25 Member States of the European Union agreed to create a specialized court for patents in Europe. (See the official website of the Unified Patent Court).
Those provisions are not applicable to Unitary patents for which the UPC has exclusive jurisdiction as from its entry into force. The transtional provisions and the opt out are only applicable to pending European patent applications and to European patents having national effects (so called “bundle patents”).
During a transitional period of 7 years, it is still possible, for a European patent, to choose either the UPC or the national courts. The choice is open to the patentee wishing to engage an infringement action and to third parties wishing to file a revocation action.
A patentee may wish to avoid that a third party files a revocation action before the UPC with the risk of a central revocation for all Contracting Member States.
The opt out procedure has been designed for this:
An opt out may not be registered if an action has already been engaged before the UPC and is still pending or already terminated.
If an opt out has been registered, a revocation action can not be brought before the UPC. All actions, including infringement actions and revocation actions must be brought before the national courts of each designated country.
The effects of the opt out extend after the end of the transitional period, until expiry of the patent.
If an opt out has been registered for a European patent application or patent, it is generally considered that the entire UPC Agreement no longer applies. The National courts would then have to apply national law for enforcement of this European patent application or patent and not the provisions of the UPC Agreement on substantive law (For more information, see here).
An opt out may be withdrawn, free of charge, as long as no action has been engaged before any national court and is still pending or already terminated.
If an opt out has been withdrawn, it is not possible to file subsequently a new opt out.
The Unified Patent Court includes:
The first instance court is constituted of:
The central division in Paris will decide the patent validity issues in the fields of transportation, textile, construction, physics, electricity, electronics and telecommunications.
The Munich section will handle issues of validity for patents in the mechanical field and the London section for patents in the fields of healthcare, chemistry and metallurgy.
All the judges of the different panels of the Unified Patent Court, will have experience in the field of patents. Some judges will have an exclusively legal training, others will also have technical training and take part to the decisions of the court.
The panels of the local and regional divisions will consist of three legally qualified judges of different nationalities.
In countries that have at present little litigation cases on patents, two judges of each panel will be chosen from a pool of international judges, the third judge having the nationality of the country where local division is located.
In countries with a higher number of patent litigation cases, such as France and Germany for example, the panels will consist of two judges having the nationality of the country where the local division is located, the third judges being chosen from the pool of judges.
In all cases, the panels of the local and regional divisions will consist of three legally qualified judges. A fourth judge with a technical background can be added to the composition of the panel at the request of either party or on the initiative of the panel.
The panels of the Central Division will always consist of one technically qualified judge and two legally qualified judges. The three judges will be of different nationalities.
The panels of the Court of Appeal shall consist of five judges, two of whom will have a technical training and three a legal training.
This organization ensures the multinational character of the panels in the first instance and at the appeal level of the Unified Patent Court and so ensure to the extent possible consistent decisions, despite the proliferation of local divisions next to the central division.
The language of the procedure will normally be the national language of the country where the local division is seated. However, a country may decide that its local division may use as language of the proceedings, English, French or German.
On request of one of the parties and after hearing the other party, the panel may decide to adopt the language in which the patent was granted. If the panel refuses the unanimous choice of the parties to such a language of proceedings, the entire case may be referred to the central division.
Before the central division, the language of the procedure is the language in which the patent was issued, that is to say, English, French or German.
On appeal, the language of the procedure is the language used in the first instance. However, the parties may agree to use the language in which the patent was granted.
The Unified Patent Court has exclusive competence for European patents and Unitary patents regarding:
The Unified Patent Court has also exclusive jurisdiction regarding :
Acts of infringement of a European patent or a Unitary patent are defined in the same way.
Those acts include the direct infringement namely the manufacture, sale, offering for sale or use of a patented product or a product directly obtained by a patented process or the use or offering to use of a patented process.
Indirect infringement is constituted by supplying the essential means of implementation of the patented invention.
Certain acts are excluded from infringement, such as private acts without commercial character, experiments, the extemporaneous preparation of medicines, the use by a farmer of the product of his harvest on his own holding.
Finally, in line with European competition law, the rights conferred by the patent are exhausted provided that the patented product has been placed on the market in the European Union by the patent proprietor or with his consent.
These provisions apply to Unitary patents and to all European patents designating a Contracting Member State of the Agreement. The provisions of the various national laws relating to infringement, no longer apply to these European patents.
The interpretation of this prior use exception remains submitted to the national law of each Member State. The holder of a European patent or a Unitary patent can not therefore prevent a third party from reproducing or using the patented invention on the territory of a particular Member State if the third party benefits, under national law, of such an exception. Of course, infringhement remains prohibited and reparations can be obtained for the other Contracting Member States in which the third party does not benefit of such an exception.
