Centralized Revocation at the UPC – a new strategic tool
Ensuring freedom to operate is a fundamental requirement to be able to make, sell, use, import or keep products in a territory without risking being sued for patent infringement. If someone already has a granted patent which is in force and covers that product, there may be serious penalties, unless action is taken to either obtain a license, revoke the patent in a court of law or apply for a declaration of non-infringement also at a national court.
Presently, a revocation action of a European patent can only be taken in national courts in the relevant European countries where a party needs freedom to operate. This can result in several parallel court actions in several different countries with varying national patent laws and lead to different outcomes from each of the courts depending on how the judges apply the national patent laws. Individual court actions are expensive and if there are several such actions, costs can soar into the millions, especially for high value products. It can also take several years for decisions and appeals to be completed and the timeline can vary from country to country.
In Europe, a new court, the Unified Patent Court (UPC), offers the opportunity for a fast, cost effective, centralized revocation action against a conventional European patent or a European patent with unitary effect (EP-UP) where the decision of the UPC will have pan-European effect across all of the European countries that are members of the UPC.
The UPC is promising to issue decisions on revocation actions with counterclaims to infringement proceedings, within 18 months. The decisions can be appealed, although the timeline for an appeal decision is uncertain at present. Similar to national courts, the UPC also offers remedies to a party successful in litigation, and typically the losing party will bear the costs.
As of 1st June 2023, which is the date the UPC is expected to open its doors, a centralized revocation action of a granted European patent or an EP-UP, can be brought at the Central Division of the UPC as well as an application for a declaration of non-infringement. The Central Division is divided by technical field into three courts, with one in Munich, a second in Pairs and a third has yet to be formally decided.
However, during a transitional period of seven years i.e. to 2030 (extendible by a further seven years), granted European patents and pending published applications can be opted-out of the UPC. If the European patent of concern has been opted-out of the UPC, then action will need to be taken at the national courts. Parallel national actions will be necessary in countries that are not party to the UPC, such as the UK amongst others. An EP-UP cannot be opted-out and will always be under the jurisdiction of the UPC.
A perceived advantage of the UPC over national courts, is that there will always be a technically qualified judge in the subject area of the patent in addition to legal judges, which could enable a fairer hearing, especially for technically complex cases. Technical judges will have a technical degree and demonstrable expertise in a particular field. They are likely to be senior European patent attorneys or former members of patent office tribunals.
Another favorable factor is that parties can be represented at the UPC by European Patent Attorneys including those based in the UK, as well as lawyers authorized to practice before a court of a UPC member state. This can provide a measure of continuity as well as a language advantage.
The language of the proceedings in the Central Division will be the language of the patent and as the majority of patents are filed in English a UK European Patent Attorney would be well placed to represent before the UPC.
Centralized revocation action fees at the UPC are fixed at Euro 20,000, which is significantly cheaper than national court proceedings. It is anticipated that there will be fee reductions of around 40% for small and micro entities, as well as further reimbursements in other instances.
Attorneys at Avidity-IP can advise you on the best strategies to adopt in securing freedom to operate in the European territories of interest. Contact us to talk to a team member here.