Patent Litigation Comparative Guide

1 Legal framework

1.1 Which laws and regulations govern patent litigation in your jurisdiction?

The Unified Patent Court (UPC) system – including the European patent with unitary effect (‘unitary patent') – is governed by:

• the Agreement on a UPC, accompanied by:
• • the Rules of Procedure of the UPC, which set out the details of litigation; and
  • the Table of Court Fees;
• EU Regulation 1257/2012/EU establishing the unitary patent; and
• EU Regulation 1260/2012/EU establishing the translational arrangements for the unitary patent.

1.2 Which bilateral and multilateral agreements with relevance to patent litigation have effect in your jurisdiction?

See question 1.1 In addition, the international jurisdiction of the UPC is established pursuant to Article 31 of the Agreement on a UPC, in accordance with:

• EU Regulation 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, amended by EU Regulation 542/2014; or
• where applicable, the Lugano Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters, including any subsequent amendments.

Furthermore, the Enforcement Directive (2004/48/EC) provides provisional and protective powers.

1.3 Which courts and/or agencies are responsible for interpreting and enforcing the patent laws? What is the framework for doing so?

The UPC includes:

• a Court of First Instance with local, regional and central divisions; and
• a Court of Appeal in Luxembourg.

The various locations of the local, regional and central divisions are shown in detail on the website of the UPC.

Articles 6 and following of the Agreement on a UPC provide the framework for the establishment of the divisions, including rules on the specific composition of the panels (see Figure 1). Article 33 of the Agreement on a UPC governs the specific competences of the divisions.

2 Forum

2.1 In what forum(s) is patent litigation heard in your jurisdiction? Are patent infringement and validity decided in the same forum or separate forums?

The Unified Patent Court (UPC) is competent to decide on both infringement and validity of unitary patents. The same applies to classic European patents and supplementary protection certificates (SPCs), unless opted out of the UPC system (Article 83 of the Agreement on a UPC).

In relation to actions for infringement, a claimant can choose to bring the action in the (local or regional) division:

• where the actual or threatened infringement has or may occur; or
• where the defendant has its residence or principal place of business or, in the absence of either, a place of business.

If the defendant is not resident in a contracting member state and does not have a place of business in a contracting member state, the claimant can bring the action:

• in the (local or regional) division where the infringement has or may occur; or
• before the Central Division (Article 33(1) of the Agreement on a UPC).

Revocation actions and actions for a declaration of non-infringement must be brought in the Central Division, provided that a claim for infringement relating to the same patent between the same parties has not been brought in a local or regional division, in which case it must be brought in that local or regional division (Article 33(4) of the Agreement on a UPC).

Under certain circumstances, however, the UPC may also bifurcate a proceeding as regards the decision on infringement and validity. For example, Article 33(5) of the Agreement on a UPC rules that if a counterclaim for revocation is brought in an infringement proceeding, the local or regional division concerned shall, after hearing the parties, have the discretion to:

• proceed with both the action for infringement and the counterclaim for revocation. The judges may request a technically qualified judge, experienced in the technology concerned, to be added to the panel;
• refer the counterclaim for revocation for decision to the Central Division and proceed with the action for infringement;
• refer the counterclaim for revocation for decision to the Central Division and suspend or proceed with the action for infringement; or
• with the agreement of the parties, refer the case for decision to the Central Division.

Actions for infringement and revocation of a European patent or a SPC may still be brought before the national courts or other competent national authorities for a transitional period of seven years after the date of entry into force of the Agreement on a UPC (ie, from 1 June 2023 until 31 May 2030; Article 83(1) of the Agreement on a UPC). The transitional period may be extended by up to a further seven years at a later stage (Article 83(5) of the Agreement on a UPC).

2.2 Who hears and decides patent disputes (eg, a judge, a panel and/or a jury)?

Generally, cases are heard and decided by a panel comprised of three to five judges who are legally and in part technically qualified, as shown below:

Fig. 1 – Court Structure

However, under certain circumstances (eg, in case of urgency), a single judge may take a decision (see Rule 194 of the Rules of Procedure of the UPC on the examination of the application for preserving evidence, which states, "The presiding judge may decide that he or the judge-rapporteur or other single judge or the standing judge may decide on the Application" (paragraph 3); and "In cases of extreme urgency the standing judge … may decide immediately" (paragraph 4)).

The judges may also refer a question which they consider relevant for their decision to the Court of Justice of the European Union for clarification (Article 267 of the Treaty of the Functioning of the European Union).

2.3 Are there any opportunities for forum shopping in your jurisdiction? If so, where and how do those opportunities exist?

Yes, opportunities for forum shopping exist at the UPC to a certain extent. The rules on the competences of the divisions provide certain options for venue selection. For example, infringement proceedings may be brought at the place:

• where the infringement occurs; or
• where the defendant has its seat.

