The UPC – Out of Beta?

The UPC has almost been in operation for six months, having opened its doors on 1 June 2023. We don’t think anyone can doubt there was some initial scepticism given there was no initial barrage of cases on Day 1 (parties certainly having had enough time to prepare). Teething problems around the Case Management System and other practicalities also dominated the headlines (what else was there to talk about at that stage?!).

Over the last six months momentum has built, preliminary issues are being decided efficiently, and so far the decisions seem to be largely pragmatic, well-reasoned and considered.

Further, and we think most importantly, judges have been very willing to publicly promote, and explain, the system. This “accessibility” seems to be working as we move from a stage where the early movers in the system were there to help build it, to one where they are now using an established platform to assert or attack patent rights.

Parties

Over 100 cases have been brought before the UPC to date. Over half of those are patent infringement actions, and large multinational household names are choosing to use it (e.g. Nokia, Panasonic, Huawei, Sanofi-Aventis). Of course it was designed from the beginning to attract these sorts of companies whilst at the same time being malleable enough to appeal to SMEs, such as by offering reduced court fees in some cases. What is perhaps surprising is the speed at which the system has gained the trust of these larger companies. They might have been expected to watch things unfold for longer for fear of entering an unknown “risky” jurisdiction. It appears it is not viewed that way.

As expected, the tech, medtech and life sciences fields dominate the cases as do proceedings where the UPC was an additional weapon to be used in a pre-existing multinational litigation campaign.

UPC decisions

Procedural issues

The decisions to date have largely been focused on procedural issues. For example:

• Whether a revocation action lodged at the Registry in Luxembourg (in hard copy, due to Case Management System issues) instead of the Munich Central Division “beat” an infringement action lodged (also in hard copy) before a Local Division a few minutes later.

Answer: Yes, making the revocation action admissible and clarifying that time may be of the essence in these cases (Sanofi v Amgen).

• Whether the existence of earlier national proceedings (pending appeal) before the UPC went live prevented a patent owner from withdrawing a UPC opt-out.

Answer: Yes, the message being to be careful about getting patents stuck opted-out (AIM Sport v Supponor).

• Whether an interested non-party to proceedings can obtain access to submissions of the parties.

Answer: Potentially. Pending a decision from the Court of Appeal it appears to depend on the division the request is made of (the Nordic-Baltic regional division so far being the most obliging) (Ocado v Autostore; Astellas v Osaka University; Sanofi v Amgen).

• Whether a wholly owned subsidiary can bring a revocation action against a party in the Central Division, notwithstanding the existence of UPC infringement proceedings involving the parent company before a Local Division.

Answer: Interestingly (and to some, alarmingly) yes, giving rise to two parallel revocation actions to be consolidated and more generally the possibility going forwards of ongoing (perhaps meritorious) infringement actions being derailed (Meril Italy v Edwards).

Injunctive relief

There have also been substantive decisions concerning injunctive relief:

• myStromer obtaining urgent (within a day) ex parte injunctive relief against RevoltZycling in advance of a trade fair, notwithstanding RevoltZycling’s protective letter on the UPC file (Düsseldorf Local Division). The arguments raised in the protective letter around non-infringement and exhaustion were deemed not to be convincing. Note as well the subsequent decision that the injunction was breached and financial penalty ordered of EUR26,500.
• 10X Genomics obtaining a preliminary injunction against NanoString Technology on the basis of a unitary patent (Munich Local Division), on the basis of “a clear preponderance of probability” that the patent was valid and of the Court being “clearly convinced that provisional measures are necessary due to the infringement of a valid patent, both in terms of substance and time.“
• 10x Genomics’ failure to obtain a subsequent preliminary injunction against NanoString Technology on the basis an infringement position was not made out (Munich Local Division).

Summary

The nascent days of the UPC may end up being quite short-lived as it moves to the next stage in its development. Our issue to watch is the possible divergence between divisions, as indicated by the judgments around non-parties’ access to documents. Forum shopping in the UPC was always envisaged. We may well see that arise more frequently as the cases develop.