The first seven months of the Unified Patent Court

This article is part of our Biotech Review of the Year - Issue 11 publication

Following years of gestation the UPC finally opened its doors in 2023. This article takes a look at the statistics and preliminary decisions from its first seven months of operation.

Back in 2016, the opening of the UPC looked imminent, before Brexit and constitutional challenges in Germany created a lengthy delay. However, after Germany deposited its instrument of ratification of the UPC Agreement on 17 February 2023, the Court was able to open its doors on 1 June 2023.

On the same date, the new unitary patent (UP), a single right with effect across all countries participating in the UPC, became available from the European Patent Office (EPO) as an alternative to classic European patents (EPs), a bundle of national rights that stem from a single application to the EPO. 

Participating countries and location of local, regional and central divisions

17 EU Member States have participated in the UPC from the start: Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovenia and Sweden. All but Bulgaria, Malta and Luxembourg are hosting a local or regional division, which will generally hear infringement actions, actions for provisional measures and injunctions. Germany, as a jurisdiction with a high number of patent cases, is hosting four local divisions in Düsseldorf, Hamburg, Mannheim and Munich. Ireland is also expected to ratify the UPC Agreement (UPCA) in 2024, at which point it will become a contracting member state and is expected to host a local division in Dublin. 

In addition to local and regional divisions, the UPCA also provides for a central division which, as a general rule, will hear patent revocation actions and actions for declarations of non-infringement. The three sections of the central division were originally set for Munich, Paris and London but, with the UK no longer participating post-Brexit, the location of the third section was up for grabs, with Milan and Amsterdam the leading contenders. The third section of the central division had not been confirmed by the UPC start date but on 26 June 2023, over 3 weeks into the UPC and after Amsterdam had dropped out of the running, the UPC Administrative Committee selected Milan to host the third section, which is expected to be operational from June 2024. 

The section of the central division that will hear each action is determined by the international patent classification. Of particular relevance for biotech companies, the Milan division will be responsible for human necessities patents (excluding supplementary protection certifications (SPCs)), the Munich division will be responsible for chemistry and metallurgy patents (excluding SPCs) and the Paris division will be responsible for all SPCs. The Milan division will therefore hear the majority of biotech cases in the central division from June 2024, unless the action concerns the validity or scope of protection of an SPC, in which case the action will be heard in Paris. It remains to be seen how cases will be allocated between the sections where the only claimed basis for revocation of an SPC is the alleged invalidity of the underlying patent.

Early statistics 

The statistics from the first seven months of the UPC paint an interesting picture.¹

Opt-outs: EPs fall under the jurisdiction of the UPC but may be opted out of the UPC system during the transitional period, which will run until at least 2030. 579,928 opt-outs have been filed with the EPO. Taking this figure at face value, it represents approximately a third of all EPs but the actual number is likely to be higher given the possibility to file bulk opt-outs covering multiple EPs.² However, some patentees appear to have had second thoughts or have taken pre-emptive steps in advance of litigation, as 1,213 opt-outs have since been withdrawn. 

Requests for UP: To obtain a UP, a request must be made to the EPO towards the end of prosecution of an EP application. 17,788 requests for UPs have been filed to date. Each UP will take effect in all EU Member States that are participating in the UPC at the time of grant, so each of the UPs granted to date are effective in the 17 EU Member States listed above. Any granted at a later date, after Ireland and any other EU Member States have joined the UPC, will also cover those territories. All actions concerning UPs must be brought within the UPC (and unlike EPs, there is no option to opt out during the transitional period). 

Actions: By the end of 2023, a total of 67 infringement actions and 24 revocation actions had been filed. Counterclaims for revocation had also been filed in 18 of the infringement actions, although more may be filed in future as the deadline for counterclaims is reached in further actions. There were also 13 applications for provisional measures, 5 applications to preserve evidence, 1 application for an order for inspection, 1 damages action and 1 application for a declaration of non-infringement. There was a large wave of cases filed within the first few weeks of the UPC (according to the UPC Administrative Committee 14 infringement actions, 3 revocation actions, 4 applications for provisional measures and 2 applications to preserve evidence had been filed by 26 June), but these have since slowed. Further, some of the early cases have now settled so there are fewer pending actions, for example three actions in the Düsseldorf, Milan and Nordic-Baltic divisions were resolved as part of a global settlement between Ocado and Autostore. Stepping back, the number of cases filed appears lower than might have been expected, but that may reflect parties waiting to see how the first few cases go before starting a UPC action themselves.

Life sciences companies choosing to litigate in the UPC: 24% of the pending UPC actions involve life sciences companies. These include disputes between Amgen and Sanofi; Edwards Lifesciences and Meril; 10x Genomics and NanoString; 10x Genomics and Vizgen; Astellas and Healios; Nutricia and Nestlé; DexCom and Abbott; Med-El and Advanced Bionics; Tandem Diabetes Care and Roche Diabetes Care; and CEAD and BEGO Medical. 

