In this episode, we will briefly discuss the prerequisites of the period of limitations under the Unified Patent Court Agreement (the UPCA) and potential interpretations of the new legal framework.
Dominik, you have certainly heard the saying: "Those who are late, will be punished by life itself."? This phrase, first said in 1989 on the occasion of a meeting between Gorbachev and Honnecker, still serves as a reminder today – and is also relevant under the UPCA.
As a reminder for our listeners Art. 72 UPCA regulates the period of limitation and reads as follows: Without prejudice to Article 24 (2) and (3), 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 act justifying the action.
Let us have a look at the individual prerequisites of Art. 72 UPCA: First, let us discuss the clause "Without prejudice to Article 24 (2) and (3)"
The provision on the period of limitation starts with a reference to Art. 24 UPCA which concerns the sources of law on which the UPC is to base its decisions. Now, interestingly, no reference is made to Art. 24 (1) (e) UPCA which provides for the application of national law.
The key question therefore seems to be: Is national law on the period of limitation applicable in addition to Art. 72 UPCA and, if so, to which extend? There seem to be two possibilities on how to interpret the introductory reference:
- Supplementary application of national law – "filling the gap": National law is applicable only concerning further details which are not answered by Art. 72 UPCA (i.e., for example, the exact calculation of limitation periods, or national provisions on the interruption or suspension of limitation).
- Additional application of national law: National law is applicable in addition to Art. 72 UPCA – but only if the relevant national provision would result in a shorter limitation period. Which of these interpretations makes more sense in your opinion, Nadine?
Well, the first possibility leads to a practical dilemma. For in proceedings for bundle patents and even more so for unitary patents, a lot of national provisions which are not harmonized are potentially applicable. Such an interpretation must therefore be rejected from a practical point of view. Rather, the provision should be interpreted to mean that if the underlying claim originates from national law, national limitation law is also applicable. An example is the assertion of a claim for compensation for the use of a patent application, to which the UPC applies Art. 67 EPC which refers to national law. In contrast, a claim for damages, for example, is directly based on the UPCA, so that recourse to national limitation provisions is prohibited.
So, let's turn to the next phrase, which is "... actions relating to all forms of financial compensation ..."
Art. 72 UPCA deals with the period of limitation for "actions relating to all forms of financial compensation". Such actions encompass, for example, regular actions for the award of damages and actions for compensation for lifted procedural measures. Any other non-financial claims, such as claims for injunctive relief, recall and destruction (in the terminology of the UPCA: "corrective measures"), shall not be affected by this limitation. But why is Art. 72 UPCA explicitly limited to financial claims?
One possible explanation could be that the fact that injunctive relief is not covered by Art. 72 UPCA is unlikely to have any effect at all in most cases – at least from a practical point of view: If the last infringing act was committed more than 5 years earlier, it may be difficult to argue that there is still a risk of repetition – which is required for a claim for injunctive relief – or a corresponding need for legal protection could be lacking.
The next phrase to be analysed is: "... may not be brought ..."
The wording of Art. 72 UPCA, according to which actions "may not be brought" before the Court raises the question whether this refers to the admissibility of the action in the first place or whether the defendant needs to raise the objection of limitation to defend against the asserted claim.
Although the wording may indicate that an action would be inadmissible in case of limitation of the claim in question, and Art. 72 UPCA is part of chapter IV of the UPCA on "Procedural Provisions", it should be noted that the (equally binding) French version of Art. 72 UPCA speaks of prescription" and the English wording limitation" also seems to indicate that the claim only falls under the statute of limitation if the defendant raises an objection (the same also applies under German law). Taking into account that the UPCA often refers to powers of the Court when it actually determines the scope of claims, it seems more likely that limitation only applies in cases where the defendant raises it as a defense against the action. In any case, it is advisable to raise the corresponding objection, even if there is a possibility that it is a procedural rule that prevents the claim from being asserted ex officio.
And finally, the rest of the Article reads "... 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":
So, turning to the specific way of calculation of the limitation period under Art. 72 UPCA, claims for financial compensation must not be asserted more than five years after the date on which the applicant became aware of the last fact justifying the action. The specific calculation of the limitation period is to be carried out according to Rules 300 et seqq. RoP.
The limitation period must be calculated for every single act separately. In the event of an ongoing infringement, only claims based on acts committed more than five years earlier can become statute-barred.
Art. 72 UPCA makes refences to the knowledge of the applicant, not the knowledge of the creditor. This is different under national German law: e, the standard limitation period of three years starts at the end of the year in which the claim arose and the creditor gained knowledge or should have gained knowledge of the circumstances establishing the claim – so-called relative limitation period. Since the UPCA is to be interpreted autonomously, a recourse to national law for alleged gaps in the provisions of the UPCA is prohibited – e.g., for the suspension and/or interruption of the limitation period, which are not provided for by the UPCA. Rather, the case-law of the UPCA will have to establish a uniform practice.
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.