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The Unified Patent Court is a single court system in which patent matters can be heard for all participating EU Member States. The Unified Patent Court will have exclusive jurisdiction over Unitary Patents and, after seven years, over traditional European patents in participating countries.

The new Court will offer the obvious advantage of enabling Unitary Patent holders to bring a single infringement action throughout all of the participating Member States. However, this will also enable third parties to knock out Unitary Patents in a single revocation action.

The Court Structure

The Court will consist of a Court of First Instance and a Court of Appeal. The Court of First Instance will consist of Central, Local and Regional Divisions. The Central Division will be based in Paris, with branches currently planned for London and Munich. Work will be split between the three locations based on subject-matter. London is scheduled to handle cases with International Patent Classification (IPC) codes A and C. These are cases relating to chemistry, pharmaceuticals, biotechnology and human necessities, including medical devices. Munich will handle cases with IPC code F. These are cases relating to some aspects of mechanical engineering. Everything else will be handled in Paris.

Local Divisions may be established in any of the participating Member States, while Regional Divisions may be established between groups of two or more participating Member States. Currently, Local Divisions are likely to be established in London, Düsseldorf, Munich, Mannheim, Hamburg, Paris, The Hague, Brussels, Milan, Helsinki, Copenhagen, and Vienna. A regional Divisions is being established as a “Nordic-Baltic” Division, for Sweden, Lithuania, Estonia & Latvia.

The Court of Appeal will be based in Luxembourg.

Summary of Actions

Different types of legal action can be brought before different parts of the Court. The following table summarises the main routes available to litigants:

Type of Action Route
Revocation Central Division – revocation actions may only be brought before the Central Division
Declaration of Non-Infringement Central Division – declarations of non-infringement may only be brought before the Central Division
Infringement Local/Regional Division – where infringement occurred, or where defendant is based, at choice of proprietor
Central Division – on agreement of both parties, or if defendant is not based in the EU, or if no Local or Regional Division exists
Counterclaim for revocation Local/Regional Division – where infringement action is brought
May be referred to Central Division at choice of court
Appeals Court of Appeal in Luxembourg

Revocation Actions and Declarations of Non-Infringement

Revocation actions and declarations of non-infringement must be brought in the relevant Central Division. Revocation of Unitary Patents or European Patents will have effect throughout the participating Member States. For European Patents, protection in all of the participating Member States which form part of the European Patent will be revoked. Countries in which a European Patent is validated which are not participating Member States will not be revoked. It will not be possible to revoke a European Patent in certain participating Member States, but not others.

Infringement Actions

Infringement actions may be brought before the Local or Regional Division where the infringement occurred, or where the defendant has its residence or principle place of business, at the choice of the proprietor. In the absence of a country of residence or principle place of business, actions may be brought in the country where the defendant has a place of business. Where the defendant has neither a place of residence, principle place of business, or place of business in a participating Member State, an action may be brought either in the Local or Regional Division where the infringement occurred or in the Central Division. Furthermore, if the country concerned does not have a Local or Regional Division, actions may be brought in the Central Division.

Counterclaims for revocation will be made in the same Local or Regional Division where the infringement action is brought, or in the Central Division when the action is brought there. Counterclaims for revocation may be referred by Local or Regional Divisions to the Central Division, at the choice of the Court. Where a counterclaim is referred to the Central Division, the infringement action may or may not be stayed by the Local Division, pending the outcome of the revocation action. With agreement of the parties, the entire case may be transferred to the Central Division. When a counterclaim for revocation is referred to the Central Division, and infringement proceedings are not stayed, the resulting process is referred to as bifurcation.

Bifurcation is one of the main talking points of the new court structure. The new system provides for a situation in which infringement proceedings may go ahead in a Local Division court, before any counterclaim for revocation has been heard by the Central Division. This could lead to Europe-wide injunctions being issued under patents which are not valid. This is clearly a very attractive situation for proprietors. While bifurcation is provided for in the legislation, it remains to be seen whether local courts will operate in this manner.

Language of Proceedings

In most cases the patent owner will have some choice over the language used at the UPC. When there is infringement of a patent in multiple countries, patent owners who file their European patent in English should usually have the option of litigating in English.

With a few exceptions the language of proceedings is usually in accordance with the following rules:

  • Local & Regional Divisions: Claimant’s choice* of one of the official languages designated by the Local/Regional Division
  • Central Division: The language of the patent

The languages of each of the Local/Regional Divisions are likely to be as follows:

Local / Regional Division Language(s)
London English
Dusseldorf, Munich, Mannheim and Hamburg German and English
Paris French and English
The Hague Dutch and English
Brussels Dutch, French, German and English
Milan Italian
Helsinki Finnish, Swedish and English
Copenhagen Danish and English
Vienna German
Nordic Regional Division English

Fees

Infringement actions will have a value based fee, that varies dependent on the potential financial impact of the case. Based on current proposals it appears that the Court fees will be comparable to present German Patent litigation, although the value based fee may be determined to be higher because the financial impact affects a larger market.

On a finding of infringement, damages, destruction and delivery-up will be available, based on current practice in the major patent courts of Europe.

One of the key features of the new system is that Europe-wide injunctions will be available. For Unitary Patents, an injunction will cover all participating Member States. For European Patents, injunctions will cover all participating Member States in which the patent has been validated. A consequence of this is that an injunction will not be effective in countries covered by a European Patent which are not part of the Unified Court system (for example Spain, Switzerland, Norway and Turkey).

Recoverable legal costs are capped and the cap will vary depending on the perceived value of the case. The draft proposals ranges from €50,000 for cases worth up to €250,000, to a maximum of €3,000,000 for cases worth more than €50,000,000.

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The Seven Year Transitional Period

Eventually traditional European patents, insofar as they cover participating UPC member states, will also fall under the exclusive jurisdiction of the new Court, but for a transitional period of seven years (which may be extended to fourteen years), claimants (whether they be the owner of a European Patent or a third party) will be able to choose to take actions at either the UPC or a national court. For Unitary Patent, the transitional period will not apply, and the UPC will be the only option (for third parties as well as the patent owner) from the outset.

The Opt-Out

At the end of the transitional period the national court option will, be removed for traditional European Patents. However owners of European Patents will have the option of registering an opt-out, such that at the end of the transitional period it is the UPC option that is removed instead and national courts must be used. The opt-out can be registered during the transitional period (and it should even be possible to do so before the new Court is operational) and it will remove the UPC option immediately. Whilst using an “opt-out” will decrease the immediate options available to the owner of the European Patent Owner during the transitional period, in some circumstances early registration will be useful if use of the UPC by third parties would be problematic. A registered opt-out will be revocable but it will not be possible to register it a second time. Once an action has been brought in the UPC in relation to a given patent, the opt-out is no longer available. Conversely, if any action has been taken at a national court, it is not possible to revoke the opt-out.

During the transitional period, there are three questions to consider when filing a patent application in Europe

‘Do you want to use the EPO?’;

‘Do you want a Unitary Patent?’; and

‘Do you want to use the Unified Patent Court?’.

Conclusions

It seems likely that the new system will offer cheaper pan-European litigation. However, costs are likely to be higher than in some existing national courts. Moreover, proprietors who rely on low numbers of high value patents may be reluctant to try the new system, owing to the increased threat of single-action revocations. How the new Court will operate is also unknown, and this may cause applicants to steer clear until it has been tried and tested.