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Background
4 April 2023

Revocation Actions at the Unified Patent Court

The advent of the UPC offers those with an interest in the European intellectual property landscape an additional option to explore the validity of patents granted by the European Patent Office (EPO).

Any patent granted by the EPO, whether a Unitary Patent or not, can, subject to the opt-out provisions, be attacked centrally in a UPC revocation action. This means that if a claimant is able to persuade the Court that the patent lacks validity, it will be revoked across the 17 countries participating in the UPC in one fell swoop. A decision of this weight is likely to be of significant influence even in those countries that are outside the UPC for now.

This is not entirely new to European procedure – the ability for third parties to revoke a European patent across all states has up until now been provided by Opposition procedure at the EPO. However, Opposition is significantly time-limited – any Opposition must be filed within nine months of grant. After that window, patents could be revoked in the national courts, but the limited effect of an individual national decision, together with significant variation in costs, timeline, and procedure, means that this option is of limited utility.

Any person “concerned by a patent” may bring a revocation action at the UPC. While not as liberal as EPO Opposition procedure – which allows parties to bring actions anonymously, naming a “straw man” rather than identifying themselves – there is no requirement to demonstrate an active conflict in order to have standing.

Language, division, and judges

Under the UPC, revocation actions are to be brought at the central division and brought in the language of proceedings. The central division is itself split between Paris, France and Munich, Germany at present, with the strong suggestion being that a further branch will be established in Milan, Italy as the UPC opens. However, hearings in person at the division are expected to be limited, so the precise location matters less perhaps than the judges chosen.

In this respect, it is worth noting that the usual provision will be for cases to be heard before a three-judge panel. In the case of revocation actions at the central division, this panel will comprise two legally qualified judges and one technically qualified judge. The two legally qualified judges must be multinational, and the current pool consists of judges with significant experience at national level – the majority of the pool of technically qualified judges are drawn from private practice patent attorneys. This latter group is likely to have EPO Opposition procedure as a strong reference point, while the multinational nature of the panel will ensure that no local tradition will dominate.

Nevertheless, each panel will be chaired by a legally qualified judge, and the role of the judge rapporteur is also reserved for a legally qualified member of the panel.

Relationship to other actions

A simplicity of Opposition procedure is that the EPO has a focused role, since it is only able to offer decisions on the validity of patents. The UPC of course is a general patent court, and therefore capable of handling a range of applications, not least infringement actions.

When a revocation action is initiated at the UPC, the defendant/patentee has the opportunity to counterclaim for infringement. Such a counterclaim would be heard in the central division together with the revocation action. However, more complex scenarios arise if an infringement action is launched not as a counterclaim but independently.

The Agreement on a Unified Patent Court provides that if an action for revocation is pending before the central division, an action for infringement between the same parties relating to the same patent may be brought before any relevant local/regional division (or before the central division). If the patentee chooses to go to a local or regional division, that division then has discretion as to how the cases are joined, if at all. This is a route to potential bifurcation of the proceedings at the discretion of the local/regional division, and could also be a route to the local/regional division assuming responsibility for the revocation action from the central division.

However, this provision applies to an action between the same parties. If an infringement action is brought against another party, then, again, the patentee will have discretion as to their chosen division. However, whether those actions will be joined is controlled by the Rules of Procedure, which refer to the opportunity for disparate panels to join actions relating to the same patent “by agreement”. As such, in this case, the discretion no longer lies with the local/regional division themselves, but is shared between the two panels acting on the patent. Since the agreement of both panels is required for the case to be joined, this perhaps means there is less likelihood of the actions being joined.

During the transitional period, additional complications arise in the relationship between infringement actions brought before the national courts and revocation actions at the UPC. Infringement and revocation are different causes of action under the Brussels regulation, so it is in theory possible that parallel actions may proceed simultaneously in different court systems, especially if there is a difference in the parties involved. Nevertheless, it might be expected that if a revocation action before the UPC is somewhat advanced, a national court might use its discretion to stay infringement proceedings on the same patent until a decision is reached.

Procedure – overview

UPC actions of all kinds are generally structured as a three-stage procedure. First, an exchange of written pleadings during the written procedure, then an interim procedure during which one judge of the panel (the judge rapporteur) is charged with distilling the issues raised in order that the final stage, the oral hearing, may be dealt with efficiently and swiftly.

Written procedure

Written procedure at the UPC follows an A-B-A-B process, with each side given two opportunities (by default, if necessary the judge rapporteur can provide for more) to make submissions. Importantly, this applies to any action, so if one party introduces a further claim (e.g. a counterclaim for infringement in the case of a revocation action) a further process is initiated. However, the timelines run in parallel, and this means that, in order to comply with the overall time frame, time is squeezed for those matters.

In the illustrated example timeline below, it is assumed that no counterclaim for infringement is made. However, even with this assumption, it is very likely that the patentee will consider an application to amend the patent, meaning that the written procedure comprises the two parallel paths shown in the bottom half of the chart. The application to amend can be conditional and can contain multiple “auxiliary requests”. This is a process familiar from Opposition procedure, in which the patentee is invited to set-out fallback positions should the patent be held invalid in its granted form.

