13.12.2023
Following the commencement of the operation of the Unified Patent Court (UPC), patent disputes may be resolved either before national courts or the UPC. What are the differences in handling a patent dispute before the UPC compared to the national court?
It is advisable to be aware of the special characteristics of the UPC already at the time of planning patent protection and later on as a patent holder. “Classic” European patents may be excluded from the jurisdiction of the UPC. In infringement situations, issues related to the UPC surface on the agenda at the latest.
Patent disputes before the UPC Helsinki Local Division
The UPC Helsinki Local Division is a part of a transnational court established by an international agreement (Agreement on a Unified Patent Court, UPC Agreement). The UPC Agreement is currently in force in seventeen EU member states.
The UPC has exclusive competence especially in respect of infringement and revocation actions concerning European patents that have effect within the territory of the member states of the UPC Agreement either as nationally validated European patents or as European patents with unitary effect, that is to say unitary patents. The UPC Helsinki Local Division has competence to deal with infringement cases of such European patents if the infringement has occurred in Finland or if the alleged infringer has its residence or principal place of business in Finland.
Disputes concerning unitary patents may only be decided before the UPC. Disputes concerning nationally validated European patents may alternatively be brought before the national courts during the ongoing transitional period. In Finland, the alternative national court is the Market Court. A holder of a nationally validated European patent may choose to opt out the European patent from the jurisdiction of the UPC by filing a request to the UPC in which case disputes concerning that patent may be decided only before the national courts.
The territorial scope of decisions issued by the UPC Helsinki Local Division covers the territory in which the unitary patent is in force, and in case of a nationally validated European patent, the member states of the UPC Agreement in which the patent has effect. Consequently, before the UPC it is possible to centrally decide an infringement case concerning an infringement that has occured in several member states of the UPC Agreement, thereby eliminating the need for separate infringement proceedings in each country. Additionally, it is possible to revoke a European patent before the UPC in single proceedings according to the same principles. When this is compared to the national alternative in Finland, the Market Court may decide a patent dispute concerning a European patent validated in Finland or a national patent.
Differences in the starting positions of trials
The proceeding before the UPC Helsinki Local Division may be conducted in Finnish, Swedish or English. Decisions before the local division are generally issued by a panel that has a multinational composition of three judges, including one Finnish legally qualified judge and two legally qualified judges allocated for the case from other member states of the UPC Agreement. The court may supplement the panel with an additional technically qualified judge with qualifications and experience in the field of technology concerned upon request by one of the parties or on its own initiative when deemed appropriate.
Proceedings before the UPC Helsinki Local Division and decisions issued by the court are based on Union law, the UPC Agreement, the European Patent Convention, other international agreements applicable to patents and binding on all member states of the UPC Agreement and national law. Additionally, the UPC conducts proceedings in accordance with specific procedural rules (Rules of Procedure) and decisions of the Administrative Committee. The UPC is expected to provide predictable and consistent case law irrespective of the court's location. Therefore, the starting points before the UPC differ from the Market Court where patent litigations are mainly based on national law.
Differences in preparation for trials
When a patent holder notices an infringement and approaches the adverse party with a warning letter, it is relevant to note that actions relating to all forms of financial compensation may not be brought before the UPC more than five years after the date on which the applicant became aware of the infringement. This so called period of limitation differs from the provisions applied in the Market Court. If in an infringement situation the suspicion of infringement is directed towards one's own activities and it is likely that the adverse party will apply for provisional measures such as a preliminary injunction before the UPC, it is possible to lodge a so called protective letter before the UPC requesting the rejection of the potential application for provisional measures. Such a protective measure is not available in national trial before the Market Court. If the foreseeable infringement claims and/or the validity of the patent in suit are validly contested in the protective letter, the court will in particular consider summoning the alleged infringer to an oral hearing in case the application for provisional measures is lodged, even if the provisional measures had been requested without hearing the defendant. Protective letters have a limited validity period so they may be used in preparing for litigation in conflict situations.
