The final countdown to the Unitary Patent and UPC

The first event, jointly organized in Brussels by the Belgian government and the EPO with the support of the European Commission, demonstrated the extent of interest and optimism in the UP and UPC. More than 1,000 participants attended the hybrid conference in person and online on November 17, 2022. Taking into account the recently revised date of June 1, 2023, for the Agreement on a Unified Patent Court (UPCA) to enter into force, the event took place just over six weeks before the start of the EPO's transitional measures on January 1, 2023. The transitional period will facilitate early requests for unitary effect and requests for a delay in issuing the decision to grant European Patents. Unless new delays occur, the sunrise period and the opportunity to opt European Patents out of the UPC's jurisdiction will become available on March 1, 2023.

Biggest change in 50 years

The significance of delivering the UP was highlighted by EPO President António Campinos, who, in his introductory speech, called it "the most fundamental change in our patent system since the signing of the European Patent Convention [EPC] in 1973."

Alongside other speakers who had been involved in the development and implementation of the system, Campinos emphasized the anticipated benefits in terms of lower costs, easier administration, streamlined enforcement, improved commercialization opportunities and higher patent quality.

These advantages were echoed by a panel of SMEs, startups and researchers, who stressed the greater potential to attract investment the UP offers innovative companies given its coverage of at least 17 (and potentially up to 24) EU Member States.

What the judges think

Many of the attendees were most interested in the day's final session, a panel discussion featuring five judges recently appointed to the UPC. They comprised the President of the Court of Appeal, Klaus Grabinski; President of the Court of First Instance, Florence Butin; Presiding Judge of the second panel of the Court of Appeal, Rian Kalden; Court of Appeal Judge Emanuela Germano and Stefan Johansson, a judge in the Nordic-Baltic Regional Division (which is currently the only planned regional division of the UPC). The panel was moderated by Kevin Mooney, who chaired the committee that drafted the UPC Rules of Procedure.

The judges were open and thoughtful in addressing many of the questions the audience had about the Court and how they might be resolved. Among the points the panel made were:

• Consistency between the various divisions of the UPC is vital, meaning a uniform approach can be expected in view of the existing EU Regulations.
• Outside of special circumstances, injunctions will be granted if infringement is found. Unlike in the U.S. approach, this means that only a permanent denial of injunctive relief will be considered, as the judges all emphasized the importance of proportionality.
• Cross-examination, where it is necessary, will be carefully controlled and limited by judges.
• The judges are aware of concerns about conflicts of interest among part-time technical judges and have prioritized developing a judicial code of conduct.

To opt out or not to opt out?

Other major questions addressed during the conference were how the opt-out will work and faults with the strong authentication scheme required for users to log in to the UPC's Case Management System (CMS). Aside from this IT issue, which has delayed the starting date of the UPC by two months, likely strategies for opting out and unitary effect requests were further discussed.

There has been speculation that businesses in industries with highly valuable patents (such as pharmaceuticals) will opt most of them out of the UPC to avoid the risk of central revocation, while those in sectors such as telecoms will be more likely to keep them in, given the potential to obtain a single injunction across at least 17 EU Member States. However, speaking on a panel of industry representatives, Chairman of the BusinessEurope Patent working group Thierry Sueur predicted that organizations would take a more sophisticated, case-by-case approach that accounts for their unique IP situation and goals.

This suggests that some companies might choose to keep certain European Patents in the system so as to set the tone of the early proceedings and improve their chances of favorable decisions in the future – because, as we have seen, there are still many uncertainties about how the Court will function.

Marking the first steps on a new road

While some operational doubts linger for the moment, with most of the remaining issues now centering around access to the CMS, the nature of the first post-grant litigation proceedings before the UPC is beginning to take shape.

Following on from the conference, a mock trial was held in Paris on November 21, 2022, with the participation of several UPC judges. The particularities of this test trial were to cover the case of an infringement action launched before the Paris First Instance Court in France, followed by a second and subsequent action initiated before the UPC, all other things being equal.

Different procedural questions were considered during the mock trial, including the very important topic of whether UPC decisions would be effective in the entire territory. Additionally, one judge highlighted that during the UPC's transitional period (lasting seven to potentially 14 years), plaintiffs will be afforded a choice between the UPC and national courts for all actions concerning European Patents that have not been opted out. That being so, the UPC is expected to become the preferred forum for patentees seeking to enforce their rights globally in infringement cases. This is because centralized actions before the Court are expected to last less than 12 months.

While a polling of general attendees accompanied the mock Court decisions, the event's main focus was to assess the European scope of future judgments. Some of the points addressed were:

• May claimants carve out a specific jurisdiction (in this case, France) to circumvent an objection of lis alibi pendens? In other words, if French courts and the UPC were to hear the same dispute, could they reach inconsistent decisions? In the test case, the judges considered that carving out of a jurisdiction was admissible, but the balance of respondents indicated a hard-to-decide opinion (53% for "yes" and 47% for "no").
• Should the UPC stay its proceedings in accordance with the "bonne administration de la justice" (proper administration of justice) principle until a decision was made by the French national court? In the test trial, the Court moved against staying proceedings until a decision was reached in national litigation. (Attendees voted 21% for "yes" and 79% for "no.")
• As national courts often take different approaches to indirect infringement, what about the argument of supplying "essential means" for putting an invention into effect? Interestingly, the Court indicated that as French patent case law has among the strictest criteria for assessing indirect infringement, meeting such requirements in France would imply that they are met in all other jurisdictions.

Of course, whether these positions will be generally admissible and admitted will have to be decided with the first real judgments of the UPC.

In any case, the primary takeaway of the mock trial was that future decisions taken by the UPC can be expected to reflect the law and Regulations of the European Union with a uniform character. No doubt, the UPC's case law will be followed with the greatest attention by all patent practitioners.

What next?

Momentum is gradually building toward launch, and now is the time for holders of European Patents, patent applicants and interested third parties to take stock of their positions, assess their portfolios and devise their policies. Far-reaching decisions need to be made about whether to seek unitary protection for pending applications, opt out European Patents or start invalidity proceedings before the UPC.

Though pushed back to resolve the remaining CMS concerns, the clock is still ticking, and there is limited time to prepare – especially with the festive season coming up! Dennemeyer's patent specialists work closely with clients to develop patent strategies and ensure no deadlines are missed. Contact our experts for tailored advice and support for your business before the UPC goes live.