Also, the defendant may influence the venue of UPC infringement proceedings – for example, by requesting the referral of an infringement case to the Central Division if:

• the action is pending before a regional division; and
• the infringement has occurred in the territories of three or more regional divisions (Article 33(2)(2) of the Agreement on a UPC).

During the transitional period (see question 2.1), both infringement and revocation actions may in general still be brought before the national courts, which provides further options for choice of venue.

3 Parties

3.1 Who has standing to file suit for patent infringement? What requirements and restrictions apply in this regard?

The patent holder is entitled to bring an infringement action before the Unified Patent Court (UPC) (Article 47(1) of the Agreement on a UPC).

Unless the licensing agreement provides otherwise, an exclusive licensee is also entitled to bring such action before the UPC, provided that the patent holder is given prior notice (Article 47(2) of the Agreement on a UPC).

A non-exclusive licensee is not entitled to bring actions before the UPC, unless:

• this is expressly permitted by the licence agreement; and
• the patent holder is given prior notice (Article 47(2) of the Agreement on a UPC).

In actions brought by a licensee, the patent holder is entitled to join the action (Article 47(4) of the Agreement on a UPC).

Co-ownership of a patent is not regulated under the Agreement on a UPC and remains a matter of the relevant national law.

3.2 Can a patent infringement suit be brought against a defendant who is a foreign entity with only a residence or place of business outside the jurisdiction?

Yes, according to Article 33(1)(b) of the Agreement on a UPC, actions against defendants which have their residence, principal place of business or, in the absence of residence or principal place of business, a place of business outside the territory of contracting member states can be brought before either:

• a local or regional division where the infringement has occurred or may occur; or
• the Central Division.

3.3 Can a single infringement action be brought against multiple defendants? What requirements and restrictions apply in this regard?

UPC proceedings may be started against a plurality of defendants if the UPC has competence in respect of all of them (Rule 330(1) of the Rules of Procedure of the UPC (RoP)). However, a single infringement action may be brought against multiple defendants only where:

• the defendants have a commercial relationship; and
• the action relates to the same alleged infringement.

Such an action can be brought before:

• a local division hosted by the contracting member state in which one of the defendants has its residence or principal place of business, or in the absence of residence or principal place of business, a place of business; or
• the regional division in which that contracting member state participates (Article 33(1)(b) of the Agreement on a UPC).

The UPC may separate the proceedings into two or more separate proceedings against different defendants (Rule 303(2) of the RoP). If the UPC orders such separation, the claimant must pay further court fees for the new proceedings, unless the court decides otherwise (Rule 303(3) of the RoP).

3.4 Can a third party seek a declaration of non-infringement or invalidity in your jurisdiction? If so, how?

The UPC is competent to hear both:

• actions for declaration of non-infringement of patents and supplementary protection certificates (SPCs) (Article 32(1)(b) of the Agreement on a UPC); and
• actions for revocation of patents and for a declaration of invalidity of SPCs (Article 32(1)(d) of the Agreement on a UPC).

According to Article 47(6) of the Agreement on a UPC, any natural or legal person, or anybody entitled to bring actions in accordance with its national law that is concerned by a patent, may bring an actions in accordance with the RoP.

The validity of a patent cannot be contested in an action for infringement brought by the holder of a licence where the patent holder does not take part in the proceedings. The party in an action for infringement wanting to contest the validity of a patent must bring the action against the patent holder (Article 47(5) of the Agreement on a UPC).

4 Patent infringement

4.1 What constitutes patent infringement in your jurisdiction?

In general, both the direct and indirect use of a patented invention may constitute patent infringement according to Articles 25 and 26 of the Agreement on a Unified Patent Court (UPC).

In more detail, without the patent holder's consent, a third party is generally not allowed to:

• make, offer, place on the market or use a product which is the subject matter of the patent, or import or store such product for those purposes;
• use a process which is the subject matter of the patent or whose use the third party knows or should have known is prohibited without the consent of the patent holder, or offer the process for use within the territory of the contracting member states in which that patent has effect; or
• offer, place on the market, use, import or store for those purposes a product obtained directly by a process which is the subject matter of the patent.

All such acts will be considered as direct infringement. In addition, the patent holder has the right to prevent any indirect use of its invention. Accordingly, any third party that does not have the patent holder's consent may neither supply nor offer to supply, within the territory of contracting member states in which that patent has effect, nor exploit the patented invention with means relating to an essential element of that invention for putting it into effect therein, where the third party knows or should have known that those means are suitable and intended for putting that invention into effect.

However, certain exemptions apply – for example, if the third party:

• has a prior use right (Article 28 of the Agreement on a UPC); or
• acted for experimental purposes relating to the subject matter of the patented invention (Article 27 of the Agreement on a UPC).

The rights provided under Articles 25 and 26 of the Agreement on a UPC are also subject to exhaustion in the case of a product covered by the relevant patent that has been placed on the market in the European Union by or with the consent of the patent holder, unless there are legitimate grounds for the patent holder to oppose further commercialisation of the product.

