The Unified Patent Court

AGREEMENT ON A UNIFIED PATENT COURT

The agreement on a Unified Patent Court was signed on 19 February 2013 and published as the Council of the European Union Notice no. 2013/C 175/01 (see footnote 1) (the "Unified Patent Court Agreement"). All the current EU Member States except Poland, Spain and Croatia have signed the Unified Patent Court Agreement. Apart from Austria none have yet ratified the Agreement.

Attached to the Unified Patent Court Agreement is a Statute laying down the organisation and functioning of the Court.

Contracting Member States

A Member State which is party to this Unified Patent Court Agreement is defined as a "Contracting Member State".

Note A "Contracting Member State" may not necessarily be the same as a "participating Member State" as referred to in the unitary patent and translation Regulations. (All the EU Member States except Italy and Spain are participating Member States).

Scope of application of the Unified Patent Court Agreement

The Unified Patent Court Agreement provides for the establishment of a Unified Patent Court which is common to the Contracting Member States. It applies to any:

1. European patent with unitary effect;
2. Supplementary protection certificate issued for a product protected by a European patent or European patent with unitary effect;
3. European patent which has not yet lapsed at the date of entry into force of the Agreement or was granted after that date, without prejudice to Article 83; and
4. European patent application which is pending at the date of entry into force of this Agreement or which is filed after that date, without prejudice to Article 83.

Note It applies to European patents generally, even if there is no European patent with unitary effect. (Article 83 is the transitional regime). In the Agreement the term "European patent", when used by itself, is specifically defined to mean a patent granted under the provisions of the EPC, which does not benefit from unitary effect. When the Agreement is referring to the "European patent with unitary effect" this specific phrase is used.

The Unified Patent Court

The Unified Patent Court consists of the following:

• The Court of First Instance;
• The Court of Appeal.

Although not part of the Court, a patent mediation and arbitration centre is also established by the Unified Patent Court Agreement. It has its seats in Ljubljana and Lisbon.

The Unified Patent Court must cooperate with the Court of Justice of the European Union ("CJEU") to ensure the correct application and uniform interpretation of EU law.

The Court of First Instance

The Court of First Instance has:

• A central division;
• Local divisions; and
• Regional divisions.

Central division

This has its seat in Paris, with sections in London and Munich. The cases are distributed between the courts (and according to the International Patent Classifications of WIPO) as follows:

• Paris
  
  
  • (B) Performing operations, transporting
  • (D) Textiles, paper
  • (E) Fixed constructions
  • (G) Physics
  • (H) Electricity
• London
  
  
  • (A) Human necessities
  • (C) Chemistry, metallurgy
• Munich
  
  
  • (F) Mechanical engineering, lighting, heating, weapons, blasting

Local division

These can be set up in a Contracting Member State upon its request – and additional local divisions (up to a maximum of four) can be set up in Contracting Member States for every 100 patent cases per calendar year commenced in that Contracting Member State during three successive years.

Regional division

These can be set up for two or more Contracting Member States upon their request. The regional division may hear cases in multiple locations.

Composition of the panels of the Court of First Instance

The panels have a multinational composition of three judges - although the parties may agree to have a single judge (who must be a legally (rather than technically) qualified judge). Any panel of the Court of First Instance must be chaired by a legally qualified judge.

For the central division the composition is:

• Two legally qualified judges who are nationals of different Contracting Member States; and
• One technically qualified judge (with qualifications and experience in the field of technology concerned) allocated from a "Pool of Judges".

For regional divisions, the composition is:

• Two legally qualified judges who are nationals of the Contracting Member States hosting the division; and
• One legally qualified judge who is not a national of the Contracting Member States hosting the division.

For local divisions:

• Three legally qualified judges who are nationals of Contracting Member States, of whom one is (and a second who is not) a national of the Contracting Member State hosting the local division. If the number of cases heard by that local division is more than 50 over a three year period, the third judge will be a national of the Contracting Member State hosting the local division. Otherwise it will be a national of another Member State.

In actions before the local or regional division any of the parties, or the local or regional division itself, may ask for a technically qualified judge to be appointed.

