The Patent Lawyer: UPC’s first year: emergence of a purely civil law system?

The UPC passed its milestone 1 year anniversary on 1 June 2024. At the time of writing we are still awaiting the first substantive decisions on invalidity and infringement, there has been Judgments from the Courts of First Instance and Court of Appeal (CoA) on preliminary measures and procedural matters that have given a flavour of how the UPC is likely to develop.

One of the aims of the UPC was to provide harmonisation on patent law under the European Patent Convention (EPC). Divergence on key issues of patent law does sometimes lead to different outcomes for the different national parts of the same European Patent (EP). Parties can find it frustrating that analysis of potential outcomes (whether enforcement or freedom to operate) can vary widely between the key patent jurisdictions such as the UK, Germany, the Netherlands, Italy and France.

As part of seeking to achieve harmonisation, the UPC Agreement and Rules of Procedure (RoP) offered the promise of a pan-European litigation toolbox. Through the UK’s involvement, the UPC’s RoP encompassed a unique blend of common and civil law traditions. Following the UK’s withdrawal, however, together with the delay in ratification by Ireland, it appears that common law litigation tools are being sidelined by the UPC.

Language

Somewhat ironically given the withdrawal of the UK, the English language has over the course of the year become the de facto language of proceedings before the UPC. The late notification that English would be accepted as at least a second language of proceedings in all Local Divisions (LD), including German, French and Italian LDs meant that many of the first set of filings with the German LDs, were in German.  Subsequent actions have increasingly been filed in English and some (but not all) requests for changes in the language of proceedings have been allowed.

Part of this trend reflects the fact that the majority of EPs are filed in English. A practical consideration for litigants is that the multinational UPC judging panels often deliberate in English. For urgent applications, dealt with by a single standing Judge, the message from the UPC’s judiciary is to consider pleading in English to avoid delays in the translation.

Opt-out

The original scheme envisaged under the UPCA was that from the launch of the UPC, all EPs validated and in force in the UPC would by default be litigated before the UPC. Following an outcry from patentees, a transitionary scheme allowing a patentee to “opt-out” of the UPC’s exclusive jurisdiction (for at least 7 years) was created. By exercising the right to opt-out of the UPC’s jurisdiction, patentees can choose to maintain the status quo that each national part of the EP bundle must be enforced or invalidated before the national patent courts. In the 3-months before the UPC’s launch, just under half a million applications to opt-out were lodged with the UPC’s Registry. This seemed to indicate a degree of nervousness at litigating existing EPs in the UPC.

While challenges to the opt-out have been rare to date, in Neo Wireless v Toyota[1] the CoA upheld the Paris CD’s decision to reject a preliminary objection that the Patent had been opted-out validly. In this case, the Patent had two proprietors (a US parent and for the EP(DE) a German subsidiary) but only the US Proprietor had applied to opt-out. The opt-out provisions provide an exception to the otherwise automatic transition into the jurisdiction of the UPC. Unless all proprietors exercise the opt-out, the “default position” of the UPC’s jurisdiction stays in place.

In CUP&CINO v Alpina[2] the Vienna Local Division held that an application for interim measures, here an unsuccessful request for a preliminary injunction, seizes the jurisdiction of the UPC (like an action on the merits). A subsequent application to opt-out, seemingly made without authorisation, was invalid.

In AIM Sport Vision v Supponor,[3] the application for the withdrawal of an opt-out (on 5 July 2023) was held to be ineffective where the EP in question had been litigated in German national infringement and invalidity proceedings that were pending when the UPC went live. This raises the possibility of national “torpedo” actions being filed against opted-out EPs by potential defendants worried about a future UPC action.

Stays pending EPO opposition

Another aim for the UPC was quick first instance decisions. In the national courts, this can vary from 10 to 12 months (Germany (infringement-only), UK and the Netherlands) to as much as 24 months or more (France, Italy, Spain) to get to a hearing at first instance. Indeed, German nullity proceedings are automatically stayed pending EPO opposition, with many other national courts also likely to stay proceedings pending resolution of EPO opposition. Oppositions on average take 19 to 24 months to a hearing before an Opposition Division but appeals to the Technical Boards of Appeal can substantially add to the delay (2.5 years or longer).

The UPC has discretion to stay proceedings pending a decision of the EPO but there have been a number of decisions where a request for a stay has been declined[4]. Both the LDs and CDs have held that proceedings must be conducted to normally allow the final oral hearing at first instance to take place within one year.

Thus as a general principle, the UPC will not stay proceedings, even where the EPO has agreed to expedite opposition proceedings. If the UPC can continue to manage UPC proceedings to achieve the one year target, this will be a significant improvement in speed to a judgment (infringement and validity) in the majority of UPC member states including Germany (revocation).

Preliminary measures

The UPC has discretion to grant preliminary measures covering all UPC members states. It is clear from its first year of operation that the UPC is willing to grant preliminary injunctions and saisie requests, including on an ex parte basis.

