London calling: the benefits of the UPC’s new home

The announcement on August 11 of the location of the London central division of the Unified Patent Court (UPC) should be welcomed by the life sciences sector. Not only is the new court at Aldgate Tower in the middle of legal London and a stone’s throw from MedCity (the organisation managing a life sciences cluster including London, Cambridge and Oxford), it’s also easily accessible to the hotbed of innovators and manufacturers based in London and the south-east and to international court users alike.

The UK is a base for high quality pharmaceutical manufacturing of medicinal products and devices. A large proportion of the British thriving life sciences industry is based in London and the south-east, making the location of the new court a convenient forum to deal with Europe-wide disputes. It’s good news for the pharma industry, one of the leading manufacturing sectors, which is consistently generating higher levels of exports over imports than any other industrial sector in the UK, represented by a trade surplus of more than £1.1 billion ($1.69 billion) per annum for the past decade.

Life sciences companies are used to litigating their intellectual property not only in London, but also across Europe, with patents being filed and enforcement action being brought on a national basis in many jurisdictions. No doubt these companies will be anxiously awaiting, perhaps with some trepidation, the opening and development of the new court and the UPC system for determination of pan-European patent disputes.

With the language of pan-European proceedings in the London central division likely to be English (the language in which the majority of life sciences patents are filed), companies based in the UK and US, and the host of companies whose operating business language is English, will be well placed to litigate here.

For those without English as their native tongue, the new court facility will be equipped with state-of-the-art translation booths and equipment and will be supported by many excellent translation firms based nearby. When patents are drafted and proceedings heard in another language, the same facilities will allow the court to seamlessly adapt.

Aldgate Tower will provide a modern facility with an eye on the needs of local and travelling parties and litigators alike. In addition to spacious court rooms and the ability to combine rooms for large multi-party disputes, there will also be meeting space and facilities for those travelling from afar. And, of course, in the centre of London there is no shortage of businesses ready and waiting to support those using the facility, from a wealth of transport options to reach the court, to hotels and restaurants for those staying nearby—not to mention London’s thriving IP practices and legal services industries.

Good decisions

The English High Court has always been renowned for its thorough and reasoned approach to national patent litigation. London’s being the central division of the UPC makes it an attractive forum for patent revocation and enforcement by all companies, as it can be envisaged that the London seat is most likely to follow this approach.

When hearing UPC cases, the London central division will be presided over by two legal judges from different member states and one technical judge. A few highly qualified and experienced UK judges have already applied to sit in the new UPC. With many cases being heard in English, it is likely that current London-based judges from the existing UK patent system will sit frequently in the London central division. It is inevitable that panels will be considerably influenced by experienced English-speaking judges with relevant technical backgrounds.

“The capacity requirements of the UK division have been carefully analysed and thought through (in consultation with users) by the UK Intellectual Property Office.”

This should help to calm some of the trepidation about the UPC currently felt by companies considering whether to opt their patent portfolios out of the new system. While an opt-out remains a valid option in the initial period after the court opens, there is little doubt that the UPC is coming and in time will have to be used by all companies wishing to protect innovation in Europe unless they go down the cumbersome national route.

First mover advantage

Arguably, there is some benefit in being the first to gain experience of the UPC. In the spotlight following its opening, the court will no doubt strive for high quality, well-reasoned decisions on the merits. It is most likely that this experienced court will turn to established European and national principles, while having the ability to cherry-pick those that best fit the circumstances of any individual case and to do justice between the parties, as long as the approach adopted falls within the rather wide boundaries of the UPC agreement and rules.

In the very beginning, the court also has the potential to provide a rapid response. Inevitably this will change somewhat as the number of listings increases. With the new rules yet to be tested outside of moot scenarios and no case law or appellate decisions for guidance, it seems likely that parties may be more inclined than usual to challenge procedural rulings of the court. For that reason it is possible that the court might clog up over time, especially with the likelihood of case management challenges in the early days.

However, the capacity requirements of the UK division have been carefully analysed and thought through (in consultation with users) by the UK Intellectual Property Office, which has taken the lead in securing the new space for the court.

There is also a clear willingness to react to the popularity of the court by taking more space if required. Therefore it is very unlikely that the UPC will find itself in the current position of the European Patent Office (EPO): huge delays in many cases. There is every chance the UPC, by contrast, will deliver on its promise of finishing cases within a year, or at least not too much longer than that.

The availability of a much faster pan-European outcome may be a particularly appealing option for those who do not wish to wait the many years taken to obtain a final decision from the EPO following opposition. Similarly, a party that identifies a relevant patent for revocation following expiry of the nine-month EPO opposition period and would therefore have had to revoke nationally in many jurisdictions to obtain freedom to operate, may now have the option of a one-stop shop for the swift determination of validity across Europe.

Generic companies will see the possibility of a jurisdiction grab in the early days. If an existing pharma or chemical European patent is not opted out, and proceedings are brought for central revocation in London, there is no option for the originator company but to defend the application centrally. All of a sudden, what seemed to be a bundle of national rights only capable of slow and state-wise revocation nationally becomes a single target capable of being revoked in its entirety. This possibility should be top of the list of considerations for originator life sciences companies considering their UPC strategy.

In addition to the court, the established patent litigation profession based nearby will be well equipped to provide top quality support to pharma companies from around the globe. Historically and currently, London firms have frequently been involved in the coordination of multi-jurisdictional patent disputes. The life sciences industry will find itself in safe hands, capable of applying the most relevant national European and EPO approaches and case law, while operating under the full breadth of the newly drafted rules.

Claire Phipps-Jones is an associate at  Bristows. She can be contacted at: claire.phipps-jones@bristows.com