Just how far can the UPC reach?

15 minutes de lecture
21 octobre 2022

Could the Unified Patent Court (UPC) award relief in the UK on the basis of a decision in respect of the German designation of a European patent?

Could a Greek designation of a European patent be litigated in the UPC, despite Greece not having ratified the UPC Agreement?

Could infringement of the Spanish designation of a European patent be considered before the UPC, even though Spain has not signed the UPC Agreement?

The UPC has recently suggested an amendment to the UPC Rules of Procedure, which would arguably make the answer to all three of these questions: "Yes".

We explore the points in a little detail below and you can also download our comprehensive analysis on the relevant legislation, nuances and potential issues to be addressed for more information.



Background

Most readers will be aware that in order to avoid the UPC having jurisdiction over European patents, patent owners will need to opt those patents out of the new system.

Rule 5.1(b) of the UPC Rules of Procedure, which concerns opt outs, has recently been amended as follows:

"The Application to opt out shall be made in respect of all of the Contracting Member Sstates for which the European patent has been granted or which have been designated in the application."

Therefore, under the previous version of the rule, a subsection of designations of European patents needed to be opted out (being those which were designations for Contracting Member States - it was not clear exactly what the definition of Contracting Member States encompassed but was understood to be either those states which had signed, or those which had signed and ratified, the UPC Agreement).

The change requires all designations of a European patent to be opted out. A European patent will grant with 39 designations (being the 39 members of the European Patent Convention, excluding extension states), which fall into the following categories:

  1. Category 1 Countries - Those which are not in the EU or the single market:
    • Albania, Macedonia, Monaco, San Marino, Serbia, Turkey, United Kingdom
  2. Category 2 Countries - Those which are not in the EU but are within the European Economic Area (EEA) and/or the European single market and have not signed the UPC Agreement:
    • Iceland, Liechtenstein, Norway, Switzerland
  3. Category 3 Countries - Those which are in the EU but have not signed the UPC Agreement:
    • Croatia, Poland, Spain
  4. Category 4 Countries - Those which are in the EU and have signed (but not ratified) the UPC Agreement:
    • Cyprus, Czechia, Greece, Hungary, Ireland, Romania, Slovakia
  5. Category 5 Countries - Those which are in the EU and have signed and ratified (or will ratify) the UPC Agreement:
    • Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, Sweden

On the face of it, the amendment might be considered to provide a clean procedural approach to opt-outs. However, there are deeper connotations, as confirmed by the reported rationale from the UPC Administrative Committee:

"[The previous version of Rule 5.1(b)] implies that the UPC solely has jurisdiction over UPCA Contracting Member States, which is not the case."

We explore what might be meant by this. First, it is necessary to introduce two important building blocks to the EU's jurisdictional regime: (1) the Brussels regime; and (2) the Lugano Convention.

The Brussels Regime

In this article we refer to Regulation (EU) 1215/2012 (Brussels I (recast)) as amended by Regulation (EU) 542/2014), as the Brussels regime. The regime primarily governs the jurisdictional position as between the courts of EU member states and the UPC (the UPC now being deemed to be a common court of the EU).

The Lugano Convention

The Lugano Convention 2007 primarily governs the jurisdictional position as between the courts of EU member states and Norway, Iceland, Liechtenstein (which are part of the European Economic Area) and Switzerland. It is not currently clear whether the UPC is considered or will be considered to be a court governed by the Lugano Convention, there having been no amendment to the convention to explicitly acknowledge the UPC, as there has been for the Brussels regime.

European patents - a reminder of the current position

The Brussels regime and the Lugano Convention are in many respects similar. The starting point is that a defendant should be sued in the country in which they are domiciled. However, patent rights are national rights and in most cases, a person who infringes for example a German designation of a European patent will be sued for infringement of that national designation before the German national courts, regardless of where they are domiciled. The basis for this is a combination of Article 7(2) of the Regulation 1215/2012 and Article 5.3 of the Lugano Convention (which state that for matters relating to tort defendants can be sued in the country where the harmful event occurred) and Article 2(2) of the European Patent Convention (which states that a European patent shall, in each of the contracting states for which it is granted, have the effect of and be subject to the same conditions as a national patent granted by that state).

The rules provide for some scenarios, where a European patent right may potentially be litigated in a state different to that for which it is designated (e.g. in the case of multiple defendants and where there is a risk of irreconcilable judgments). However, generally where validity, is also an issue these rules are not implemented because decisions of validity are always reserved to the national courts of the state of the relevant designation.

