The Unified Patent Court: five reasons to factor the UPC into your patent strategy

The start date for the Unified Patent Court (UPC) will be 1 June 2023. This will also be the date on which the Unitary Patent (UP) system comes into effect.  Thus, many patent holders are currently considering the merits keeping their EP patents ‘opted in’ to this system. 

Our UPC brochure outlines reasons why a you may wish to ‘opt out,’ but also includes some advantages of remaining ‘opted in.’  The purpose of this article is to expand on the latter, to assist weighing up the pros and cons of adapting your patent strategy such that future litigation would be through the UPC, instead of solely through the individual national courts across Europe. Thus, five advantages of remaining ‘opted in’ are outlined below.

1. Pan-European enforcement

Naturally, the first advantage of the UPC to note is that its jurisdiction covers numerous European territories (initially 17, likely extending to 25 in the coming years). Thus, relief for infringing activities across all of these territories can be sought via a single action.

Advantages include:

• Mitigating the complexity and cost of infringement proceedings, compared to pursuing proceedings at each individual national court. This may also avoid a scenario in which the national courts reach conflicting opinions on the issue of infringement.
• Relief for infringing activities occurring across the contracting member states, even in those states where an applicant may not have considered validating a ‘traditional’ EP patent or may have avoided for the purpose of infringement proceedings (e.g. a territory lacking a litigation track record in the field of the patent).
• The possibility of a Europe-wide injunction enforceable against a third party in each contracting member state, avoiding commercial confusion in scenarios where injunctions are ordered by only a selection of national courts, with the third party being (at least theoretically) free to continue their activities in other European states.
• Damages that may reflect the size of the market defined by the at least 17 (and counting) contracting member states, which is anticipated to be considerably more lucrative than damage obtainable from a single (or limited selection of) national court(s). This is particularly attractive for seeking damages in territories where the law on damages is less patentee-friendly.
• Enforcement of a single patent ‘pan-Europe’ is anticipated to be cheaper than separate litigation actions in the various European territories. This may be particularly attractive for patents covering technology sold widely at high volume, but at low value.

2. A system ‘born for’ patents

Although a number of European territories have excellent patent courts, such courts tend to be a smaller ‘part’ of a wider (e.g. civil) court system, with judges potentially selected for their broad IP knowledge across different types of IP. In contrast, the UPC is a court system dedicated to patent matters and is the outcome of years of meticulous planning by patent experts toward optimisation for patents. Furthermore, given the importance of this new system to the patent profession, numerous knowledge bases have been/ are being generated on a regular basis as the UPC is being rolled out. Thus, an interested applicant/ patentee can enjoy access to a wealth of information on the UPC system at their fingertips.

Advantages include:

• a patent court system designed to operate efficiently, with a first instance trial intended to be scheduled for within 12 months from the commencement of proceedings (versus a more typical period of about two years in some national courts). This should deliver more rapid resolution, and thus more rapid commercial certainty.
• Trial days are to be minimised (e.g. one trial day only, where possible), thus saving costs.
• Access to a talented pool of judges (85 of which have already been appointed), selected for their excellence in patent matters from over a thousand applications, and expected to deliver consistent decisions.
• Uniform court management systems (optimised for patent matters) across the divisions available to hear a case, leading to clarity and consistency in terms of timelines and costs.  Indeed, each division, independent of its territory, will follow the same Rules of Procedure that govern how litigation is conducted before the UPC.

3. Flexibility in forum selection

Given that the EU is a single market, it is not uncommon for an infringing activity in one territory to also be taking place in multiple (or even all) other territories. A claimant may therefore have a choice of litigation venue, chosen from one of the local/regional divisions present in any of the territories where infringement occurred. This opens the possibility for patentees to make strategic venue choices.

Advantages include:

• The option to select a venue considered desirable for your technical field.  For example, the background of the judges at the different divisions could be analysed to identify a panel with strong knowledge in the technical field of the invention, reducing the need for and cost of expert witnesses.
• For a territory lacking a litigation track record (e.g. in the technical field of the patent), litigation could instead be opened in a territory with a more established track record, such as in Germany. In this scenario, proceedings could be sought in German, or indeed even in English (both languages of the German local divisions). 
• A single litigation team can be brought on board, to manage a single litigation action conducted through the UPC. This contrasts with the traditional system where it has been necessary to recruit litigators in each territory.

4. The best of both worlds

It is also possible to adopt a strategy that makes use of both the UPC and the traditional national validation system. For example, a patent portfolio could be analysed to select members of the portfolio suited to the UPC e.g., for patents anticipated to be widely infringed across the EU (incl. in territories lacking a litigation track record). Other members of the portfolio could instead be ‘opted out’ of the UPC and proceed via traditional national validation e.g., where widespread infringement is not anticipated, and it is desirable to avoid the risk of central revocation.

Furthermore, creative ‘divisional’ application filing strategies may allow both systems to be pursued in parallel. For example, a broad ‘parent’ patent may be ‘opted out’ to be maintained via the traditional national validation system. Separately, a narrower ‘divisional’ patent (e.g. more particularly focused around a key commercial embodiment) could be set up for the UPC. This could provide a scenario where the parent patent provides a broad deterrent to infringers, and although broader it would not be at risk of central revocation, a feature of the UPC.  The narrower ‘divisional’ patent, on the other hand, may have reduced risk of central revocation due to its narrow nature that could resist validity attacks.

5. Stay ahead of the curve

Eventually, the UPC will have exclusive jurisdiction over all patents granted by the EPO, irrespective of whether the patent is pursued as a Unitary Patent, or is ‘classically’ validated. This situation will begin at the end of the transitional period, lasting seven years (extensible to 14 years) after the Unitary Patent system comes into effect on 1 June 2023.

Thus, by engaging in the system as it rolls out, it would be possible to begin developing experience and expertise in a system that will eventually become the status quo. By getting involved now, early users could be in a position to provide vital feedback as the system beings, playing a hand in helping to shape it. Perhaps even more appealing would be the possibility to help shape the development of case law under the UPC, for example toward establishing patentee friendly case law.

Conclusion

The UPC is set to be a significant commercial tool for organisations in the years to come. Our dedicated UPC and UP Hub has been created to provide updates on current developments in the UPC landscape, and to identify the potential implications for your patent portfolio.

Please contact your usual Mathys & Squire attorney or email us at [email protected] to discuss your UPC strategy in more detail.