Choice of venue: For a revocation action, the venue within the central division is pre-determined by the international patent classification of the patent. However, for an infringement action the patentee will often have a choice of where to start proceedings if the infringement is taking place in more than one jurisdiction or the alleged infringer has its residence or place of business in a UPC state. The graph below shows the number and percentage of cases in each local and regional division by the end of 2023, with Germany’s four local divisions attracting 72% of all infringement actions.

Given the number of cases proceeding in the German local divisions and therefore the majority of judges being drawn from the German judicial system, there are already a number of decisions and consequential orders that will likely have been informed by the experience of hearing cases in German infringement courts. 

Language of proceedings: For revocation actions in the central division, the language of the proceedings is that of the granted patent. In the majority of cases, this will be English. However, for local or regional divisions, each division may specify the languages in which actions may be filed. The number of proceedings filed in each language in 2023 is shown below. 

All of the local and regional divisions offer English as a possible language (and in the Nordic-Baltic division, it is the only language), but the local divisions in Germany, Italy and France only confirmed that English would be an option in those divisions shortly before the start of the UPC. Many of the early cases, presumably prepared in advance of the UPC start date, were therefore filed in a language other than English (in particular German, reflective of the fact that a large number of cases have been filed in German divisions) but it is expected that the proportion of cases filed in English will increase over time.

It is also possible for the language of proceedings to be changed in the course of proceedings. In two of the early UPC cases, the language has been changed to English. In Plant-e Knowledge v Arkyne Technologies³, which was filed in the Hague local division, the defendant Arkyne applied to change the language from Dutch to English on the basis that translation costs for Arkyne, a small Spanish start-up, would be burdensome, whereas switching the language to English would not cause prejudice to Plant-e as an international company. The Hague local division granted Arkyne’s request on the grounds of fairness, finding that being sued in a foreign language can be a significant inconvenience and add considerable time and expense. Although this approach will not necessarily be followed in all future such applications, it suggests that parties may be encouraged to use a language common to both parties, limiting the inconvenience to defendants being sued in a first instance division they have not chosen. In the infringement proceedings between Amgen v Sanofi⁴ in the Munich local division, the parties agreed and the Court ordered that the language of proceedings should be changed from German to English. By contrast, in Panasonic v Oppo⁵, the Mannheim local division refused to change the language of proceedings from German to English at Oppo’s request. Oppo has appealed this decision, so further guidance on this issue can be expected in early 2024.

Early decisions

The first cases will not go to trial until summer 2024 so main action decisions will not be available until the second half of next year. However, there have been some early decisions regarding preliminary injunctions, the impact of opt-outs, seizure orders and document access requests, some of which are summarised below.

Preliminary injunctions

• myStromer v Revolt (Düsseldorf local division)⁶: myStromer, an e-bike manufacturer, applied for an ex parte preliminary injunction against Revolt on 22 June 2023 after Revolt’s product was found to be available for test rides at a trade fair in Frankfurt. Revolt had filed a protective letter, arguing that its product did not infringe, invoking the doctrine of exhaustion, and requesting that any application be considered inter partes.

Notwithstanding the protective letter, the Düsseldorf local division granted the preliminary injunction across Germany, the Netherlands, France, and Italy on an ex parte basis on the same day, noting that it considered the arguments in the protective letter to be unconvincing. Although this is a single case and may be limited to its facts, this raises the possibility that defendants may be better served not to file a protective letter unless it contains strong non-infringement or invalidity arguments.

After the Order was served via bailiff, Revolt took 2.5 hours to close the stand, and customers could still book test rides on Instagram until the next day. myStromer considered this to be a violation of the Order, and in November 2023, the Court agreed, ordering the first penalty payment of the UPC in the amount of €26,500.

• 10x Genomics v NanoString (Munich local division)⁷: 10x Genomics has asserted two patents against NanoString relating to its RNA and protein analyte detection technology, a parent and a divisional from the same family, and sought preliminary injunctions in respect of both. 

10x Genomics was successful with the divisional patent in a decision of 19 September 2023, with an injunction ordered across all 17 contracting member states of the UPC. The decision itself runs to over 100 pages of reasoning. Of interest is that i) the Munich local division conducted a detailed assessment of validity and appeared to align itself with the EPO approach; ii) urgency was established because 10x Genomics had filed its application at the earliest possible time and the fact that the parent application could have been, and indeed was, enforced in national courts prior to the UPC opening, was irrelevant; iii) the UPC also engaged in a detailed analysis of harm to the patentee (in line with the UK approach to irreparable harm); and iv) 10x Genomics was not required to provide any security to enforce the decision. NanoString was subsequently issued a penalty of €100,000 by the Munich local division for failing to comply with the order in a timely manner. NanoString has appealed the decision, which resulted in the first UPC Court of Appeal hearing on 18 December 2023. On both parties’ agreement, the hearing was held in English, despite the Munich local division conducting the first-instance proceedings in German. The decision is still awaited at the time of writing.

10x Genomics was unsuccessful with its PI application based on the parent patent as the court found that infringement had not been established. One point of interest is that the application was not refused on the basis of lack of jurisdiction, despite this patent having already been enforced against NanoString in the national Regional Court of Munich in May 2023 and injunctions in respect of the same NanoString products already being in place in Germany under the patent. The question of jurisdiction is dealt with very briefly in the decision, with the Munich local division concluding (surprisingly to many commentators) that it has jurisdiction without any consideration of the Brussels Regulation (which applies where proceedings involving the same cause of action and between the same parties are brought in the courts of different Member States and requires any court other than the court first seized to stay proceedings). 

