(2) BR must be interpreted in that these provisions apply, according to the wording of Art. 71c(2) BR “where during the transitional period (…) proceedings are brought in the Unified Patent Court and in a court of a Member State party to the UPC Agreement”. However, the judges went one step further and held that Art. 29 to 32 BR also apply if the national proceedings were initiated even prior to the transitional period (ie, before 1 June 2023), because those provisions were supposed to cover in principle “all situations of lis pendens”, otherwise “there would be no mechanism for resolving cases of lis pendens and related actions before the UPC and a national court where the proceedings before the national court commenced before the transitional period”.

This decision is welcome, as it provides clear guidance for litigants in case of parallel national nullity proceedings. The Court of Appeal has also made it clear that it is well prepared to apply European law. The UPC could have referred the question to the European Court of Justice, but did not do so, which might furthermore indicate that such referrals might be rare in the future. 

In its decision of 17 October 2024, the Central Division Munich decided, however, that in the NanoString v President and Fellows of Harvard College case no stay was required. The claimants of the two cases were distinct legal entities, so that Art. 29 BR was not applicable. Even though the UPC and the national revocation action were related the UPC judges also denied a discretionary stay according to Art. 30 BR, because of various specific circumstances of the case (parties’ request for a decision to obtain legal certainty also in view of pending infringement actions, the advanced stage of the UPC revocation action being ripe for a decision, the impracticality of delaying the decision on the Dutch and French parts of the patent-in-suit in the UPC revocation action, cost aspects and the lacking risk of contradictory decisions, since the UPC’s Central Division also revoked the patent like the German Federal Patent Court). 

This decision underscores the UPC’s dedication to provide not only thoroughly considered decisions, taking into account the various arguments and interests of the parties in each specific case. Moreover, the judges also keep an eye on an efficient, cross-jurisdictional adjudication in line with its mandate for streamlined patent litigation across Europe. All of these aspects are important to attract litigants in the long term. 

Inventive step assessment by the Central Division

On 16 July 2024, the Central Division Munich issued the first decision in a central revocation action (Sanofi-Aventis v Amgen) revoking the patent-in-suit in 17 UPC Member States due to lack of inventive step. Notably, the court explained in detail how to assess the inventive step requirement. 

The assessment begins from a so-called “realistic starting point” in the prior art. “A starting point is realistic if its teaching would have been of interest to a skilled person who, at the priority date of the patent at issue, was seeking to develop a similar product or method to that disclosed in the prior art which thus has a similar underlying problem as the claimed invention” (no. 8.6 of the decision). It is, however, not necessary to identify the “most promising” starting point, as there can be several realistic starting points. The next question is whether it would be obvious for the skilled person to arrive at the claimed solution starting from a realistic prior art disclosure, in view of the underlying problem. In a recent decision dated 17 October 2024 (NanoString v President and Fellows of Harvard College) the Central Division Munich affirmed this legal framework.

Although there are some similarities between the EPO’s “problem-solution approach” when assessing inventive step, the Central Division Munich deviated to a certain extent from the well-established EPO practice. Contrary to the EPO, the UPC does not require beginning with the “closest prior art” for the assessment, but a “realistic starting point” in the prior art is sufficient. 

Another subtle difference concerns the determination of the “underlying problem”, whereby the Central Division Munich considered the patent description, whereas the EPO establishes the objective technical problem based on the distinguishing features between the claimed invention and the closest prior art and the technical effects resulting from them (Guidelines of the EPO, G.VII.5.2). 

Notably, in a decision by the Central Division Paris dated 19 July 2024 (Meril v Edwards Lifesciences) the court outlined that it was aware of the “problem-solution approach” of the EPO, but since this test was not explicitly provided for in the EPC, its application was not mandatory. Nevertheless, the Central Division Paris noted that applying the EPO’s problem-solution approach would not have led to a different outcome.

It will be interesting to see how the different Central Divisions will continue to determine the legal framework for assessing inventive step, and how the Court of Appeal might shape this further. 

Unsuccessful “Gillette Defence”

In its infringement decision issued on 31 October 2024 (SodaStream v Aarke), the Local Division Düsseldorf ruled in favor of SodaStream, finding Aarke infringed SodaStream’s patent covering “a device for carbonating a liquid with pressurised gas”. Aarke had tried to rely on the so-called “Gillette defence”, arguing that the claims could not “be interpreted so broadly as to cover also the free state of the art”. 

The court rejected this defence in this case, pointing to Art. 69(1) of the European Patent Convention, according to which the extent of the protection conferred by a European patent shall be determined by its claims. While the description and drawings can be used to interpret the claims, prior art is not mentioned in Art. 69(1) EPC. However, the court noted that prior art may be of certain relevance if it is discussed in the description of the patent-in-suit. In such a case, the relevant considerations must be taken into account. In the case that the patent distinguishes itself from the prior art in a certain way, an interpretation that negates that distinction must be avoided according to the UPC. Since a certain distinction from the prior art had been made in that case, the Local Division Düsseldorf rejected the defence argument. It remains to be seen how this might be handled by the Court of Appeal.

Conclusion

In summary, the UPC has established itself during the first 18 months as a highly attractive venue for European patent litigation. With over 500 cases already on record, the court has demonstrated its capabilities to handle multiple proceedings spanning various industries. 

Litigants have shown considerable interest in the German divisions, reflecting broader trends in European patent litigation. Key decisions have addressed foundational issues such as indirect infringement, prior use rights, and inventive step assessments, while the pharmaceutical sector, though initially cautious, has started leveraging the UPC for high-stakes disputes.  

If the court continues on its successful course, it certainly has the potential to become the number one patent litigation venue in Europe and will undoubtedly play a decisive role in shaping the future of European and global patent litigation.

The authors thank Robert Baumann, law clerk at Finnegan, for his valuable support in the preparation of this article.