UPC: keeping a weather eye

The unitary patent and the concurrent Unified Patent Court (UPC) promise to bring the biggest changes in patent litigation in Europe since the European patent and European Patent Office were introduced more than 40 years ago.

However, it is impossible to grasp the full implications of the UPC without appreciating that the new system will not actually replace the existing one but, instead, co-exist and interact with it. This is particularly important for European patents during the transitional period and will have an important bearing on how the UPC is used.

The national courts competent to hear patent actions in the member states, whether they have contracted to the UPC agreement or not, will continue to operate after the UPC becomes operational. These will be of three kinds:

1. National courts of the 25 member states contracted to the UPC;
2. National courts of the two member states that have not signed the UPC (Spain and Poland); and
3. National courts of the countries that are signatories to the European Patent Convention, but cannot join the UPC because they are not EU member states, such as Norway and Switzerland.

The courts in the second and third categories will continue to operate as they do now, largely unaffected by the UPC. The first category, however, will have a close relationship with the UPC, as we describe further below.

What about the patents themselves? At the same time as the UPC comes into force, it will also be possible to start obtaining unitary patents. The existing system of ‘classical’ European patents (we refer to them as classical to distinguish them from unitary patents) will, however, continue. National patents, those that are prosecuted and granted in the national intellectual property offices, will also continue.

What form of patent can be litigated in which type of court in the new system? It will continue to be possible to litigate national patents only in their respective national courts, no matter whether they are granted for contracting member states or not; they are unaffected by the UPC. By contrast, actions concerning infringement and revocation of unitary patents can proceed only in the UPC, and never in the national courts.

The situation for classical European patents is more complex. First, when a classical European patent is litigated in the UPC, the court’s decision applies to all the national parts of that patent for those 25 member states contracting to the UPC. This contrasts with a national action, which affects only the national part of the classical patent for the country in question.

Second, classical patents are subject to the ‘transitional period’. This period will initially last for seven years, although it can later be extended by a further seven years. During the transitional period, the UPC and the national courts both have jurisdiction to enforce or revoke a classical patent. When the transitional period has expired all infringement and revocation actions concerning classical European patents (that have not opted out—a topic we will cover in our next article) must be started in the UPC.

Simultaneous proceedings

The dual jurisdiction during the transitional period raises the possibility of actions concerning the same patent proceeding at the same time both in the national courts and in the UPC. For example, a party may in the UPC try to revoke a classical European patent that is already subject to infringement proceedings in a national court.

Or, the owner of a classical patent that is subject to revocation proceedings in a national court might at the same time wish to try to enforce it in an infringement action in the UPC. Furthermore, if revocation and infringement counterclaims were to follow in each of these actions, respectively, the UPC and national court(s) would then be seised with the same cause of action, in respect of the same patent and between the same parties. Is that possible?

This issue is addressed by amendments to the Brussels I Regulation (recast), in particular by article 71c. This article provides for ‘lis pendens’ (a notice that a lawsuit has been filed) rules. One purpose of these rules is to avoid duplicative actions concerning the same classical European patent in both the UPC and a national court of a contracting member state, during the transitional period.

The difficulty comes in determining what a duplicative action is. Articles 29 and 30 of the amended Brussels I Regulation, which are referred to in article 71c, provide for two distinct situations:

The bar on parallel proceedings concerning the same cause of actionbetween the same partiesin article 29would not seem, at first glance, to prevent an action for revocation being brought in a national court of a contracting member state against a classical European patent that is already the subject of infringement proceedings in the UPC, and vice versa—the causes of action are different.

“The favoured view is that the UPC could take the revocation case so long as the validation of the classical patent in the national action is carved out."

However, if a counterclaim for revocation or a counterclaim for infringement followed, article 29 would then be triggered because the same cause of action between the same parties would be lodged in both the UPC and a court of a contracting member state.

But what about article 30—infringement and revocation are not the same cause of action, but are they related? Consider also another scenario: a revocation action is lodged in the national court by party X. This time it is followed by an infringement action in the UPC relating to the same patent, but against a different party, Y. The infringement counterclaim that then follows in the national court is against X, not Y. Are these ‘related’ actions?

The UPC agreement says that related actions are actions “so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings”. This in turn raises the question of what circumstances would amount to a risk of “irreconcilable judgments”.

On the broadest interpretation, there is a risk of irreconcilable decisions when the meaning and scope of a patent claim is determined one way in one court, for the purpose of the revocation claim, and another way in another court, for the purpose of an infringement claim. This would mean that such actions are related.

However, the language of irreconcilable judgments is derived from a related part of the Brussels regulation which has been interpreted by the Court of Justice of the European Union in Roche v Primus and Solvay v Honeywell.These casessuggest a much narrower interpretation: related proceedings are those in which the parties are not the same but belong to the same group, market the same product and each infringe the same national parts of a European patent. If this is the correct interpretation, then there are circumstances during the transitional period in which infringement actions against different parties, but concerning the same non-opted out European patent, could proceed in both the UPC and the national court of a member state.

There is another issue of wider importance: in cases where article 29 or 30 does apply, in particular if a revocation action is filed against a classical European patent in a national court first, followed by a revocation action in the UPC, is the UPC prevented from hearing revocation of all the national validations of the classical patent, or just the one that is in the national proceedings?

There are currently mixed views on this issue, even at the level of the committee drafting the rules of procedure for the UPC. The favoured view is that the UPC could take the revocation case so long as the validation of the classical patent in the national action is carved out. The alternative, a complete bar on the UPC hearing revocation of any validation of the classical patent, would leave it powerless with regard to revocation decisions about the rest of Europe. Similarly, in an infringement action, a proprietor would be unable to enforce its patent in the UPC, because a national action had been started first.

If the favoured view is correct, then a national action may have a different but significant bearing on the UPC, particularly given that the court is new and yet to establish its own case law. In these circumstances, it is foreseeable that parties will seek to revoke or enforce patents in national courts where these actions are quick and considered to have the best prospects and to use a favourable decision to seek to influence the outcome of a UPC action.

In looking ahead to the introduction of the new patent system, it is clear that the dual jurisdiction during the transitional period means parties will need to keep an eye on the old one.

Paul England is a senior associate at  Taylor Wessing in London. He can be contacted at p.england@taylorwessing.com

Simon Cohen is a partner and International Head of Patents at Taylor Wessing. He can be contacted at: s.cohen@taylorwessing.com.