The time periods are tight, for both sides. The patentee will need to provide a complete response to the claim for revocation within two months, together with any application to amend. It is to be expected that introducing alternative amendments later in the procedure will be difficult unless a clear cause can be identified for failing to introduce them at the outset. Similarly, the claimant has a period of only two months to respond to this application – if potential amendments have not been anticipated from the outset this will be a tight turnaround to optimise the case.

Further rounds of correspondence have shorter time frames still. At each stage the process is intended to reduce the number of issues covered. So, for example, the rejoinder can only address issues raised in the reply to which it is responsive. Nevertheless, it will be important for those entering into a revocation action to be prepared to respond with alacrity during the written procedure.

Interim procedure

The interim procedure represents a divergence from experience at EPO Opposition proceedings, which typically progress from the parties’ written cases to an oral hearing, albeit with a preliminary view given by the Board in advance. In broad terms, the interim procedure is designed to allow one of the panel of judges, the judge rapporteur, to take the necessary steps to manage the case so that a decision on the merits can be reached efficiently at the final oral hearing. In practice, this means the judge rapporteur has a wide range of options at their disposal, including the ability to issue orders regarding the production of documents or experts, and to establish the framework under which witnesses may be questioned.

In a revocation action driven by documentary prior art evidence, these issues may be relatively less complex than they might be in the context of an infringement action. Witnesses may not be necessary to demonstrate the evidence relied upon, and while the evidence of experts may have a role, it is not incumbent on a claimant to rely on such experts; the presence of a technically qualified judge on the panel is intended to ensure the panel is not overly reliant on external expertise.

However, an aspect of the interim procedure that will interest the parties in a revocation action is that it is at this stage that the judge rapporteur should reach a view about the value of the proceedings for the purpose of recoverable costs. The judge rapporteur may also order the parties to submit, in advance of the final oral hearing, an indication of the costs they will seek to recover. Further details of the costs regime are provided below.

The interim procedure will itself involve a conference, albeit one that is likely to be held remotely. That, together with the ability of the judge rapporteur to request any written information necessary to complete the procedure, means that the interim procedure will also be reasonably time-pressured, although the extent of that pressure will depend on the complexity of the issues involved. The interim procedure is intended to take a maximum of three months from the end of the written procedure.

Oral hearing

It is part of the judge rapporteur’s tasks during the interim proceeding to summon the parties to the final oral hearing. Once the interim procedure is complete, the oral procedure begins and the “presiding judge” (who may or may not be the same as the judge rapporteur) assumes responsibility for management of the case.

The summons is not currently anticipated to include any indication of the judicial panel’s thinking beyond that which the parties may have inferred from the conduct of the interim procedure. As such, while the conduct of the oral hearing may be relatively regimented – the rules allow for explicit scheduling of the time available to the parties and any witnesses – representatives will need agility to cover any issues that arise during the course of the proceedings. In most cases, it is anticipated that the oral hearing should be completed within a day, although further time can be provided to hear witnesses if necessary.

The presiding judge controls the conduct of the oral hearing, which is held before the full panel. The Court can give its decision on the day (with detailed reasons provided later), but in general should provide a decision within six weeks of the hearing.

Costs

The fee for filing a revocation action at the UPC is €20,000, but the overall costs will of course be driven by the fees incurred during the process. In particular, at the UPC a losing party may be liable for the other party’s legal fees, and this creates an element of uncertainty in the procedure. Within one month of a decision on the merits, the winning party may initiate a separate, written procedure, seeking to recover these costs. The losing side will be offered the opportunity to comment on the matter, and it will be decided by the judge rapporteur.

The most recently published schedule of recoverable costs is reproduced above, although there may be changes to this scheme as yet. Nevertheless, it can be seen that the key factor will be the purported value of the proceedings. Final guidance has not yet been set by the Administrative Committee, but earlier versions provided a clearer indication in the context of an infringement action – the value corresponds broadly to the damages sought – than in the context of revocation. It will be important to follow the development of this as the Court beds in, but it is notable in the current rules that the judge rapporteur will be key, deciding the value during the interim procedure and deciding on the costs awarded later.

Final comments

Revocation at the UPC has the potential to substantially change the European patent landscape, allowing third parties a powerful tool to clear weak patents without being limited to the current nine-month Opposition window. Used well, this should be an opportunity to increase the value of the patent system to European innovation, reducing the stifling effect of wrongly granted patents while at the same time increasing the value of those which represent true progress.

In the short term, the use of opt-outs may limit the effect, as patentees may choose to pre-emptively protect themselves from revocation where possible. However, this is a transitional measure, and in time all patents granted by the EPO will be open to revocation at the UPC throughout their lifetime. Those with an interest in the European patent system would do well to ensure they understand the consequences and are in a position to take advantage.

 

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