Differences in the course of trials
The handling of a patent infringement case before the UPC Helsinki Local Division differs partly from the handling of a corresponding case before the Market Court. Thus, this review is limited to differences regarding courts of first instance. Firstly, it's possible that a case pending before one division of the UPC is bifurcated to be handled also before another division, or the case may be completely referred to the other division. Therefore, the handling of a case pending before UPC Helsinki Local Division may, in specific situations, be partially or completely referred to the central division. For example, if an alleged infringer (defendant) files a counterclaim for revocation of the patent in suit, the UPC Helsinki Local Division may proceed with both the infringement action and the counterclaim or refer the counterclaim for decision to the central division or, with the agreement of the parties, refer the case for decision to the central division.
There is also a difference in the duration of trials. The UPC has specified procedural time limits, set in the Rules of Procedure, for the progress of proceedings. For example, the defendant may lodge a Preliminary objection within one month of service of the Statement of claim and the deadline for lodging a Statement of defence, including a possible counterclaim for revocation, is three months from the service of the claim. As a starting point, trials at first instance of the UPC are concluded within one year, including the final oral hearing. Therefore, proceedings before the UPC progress fast when compared to the Market Court where time limits are discretionary and obtaining extensions is easier. The UPC makes use of electronic procedures and video conferencing at different scales compared to the Market Court, thereby promoting swift progress of the proceedings.
By default, witnesses are not heard orally at the main hearing before the UPC but written witness statements are used. Witnesses and experts may be heard separately through videoconference before the main hearing at the UPC. It is possible to attend the oral hearing by videoconference. Before the Market Court, the main hearing is oral and using written witness statements is not allowed. The main hearing before the Market Court is held on the spot and the possibilities to exploit videoconference are limited. One further difference is the possibility before the UPC to determine the amount of damages and legal costs in separate proceedings following the decision on the merits which facilitates timely issuance of the decision on the merits.
Differences in costs
The court fees before the UPC are significantly higher compared to those before the Market Court. The court fee before the UPC consists of a fixed fee that depends on the action type and a value-based fee that is determined according to the value of the action. For example, the court fee for an infringement action handled before the UPC Helsinki Local Division is 11,000 euro if the value of the action is 500,000 euro, at the most. If the value of the action is for example 15 million euro, the total court fee is 86,000 euro and it must be paid upon filing of the infringement action. The corresponding court fee before the Market Court is 2,120 euro.
When comparing court fees, it is essential to note that a patent infringement that has occurred in the territory of several countries may be resolved in a single trial before the UPC. For example, a preliminary injunction to prohibit the continuation of the infringement may also be ordered covering up to seventeen EU member states. Thus, with a higher fee more extensive outcomes may be achieved. The UPC court fees should be compared with corresponding costs of several trials in national courts.
As to the legal costs, the UPC applies ceilings for recoverable representation costs that depend on the value of proceedings. For example, if the value of the proceedings is 250,000 euro at the most, the ceiling for recoverable representation costs of the successful party is 38,000 euro. If the value of the proceedings is 16 million euro, the ceiling for recoverable representation costs is 800,000 euro. Such provisions are not applied at the Market Court.
UPC provides further options for dispute resolution
The UPC is particularly suitable for international patent disputes in which an infringement of a European patent, having effect in the member states of the UPC Agreement, has occurred in the territory of several member states, or in which revocation of a European patent is sought within that territory. In such cases, centralized litigation before the UPC is an efficient option compared to national litigations. Additionally, the financial value of the dispute is a notable factor in determining whether investment in the litigation before the UPC is worthwhile.
The efficiency of the UPC compared to national courts is evident not only in terms of geographical coverage but also in terms of speed of obtaining enforceable decisions. The UPC's procedures, differing in some aspects from those of national courts, enable swift legal proceedings. Considering the tight time limits combined with the front-loaded proceedings before the UPC, parties benefit from a sufficiently large team for representation, consisting of lawyers and patent attorneys specialized in patent litigations. Thus, when preparing for dispute resolution by legal means, the UPC brings more possibilities as compared with the past.
