The first year of the Unified Patent Court (UPC) has been marked by significant fanfare and scrutiny but, importantly, strong signals of trust from potential users of the system across the full range of technology areas. The speed and efficiency of the new Court has been impressive, and the volume of cases being filed has already led to significant expansion of the Court’s capacity. The Court of Appeal has provided guidance on how the Court will approach key issues such as claim interpretation and third-party access to pleadings, with plenty more guidance to come. In this article we look back at key milestones from the past year and what’s on the horizon for the UPC.
Reflections on the UPC’s first year
Volume, speed and value
The Court’s first year of operation has confirmed its commitment to conclude first instance proceedings on the merits within a year from the start of an action. In multiple cases, it has cited this goal as grounds to refuse a stay in view of parallel proceedings, even where those proceedings have been accelerated by the EPO (see our article). The Court also seems keen to complete oral hearings in a single day, even where the case is very complex. Carpmaels attorneys acting before the UPC have seen very active management of cases by UPC judges, clearly with these goals in mind. This ranges from setting deadlines and calling hearings on procedural points at a handful of days’ notice to emphasising the frontloaded nature of the proceedings and ensuring that all arguments, facts and evidence are received by the panel far in advance of the hearing.
Action in the UPC has spanned a wide breadth of technologies, with particularly high value cases in life sciences, a large number in telecoms, connected vehicles and encoding schemes (including an SEP battle between Panasonic, Oppo and Xiaomi), major litigation in the medical devices field, including as part of the long-running disputes over heart valves and continuous glucose monitoring, and large numbers of mid-size cases in the mechanical engineering categories, involving products ranging from e-bikes to coffee systems to textile machines. As of the end of May 2024, the UPC had received 134 infringement actions and in 63 of these a counterclaim for revocation was filed. The Paris Central Divisions is handling 35 primary revocation actions, and Munich four. All statistics on UPC cases are taken from the UPC’s case load update of 31st May 2024.
In terms of the litigants, the court is handling cases involving SMEs as well as multinational companies, including those seeking to enforce rights quickly at trade fairs, those seeking to use the UPC as part of wider ongoing EU disputes, and non-practising entities.
In the healthcare sector, much of the action in the UPC has been continuation of existing litigation, with notable cases such as Sanofi & Regeneron v Amgen (PCSK9 antibodies), 10x Genomics & Harvard v NanoString (DNA sequencing technologies – see our article here), Astellas v Healios (methods of producing retinal pigment epithelial cells) and Edwards Lifesciences v Meril Lifesciences (heart valves). This could indicate strategic use of the large geographical reach of the UPC to provide additional leverage to provoke settlement. Further, in the past week, we have seen the first infringement actions filed in relation to a small molecule drug in a classic innovator vs generic dispute.
As of the end of May 2024, the Court of First Instance had received 26 applications for provisional measures, including preliminary injunctions, preserving evidence and orders for inspection1. The short timeframes of the UPC mean that provisional measures can be handed down very quickly, sometimes in as little as 24 hours for ex parte measures, with significant implications for business operations. To mitigate against this risk, the Carpmaels team has assisted several clients with protective letters to safeguard against the granting of preliminary injunctions ex parte. Applications for inter partes preliminary injunctions have been granted or refused within about 3 months.
The speed of action at the UPC means that, if there is a chance you could be served with revocation or infringement actions, it is vital to put preparations in place as soon as possible. This includes selecting counsel, preparing arguments and filing protective letters where appropriate.
Lingua franca?
English has now overtaken German as the preferred language of proceedings, making up 50% of all proceedings1. In 10x Genomics v. Curio Bioscience, in which Carpmaels & Ransford represented Curio Bioscience, the UPC Court of Appeal recently clarified the circumstances relevant to switching to the language of the patent. More detail is given in our recent article, but the factors outlined by the Court suggest that switching proceedings to the language of patent is likely to be permitted in many cases, which is significant since the vast majority of European patents are in English. This may motivate parties to file UPC actions in the language of the patent to avoid this distraction.
Transparency
Third party access to pleadings is another hot topic, particularly in view of the different approaches in national courts across Europe, which leads to different expectations among practitioners. After many refusals of requests for access to documents by the first instance Divisions, the UPC Court of Appeal’s decision in Ocado v AutoStore provided welcome guidance as to the availability of written evidence and pleadings to the public upon “reasoned request” (see the write up from the Carpmaels team on the IPKat blog). The decision clarified that while, as a general principle, the register is public and the proceedings are open to the public, the prospects of accessing these documents during the course of proceedings are generally slim (except when a member of the public has a specific interest instead of a general interest). There may be an increased chance of access after the proceedings have come to an end, and indeed, access was granted in Ocado v AutoStore, where the case was concluded. Following this, the Paris Central Division granted a third party access to documents, finding that it was not appropriate to wait until proceedings have ended because this would be too late for the third party’s intended use of the documents (which was to understand the influence of the documents in parallel EPO proceedings).