Of course, the UPC will change the status quo. It will become possible for some European patent designations to be litigated before the new court and a single decision on infringement and validity will have effect across multiple states.

But, which designations and states?

The UPC's jurisdictional issues

There are two noteworthy points arising from the Brussels regime. Regulation 1215/2012 indicates:

  1. that application may be made to the UPC for provisional, including protective, measures, even if the courts of another state (including those outside the EU) have jurisdiction as to the substance of the matter (Article 71b(2))
  2. that where the UPC has jurisdiction over a defendant under point (1) above in a dispute relating to an infringement of a European patent giving rise to damage within the EU, that court may also exercise jurisdiction in relation to damage arising outside the EU from such an infringement (Article 71b(3))

So, the EU has legislated to arguably allow for the UPC to have jurisdiction to hear applications for provisional measures and award damages, and to extend its remit beyond the EU for those purposes.

It is worth noting that it is Regulation 1215/2012 which in some circumstances allows a company to obtain pan-EU preliminary relief (on the basis of multiple designations of European patents) from e.g. a court in the Netherlands. This was demonstrated in the recent reported proceedings between patent holder, Novartis, and alleged infringer, Pharmaten.

So, just how far can the UPC reach?

We address here each of the categories of countries mentioned above, and our view as to whether the UPC can be considered to have jurisdiction over them.

Category 1 Countries (Albania, Macedonia, Monaco, San Marino, Serbia, Turkey, United Kingdom)

These countries are not in the EU, and are not states that are party to or governed by the Brussels regime or the Lugano Convention. Although the provisions of Regulation 1215/2012 purport to allow the UPC to have jurisdiction over states beyond the EU, we believe that, as a matter of comity the jurisdiction of the UPC will not be able to extend that far without the consent of the courts of the countries concerned. The UK courts have expressed a willingness to grant anti-suit injunctions in situations where a foreign court seeks to overreach its jurisdictional capabilities (see e.g. Cook v Boston [2022] EWHC 504 (Pat)). In the same way as we do not believe the UPC could exert jurisdiction over the USA or China (or rights in those countries), for example, it could not do so over the Category 1 Countries, including the UK.

Category 2 Countries (Iceland, Liechtenstein, Norway, Switzerland)

The Lugano Convention governs the jurisdictional relationship of these countries with the UPC. As noted above it is uncertain whether the UPC will be deemed to be a court governed by the Lugano Convention and we believe this question will need to be addressed in time.

Category 3 Countries (Croatia, Poland, Spain)

For the EU member states, which have not signed the UPC Agreement, the Brussels regime will continue to apply. Therefore, in the same way that a Dutch Court can in some circumstances grant cross-border preliminary relief in respect of non-NL designations of a European patent, the UPC will have the same ability (although it remains to be seen whether the UPC would in fact exercise that right). However, the validity of European patent designations of Category 3 Countries will only be tested in the national courts of those countries, not the UPC.

Category 4 Countries (Cyprus, Czechia, Greece, Hungary, Ireland, Romania, Slovakia)

For those countries, which have signed but not ratified the UPC Agreement, the position is again unclear because Regulation 1215/2012 states (Article 71b(1)):

"a common court [i.e. the UPC] shall have jurisdiction where, under this Regulation, the courts of a Member State party to the instrument establishing the common court would have jurisdiction in a matter governed by that instrument".

It is unclear whether "party to the instrument establishing the common court" includes states that have signed but not ratified the UPC Agreement. Download our analysis to find out more about the possible implications. The key issue which will need to be addressed is whether the validity and infringement of European patents designated in states which have signed but not ratified the UPC Agreement (for example, Greece) can or cannot be tested before the UPC.

Category 5 Countries (Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, Sweden)

The position in relation to countries, which have signed and ratified the UPC Agreement is not controversial: the full scope and remedies of the UPC will be available in these countries including decisions on validity and infringement of European patents designating those countries, and the award of interim and final relief and damages covering those countries.

Summary

Perhaps unsurprisingly for a new Court with the ambition and scope of the UPC, clarification may be required as to its practical operation and reach. Partly, that will be the role of the Court of Justice of the European Union. We look forward to seeing how the issues are addressed and to navigating the complexities of the European patent system (both the UPC and its interaction with the national courts) over the coming years.

If you have any questions, please contact Gordon Harris, Ailsa Carter, Arnie Francis or Alex Driver.

Download our full analysis of the UPC's jurisdictional reach


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