4.2 How is infringement determined?

The person asserting the patent must submit:

• the facts and evidence relied on to prove infringement; and
• the reasons why those facts constitute patent infringement, including:
• • arguments of law; and
  • if required, the proposed claim construction.

The UPC will then assess whether it is convinced of patent infringement and decide accordingly.

4.3 Does your jurisdiction apply the doctrine of equivalents?

Article 69 of the European Patent Convention (EPC) and the Protocol to Article 69 of the EPC contain the rules for determining the scope of protection of the claims of a European patent and are included in the laws applied by the UPC under Article 24(1)(c) of the Agreement on a UPC.

Article 2 of the protocol provides that: "For the purpose of determining the extent of protection conferred by a European patent, due account shall be taken of any element which is equivalent to an element specified in the claims."

The Agreement on a UPC does not mention specifically the doctrine of equivalents and we have not yet seen any UPC case law dealing with it. Therefore, it is hard to predict:

• whether the UPC will apply the doctrine of equivalents; and
• which testing standards it will apply.

4.4 Is wilful infringement recognised? If so, what is the applicable standard?

As noted in question 4.1, infringement may take place irrespective of whether the infringer acts wilfully. If infringement is found, the UPC may grant an injunction (Article 63 of the Agreement on a UPC).

There is more differentiation when it comes to compensation for damages resulting from infringement:

• If a person knowingly, or with reasonable grounds to know, engaged in infringing activity, the UPC may order that person (upon request) to pay the injured party damages appropriate to the harm actually suffered (Article 68(1) of the Agreement on a UPC).
• Where the infringer did not knowingly, or with reasonable grounds to know, engage in the infringing activity, the UPC may order the recovery of profits or the payment of compensation (Article 68(4) of the Agreement on a UPC).

5 Bringing a claim

5.1 What measures can a patent holder take to enforce its rights in your jurisdiction? Are interim measures available before receiving a ruling on the merits?

A patent holder may bring proceedings on the merits, requesting:

• a permanent injunction (Article 63 of the Agreement on a Unified Patent Court (UPC));
• a recall of products from the channels of commerce (or deprivation of their infringing property); and
• the destruction of the products and/or of the materials and implements concerned (Article 64(2) of the Agreement on a UPC for more details).

In addition, the plaintiff may request:

• damages (Article 68 of the Agreement on a UPC); and
• the communication of sales information in the chains of commerce (Article 67(1) of the Agreement on a UPC) and books to be laid open to calculate damages (Rules 131(1)(c) and 141 of the Rules of Procedure of the UPC (RoP)).

The patent holder may also apply for a preliminary injunction (Article 62 of the Agreement on a UPC):

• to prevent an imminent infringement; or
• to prohibit the continuation of an infringement that has already taken place.

The decision lies at the discretion of the UPC. The UPC has the power to order the applicant to provide security for the harm that the defendant is likely to suffer as a result of grant of the provisional injunction. Moreover, the UPC may order a preliminary injunction ex parte – that is, without hearing the other party – in particular where any delay is likely to cause irreparable harm to the patent holder (Articles 62(5) and 60(5) of the Agreement on a UPC). The UPC also has the discretion to weigh the parties' interests, taking into account in specific the potential harm resulting from the granting or refusal of the preliminary injunction for both parties (Article 62(2) of the Agreement on a UPC). The UPC may also order the seizure or delivery up of the products suspected of infringing a patent so as to prevent their entry into, or movement within, the channels of commerce (Article 62(3) of the Agreement on a UPC). In addition, a patent holder may request the seizure of both movable and immovable property, including the blocking of bank accounts. If a provisional measure is granted without hearing the affected party, that party must be given notice without delay and, at the latest, immediately at the time of the execution of the measures (Rules 197(2) and 212(2) of the RoP; Article 60(6) of the Agreement on a UPC also mentions notification "after" execution).

5.2 What is the limitation period for patent infringement in your jurisdiction?

According to Article 72 of the Agreement on a UPC, actions relating to all forms of financial compensation may not be brought more than five years after the date on which the applicant became aware, or had reasonable grounds to become aware, of the last fact justifying the action. This means that claims other than those for financial compensation should not be affected.

5.3 Must the alleged infringer be notified in advance before a claim is brought?

There is no explicit obligation for a plaintiff to notify the alleged infringer prior to bringing a claim. However, Article 69(3) of the Agreement on a UPC states that a party should bear any unnecessary costs it has caused the other party. If the alleged infringer accepts all claims brought by the infringed party when the claim is brought, the plaintiff might be considered as having caused unnecessary costs by bringing the action. Thus, it might be sensible to send a notification in advance to avoid this scenario as a precaution.

The UPC may also, if it considers the matter exceptional, deny or reduce the reimbursement of court fees.

5.4 What are the procedural and substantive requirements for bringing a claim for patent infringement? How much detail must be presented in the complaint?

