The first 12 months of the UPC

The Unified Patent Court (‘UPC’) opened for business a year ago on 1 June 2023. It is a remarkable achievement – the world’s first supranational patent litigation court, with judges from across European countries. By Darren Smyth, Joanne Welch and Alona Andrieieva of EIP.

Overview

The system is pretty popular – according to official Court reports, in the first year, there are 373 cases filed,[1] including 134 infringement actions at the local/regional divisions and 39 revocation actions at the central division. The parties involve a promising cross-section of seasoned litigators and new litigants. It does seem that the court is accessible for parties of all sizes, and from across the world – Europe, Asia and the USA are all well represented.

The early filed cases had a high number of actions filed in German, but Germany only announced at the last minute that English would be allowed, and so the cases had likely already been prepared in German. The proportion of English cases is increasing, which will be welcomed by international users of the system. In the meantime, quite a few (but not all) requests to change the language of proceedings into English have been granted.

As the system has been running for only a year, there are no full decisions on the merits yet, but there have been many preliminary and procedural decisions that are of great interest.

Provisional injunctions are possible to obtain, but the bar to success is quite high – it is necessary in general to demonstrate urgency, a sufficient likelihood that the patent in question is valid and infringed, and that the balance of harm favours the patentee. On the other hand, orders to inspect premises and seize evidence are relatively easy to get, so if evidence (located in the participating European countries) is needed to prove a case, the UPC system is quite useful.

Some cases have come to final hearing within a year, so the aspirational rapid conduct of proceedings of around 12 months to a hearing is achievable in at least some cases. On the other hand, this means that extensions of time are hard to obtain, so parties need to be able to work to short and inflexible deadlines.

The majority of infringement actions have been filed at one of the German local divisions, Munich in particular, and the number of panels in the German divisions has been increased to keep up with demand. Some local divisions (Copenhagen, Lisbon, Ljubljana) still have no cases at all. It is too early to say whether there is a noticeable difference in outcome depending on the division chosen. Consistency (as well as the quality of the decisions themselves) will be key to the long-term success of the UPC.

In this regard it is perhaps unfortunate that the first high-profile provisional injunction to be granted, in the case of 10x Genomics v Nanostring, was overturned by the Court of Appeal who disagreed with the first instance court over whether the patent was valid.

Overall, however, the indications are positive that the UPC will be a welcome and useful addition to the European litigation landscape. We look forward to the first batch of decisions on the merits over the next few months.

The public would welcome decisions and orders being posted more promptly – some are available within a day, others do not appear for months, or even at all. And public access to documents such as pleadings and evidence filed with the court is limited, especially while cases are still pending.

Users of the system have raised numerous concerns over the case management system, which seems over-engineered and inflexible, while also being prone to breakdown. This has caused problems for representatives and judges alike. The Court promises that improvements are being urgently addressed.

Romania has just ratified the UPC Agreement, which will bring the number of participating countries to 18 from 1 September 2024. At one stage it looked as though Ireland was set to join as well, but the referendum that is necessary to permit this has unfortunately been postponed.

Some statistics from the first year of the UPC

These figures are taken from cases we can see on the CMS. There is some delay between a case being filed and appearing on the CMS so these figures may differ slightly from those supplied by the Court itself (quoted above).

Total cases filed (excluding counterclaims)

Table 1 shows the total number of cases filed (excluding counterclaims for revocation) during the first 12 months of operation of the UPC. Table 1 also shows the split into those cases filed in the first seven months, in 2023, and those filed in the next five months, in 2024 to flag up any major trends over time.

So far there have been 122 infringement cases filed. The rate per month for 2023 was 10.7. For the first five months of 2024, the rate is slightly lower at 9.4. The decrease is not great and rather than indicating a reduction in interest in recent months, is more likely explicable because there was an initial store of cases ready and waiting to be filed when the UPC opened.

There is a much more noticeable drop in filings of standalone revocation actions, from 25 in 2023 to just three in the first five months of 2024, a drop in the rate filed from 3.8 to 0.6 per month. We can only speculate why that is.

Infringement cases by division

As to interest in the various divisions for filing infringement claims, both local and the regional Nordic-Baltic, Germany is by far the most popular forum, see Figure 1. Between them, the four German local divisions have 95 of the total 122 cases (78%) with Munich on its own having the lion’s share of 46 (38%). Dusseldorf is next most popular with 13 (21%).

Figure 2 shows that the majority of infringement cases, 67/122 (55%), were filed in the German language which is perhaps not surprising given the popularity of the German local divisions for filing. 45/122 (37%) were filed in English. Four infringement cases were filed in French and three each in Dutch and Italian.

Looking only at the more recent filings made in the five months of 2024, the split is 26/47 (55%) filed in German and 20/47 (42 %) in English. The proportion filed in German is therefore stable, but with a slight increase in the proportion filed in English. In 2024 so far, no infringement cases have been filed in Dutch or Italian and only one in French.

Language change: The Rules of Procedure allow for requests to be made to change the language of proceedings into the language of the patent. So far, five actions have changed the language of proceedings from German to English and one from Dutch to English.

Provisional measures and preserving evidence

As to actions for provisional measures, again the German divisions dominate, with 19 of 22 cases filed, but there have been applications for provisional measures also in The Hague and Helsinki, see Table 2.

Of the cases visible on the CMS the possibility of preserving evidence and inspection has not yet been greatly used, with a total of four applications to preserve evidence and one inspection case listed, see Table 3. However, some of the early cases relating to provisional measures and preserving evidence are not visible on CMS so the real number of these cases may be greater. The reason for the lack of visibility is unclear.

Unitary Patent

The European Patent Office has received 28,452 requests for unitary patents, and registered 27,961 of those. This equates to 19.3% of eligible patents (those granted after 1 June 2023) being converted into unitary patents. The evolution over time has been rather stable:

[1] This may be regarded as an overstatement, since where there are counterclaims for revocation in an infringement action, each defendant in the same action counts as a separate counterclaim. Thus, the 165 recorded counterclaims relate to 63 infringement actions. Accordingly, the number of “real” cases is about 100 lower than the official number.