The new litigation system
The Unified Patent Court will be a new specialised litigation system that will allow the enforcement, the defense of the validity or revocation of a European patent (with or without unitary effect) through a single decision with effect in all participating member states.
The Court was established by an international agreement in February 2013. It has been signed by 24 of the 27 member states of the European Union. Only Spain, Poland and Croatia have not signed the Agreement. As long as Poland does not sign the Agreement it will not be possible to have a unitary patent in Poland despite having signed the enhanced cooperation procedure for the creation of the unitary patent.
The UPC will start hearing cases once the Agreement has entered into force.
The territorial scope of the decisions of the UPC will change over time because it is most likely that not all participating states have ratified it, when the Agreement enters into force,
The Court Structure
The UPC will have a Court of First Instance that will comprise local divisions, regional divisions and a central division, and a Court of Appeal located in Luxembourg.
Local and regional divisions will be placed in the contracting member states at their request. The Central Division will have its main seat in Paris and a section in Munich. Still to be known is how the necessary transfer of the seat’s functions allocated initially to London before Brexit will be resolved.
The cases will be divided by field of technology according to the International Patent Classification (IPC) of the WIPO.
Generally speaking, local and regional divisions will mainly hear patent infringement cases and the Central Division will hear validity cases.
Depending on the division which hears the case, the language will be different.
Opt-out /Opt-in requirements
The UPC will have exclusive jurisdiction regarding:
a) “classic” European patents in the member states which have ratified the Agreement,
b) unitary patents, and
c) Supplementary Protection Certificates (SPC) based on the above patents.
However, during a transitional period it will be possible to avoid the competence of the UPC for a “classic” European patent opting it out of the system, provided that this patent has never been the subject of an action before the UPC. It will be possible to register opt-out before the system enters into force. This option is expected to be available three months before the UPC is operational.
It will also be possible to withdraw the opt-out (opt-in) at any time provided that this patent has never been the subject of an action before a national court. A second opt-out is not allowed.
There will be no fee for opt-out a European patent or patent application, nor any fee for opting it back in again.
The opt-out procedure will only be available for the first seven years (extendable up to 14 years, on review after 5 years) from when the UPC comes into force.
Stages in the proceedings before the UPC
The procedure will comprise four stages: written proceedings (where the parties will exchange arguments in writing), interim proceedings (where a judge will make all necessary preparations for the oral hearing), the oral hearing, and the Court decision. It is expected that the UPC renders its decision in a period of 12-14 months from filing of the suit at most.
Representation before the UPC
Representation of the parties will be compulsory before the UPC except for actions against decisions of the European Patent Office related to the unitary patent. Authorized representatives can be lawyers authorized to practice before a court of a contracting Member State or European Patent Attorneys with appropriate qualifications such as a European Patent Litigation Certificate.
The costs of litigation before the UPC
The UPC will work with two types of fees: fixed fees (for all types of actions) and value-based fees (for certain types of actions such as infringement actions or declarations of non-infringement). The value-based fees will have to be paid when the value of the action, which will be determined by the Court, is estimated to be above 500.000 EUR
For recoverable costs, which are the costs incurred by the successful party that will be generally paid by the unsuccessful party, ceilings will be fixed. It is estimated that they will range from 50.000 EUR for actions valued at up to 250.000 EUR to 3 million EUR for actions valued at more than 50 million EUR.