To bring an action, the plaintiff must file a statement of claim with the division chosen in accordance with Article 33 of the Agreement on a UPC. The statement of claim must include, among other things:

• the names and addresses of the parties;
• details of the patent concerned;
• information about any prior or pending proceedings relating to that patent;
• the nature of the claim;
• the order or the remedy sought;
• an indication of the facts and the evidence relied on;
• the reasons why those facts constitute an infringement (see also question 4.2);
• the value of the action; and
• a list of the documents, together with:
• • any request that all or part of any such document need not be translated; and
  • any request that the documents be kept confidential.

Further details as regards the content may be found in Rule 13 of the RoP. Also, certain language requirements must be met (eg, see Rule 14 of the RoP).

5.5 Are interim remedies available in patent litigation in your jurisdiction? If so, how are they obtained and what form do they take?

The UPC may grant interim remedies such as:

• preliminary injunctions (see Article 62 of the Agreement on a UPC and question 5.1);
• orders to produce (Article 59 of the Agreement on a UPC) or preserve evidence;
• orders to inspect premises (Article 60 of the Agreement on a UPC); and
• freezing orders (Article 61 of the Agreement on a UPC) if the applicant has presented "reasonably available evidence" to support the infringement claim.

To obtain such orders, an application for provisional measures must be lodged. This can be submitted either before or after proceedings on the merits have been started before the UPC.

The application must contain, among other things:

• the names and addresses of the parties;
• details of the patent concerned;
• information on any prior or pending proceedings relating to the patent;
• an indication of the provisional measures requested;
• the reasons why provisional measures are necessary:
• • to prevent or forbid the continuation of an alleged infringement; or
  • to make such continuation subject to the lodging of guarantees; and
• the facts and evidence relied on, including evidence to support the claim that provisional measures are necessary (see further details in Rule 206 of the RoP).

The applicant may even request that provisional measures be ordered without hearing the defendant and the UPC has discretion to decide whether to comply with this request.

5.6 Under what circumstances must security for costs and/or damages incurred by the other party be provided?

At any time during the proceedings, following a reasoned request by one party, the UPC may order the other party to provide, within a specified period, adequate security for the legal costs and other expenses incurred and/or to be incurred by the requesting party, which the other party may be liable to bear (Article 69(4) of the Agreement on a UPC; Rule 158(1) of the RoP). Before making such an order, the UPC will hear the parties (Rule 158(2) of the RoP).

Also, the enforcement of a decision may be subject to the provision of security or an equivalent assurance to ensure compensation for any damage suffered, in particular in the case of injunctions (Article 82(2) of the Agreement on a UPC). For example, the UPC may order the applicant of a preliminary injunction to provide adequate security for appropriate compensation for any injury likely to be caused to the defendant which the applicant may be liable to bear in the event that the UPC revokes the order for provisional measures at a later stage (Rule 211(5) of the RoP). Also, measures to preserve evidence may be ordered subject to the lodging of adequate security by the applicant to ensure compensation in case of any future damages incurred by the defendant due to the subsequent revocation or lapse of the measures, or where it is later found that no (threat of) infringement existed (Article 60(7)(9) of the Agreement on a UPC).

6 Disclosure and privilege

6.1 What rules on disclosure apply in your jurisdiction? Do any exceptions apply?

The Unified Patent Court (UPC) does not provide for broad disclosure as is known in common law jurisdictions. However, at the request of a party, it may order the opposing party to produce evidence, provided that the applicant:

• has presented reasonably available evidence sufficient to support its claims; and
• in substantiating those claims, has specified the evidence and information to be communicated (including banking, financial or commercial documents) lying in the control of the opposing party or a third party (Article 59 of the Agreement on a UPC).

The UPC may order the opposing party or a third party to present such evidence and information, subject to the protection of confidential information. In certain cases, the UPC may also order the preservation of evidence and an inspection of premises (Article 60 of the Agreement on a UPC).

The proceedings for the award of damages may include a procedure to lay open books, to allow the claimant to obtain the relevant information to determine its claim for damages.

To protect the trade secrets, personal data or other confidential information of a party to the proceedings or of a third party, or to prevent an abuse of evidence, the UPC may order that:

• the collection and use of evidence in proceedings before it be restricted or prohibited; or
• access to such evidence be:
• • restricted to specific persons (Article 58 of the Agreement on a UPC); and
  • subject to appropriate terms of non-disclosure (Rule 190 of the Rules of Procedure of the UPC (RoP)).

6.2 What rules on third-party disclosure apply in your jurisdiction? Do any exceptions apply?

See question 6.1.

6.3 What rules on privilege apply in your jurisdiction? Do any exceptions apply?

Article 48(5) of the Agreement on a UPC provides that representatives of the parties shall enjoy the rights and immunities necessary for the independent exercise of their duties – including the privilege from disclosure – in proceedings before the UPC in respect of communications between a representative and the party or any other person under the conditions laid down in the RoP.