The Court of Appeal

The Court of Appeal is in Luxembourg. Its has panels of:

• Three legally qualified judges (one of whom will chair the panel) who are nationals of different Contracting Member States; and
• Two technically qualified judges (with qualifications and experience in the field of technology concerned) allocated from the Pool of Judges.

Judges

The Court judges must have proven experience in the field of patent litigation.

• Legally qualified judges shall possess the qualifications required for appointment to judicial offices in a Contracting Member State.
• Technically qualified judges shall have:
  
  
  • A university degree;
  • Proven experience in a field of technology; and
  • Proven knowledge of civil law and procedure relevant in patent litigation.

Relationship with the Court of Justice of the European Union ("CJEU")

The Unified Patent Court must cooperate with the CJEU to ensure the correct application and uniform interpretation of EU law – and decisions of the CJEU are binding on the Court.

Jurisdiction of the Unified Patent Court

Essentially the international jurisdiction of the Unified Patent Court is the same as that of courts of the EU Member States and its decisions cover the territory of those Contracting Member States for which the European patent has effect.

Article 32(1) of the Unified Patent Court Agreement provides that the Court shall have exclusive competence in respect of:

1. actions for actual or threatened infringements of patents and supplementary protection certificates and related defences, including counterclaims concerning licences (see footnote 2);
2. actions for declarations of non-infringement of patents and supplementary protection certificates;
3. actions for provisional and protective measures and injunctions;
4. actions for revocation of patents and for declaration of invalidity of supplementary protection certificates;
5. counterclaims for revocation of patents and for declaration of invalidity of supplementary protection certificates;
6. actions for damages or compensation derived from the provisional protection conferred by a published European patent application;
7. actions relating to the use of the invention prior to the granting of the patent or to the right based on prior use of the invention;
8. actions for compensation for licences on the basis of Article 8 of Regulation (EU) No 1257/2012; and
9. actions concerning decisions of the European Patent Office in carrying out the tasks referred to in Article 9 of Regulation (EU) No 1257/2012. Article 32(2) of the Unified Patent Court Agreement provides that "The national courts of the Contracting Member States shall remain competent for action relating to patents and [SPCs] which do not come within the exclusive jurisdiction of the [Unified Patent] Court."

Where must proceedings be brought?

Although the position is complicated, essentially, all the proceedings referred to in (a) to (h) above may be brought in either the central, regional or local divisions – but there are specific requirements which must be fulfilled.

For example:

• Proceedings referred to in (a) above (actions for actual or threatened infringements of patents and supplementary protection certificates and related defences) can be brought in:
  
  
  • the local division hosted by the Contracting Member State where the actual or threatened infringement has occurred or may occur, or the regional division in which that Contracting Member State participates;
  • the local division hosted by the Contracting Member State where the defendant or, in the case of multiple defendants, one of the defendants has its residence, or principal place of business, or in the absence of residence or principal place of business, its place of business, or the regional division in which that Contracting Member State participates; or
• Where proceedings referred to in (a) above are brought against defendants having their residence etc outside the territory of the Contracting Member States, the proceedings must be brought before the local division where the actual or alleged infringement has occurred, or may occur, or the regional division in which the Contracting Member State participates (or if no such local or regional division, before the central division).
• Parties may agree to bring actions referred to in (a) to (h) above before the division of their choice.
• Proceedings referred to in (i) above must be brought in the central division.
• For a transitional period of seven years (which could be prolonged by up to a further seven years) after the date of entry into force of the Unified Patents Court Agreement the following may be brought before national courts or other competent authorities (see footnote 3):
  
  
  • actions for infringement or revocation of a European patent (see footnote 4);
  • actions for infringement or a declaration of invalidity of an SPC.

Note The example above is just an example and is incomplete. Article 33 of the Unified Patent Court Agreement has to be checked in detail to establish the competence of the divisions of the Court of First Instance to deal with specific proceedings.

Rules of procedure

The Unified Patent Court Agreement sets out some basic procedural rules – but the "Rules of Procedure" have yet to be adopted by the Administrative Committee (see footnote 5). Amongst other things:

• The litigation must be dealt with in ways which are proportionate to the importance and complexity involved and will be actively managed by the Court;
• Those entitled to bring patent actions include:
  
  
  • The patent proprietor;
  • The holder of an exclusive licence under the patent – provided that the licensing agreement does not provide otherwise (and the patent proprietor must be given prior notice); and
  • The holder of an non-exclusive licence under the patent in so far as expressly permitted by the licence – and the patent proprietor is given prior notice.