Impact of opt-outs

• AIM v Supponor (Helsinki local division)⁸: In this dispute concerning the overlay of sports stadium advertising during TV broadcasts, the Helsinki local division denied AIM’s request for a preliminary injunction because, under the UPCA, the patent’s opt-out could not be withdrawn. Article 83(4) of the UPCA states that “[u]nless an action has already been brought before a national court, [patentees] who made use of the opt-out … shall be entitled to withdraw their opt-out at any moment”. The patent that AIM attempted to assert in the UPC had been subject to German infringement and nullity proceedings in 2022 and had been opted out by AIM before it purported to withdraw that opt-out before commencing the UPC proceedings. AIM argued that Article 83(4) only applies where national proceedings are filed after the UPC start date, but the Helsinki local division disagreed.

Seizure and inspection orders

• Oerlikon v Himson; Oerlikon v Bhagat (Milan local division)⁹: In June, only two weeks into the UPC, Oerlikon, a German textile company, sought seizure orders for copies of all technical and commercial documentation relating to machinery from the defendants’ booths at a trade fair in Milan. Oerlikon presented brochures, expert reports, photos and videos to support its request. The evidence presented was considered sufficient for infringement to be likely, the patent was presumed to be valid and the extreme urgency requirement was fulfilled as the trade fair was due to conclude imminently. The Milan local division therefore issued ex parte seizure orders against both defendants in June 2023, within a day of filing of the applications. The orders were enforced in accordance with Italian law, through a local bailiff. 
• Jozef Frans Nelissen v OrthoApnea (Brussels local division)¹⁰: In September, the Brussels local division granted an ex parte inspection at a symposium in Belgium to enable Jozef Frans Nelissen to gather information on a device for treating night-time breathing problems. As with the Oerlikon cases, the request was granted within a day of filing of the application, indicating that the UPC will respond quickly to such urgent requests.

Document access requests

Whilst all of the Court’s orders and decisions are available on the UPC website pursuant to Rule 262.1(a) of the Rules of Procedure (RoP), and representatives can see which documents have been submitted by the parties on the UPC’s case management system, the availability of those documents to the public is subject to Rule 262.1(b) of the RoP: “written pleadings and evidence, lodged at the Court and recorded by the Registry shall be available to the public upon reasoned request to the Registry; the decision is taken by the judge-rapporteur after consulting the parties”. Various approaches have been taken to this rule:

• Munich Central Division (Sanofi v Amgen¹¹; Astellas v Healios¹²): Requests to access pleadings were denied in both cases. The first request was made to inform a validity opinion on the patent in issue, and was denied for lack of reasoned request as the mere wish for someone to form an opinion was not a sufficiently concrete, legitimate reason to grant access. In reaching this decision, the Court balanced Article 58 UPCA (regarding the protection of confidential information) with Article 45 UPCA (under which hearings are in principle open to the public). A key factor appears to have been that for many contracting member states, there is no general right of public access to court files. The second request was made for education and training purposes. This was also considered insufficiently concrete, in particular where education and training could be achieved via the Court’s decisions and orders.
• Nordic-Baltic Regional Division (Ocado v Autostore¹³): This request was approved, with the regional division holding that a “reasoned  request” under Rule 262 requires the applicant to provide a credible explanation for why the applicant wants access, and that the default position was that documents should be public. In this case, the applicant’s explanation (that the pleadings were sought on the basis of a broader public interest being made public, particularly in light of the parallel proceedings) was considered credible and none of the parties had submitted a request for confidentiality. Therefore the court decided to allow access to the documents requested from its division, but not those sought in parallel cases in the Düsseldorf and Milan local divisions. The documents have not yet been made public as an appeal with a request for a stay of the order has been filed. It is hoped that the UPC Court of Appeal will provide clarity regarding the conflicting approaches taken by the different first instance divisions to date. 

The next 12 months of the UPC

It will be interesting to see how the cases develop, in particular the first substantive decisions after the main action proceedings reach trial later this year. In the meantime, there is plenty of scope for interest in terms of the early procedural decisions and orders for preliminary measures. We also have the first UPC Court of Appeal decisions to look out for. Will we see a shift to English language proceedings? Will the German courts continue to dominate or will patentees choose to file proceedings in other divisions as the case law develops? Will the number of actions being filed in the UPC continue at its current pace or will more patentees start to use the system? Only time will tell, but you can be sure that we will report again next year!

For biotech companies, the UPC offers an additional option for litigation in Europe, whether the opportunity to obtain a preliminary or final injunction covering the UPC contracting member states or to invalidate a competitor’s UP or any EP that has not been opted out of the system. It is early days yet and many companies will continue to opt their patents out of their system and/or choose national litigation over the UPC while the new system finds its feet. However, if biotech companies want to play a role in shaping the new system, this is a key moment to get involved.