Rule 287 of the RoP provides for attorney-client privilege. Where a client seeks advice from a lawyer or a patent attorney whom it has instructed in a professional capacity – whether in connection with proceedings before the UPC or otherwise – any confidential communication (whether written or oral) between them relating to the seeking or the provision of that advice is privileged from disclosure, while it remains confidential, in any proceedings before the UPC.

This privilege also applies to communications between a client and a lawyer or patent attorney employed by the client and instructed to act in a professional capacity, whether in connection with proceedings before the UPC or otherwise.

Unless expressly waived by the client, the privilege extends to:

• the work product of the lawyer or patent attorney (including communications between lawyers and/or patent attorneys employed in the same firm or entity or between lawyers and/or patent attorneys employed by the same client); and
• any record of a privileged communication.

The privilege according to the UPC rules also prevents a lawyer or patent attorney and his or her client from being questioned or examined about the contents or nature of their communications.

7 Evidence

7.1 What procedure(s) exist for collecting and presenting evidence in patent infringement litigation?

Any party that relies on certain facts must prove them (see Article 54 of the Agreement on a Unified Patent Court (UPC) on the burden of proof). That means a party making a statement of fact that is contested or likely to be contested by the other party must indicate and, if available, produce the means of evidence to prove it. In case of failure to indicate the means of evidence regarding a contested fact, the UPC will take such failure into account when deciding the issue in question (Rules 171 and 172 of the Rules of Procedure of the UPC (RoP)). A factual assertion that is not disputed by any party is deemed to be undisputed (Rule 171(2) of the RoP).

In proceedings before the UPC, the means of giving or obtaining evidence include in particular the following (Article 53(1) of the Agreement on a UPC):

• hearing of the parties;
• requests for information;
• production of documents;
• hearing of witnesses;
• opinions by experts;
• inspection;
• comparative tests or experiments; and
• sworn statements in writing (affidavits).

7.2 What types of evidence are permissible in your jurisdiction? Is expert evidence accepted?

In proceedings before the UPC, the means of evidence include (see Rule 170(1) of the RoP):

• written evidence, whether printed, handwritten or drawn – in particular, documents, written witness statements, plans, drawings and photographs;
• expert reports and reports on experiments carried out for the purpose of the proceedings;
• physical objects – in particular devices, products, embodiments, exhibits and models; and
• electronic files and audio/video recordings.

The possibility for the parties to produce expert evidence is without prejudice to the right of the UPC to appoint court experts in relation to a specific technical or other (eg, legal or economic) question in relation to the action (Article 57(1) of the Agreement on a UPC).

7.3 What are the applicable standards of proof?

The UPC must be convinced that there has been infringement of the asserted patent. The standard that the UPC will apply in specific cases (eg, a very high probability that infringement of the asserted patent has occurred) remains to be seen.

7.4 On whom does the burden of proof rest?

In general, the burden of the proof of facts rests with the party that is seeking to rely on those facts (Article 54 of the Agreement on a UPC). Also, a reversal of the burden of proof applies under certain conditions – for example, if the subject matter of a patent is a process for obtaining a new product, an identical product produced without the consent of the patent holder will, in the absence of proof to the contrary, be deemed to have been obtained by the patented process (see Article 55 of the Agreement on a UPC). The same principle is also applied where:

• there is a substantial likelihood that the identical product was made by the patented process; and
• the patent holder has been unable, despite reasonable efforts, to determine the process actually used to produce that identical product.

8 Claim construction

8.1 Is there a procedure for construing claims during a patent infringement action? If so, when and how is it performed?

There is no separate procedure for claim construction as is known, for example, in the United States (Markman hearing). Unified Patent Court (UPC) infringement proceedings comprise:

• a written procedure;
• an interim procedure;
• an oral procedure; and
• the decision of the UPC.

According to Rule 104(a)(b) of the Rules of Procedure of the UPC (RoP), the interim conference enables the judge-rapporteur to identify the main issues and determine which relevant facts are in dispute. Where appropriate, the judge-rapporteur will clarify the position of the parties as regards those issues and facts. This might include discussions on claim construction. However, we expect that the entire case will be dealt with finally in the oral procedure before the UPC decides the case.

8.2 What is the legal standard used to define disputed claim terms?

According to Article 24(1)(c) of the Agreement on a UPC, the European Patent Convention (EPC) is applicable. Article 69 of the EPC provides that the extent of the protection conferred by a European patent or a European patent application will be determined by the claims. The description and drawings will be used to interpret the claims. Article 1 of the Protocol on the Interpretation of Article 69 of the EPC provides that a court should find a balance between the fair protection of the patent holder and a reasonable degree of legal certainty for third parties. It remains to be seen whether the UPC will develop this further in future case law.

8.3 What evidence does the court consider in defining the claim terms?

The UPC may consult the patent description and drawings when construing the patent claims. In this regard, the patent description should be its own lexicon for the terms used in the claims. It remains to be seen whether (and if so, to what extent) the UPC will accept the prosecution file to be considered for claim construction.