In relation to PI requests, where these have been on an inter partes basis, the LDs and CoA have had the benefit of full written submissions and arguments on both infringement and validity of the patent.  These have been carefully weighed and where there have been doubts about the validity of the underlying patent, the PI has been denied.[5]

With saisie requests aimed at preserving evidence of infringement, the Paris LD took the view that while the applicant had to provide reasonably available evidence of the alleged infringement, at an early stage there was no reason for the Court to examine further the validity of the patent in question.[6]

One notable aspect of the UPC’s management of requests for preliminary measures, is the speed of fully argued hearings and Judgments, including appeal judgments.  A multi-territorial injunction within 2-3 months, or the ability to enter premises to seize evidence across the UPC within 3-4 weeks of the order is incredibly powerful.

Means of Evidence

In common law jurisdictions like the UK, fact and expert evidence – both written and oral – are key to winning a case. In civil law jurisdictions the importance and weight given to expert evidence varies from it being treated as having little weight, through to it being recognised as an important part of the action, with limited questioning from either the judicial panel and/or the opposing counsel. In the UK, although each party pays for their own expert, any expert’s overriding duty is to the Court and it is important that they don’t become an advocate. The ability to cross-examine experts and witnesses adds time to the trial but provides assistance to the Court and ensures a party’s evidence reflects the honest belief or opinion of the witnesses or expert.

It is very clear from of the UPC’s RoP that one means of evidence includes expert reports (Rule 170.1(e)).  Rule 170.2 states that means of obtaining evidence includes “appointing, receiving opinions from, summoning and hearing and questioning experts”. As in the UK, party experts in the UPC have a duty to assist the Court impartially on matters relevant to their expertise, which overrides any duty to the party instructing them. The expert must also be independent and objective, and shall not act as an advocate for any party to the proceedings (Rule 181.2).

Despite the Rules allowing for the use of expert evidence and the ability to question the experts orally, the commentary from UPC judges has been dismissive of the role and value of these procedural tools.  There also does not yet seem to be any cases where a separate hearing has been set to question experts and it is unclear whether the Presiding Judges have allowed parties to put questions to experts.

Disclosure

Alongside expert evidence, the ability to obtain documents from the adverse party during litigation is a key reason that parties litigate in the UK patents court. Disclosure is usually issue-based (e.g., relating to alleged prior use). Unless infringement is admitted, the defendant must provide disclosure or produce a product and process description. The availability of disclosure in the UK gets around the difficulty in civil law jurisdictions where a party suspects that the other party has the documentary evidence relating to a particular issue in dispute but has no means to introduce it into the proceedings.  Disclosure can also be relied upon by the parties at trial to improve their cases, particularly since UK parties are obliged to disclose adverse documents.

While it is clear that the UPC is willing to grant measures to inspect and preserve evidence of infringement as a preliminary measure (saisie), it is not clear yet whether the common law tools disclosure tools available during the proceedings are being utilised. Means of obtaining evidence include “requests for information” and “production of documents” (Rule 170.2(b)(c)).  The UPC can also order inspection of a place or physical object (Rule 170.2(f)) and order a third party to produce evidence (Rule 170.3(a)).

What does this mean for patent litigation in the UK?

In 2023, there have been robust levels of patent actions issued and coming to trial at the UK Patents Court, whereas in Germany, for example, we have seen a clear shift towards the UPC’s local divisions rather than national patent courts. This shift has been mirrored by the movement of patent judges towards full-time roles at the UPC.  This is an early indication of the future shift in focus for patent litigation in the EU. Despite the significant involvement of dual-qualified UK solicitors and UK-based European Patent Attorneys in UPC proceedings, those proceedings have reflected civil law approaches.

What we will see in the next 12 months, is the UPC’s approach to the substantive patent law issues. What approach with the UPC take on straightforward matters of infringement and validity – will national law of the relevant division be the touchstone or will the UPC create a new approach that takes the best (hopefully) of all contracting states. Will the EPO approach to added matter or inventive step (problem–solution) prevail – or only sometimes. How will the UPC approach contributory infringement and what does a UPC doctrine of equivalents look like. How will the UPC approach injunctions for standard essential patents and issues of FRAND licensing. What will be the approach to second medical use patents and “clearing the way” ahead of a generic launch.

Both the UPC’s approach to patent law and procedural litigation tools will remain an important factor in choice of venue. While the UPC remains reluctant to embrace the common law tools for disclosure and evidence available, the UK will remain the primary EPC jurisdiction where disclosure and expert evidence is available and can be tested by cross-examination. This together with the comparable speed of proceedings before highly specialised Patent Judges, and the quality of UK judgments, means that the UK Patents Court remains an important venue for patent litigation, whether in parallel or as an alternate to the UPC.

[1] UPC_CoA_79/2024, 4 June 2024.

[2] UPC_CFI_182/2023, 13 September 2023.

[3] UPC_CFI)214/2023, 20 October 2023.

[4] UPC_CoA_22/2024, 28 May 2024.

[5] UPC_CoA_335/2023, 26 February 2024.

[6] UPC_CFU_397/2023, 1 March 2024.

---

This article was written by Head of Law, Rachel Fetches for The Patent Lawyer. Read the full edition here.