The Unitary Patent and Unified Patent Court: A New Era for European Patent Litigation

The UPC has seen good adoption across various industries, with many of the world's leading companies participating. Notably, most of the top 10 claimants are US-based, and one-third of all infringement cases had a US claimant. This high level of participation from US companies underscores the importance of the UPC in the global patent landscape. The UPC judges have shown their technical and legal expertise, maintaining a pro-justice stance rather than being pro- or anti-patentee. This balanced approach ensures that both patent holders and challengers receive fair treatment under the new system. The number of UPC judges has recently increased to handle the rising caseloads, reflecting the growing demand for the court's services.

1. Cost-Effectiveness: While more costly than European Patent Office (EPO) opposition proceedings, UPC litigation is significantly more cost-effective than litigation in multiple European territories (or even, in some cases, than pursuing a single revocation action in one European territory). One action is effective across all UPC member states, with streamlined procedures and limited discovery/disclosure; and there is also the opportunity for cost-recovery (unlike EPO proceedings). This cost efficiency is particularly advantageous for US companies looking to enforce their patents across Europe without incurring prohibitive legal expenses.

2. Speed: The UPC aims to resolve cases within 12-15 months, with oral hearings completed in one day and reasoned judgments issued within weeks, and is therefore much quicker than national litigation. The EPO has also committed to accelerating opposition proceedings that run parallel to UPC revocation actions. This expedited process allows companies to resolve patent disputes quickly, minimising the disruption to their business operations.

3. Flexibility: UPC actions can be commenced at any time during the life of the patent, and even after patent expiry. Under the present provisions, Patentees can 'opt-in' their patents to the UPC when ready to enforce, but keep them ‘opted out’ before that thereby minimising the risk of revocation across Europe. The flexibility in forum selection allows claimants to choose divisions based on technical strength, pro-claimant tendencies, or better track records. This strategic flexibility is invaluable for US companies navigating the European patent landscape.

4. Improved Remedies: The UPC is willing to grant wide-ranging interim and permanent remedies, including ex-parte injunctions. Saisie orders (which, if granted, effectively permit a patentee to preserve or inspect evidence at an alleged infringer’s premises) are powerful pre-action tools for evidencing infringement, and are particularly useful for process patents, and the UPC has shown a willingness to grant them. Penalty payments are available for delays in compliance with injunctions. Furthermore, damages can be obtained for infringement across all 18 UPC states in a single action (an economic area similar in size to the US market). These robust enforcement mechanisms provide strong protection for patent holders, ensuring that their rights are upheld.

The UPC allows claimants to put significant pressure on defendants, who face tight deadlines and an intensive written procedure. The court has taken a strict approach to granting extensions, only allowing them in exceptional circumstances, and a general reluctance to stay proceedings in view of EPO opposition proceedings. This combination of factors can lead to early settlements, as seen in several high-profile cases. For US companies, the ability to apply pressure through the UPC can be a powerful tool in patent enforcement. By leveraging the court's streamlined procedures and strict deadlines, claimants can create a sense of urgency that encourages defendants to settle disputes quickly. This can be particularly beneficial in industries where time is of the essence, such as digital and electronic technology, and pharmaceuticals.

1. Opt-Outs: Unless intended for strategic enforcement within the unitary system (i.e. as a deterrent), Defendants should ensure their classical European Patents are validly ‘opted-out’ of the jurisdiction of the UPC to avoid centralised revocation.

2. Protecting Letters: Preparing and filing protective letters as a pre-emptive measure against potential allegations of infringement at the UPC is crucial. These letters set out defences to potential allegations (revocation attacks and/or non-infringement arguments) and are reviewed by the court if an application for provisional measures is filed by a patentee/claimant. Importantly, the letters are not made public and so the patentee will not be aware of the existence of a protective letter unless and until they file an application for provisional measures, such as a preliminary injunction. For US companies, this proactive approach can help mitigate the risk of unexpected legal challenges.

3. Freedom to Operate (FTO) and Competitor Analysis: Conducting FTO and competitor analyses (including for opted-out European Patents (EPs), which can be opted in and enforced in the UPC within a matter of days), is essential. Defendants should be prepared to work at speed to meet deadlines and file responsive evidence. This thorough preparation can help US companies avoid costly litigation and protect their market position.

1. Revocation Claims: If a patent of concern is opted in, consider bringing a revocation claim. Being the claimant in proceedings can maximise prospects of success. Conduct expert searches and prepare expert evidence in advance to create procedural and pleadings pressure, potentially securing settlement ahead of trial. For US companies, this offensive strategy can be an effective way to challenge competitors' patents and clear the path for their own innovations.

2. Challenging Opt-Outs: Consider challenging the ‘opt-out’ of European patents that are not presently under the jurisdiction of the UPC, and then seeking their central revocation before the UPC. Even ostensibly opted-out patents can be challenged if the opt-out application was not lodged by or on behalf of all proprietors of all national parts of the patent. Co-owned patents or those with a complex chain of title may be vulnerable to such an attack. This strategy can help US companies neutralise potential threats and strengthen their patent portfolios.

One of the most critical aspects of navigating the new European patent landscape is the integration of EPO opposition and UPC strategy. These two mechanisms should not be viewed in isolation but rather as complementary tools in a comprehensive patent strategy. For US companies, this integrated strategy is particularly important. By coordinating EPO opposition proceedings with UPC litigation, companies can ensure that they are fully prepared to defend their patents or challenge competitors' patents on multiple fronts. This dual approach can provide a significant strategic advantage, allowing companies to address potential threats early and comprehensively.

The lis pendens rule applies where there are co-pending cases before the UPC and national courts of a Contracting Member State during the UPC transitional period, or national courts of an EU Member State which is not a UPC Contracting Member State (e.g., Spain). The court "first seized" must accept jurisdiction, and the second court must stay proceedings, if the cases concern the same cause of action between the same parties. For related actions (similar cause of action and/or related parties), the second court may choose to stay proceedings. This jurisdictional framework aims to ensure that patent disputes are handled efficiently and consistently, reducing the risk of conflicting decisions. For US companies, understanding the nuances of this framework is key for effectively managing cross-border patent litigation. Recent jurisdiction cases: These cases highlight the UPC's commitment to ensuring that patent disputes are resolved in a timely and efficient manner; it is willing to stay proceedings before it (in the right cases) but without undermining its role as a central authority for patent litigation in Europe.

The UPC represents a significant shift in European patent litigation, offering a centralised, efficient, and flexible forum for resolving patent disputes. Both claimants and defendants must navigate this new landscape strategically, leveraging the advantages of the UPC while being mindful of the potential challenges. As the system continues to evolve and gain traction, it will be crucial for all stakeholders to stay informed and adapt their strategies accordingly. For US companies, the UPC offers a valuable opportunity to streamline their patent enforcement and defence efforts in Europe. By understanding the key aspects of the UPC and developing tailored strategies, US companies can effectively protect their intellectual property rights and maintain a competitive edge in the global market.