8.4 Can the claims of a patent be amended in the course of the proceedings?

Yes, the defence to a revocation action or to a counterclaim for revocation (which may be brought by a defendant in infringement proceedings) may include an application to amend the patent (details are outlined in Rule 30 of the RoP).

9 Defences and counterclaims

9.1 What defences are typically available in patent litigation?

The main defences to an alleged infringement include:

• a denial of infringement based on a different claim construction and/or allegedly incorrect facts;
• the lack of validity of the patent in suit, which can be asserted by a counterclaim for revocation (Article 32(1)(e) of the Agreement on a Unified Patent Court (UPC));
• an alleged right to use the invention based on a valid licence agreement or a prior use right (Article 28 of the Agreement on a UPC); or
• exhaustion of the patent holder's rights because the allegedly infringing product has been placed on the market in the European Union by, or with the consent of, the patent holder (Article 29 of the Agreement on a UPC).

In addition, any party which is concerned that it might be sued for patent infringement may file a protective letter at the UPC Registry if there is a likelihood that the patent holder might apply for provisional measures (Rule 207 of the Rules of Procedure of the UPC (RoP)). The protective letter can outline:

• why the product/process does not infringe the patent;
• why the patent is invalid; and/or
• why granting a preliminary injunction would be disproportionate.

A protective letter is held by the UPC Registry and is not made publicly available. If an application for provisional measures is made, the registry will forward the protective letter to the judge(s) hearing the application for provisional measures.

9.2 Can the defendant counterclaim for revocation or invalidation of the patent? If so, on what grounds and what is the process for doing so?

Yes, a defendant in infringement proceedings may bring a counterclaim for revocation together with its statement of defence (Articles 32(1)(e) and 33(3) of the Agreement on a UPC; Rule 25(1) of the RoP). Notably, the counterclaim for revocation can be brought without the applicant having to file notice of opposition with the European Patent Office (Article 33(8) of the Agreement on a UPC). The local or regional division concerned shall, after hearing the parties, have the discretion to:

• proceed with both the action for infringement and with the counterclaim for revocation and request the president of the Court of First Instance to allocate from the pool of judges, in accordance with Article 18(3), a technically qualified judge with qualifications and experience in the field of technology concerned;
• refer the counterclaim for revocation for decision to the Central Division and proceed with the action for infringement;
• refer the counterclaim for revocation for decision to the Central Division and suspend or proceed with the action for infringement (bifurcation); or
• with the agreement of the parties, refer the case for decision to the Central Division.

In particular, Rule 37(4) of the RoP provides that the infringement proceedings:

• may be stayed pending the outcome from the invalidity proceedings; and
• will be stayed in circumstances where there is a high likelihood that the relevant claims of the patent will be held to be invalid.

9.3 Are there any grounds on which an otherwise valid patent may be deemed unenforceable against a defendant?

The following should exclude a person making use of the patented invention from being successfully sued for infringement:

• a valid licence;
• a valid prior use right; and/or
• the exhaustion of rights

10 Settlement

10.1 Are mediation and/or other forms of settlement discussions required by the court in your jurisdiction or merely optional to the parties?

A Patent Mediation and Arbitration Centre has been established with seats in Ljubljana and Lisbon (Article 35 of the Agreement on a Unified Patent Court (UPC)). At any stage of the proceedings, if the UPC is of the opinion that the dispute is suitable for a settlement, it may propose that the parties make use of the centre to settle or explore a settlement of the dispute. In particular, the judge-rapporteur will, during the interim procedure, explore with the parties the possibility of a settlement, including through mediation and/or arbitration, using the facilities of the centre (Article 52(2) of the Agreement on a UPC).

The parties may also, at any time in the course of proceedings, conclude their case by way of settlement, which will be confirmed by a decision of the UPC. A patent may not be revoked or limited by way of settlement (Article 79 of the Agreement on a UPC).

10.2 Can the proceedings be stayed or discontinued in view of settlement discussions?

Pursuant to Rule 295(m) of the Rules of Procedure of the UPC (RoP), in any case where the proper administration of justice so requires, the proceedings may be stayed. We expect this to be the case when mediation/arbitration takes place. According to Rule 295(d) of the RoP, proceedings may also be stayed at the joint request of the parties – for example, in the case of settlement negotiations.

10.3 Is it necessary to report the results of settlement discussions to the court? If so, how; and what are the implications?

If the parties have concluded their action by way of settlement, they must inform the judge-rapporteur. The UPC will then confirm the settlement by decision of the court, if requested by the parties, and the decision may be enforced as a final decision of the court (Article 79 of the Agreement on a UPC; Rule 365 of the RoP).

11 Court proceedings for infringement and validity

11.1 Are court proceedings in your jurisdiction public or private? If public, are any options available to the parties to keep the proceedings or related information confidential?

