The UPC will be a new court with powers to grant injunctions and damages or a central revocation decision across all active UPC states. Patentees will be able to bring a single action against a competitor in the UPC to claim damages and injunctions against infringements in all UP ratified states in which the patent is active. Whilst Competitors will be able to revoke an EP patent across all UP ratified states in which the patent is active in a single action. It is thought that some patents will want to avoid UPC jurisdiction particularly at first while there will be a lot of uncertainty.
- Essentially a Pan-European injunction and revocation system.
- Possibility of forum shopping between central and local divisions.
- Exclusive jurisdiction can be avoided by opting out patents and applications during transitional period.
Patents having Unitary Effect will fall within the exclusive jurisdiction of the UPC. The two are inescapable.
Classically validated European patents will automatically fall within UPC jurisdiction unless the patent has been opted-out during the transitional period.
The UPC will mainly hear infringement and revocation actions including provisional protective measures and injunctions.
In addition, the UPC will hear cases concerning damages or compensation derived from provisional protection and / or prior use. The UPC will also decide on appeals regarding the EPO’s tasks of implementing the unitary patent.
The UPC will have first instance courts and an appeal court. The final decisions will take affect simultaneously in all UPC member states for Unitary patents or all UPC member states in which the patent has been classically validated. The UPC orders will be enforceable in each country under local law.
There will be a number of first instance courts spread around the various countries party to the UPC. Each country is able to nominate one or more local divisions or join with other countries to share a regional division. There will also be three central divisions
The three central divisions will be based in London (Chemistry and Biotech), Munich (mechanical engineering) and Paris (electronics). Cases will be split between these central divisions based on IPC codes.
Any dispute will start in a first instance court. Which court location will depend on factors such as: where the parties are based; where the infringements have occurred; whether local or regional divisions are available; and what type of action is being initiated.
Requests for revocation or declarations of non-infringement filed in isolation of an infringement action will have to issued in the applicable central division. In these cases there will be little scope for choosing the location of the court.
In contrast, the claimant will likely have a large choice of locations for infringement actions. This is because, infringement actions will typically have to be started in the local or regional division where the infringement occurred or where the defendant has a residence or place of business. If the defendant has no residence or place of business in a UPC state, the claimant can choose between the applicable central division or the local / regional division where the infringement has occurred.
If a defendant counterclaims invalidity, the revocation action will have to be filed in the same court as the infringement proceedings. Local / regional courts will then have a choice whether to hear the two issues concurrently (as occurs in UK, FR, NL) or to split the issues (bifurcation – DE). The court may also decide to transfer both issues for simultaneous hearing at the central division.
If the court decides to bifurcate the issues, the infringement hearing will be paused whilst the revocation is heard in the central division as long as there is a likelihood that the revocation will be a success. The level of likelihood the courts apply will determine whether forum shopping to courts (for instance German courts) where bifurcation is likely is something parties should consider.
The appeal court will hear appeals from decisions of the first instance courts. Based in Luxembourg, the appeal court will be the only court hearing appeals and the appeal procedure will be between the two extremes of a complete re-run of the first proceedings and appeals only on points of law.
Court Costs and recoverable fees
The UPC court costs will be based on a fixed fee and an additional value based fee. The basis of the value based fee is to reflect the objective interest pursed by the party filing the action. In particular, the court is likely to consider an appropriate licence fee when setting the value fee.
For infringement proceedings, the fixed fee will be £8,600 (€11,000). The value based fee is introduced for actions deemed to have a value above £390,000 (€500,000) and rises in increments up to £254,000 (€350,000) for values in excess of £39 million (€50 million).
Counterclaims for revocation will incur the same fee as the infringement action up to a cap of £15,600 (€20,000).
Revocation actions without corresponding infringement proceedings have a flat, fixed fee of £15,600 (€20,000).
Small and micro enterprises are entitled to a discount on official court fees. Furthermore, the official fees will be refunded if the case is withdrawn. But the amount of the refund is dependent on which stage the proceedings have reached before the action is settled or withdrawn
The winning party will be entitled to recover costs from the other side. The amount of costs recoverable is capped and determined on a scale, which is again based on the value of the proceedings. For cases valued up to £195,000 (€250,000) the recoverable costs will be capped at £30,000 (€38,000). For cases valued at over £39 million (€50 million), the recoverable costs will be capped at £1.56 million (€2 million).