The Unified Patent Court (UPC) in Context Comparisons with Procedure in England & Wales
The United Kingdom and the UPC compared
The UK is actually made up of four jurisdictions, and this article focuses on the largest – England & Wales – and the Patents Court that sits typically in London. The English Patents Court can consider the validity and infringement of patents registered in the UK, which of course includes those granted from a European application at the European Patent Office. This was not affected when the UK left the European Union, as the European Patent Convention (EPC) is not an EU agreement.
The UPC is a court that comprises judges from participating Member States of the EU. The UPC currently has 17 EU Member States taking part in its jurisdiction, under the Agreement on a Unified Patent Court (UPC Agreement) which will enter into force on 1 June 2023. The UPC can consider the validity and infringement of European patents with unitary effect, and traditional European patents in the contracting Member States that have not been opted-out from the scope of the UPC.
Cases in the English Patents Court are heard by a single judge with expertise in patent law. This judge will make findings of both fact and law. In the UPC, there will be a panel of judges including legal judges and technical judges (experts). The panel decides the facts of the case, but the legal issues are decided by the legally-qualified judges.
In the English Patents Court, arguments on invalidity and infringement are generally heard together, rather than being bifurcated. In the UPC, bifurcation – in line with the traditional model in Germany – is possible, and the degree to which it is adopted will be closely monitored.
The UPC will have a Court of First Instance (divided into local, regional, and central divisions) and a Court of Appeal based in Luxembourg. Cases will commence in any one of these divisions depending on the subject matter of the case and the prescribed division set out in the UPC Agreement and the UPC Rules. The central division can hear infringement and validity matters, and the local divisions are expected to routinely hear infringement but not validity – so, if an infringement claim is brought in a local division of the UPC, then the local division can hear the claim, but if there is a counterclaim for revocation (raising validity), this needs to be referred to the relevant central division branch.
Before filing a claim in the English Patents Court, the claimant must engage in pre-action correspondence with the proposed defendant to see if the matter can be settled without litigation. However, there are presently no formal requirements to correspond with the proposed defendant prior to issuing a claim at the UPC. In practice it is likely for correspondence to occur between parties before a case commences to see if a settlement can be reached without the expense of going to court.
Issuing and serving the claim
The initial claim documents in the English Patents Court include the Claim Form (which provides brief details of claim) and the Particulars of Claim (which provides the full details of the claim). In patent litigation claims, the Particulars of Claim are normally served at the same time as the Claim Form but can be served up to 14 days later. The UPC uses a single document called the Statement of Claim, which provides the full details of the claim.
In the English Patents Court, once the Court has issued (i.e. formally accepted and recorded receipt of) the documents, the claimant normally serves the documents on the defendant(s) directly. In the UPC, once the Court receives the documents, the Court will serve the documents on the defendant(s).
The cost to issue a claim in the English Patents Court depends on the value of the claim, and can be up to GBP £10,000. The cost to issue a claim in the UPC is €11,000 plus an additional fee depending on the value of the claim – this additional fee can be up to €325,000.
Preservation of evidence and disclosure
In the English Patents Court, once litigation is within reasonable contemplation (e.g. after sending/receiving pre-action correspondence), parties are required to preserve all documents (physical and electronic) that could be disclosed during the claim. This includes documents that would ordinarily be deleted under a document retention policy or in the general course of business. Documents that must be preserved and disclosed include both those that will help each party’s case, but also those that would weaken that party’s case or assist the other party’s case.
In the UPC, a party can make an application to preserve evidence, but there is no automatic requirement to preserve documents. If a party wishes for the other party to provide disclosure in the UPC, then that party must make an application to the Court, including the specifics of the evidence to be disclosed, and provide reasons for this request. From an English perspective there would seem to be no reason not to make the applications for preservation of evidence and for disclosure routinely, but we must wait to see how practice develops.
A patentee can apply for an interim injunction in the English Patents Court. The Court will consider whether there is a serious question to be tried and whether the “balance of convenience” favours making the order, i.e. compares the inconvenience or damage to the patentee if the injunction is not granted with the inconvenience to the alleged infringer if it is granted. The patentee will have to give a cross-undertaking in damages – if the interim injunction is later found to have been wrongly granted (because the patent is invalid or not infringed) then the patentee will have to compensate the other party.
A patentee can apply for a preliminary injunction in the UPC. Before granting an injunction, the Court shall weigh up the interests of the parties, in particular the possible damage that could result to the respective parties from the granting or the rejection of the injunction. The Court may require the applicant to establish that they are entitled to commence proceedings, that the patent is legally valid, and that the patent is infringed or threatened with infringement. If it subsequently turns out that there has been no infringement, the Court may order the applicant to compensate the respondent for the damage done by the interim injunction.
Remedies and enforcement
The English Patents Court can grant the claimant damages or an account of profits. There are also powers to grant orders for destruction/delivery-up of infringing items and an injunction in England & Wales to stop certain activity/infringement. The UPC can grant the claimant damages or an account of profits, as well as orders for destruction/delivery-up of infringing items and an injunction across all the contracting Member States.
A judgment of the English Patents Court can be enforced in England & Wales, and will be recognised in Northern Ireland and Scotland. Failure to comply with a judgment is contempt of court. A judgment of the UPC can be enforced directly in any contracting member state. Failure to comply with the judgment in a particular Member State has the same consequences as failing to comply with a judgment of the national Court of that Member State.
The successful party in the English Patents Court can expect to recover some of their costs – typically 60%, or more if the other side has behaved unreasonably. Similarly, the successful party in the UPC will be able to recover “reasonable and proportional” costs from the losing party. However, until costs decisions have been made in a number of cases, it is not clear what orders may become common. Recovery for legal representation fees (i.e. not court fees) is capped depending on the value of the claim (between €38,000 for a case of less than €250,000 and €2 million for a case worth more than €50 million) in the UPC.
Since the departure of the UK from the EU, there is no longer any overlap of scope between the jurisdiction of the English Patents Court and the UPC. If a company needs to enforce its rights in both the UK and across the contracting Member States, then there will have to be separate proceedings. As they would be covering separate patents (even if the claims for such are the same), the proceedings could run contemporaneously, as long as the claimant has the cashflow to pursue both litigations at the same time. The English Patents Court is one of the fastest jurisdictions globally, with a trial typically of 12-18 months from a claim being issued, and appeal rounds normally occurring within a year. If the UPC is slower than this, and if bifurcation becomes commonplace, as it may, then the prospect of seeking a decision in England first, ahead of UPC proceedings, might be tactically advantageous for some parties.