The proceedings will be open to the public unless the Unified Patent Court (UPC) decides to make them confidential, to the extent necessary:

• in the interests of one of the parties or other affected persons; or
• in the general interests of justice or public order (Article 45 of the Agreement on a UPC).

Accordingly, third parties may in general attend the interim conference (Rule 105 (2) of the Rules of Procedure of the UPC (RoP)) and the main oral hearing (Rule 115 of the RoP). Also, decisions and orders made by the UPC will be published (Rule 262(1)(a) of the RoP). Written pleadings and evidence lodged with the UPC and recorded by the UPC Registry will be available to the public upon reasoned request to the registry; the decision is taken by the judge-rapporteur after consulting the parties (Rule 262(1)(b) of the RoP).

However, a party may:

• request that certain information of written pleadings or evidence be kept confidential; and
• provide specific reasons for such confidentiality (Rule 262(2) of the RoP).

A party may also apply for an order that:

• certain information contained in its pleadings or the collection and use of evidence in proceedings be restricted or prohibited; or
• access to such information or evidence be restricted to specific persons (Rule 262A of the RoP).

The application shall contain the grounds upon which the applicant believes the information or evidence in question should be restricted in accordance with Article 58 of the Agreement on a UPC.

11.2 Procedurally, what are the main steps in patent infringement proceedings in your jurisdiction? Is patent validity handled in the same proceedings as infringement or is it handled separately? If separate validity proceedings are available, what are the main steps in those proceedings?

The UPC has jurisdiction over both patent infringement and revocation proceedings. Those proceedings can be brought as standalone actions or be part of the same proceeding – for example, if:

• a counterclaim for infringement is filed in revocation proceedings; or
• a counterclaim for revocation is brought in infringement proceedings.

The proceedings comprise in essence the following stages:

• the written procedure (approximately nine months at first instance);
• the interim procedure (approximately three months at first instance);
• the oral procedure (one day); and
• the subsequent decision (issued within six weeks).

Separate cost and damage proceedings might follow and in general decisions can be appealed. The stages in the appeal proceedings are the same as those at first instance.

11.3 What is the typical timeframe for patent infringement proceedings? If separate patent validity proceedings are available, with is the typical timeframe for those proceedings?

The expected duration of proceedings at first and second instance is 12 to 14 months (see question 11.2).

11.4 To what extent do the decisions of national or foreign courts or bodies influence the court's decision?

The UPC is a common court of contracting member states and is part of their judicial system (Article 21 of the Agreement on a UPC). Decisions of the Court of Justice of the European Union (CJEU) are hence binding on the UPC (see also Recital 10 and Article 20 of the Agreement on a UPC). The UPC may also refer legal questions to the CJEU.

Furthermore, the UPC recognises the principle of res judicata (Rule 362 of the RoP). That means in general that no case can be litigated twice before the UPC, if it is identical. Due to the lack of case law, it remains to be seen:

• how the UPC will shape the scope of res judicata when it comes to national judgments of other courts of the UPC states; and
• whether the UPC will consider itself bound by such decisions (eg, if a national revocation action was already granted or dismissed, whether that will have an impact on the other national parts of the European patent when attacked at the UPC).

12 Remedies

12.1 What remedies for infringement are available to a patent holder in your jurisdiction?

A patent holder may request:

• injunctions;
• recall or destruction of products;
• damages; and
• the communication of sales information and rendering of accounts to calculate its damage claim (see question 5.1).

12.2 Are punitive or enhanced damages available in your jurisdiction? If so, how are they determined?

No punitive damages exist under the Unified Patent Court (UPC) system (Article 68(2) of the Agreement on a UPC). In addition, when calculating damages, the UPC should observe the principles according to which:

• the injured party will be placed back in the position it would have been had no infringement taken place; and
• the infringer will not benefit from the infringement.

12.3 What factors will the courts consider when deciding on the quantum of damages?

The UPC can order the patent infringer to pay the injured party damages appropriate to the harm actually suffered by that party as a result of the infringement (Article 68(1) of the Agreement on a UPC). When the UPC sets the damages, it will:

• take into account all appropriate aspects, such as:
• • the negative economic consequences, including lost profits, which the injured party has suffered;
  • any unfair profits made by the infringer; and
  • in appropriate cases, elements other than economic factors, such as the moral prejudice caused to the injured party by the infringement; or
• alternatively, and in appropriate cases, set the damages as a lump sum on the basis of elements such as the amount of the royalties or fees which would have been due if the infringer had requested authorisation to use the patent in question.

If the infringer did not knowingly, or with reasonable grounds to know, engage in the infringing activity, the UPC may order the recovery of profits or the payment of compensation only.

There must be a causal link between the harm for which damages are payable and the infringement.

13 Appeals

13.1 Can the decision of a first instance court or body be appealed? If so, on what grounds and what is the process for doing so? Please also describe the availability and process for additional levels of appeal.

