UPC: The ‘Sharp Sword’ of Global Patent Litigation

On June 1, 2023, the Unified Patent Court (UPC) opened its doors for business. This marked an important milestone in European patent jurisdiction. It provides a new venue for parties in cross-jurisdictional patent disputes.

Both infringement and invalidity claims can be brought in a centralised procedure. A single decision can take effect in up to 17 participating member states of the European Union (UPC states). This is expected to attract many litigants, and the new system even comes along with further advantages such as: extremely fast proceedings, high transparency, potential cost savings compared to multiple parallel national proceedings, and the avoidance of divergent decisions in the countries concerned.

UPC attracts first filers

Since its launch, the UPC has rapidly become an attractive venue for litigants, including global players from various industries. As per July 27, 2023, we noted 28 pending proceedings registered in the court’s case management system (CMS), including:

• 22 infringement actions

In such proceedings the right holder may seek the judicial determination that the patent-in-suit is infringed, the granting of a permanent injunction to drive the infringer out of the market, as well as a recall or destruction of infringing items and finally damages to be paid for the sold and distributed products.

• Four revocation actions

Those aim to revoke a patent entirely or at least in part. Such a challenge may be brought either as a counterclaim in pending infringement proceedings or as a standalone revocation action to pave the way for a potentially patent infringing product before its market launch.

• Two applications for protective or provisional measures

Such measures may include the request for the grant of a preliminary injunction, or an order to freeze assets, or produce evidence, including even an inspection of premises.

In particular, a preliminary injunction is a powerful tool. It provides temporary relief to a party within a very short timeframe to prevent irreparable harm by maintaining the status quo, while a decision on the merits usually takes substantially longer.

More cases expected

Notably even more cases seem to have been filed already. The reasons why not all cases are visible for the public (yet) are twofold. Firstly, as one of the first action filing law firms, we noted a certain time lag between filings and publicly visible registrations, which seems to take between a few hours up to several days or even weeks according to the data in the CMS.

Secondly, not all filings are supposed to be visible for the public anyhow. For example, this applies to preliminary injunction requests or protective letters, which can be filed by a potential infringer who fears being sued trying to prevent the grant of an injunction without its arguments being heard. As of June 29, 2023, the court itself announced that six applications for provisional measures and 236 protective letters had already been filed.

Technical divide

We have assessed the technical divide of the cases registered pending at the UPC based on the patent data available at the CMS as per July 27, 2023. Accordingly, we found the following split across industries:

• 41% life sciences (including medical devices and products, pharmaceuticals, chemicals, biotechnology)
• 30% mechanics
• 29% electronics

All revocation actions currently belong to the field of life sciences. Given that the absolute filing numbers are still in the two-point digit, the split between sectors could easily shift with the next filings. This will be a telling trend that should be monitored over time.

German UPC divisions most popular

The popularity of German divisions is evident, as a significant number of the registered UPC actions has been filed there:

• 14 out of 22 infringement actions were filed at the Düsseldorf, Munich or Hamburg local divisions.
• All four revocations actions are pending at the Munich central division
• One of the two applications for provisional measures was brought to the Munich local division.

Apart from Germany, actions have also been registered for the Helsinki division in Finland (two cases), the Milan local division in Italy (three cases), the local division in The Hague in the Netherlands (one case), and the Nordic-Baltic division (two cases).

A split of filing numbers across countries shows how attractive Germany is as a venue for patent litigation, not only when it comes to national proceedings, but also for cross-border litigation at the UPC. Overall, the Munich division is currently leading with 13 out of all 28 registered proceedings being assigned to either the local or central division.

It should be noted that for the four revocation actions filed at the Munich central division, the technology of the patent in dispute is the decisive factor where such actions need to be filed.

For infringement and provisional measure actions, however, the claimant has more options depending on where the infringement takes place or where the defendant resides, among other factors.

Three key considerations for potential UPC litigants

For those litigants not having decided yet if they want to make use of the new venue for their patent litigation strategy, the following key aspects seem noteworthy:

• Efficient and speedy proceedings

The UPC is known for its speedy proceedings, ensuring swift resolutions of patent disputes. Infringement proceedings are expected to last between 12-14 months in the first instance, even if a counterclaim for revocation is brought. This means that a decision covering both infringement and validity could be obtained within approximately one year.

Hence it is crucial for litigants to be adequately prepared. In view of the short filing deadlines, parties need to have the relevant legal arguments established and all supportive documents at hand. Familiarity with the UPC statutes is important to avoid traps when filing and to navigate the proceedings successfully.

• Preliminary cross-border injunctions available

The UPC statutes provide a basis for the grant of preliminary injunctions with cross-border effect for up to 17 UPC states if certain conditions are met. This can be very appealing for litigants, particularly as such an order may be issued within a few days or weeks, if required even without the alleged infringer being heard.

Furthermore, under certain conditions a preliminary injunction may even be ordered if an infringement of a European Patent in a UPC state causes damages outside the territory of the UPC states.

• Public access to the UPC register

Unlike other European national courts, the UPC registers its cases in the publicly accessible CMS. This transparency allows third parties to monitor litigants, patents and technologies concerned, including even the value in dispute submitted by the parties.

The highest litigation value currently registered is a figure of €100 million ($109 million) for one single proceeding.

The submissions of the parties are not publicly visible per se, but written pleadings and evidence which are lodged and recorded at the UPC can be made available to the public upon reasoned request. This transparency promotes openness but also means that litigants need to be mindful of what they file and whether they should seek confidentiality orders.

The sharp sword in global patent litigation

The UPC’s speedy proceedings, public accessibility of the CMS, and availability of cross-border preliminary injunctions are appealing. Since filing deadlines in UPC litigation are very tight, and as the territorial reach of decisions is broad, UPC patent litigation could be used to put enormous pressure on competitors sued.

This might be the reason for a first settlement of a global patent dispute being announced shortly after three UPC infringement actions had been filed based on three European patents in three different UPC states. In conclusion, this new forum could be used as a sharp sword for quick resolution not only for European, but also global patent disputes.