The Unified Patent Court (UPC)

Catherine M. Jewell | June 2016

As part of our series on the new European Unitary Patent Package, in this article we summarise what is known so far about some of the procedural aspects of the Unified Patent Court, specifically the General Structure of the UPC and the questions of what kinds of actions will be handled in each division of the Court of First Instance, which local/regional division should be used, who will be judging, what will the procedure be/how long might proceedings take, and how likely is it that infringement and validity proceedings will be separated?

For a general introduction to the Unitary Patent Package see our earlier summary of the system here.  For more detailed advice in relation to the unitary patent or UPC, please feel free to contact us.

General Structure of the UPC

The UPC will have a Court of First Instance and a Court of Appeal.  As shown in figure 1 below, the Court of First Instance will include a central division and local or regional divisions. 

The Court of Appeal, central division and local/regional divisions each has a different balance to the composition of its panel of judges, in terms of their qualifications (legally qualified judges and/or technically qualified judges) and nationality – this is discussed in more detail later, but the general composition of each panel of judges is summarised in figure 1.

Figure 1: General structure of the UPC and composition of the judging panels

Individual contracting states can set up their own local divisions.  Alternatively, regional divisions may be set up for two or more contracting states which prefer to establish a common division.  There will be at least one regional division, the Nordic-Baltic regional division which will cover Sweden, Latvia, Estonia and Lithuania.  A South-East regional division covering Greece, Romania, Bulgaria and Cyprus is also expected to be formed.  Other potential regional divisions under discussion include a regional division covering Hungary, Croatia and Slovenia, and a regional division covering the Czech Republic and Slovakia. 

The central division will be based in Paris with sub-divisions in London and Munich, cases being allocated between these according to their subject-matter.   The London sub-division will hear cases related to chemistry, metallurgy and pharmaceutical and human necessities, while the Munich sub-division will deal with cases relating to mechanical engineering.  All other subject-matter will go to Paris, i.e. cases relating to performing operations, transporting, textiles, paper, fixed constructions, physics and electricity.

The Court of Appeal will be located in Luxembourg.

What kinds of actions will be handled in each division of the Court of First Instance?

As a rule of thumb, the central division will be competent to hear stand-alone patent invalidation actions, whereas patent infringement cases would be brought before the local/regional division where the infringement occurred or where the defendant is seated.

Figures 2 and 3 (below) summarise the relationship between the central division and local/regional division and the type of actions that are intended to be handled by each.

 

Figure 2: Summary of jurisdiction of central division – unless an infringement action is pending between the same parties and related to the same patent (in which case the local/regional division where the infringement matter is pending will be competent to deal with this action as well).

Figure 3: Summary of jurisdiction of local/regional divisions

Which local/regional division should be used?

Actions which should be heard by local/regional divisions, as set out in Figure 3, may be brought before:

  • the local/regional division where infringement occurred, or
  • the local/regional division where defendant has residence or place of business.

If the defendant has no residence or place of business within the Contracting Member States then actions may be brought before:

  • the local/regional division where infringement occurred, or
  • the central division.

If the concerned Contracting Member State has no local/regional division then actions may be brought before the central division.

Alternatively, parties can agree to bring an action before the division of their choice.

Who will be judging?

At first instance, the composition of the judging panel will vary according to whether a local, regional or central division of the UPC is concerned, and sometimes depending on the volume of cases handled by the court, and the nature of the case.  Table 1 (below) outlines the composition of the panels with regard to the nationality, qualifications (legally or technically qualified) and source of appointment of the judges (where known).

 

 

Court of First Instance

Panel

Number of Judges

Qualifications

Appointed From

Service

Nationality

Total

Split

Local Division

If hearing <50 cases per year (over preceding 3 years)

3 or 4

1

Legal

 

 

National of host contracting state

2

Legal

Pool of Judges

Case by case

Non-nationals of host contracting state

1

Technical (Optional)

Pool of Judges

Case by case

 

If hearing ≥50 cases per year (over preceding 3 years)

3 or 4

2

Legal

 

 

Nationals of host contracting state

1

Legal

Pool of Judges

Long-term

Non-national of host contracting state

1

Technical (Optional)

Pool of Judges

Case by case

 

Regional Division

All cases

3

2

Legal

Regional List

Permanent

Nationals of contracting states in region

1

Legal

Pool of Judges

 

Non-national of contracting states in region

Central Division

Actions re EPO decisions on Admin Tasks

3

3

Legal

 