A decision of the Court of First Instance may be appealed before the Court of Appeal in Luxembourg by any party which has been unsuccessful, in whole or in part, in its submissions, within two months of the date of the notification of the decision (Article 73(1) of the Agreement on a Unified Patent Court (UPC)). The statutory filing deadline is even shorter for certain orders. The appeal against a decision or an order of the Court of First Instance may be based on points of law and matters of fact (Article 73(3) of the Agreement on a UPC). No new facts nor evidence may be introduced, unless the party submitting the new facts/evidence could not reasonably have been expected to do so during the proceeding before the Court of First Instance. No further appeal is available.

An appeal generally has no suspensive effect, unless the Court of Appeal decides otherwise at the request of one of the parties (Article 74(1) of the Agreement on a UPC). Certain exemptions exist – for example, in case of an appeal filed against the decision in a revocation action or on a counterclaim for revocation.

13.2 What is the average time for each level of appeal in your jurisdiction?

Similar to proceedings at first instance, the duration of appeal proceedings is approximately one year (see questions 11.2 and 11.3).

14 Costs, fees and funding

14.1 What costs and fees are incurred when litigating in your jurisdiction? Can the winning party recover its costs?

Costs incurred may comprise:

• court fees (see the Table of Court Fees);
• the costs of experts;
• the costs of witnesses; and
• translation and interpretation costs.

Reasonable and proportionate legal costs and other expenses incurred by the successful party will, as a general rule, be borne by the unsuccessful party, unless equity requires otherwise, up to a ceiling set in accordance with the Rules of Procedure (Article 69(1) of the Agreement on a Unified Patent Court (UPC)). Where the successful party wishes to seek a cost decision, it must lodge an application for a cost decision within one month of service of the decision (Rule 151 of the Rules of Procedure of the UPC (RoP)).

The UPC may also order an interim award of costs to the successful party in the decision on the merits or in a decision for the determination of damages, subject to any conditions that it may decide (Rule 150 of the RoP).

14.2 Are contingency fee and/or other alternative fee arrangements permitted in your jurisdiction?

The winning party is entitled to recover reasonable and proportionate costs for representation. The Administrative Committee will adopt a scale of ceilings for the recoverable costs by reference to the value of the proceedings. The scale may be adjusted from time to time (see Rule 152 of the RoP).

14.3 Is third-party litigation funding permitted in your jurisdiction?

We are not aware of any limitations as regards third-party litigation funding. A party who is a natural person and who is unable to meet the costs of the proceedings, either wholly or in part, may at any time apply for legal aid (Article 71 of the Agreement on a UPC). The conditions for granting of legal aid are laid down in Rules 375 and following of the RoP.

15 Trends and predictions

15.1 How would you describe the current patent litigation landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

Since it commenced operations on 1 June 2023, the Unified Patent Court (UPC) has attracted a number of cases in the two-digit range. As per 21 August 2023, 43 pending proceedings had been registered in the Case Management System (CMS). However, there should be more, since only two applications for provisional measures are visible in the CMS; while the UPC itself announced on 29 June 2023 that "6 protective measures (more specifically, 4 applications for provisional measures; 2 applications to preserve evidence)" were pending at that time, and it is expected that more may have been filed since then.

Currently, 32 out of the 43 registered proceedings have been filed with German divisions of the UPC. This applies to 27 of the 35 registered infringement proceedings on the merits. Within the German local divisions, the division located in Munich has received many cases (14 had been registered in Munich as of 21 August 2023). As certain options for forum shopping exist in infringement proceedings, this suggests that litigants have great trust in the German divisions.

Many litigants are well-known companies which already litigate frequently before the national courts. This shows that the UPC is perceived as an attractive venue for European patent litigation. The speedy proceedings and the far-reaching territorial scope of the decision may be some of the reasons why litigants are choosing this venue.

When it comes to the technical split, we see a high number of electronic patents at stake in infringement proceedings, followed by mechanical, bio/pharm and medical devices patents. However, as the absolute number of cases is still not extremely high, developments should be monitored as trends might change over the course of time.

16 Tips and traps

16.1 What would be your recommendations to parties facing patent litigation in your jurisdiction and what potential pitfalls would you highlight?

As the new Unified Patent Court (UPC) is still very young, we highly recommend that further developments as regards filing numbers and case law be monitored on an ongoing basis. It will be interesting to track these to gain a better understanding of how the UPC is handling cases. The first judgments in main proceedings are likely expected around mid-2024, while a few preliminary injunction decisions are out already.

Litigants should be sufficiently prepared in view of the extremely short filing deadlines. This is exacerbated by the fact not only that both infringement and validity may form part of a single proceeding, but also that infringing acts in various jurisdictions may be at stake. Furthermore, we expect – particularly at the beginning – that numerous disputes will arise in relation to formal issues, since the UPC statutes are untested thus far. Litigants should thus prepare their arguments and evidentiary documents so that they have everything at hand.

Furthermore, it will be important to rely on a strong team of litigators who can handle such proceedings from not only the legal but also the technical standpoint.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.