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Background
27 February 2024

The interplay between EPO opposition proceedings and UPC revocation actions: to stay or not to stay

The introduction of the Unified Patent Court (UPC) offers a new route to centrally challenge the validity of patents granted by the European Patent Office (EPO). This adds to the existing opposition procedure at the EPO, which has long been a cost effective route for third parties to test patent validity, but with the major limitation that any opposition must be filed within 9 months of grant.

With UPC revocation actions and EPO oppositions now possible in parallel, the question arises as to how these actions should interact. Within the framework of the UPC Agreement and its Rules of Procedure, provisions are made to stay UPC proceedings “when a rapid decision may be expected” from the EPO. Two early UPC Orders have provided some insight into how this concept might be implemented in practice.

“Concrete expectation in the near future” of a decision and weighing interests of the parties

 In the revocation action, at the Munich Central Division, initiated by Astellas Institute for Regenerative Medicine against a patent owned by Healios and Osaka University (UPC_CFI_80/2023), the defendants applied for a stay of proceedings on the basis that an EPO Opposition Division (OD) hearing was scheduled for just over three months later and before the interim conference for the UPC proceedings was due to be held.

The defendants argued that given that a notification of the decision at first instance would be given immediately after the OD hearing, it would be procedurally efficient to stay proceedings at least until that hearing. Moreover, even if the EPO decision were to be appealed, the claimant’s clinical trials were estimated to take another 13 years and so there is temporal flexibility for the validity issue of the patent to be settled.

The claimant on the other hand pleaded its need for clarity in respect of freedom to operate and its motivation to file an action at the UPC precisely because a “swifter decision” was expected.

The court decided in its order (ORD_579547/2023; 20 November 2023) to reject the application for a stay.  In reaching this conclusion the court defined a “rapid decision” to be one where there is “concrete expectation (i.e. a known date in time) for a decision which date should be in the near future such that it is clearly expected to be delivered before an expected decision by the UPC” (headnote). Moreover, the “decision” need not be a final one – that is a first instance decision open to appeal at the EPO could be taken as relevant for this factor.

Notwithstanding this, the court nevertheless had doubts that the anticipated first instance decision of the EPO fulfilled the criteria of a “rapid decision”. However, a final decision on this was not necessary, because, as the court emphasised, even if a rapid decision is expected the court nevertheless has discretion over whether a stay should be granted.

In the context of this discretion, the likelihood of appeal and the time that this would take is a factor that should be taken into account. Notably, the very existence of pending contested EPO and UPC proceedings was felt to indicate a high chance of appeal absent some contra-indication.

Given this likely overall time frame at the EPO, the Claimant had a legitimate interest in accessing justice through the UPC, which the Defendant had not overcome in its request for a stay.

The court came to the conclusion that proceedings will continue at least until the interim conference, due to take place soon after the EPO OD hearing. At that point, depending on the decision of the OD, the court may write to the EPO requesting that the written decision be issued prior to the first UPC hearing in the case and if that is not possible, postpone proceedings or revisit the issue of staying proceedings.

“Expected date of decision” and “unjustifiable harm to the right to access justice”

In the more recent revocation action initiated at the Paris Central Division by Bitzer Electronics against a patent owned by Carrier Corporation (UPC_CFI_263/2023), the defendant also applied for a stay of proceedings under R.295(a) RoP (ORD_591040/2023; 8 January 2024).

The application was made on the basis that a notice of opposition against the patent in suit was filed months ago and that a request was made by the defendant a couple of months previously that the opposition proceedings be accelerated. The defendant argued that based on the prior experience of their representatives a decision was to be expected in 9-10 months.

The court emphasised the need for a consistent interpretation of Rule 295(a) RoP, but notably did not make any reference to the decision of the Munich Central Division discussed above.

In contrast to the Munich Central Division, the Paris Central Division seems to have offered an interpretation of the term “rapid decision” that includes a weighing up of the interests of the parties, rather than leaving this assessment to the Court’s application of its discretion..

The court considered it appropriate to take account of the expected date of the EPO decision and consider, in light of this, whether a stay would “cause an unjustifiable harm to the [claimant’s] right to access to justice”. The court indicated that it would only be appropriate to stay proceedings if the EPO proceedings are “near to the end” and the UPC proceedings have “just begun”. Given the relevant time frames at issue, the court did not need to consider whether any EPO appeal process needed to be taken into account in this assessment.

In rejecting the application, the court identified the absence of a “concrete expectation date” for a decision at the EPO as a decisive factor.

Conclusion

While the approach of the respective courts in deciding the two applications for a stay of revocation proceedings is somewhat different, they both point to a scepticism towards staying of proceedings. A common feature of both decisions is the need for a “concrete” date on which an EPO decision is expected. Furthermore, both decisions emphasise the need to weigh up the interests of the parties. Notably, the Munich Central Division emphasised that there is a burden on the party requesting a stay to show reasons why such an approach is appropriate – simply demonstrating that a “rapid decision” is expected is not enough.

Overall, both decisions indicate that a defendant in revocation proceedings will face an uphill struggle to stay proceedings without a concrete expected EPO decision date and a likelihood that the EPO decision will bring EPO proceedings to an end.

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