Lessons to be learnt – one year of the UPC

September 2024 | FEATURE | INTELLECTUAL PROPERTY

Financier Worldwide Magazine

September 2024 Issue

The Unified Patent Court (UPC) opened for business on 1 June 2023 and has since redefined the framework of patent litigation in Europe. The court’s launch, alongside the new Unitary Patent (UP) system, offers a new approach to patent protection across participating European Union (EU) member states.

Those states currently part of the system are Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovenia and Sweden. Other EU signatories are expected to join the UPC in the coming years. Though it is unlikely that Ireland will join in 2024, as the Irish referendum has been delayed, Romania deposited its instrument of ratification on 31 May 2024 and will become the 18th member state of the UPC on 1 September 2024.

UP uptake is on the rise. Of all European patents granted in 2023, 17.5 percent were converted into UPs. The rate for cases granted in 2024 so far stands at 24 percent. This increase reflects heightened confidence in the UPC, as certainty emerges around particular issues.

Since last June, the UPC’s local and central divisions as well as the Court of Appeal have handed down numerous orders and judgments. There are currently over 330 cases pending before the UPC.

To coincide with its first year of operation, the UPC has issued a new set of statistics from 1 June 2023 to 31 May 2024. These reveal 373 applications, including: (i) 134 infringement actions lodged in local divisions; (ii) 165 counterclaims for revocation (from 63 individual infringement actions); (iii) 32 applications for provisional measures (including preliminary injunctions and saisie-contrefaçon orders, among others); and (iv) 39 revocation actions direct to the central division.

According to court data, since the UPC opened its doors, the number of cases has grown each month, at a steady rate of 31 or so. There are around 10 new infringement cases, three new central revocation actions and two new applications for provisional measures per month.

“Though application and case numbers are probably lower than the UPC had hoped for in its first year, the court has seen significant activity.”

More than 90 infringement actions were commenced in the four German UPC first instance local division courts. The Milan seat of the UPC central division began receiving cases on 24 June, and will principally deal with pharmaceuticals going forward.

The statistics also show a move from German to English as the predominant language of filing over the course of the year, with 50 percent of proceedings in the first year being in English and 44 percent in German, 2 percent in French, 2 percent in Italian and 2 percent in Dutch.

Vital cog

Supporters of the UPC point to noted successes including its pan-European enforcement, its speed, efficiency and cost-effectiveness, and the fact that it allows parties to avoid the administrative time and cost of opting out. Add to that the court’s ability to competently handle complex technical issues and the thoroughness of the decisions it has issued to date. These qualities have won the UPC admirers across the continent.

The court does, however, have its detractors. Critics suggest that proceedings are often expensive and complex, there is a risk of central revocation, the court is relatively untested, and that it maintains the status quo. Others believe there is a lack of transparency, pointing to the difficulty of obtaining information on pending cases, the fact that interim proceedings are not made public, and that access to briefs of other actions can only be obtained by request from a registered UPC representative. In addition, complaints have been raised against the UPC’s case management system.

Though application and case numbers are probably lower than the UPC had hoped for in its first year, the court has seen significant activity. Many organisations, large and small, appear to be making use of both the UPC and UP.

According to Hoffmann Eitle, however, the second year will be even more important for the UPC: “The first decisions in main infringement and revocation cases will be issued and reviewed by the Court of Appeal. These decisions will be closely monitored and assessed by practitioners and patent owners in deciding how to use the UPC for years to come because they will significantly broaden the case law on important aspects such as claim construction and standards for assessing inventive step.”

The court will continue working to establish itself as the preeminent forum for patent enforcement across Europe through year two and beyond. Should the level of activity continue to rise, the UPC must be ready to handle the increase in caseload and maintain consistency in its rulings.

Doing so will help solidify the UPC as a vital cog in the machinery of Europe’s patent system – both as an additional forum for ongoing, international patent disputes and as the initial forum for many new disputes.

Richard Summerfield