 

Nationals of different contracting states

All other cases

3

2

Legal

 

 

Nationals of different contracting states

1

Technical

Pool of Judges

 

 

 

 

Court of Appeal

Panel

Number of Judges

Qualifications

Appointed From

Nationality

Total

Split

Actions re EPO decisions on Admin Tasks

3

3

Legal

 

Nationals of different contracting states

All other cases

5

3

Legal

 

Nationals of different contracting states

2

Technical

Pool of Judges

 

Table 1: Summary of Composition of Judges Panels in UPC Court of First Instance and Court of Appeal

Recruitment of judges is currently underway, with applications from experienced IP judges being particularly encouraged.

 

What will the procedure be/how long might proceedings take?

Proceedings before the Court of First Instance will consist of the following stages:

(a) written procedure;

(b) interim procedure, which may include an interim conference with the parties;

(c) oral procedure including an oral hearing of the parties (if parties agree then the Court can dispense with the oral hearing);

(d) procedure for the award of damages, which may include a procedure to lay open books;

(e) procedure for cost decisions.

Figures 4 and 5 are taken from the current draft Rules of Procedure and illustrate the written procedures for infringement (figure 4) and revocation (figure 5) actions before the UPC. 

Originally the aim was that proceedings before the UPC would take no more than 12 months from start to finish.  It remains to be seen whether this can be achieved in practice, however the written procedures sketched out in figures 4 and 5 seem likely to take 6-9 months, which would be broadly consistent with this goal.

Figure 4: Written procedure in respect of Infringement Action before the UPC

 

Figure 5: Written procedure in respect of Revocation Action before the UPC

 

How likely is it that infringement and validity proceedings will be separated – will bifurcation be a regular feature at the UPC?

It remains to be seen how the various local and regional divisions will handle cases where there is a possibility of bifurcation, i.e. separation of infringement and validity proceedings so as to be heard by different divisions, for example the local/regional division hearing an infringement action while the central division hears a related counterclaim for revocation.

Under the current national court systems in EU member states the handling of this issue varies widely.  For example, in the UK there is no bifurcation, whereas in Germany validity proceedings are routinely separated from infringement proceedings.  In Germany infringement proceedings typically take 6-12 months, while the separate validity proceedings typically take 15-36 months.  The gap between these decisions can be problematic, particularly if preliminary injunctions have been granted as a result of the infringement proceedings.

In the UPC bifurcation is possible in the context of a counterclaim for revocation, where the local/regional division has discretion to proceed with both infringement and validity proceedings (with a technically qualified judge), or to refer the counterclaim to the central division and either suspend or proceed with the infringement proceedings, i.e. bifurcate proceedings.  Alternatively, if the local/regional division has the agreement of the parties then they can instead refer the whole case to the central division.

Bifurcation at the UPC is also possible in the context of a “stand-alone” revocation claim because a revocation action at the central division will be stayed if an infringement action is subsequently brought between the same parties in relation to the same patent.  In this event the local/regional division would have the same options as outlined above.

It is possible that local/regional divisions in countries which have a tradition of bifurcation may follow this practice in the UPC.  However, in contrast with the national court systems in the EU which currently apply bifurcation, in the UPC there will be an option not to separate the proceedings. 

A decision on bifurcation in the UPC would be made only after the closure of written pleadings on both infringement and validity.  In the event that a case was bifurcated and the validity proceedings were referred to the central division then the local/regional division would next have to decide whether or not to suspend the infringement proceedings.  This decision would require the local/regional division to consider how the central division would be likely to decide the validity issue.  In addition, a decision to bifurcate must be reasoned and there is the possibility of a procedural appeal.  

All of these factors suggest that the local/regional divisions would be more likely to hear both the infringement and validity proceedings themselves, i.e. not to bifurcate.

Summary

For patentees the UPC offers enforcement through a single court system which covers most EU countries, hence a single judgement can be obtained which applies across most of the EU. 

For defendants, the UPC offers the possibility of removing threats across the EU with one counterclaim (in an infringement action) or a revocation action.

The UPC aims to provide the advantages of having the same procedure and experienced judges in every division, with the option of a technically qualified judge.  A single set of proceedings means a single set of costs, and the system aims to provide a judgement within twelve months.

With the release of these further details on procedures and the ongoing recruitment of judges, the UPC is on track to be up and running in early 2017. 

For more detailed advice or guidance in relation to the unitary patent or UPC, please feel free to contact us.