In actions brought by a licence holder, the patent proprietor shall be entitled to join the action - - but if the patent proprietor does not take part in the proceedings the validity of the patent cannot be contested in an infringement action.

• The parties can be represented by:
  
  
  • lawyers authorised to practice before a court of a Contracting Member State;
  • European Patent Attorneys who are entitled to act before the EPO and have appropriate qualifications such as a European Patent Litigation Certificate.

Patent attorneys may also assist and shall be entitled to speak at hearings in accordance with the Rules of Procedure.

• Representatives of the parties shall enjoy the rights and immunities necessary for the independent exercise of their duties, including privilege from disclosure in proceedings before the court in respect of communications between a representative and the party or any other person.

Note The rules on privilege vary considerably within Europe. It will be noted that privilege is only expressly said to extend to communications with a "representative"– i.e. a lawyer of a Contracting Member State or a relevant European Patent Attorney.

• The proceedings shall consist of a written, an interim and an oral procedure (see footnote 6). In the interim procedure the judge may convene an interim hearing and shall in particular explore with the parties the possibility of a settlement using the facilities of the patent mediation and arbitration centre.
• Decisions on the merits may only be based on grounds, facts and evidence which were submitted by the parties or introduced into the procedure by an order of the Court and on which the parties have had an opportunity to present their comments (see footnote 7).

Note This may have a significant impact on the way the technical judges are able to reach their decisions.

Powers of the Court

The Court has power to impose such measures, procedures and remedies as are laid down in the Agreement (see footnote 8). It shall decide in accordance with requests submitted by the parties and shall not award more than is requested (see footnote 9).

Note It does not have power where nothing is laid down.

Validity, damages and costs

The main powers in relation to validity, damages and costs include:

• Deciding on the validity of a patent – which it may revoke in whole or in part;
• Awarding damages;

Note The provisions relating to damages introduce non-traditional compensation (e.g. damages for moral prejudice) and do not make it clear precisely how the damages are to be arrived at in any given situation.

• Ordering the payment of costs; and
• Ordering the payment of security for costs.

Other powers

Other powers include:

• Appointing Court experts;
• Protecting confidential information;
• Making Orders for production of evidence; and
• Granting provisional and permanent injunctions against (alleged) infringers and against an intermediary whose services are used by the (alleged) infringer.

Enforcement of decisions and orders

Decisions and orders of the Court are enforceable in any Contracting Member State and the enforcement procedures are governed by the law of the Contracting Member State where the enforcement takes place.

The sanction against non-compliance with the terms of a Court order is a recurring penalty payment – which is proportionate to the importance of the order to be enforced.

Note There is no provision anywhere in the Unified Patent Court Agreement for sending anyone to prison.

The period of limitation

Except in those cases where national law (or the law of non-contracting States) applies, 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.

Appeals

Appeals from the Court of First Instance are to the Court of Appeal and can be based on matters of fact and law.

Settlement

Parties may settle at any stage.

Supplementary documents See supplementary documents for further information on: A short introduction to the Unitary Patent and the Unified Patent Court The Unitary Patent The role of the EPO and financial provisions Translation and language arrangements Situations where the permanent long term provisions will not apply (including transitional provisions and opt-out) How valuable will the new regime be to your business? Developments since signature of the Unified Patent Court Agreement

Footnotes

1. Attached to the Unified Patent Court Agreement is a Statute laying down the organisation and functioning of the Court.

2. See also Regulation EU no 1257/2012 of 17 December 2012, Article 5(3) (above) regarding the acts against which the patent provides protection.

3. Article 83(1) of the Unified Patent Court Agreement

4. This does not include European patents with unitary effect.

5. This is one of the committees set up under the Unified Patent Court Agreement to ensure its effective implementation.

6. Article 52 of the Unified Patent Court Agreement

7. Article 76(2) of the Unified Patent Court Agreement

8. Article 56 of the Unified Patent Court Agreement

9. Article 76 of the Unified Patent Court Agreement

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.