These decisions make clear that parties should keep in mind when filing written evidence and pleadings that members of the public with a reasonable request may have access to these in future.
Confidentiality clubs
In a similar vein to transparency, it has been interesting to see the UPC’s approach to confidentiality clubs, considering that the UPC rules require at least “one natural person from each party” be included. It appears that when a mutual agreement is reached on this between the parties, confidentiality clubs limited to legal representatives are accepted (as was the case in C-Kore v Novawell). When deciding on confidentiality clubs, the UPC assessed whether the interests of a party to protect that information outweigh the other party’s fundamental right to be heard. Key in that assessment was considering the confidential nature of the information. As a further step it will decide which individuals get access, and which do not, considering all circumstances of the case.
Costs, and security for costs
The UPC has demonstrated it is generally reluctant to grant security for costs, but is willing to make an exception where the financial position of one party may give rise to a legitimate and real concern that the costs may not be recoverable. Of particular interest to readers based outside of the UPC’s jurisdiction is the decision in NanoString v Harvard, where the Court ordered NanoString to provide security for legal costs and other expenses of EUR 300,000, in part because NanoString was UK-based and that was considered to create an additional (procedural) burden and uncertainty on the party seeking to enforce the judgment in the UK. A similar approach was taken by the Paris Local Division in respect of a US defendant. In both cases, the defendant’s financial situation was also taken into account.
While a decision on the merits is yet to be handed down, there has been some guidance on costs in PI proceedings where “interim” costs were awarded. Specifically, the LD Dusseldorf in the 10x v Curio Bioscience decision based the amount of the costs awarded on the proportion of requests that are successful: half the requests of each party were successful, so each were awarded half of their requested costs (which in turn were based on the cost ceiling linked to the proposed value of the case).
Testing of opt outs
During the sunrise period ahead of the introduction of the UPC, Carpmaels & Ransford was involved in filing thousands of opt out requests for clients wishing to remove European patents and patent applications from the jurisdiction of the UPC. There was some speculation as to whether we would see parties filing revocation actions on ostensibly opted out patents, challenging the validity of the opt out and alleging the UPC has jurisdiction over the patent. Such challenges have been rare so far, but we have seen opt outs successfully challenged where one of the legal owners was omitted from the opt out form and where the opt out was filed after the UPC action rather than before. Carpmaels & Ransford provides an opt out audit service for those who wish to confirm the robustness of opt outs they have filed: please get in touch with your usual Carpmaels contact for more details.
Last but not least: unitary patents
Unitary patents (UPs) are key part of the new system. These unitary rights covering 17 countries represent a significant cost saving compared with traditional national validation and cannot be opted out of the UPC’s jurisdiction The EPO Patent Index reveals that 28,326 UP requests have been received as of May 2024, and 24% of all European patents granted in 2024 are granting as UPs.
On the horizon
Hearings in main proceedings
Just as the first year of the UPC has provided many decisions on applications for provisional measures, including judgements from the Court of Appeal, the summer of 2024 will prove enlightening for users of the UPC as the Court of First Instance holds hearings in proceedings on the merits filed in the early days of the Court one year ago. We expect to see decisions on a range of substantive issues including how the UPC will assess patentability, claim interpretation and infringement. Of course, it will be some time yet before we see guidance in these cases from the Court of Appeal.
Expansion of the UPC
Romania ratified the UPC Agreement on 14th April 2024 and should become part of the system later in the year, bringing the total number of countries in the UPC to 18. Unfortunately, Ireland’s referendum on the UPC agreement has been postponed to allow more time for public discourse and engagement, so it remains to be seen when Ireland will also join the system. Eight further EU countries can also join the system in future, should they wish to.
The third seat of the UPC Central Division is due to open in Milan on 26th June 2024, with judges from Italy, Germany and the Netherlands. The Milan CD will focus on human necessities including pharmaceutical and medical devices and will provide welcome additional capacity for the other divisions in Paris and Munich. Additional capacity is also being added to the Local Divisions, with new judges being appointed, and a second panel being established in the Munich Local Division headed by Ulrike Voß.
Conclusion
The large number of UP requests and cases handled by the UPC over the past 12 months is a strong indicator of the level of confidence in the new system. At Carpmaels & Ransford we have been involved in all aspects of the new Court including filing the first UPC revocation action, representing the appellant at the first hearing of the UPC Court of Appeal, advising on potential allegations of infringement and filing protective letters, and representing clients facing applications for preliminary injunctions.
We now have around 100 UPC representatives at the firm and we look forward to helping even more of our clients to make use of the new system over the coming years. If you have any questions concerning the UPC, don’t hesitate to contact us. Additional resources can also be found on the UPC Hub on the Carpmaels & Ransford website.