Infringement proceedings may be brought before a local or regional division located in a Member State in whose territory an act of infringement was committed (jurisdiction based on the place of infringement).
The action can also be brought before a local or regional division located in a Member State in whose territory one of the defendants is domiciled (jurisdiction based on the place of domicile of the defendant)
Infringement proceedings can also be brought before the central division if one of the defendants is domiciled outside the territory of the Contracting Member States. This can for instance be the case if an alleged infringing product is being imported into the territory of the Contracting Member States from Asia, America or Switzerland, Spain which are European countries not part of Agreement.
Finally the parties may agree to refer the dispute to any of the first instance divisions, including the central division.
The plaintiff in an infringement action may in some cases prefer the central division rather than any local division.
Indeed, the panels of the central division always include a technically qualified judge which can be an advantage when the invention is technically complex.
The language of proceedings before the central division is always the language in which the patent was granted so that discussions on the validity and scope of the patent are easier.
Infringement proceedings may be brought before the central division in the following cases:
In case of a counterclaim for revocation, presented as a defense during an infringement action brought before a local or regional division of the Unified Patent Court, the panel of the local or regional division has the choice between three options:
The Unified Patent Court may issue an order, allowing an independent person, representing the applicant, to carry out an inspection in situ to perform a detailed description of an alleged infringing product or method, with or without the taking of samples and seize any document relating to the manufacture and distribution of the products. Such an order can be obtained even before engaging the action on the merits and without hearing the other party.
Appropriate measures may also be provided to ensure the confidentiality of information gathered during this operation.
This procedure is similar to the infringement-seizure procedure, widely used in France for obtaining evidence of alleged patent infringement.
The Unified Patent Court may also, upon request of a party, order the other party to produce additional evidence in his possession.
The proceedings in the first instance and on appeal, has three phases.
The entire procedure in the first instance should have a duration of about one year.
It is possible to request a quick decision for preliminary injunction to stop an alleged infringement of a patent, even before engaging the proceedings on the merits and, in some cases without hearing the other party.
A third party that fears of being submitted to such a provisional injunction without a hearing, may file at the Registry of the Unified Patent Court, a protective letter stating the name of the person who may may require a preliminary injunction and the number of the patent. The letter may provide arguments against a claim for infringement and challenging the patentability of the invention claimed in the patent. This letter (which is valid only 6 months) will be subsequently transmitted by the Registry of the Court to first instance division where a request for prliminary injunction is filed.
The decision on the merits of the Unified Court may include reparations for the damage suffered by the plaintiff, including the determination of damages and costs to be paid to the plaintiff by the loosing party.
Alternatively, and in more complex cases, the determination of damages will be done during a subsequent separate procedure.
According to EU Regulation N° 1215/2012 (recast), in force since January 2015, the Unified Patent Court is also capable of deciding on damages resulting from infringement acts which occurred in countries of the EU, not part of the UPC Agreement, covered by a European patent. This could be the case for Switzerland or Spain for example.
The Unified Patent Court must ultimately cover all of its costs through the collection of fees, to be paid for all main acts of the proceedings. Some of these fees include a fixed part to be paid together with the filing of an act and a value based part depending on the "value of the dispute" as determined during the interim procedure by the judge rapporteur after study of the proposals of the parties.
The Unified Patent Court increases the risk for a European patent owner to see his patent canceled simultaneously for all Contracting Member States. This risk is clearly accepted if the choice is made of a Unitary patent. It may not be the case for a European patent having national effects in the designated countries (so called “bundle patent”). This could encourage many holders of European patents to use the temporary opt out provided for in the Agreement in order to continue to use the different national courts. Of course the possibility to opt-out will not stand forever and there will come a time when it will no longer be possible to bypass the exclusive jurisdiction of the Unified Patent Court, except for purely national patents.
On the other hand, the Unified Patent Court has many advantages.
It makes it possible to get through a single decision, made by a panel of highly specialized patent judges, usually including at least one technically qualified judge, a permanent injunction effective in a large number of European states as well as damages in compensation for infringements committed in all these countries.
The procedure should be reasonably fast, with a strict case management and only a few exchange of written arguments
The costs of the procedure seem higher than the costs of an infringement action in France but approximately similar to an infringement action together with a revocation in Germany.They will certainly be lower than an infringement action in the United Kingdom.
For more information from the Preparatory Committee of the Unified Patent Court, please click here.