Life sciences companies take advantage in filing early UPC cases

The UPC is a new European court that will have exclusive jurisdiction for hearing and resolving disputes relating to infringement and validity of new unitary patents and classic European patents, for participating member states, which have not been "opted out" of the new system. Years in the making, the UPC began operating on 1 June 2023.

The UPC comprises a Court of First Instance, a Court of Appeal, and a Registry, as well as a Patent Arbitration and Mediation Centre, and a Training Centre. The Court of First Instance is divided into local, regional divisions and a central division. Revocation actions have to be raised before the central division of the court. The seat of the central division is located in Paris, with a section in Munich and a another section in Milan due to become operational next year. The subject matter of the patents in issue will determine the section in which the proceedings should be brought. Infringement actions can be raised before a local or regional division in either the division where an alleged infringement is taking place or where the defendant is domiciled.

Jules Fabre of Pinsent Masons said that the data available at this time indicates that cases have been lodged before a number of the different divisions of the UPC, but that there appears to be some issues relating to the functionality of the UPC’s electronic Case Management System (CMS), which enables access to the UPC Register of all proceedings, including opt-out applications, before it.

Fabre said: “At present, the information that is available via the CMS is not up-to-date, and it seems to be taking some time for filed cases to appear on the system. It seems that this is notably due to formal deficiencies having been raised by the Registry in relation to certain claims, which implies a delay between their filing date and the date when they are officially admitted in the court list. At its meeting on 26 June 2023, the UPC Administrative Committee confirmed that, as of that date, 23 cases had been filed, but not all are shown on the CMS and there is a lack of clarity as to the details of some of these cases.”

Of the 23 cases, the Administrative Committee confirmed that three are revocation actions, which accords with the information shown on the CMS. One of these actions was filed in the Munich section of the central division, and two in the Paris section, although it now appears that these two have been transferred to Munich based on their subject matter.

Further, 14 infringement actions had been filed – two in the Nordic-Baltic regional division, six in the Munich local division, two in the Düsseldorf local division, two in the Hamburg local division and one in the Milan local division.

The Administrative Committee also confirmed that six applications for protective measures have been filed, which comprises four applications for provisional measures and two applications to preserve evidence. 

The court had also received 236 protective letters. A protective letter may be lodged with the court when a party considers that its business may be the subject of an application for provisional measures, such as an ‘ex parte’ injunction, and why that application should be rejected.

The court has acknowledged the issues with the functionality of the CMS. It said: “The UPC’s IT department is working hard to maintaining the CMS’s robustness while gradually implementing improvements to the system for the benefit of both internal and external users.” 

Fabre said “Although a number of protective letters have been filed, there have been some teething problems as to practicalities relating to how they are lodged with the court. For instance, the CMS requires a contact e-mail to be provided for the patentee or presumed applicant(s) when filing a protective letter, whereas this is not required under the Rules of Procedure and in many cases possible defendants will not have a relevant contact to provide. We understand that the court is looking into this, and so far it has been very responsive to questions and issues raised via the UPC website’s contact form.”

“For instance, it was initially not possible on the CMS to file a protective letter on behalf of more than one possible defendant, which thus required filing multiple protective letters and paying the court fees multiple times. After we, and most likely many others, raised this with the UPC Registry, this issue was fixed. It is hoped more generally that the functionality of the CMS will improve over time,” he said.

One of the most important remaining issues with the CMS is the accessibility of the public to information and documents from opt-out applications. The UPC Register is stated to be accessible by the public, but it is currently not possible to obtain access to documents filed in support of an opt-out application.

The UPC Register only displays whether an opt-out has be filed and, if there is one, the date of the opt-out application and the person – typically a representative – who filed the opt-out. The person(s) on behalf of whom the opt-out has been filed is not mentioned and, whilst the list of documents filed, including the application itself, is visible, access to them is restricted. This means that third parties wishing to bring a revocation action or a declaration of non-infringement against a patentee cannot scrutinise an opt-out to ensure that it has been made properly. This is relevant because the Registrar merely records opt-out applications and does not check whether they meet all the requirements to be valid.

If third parties are unable to access and review opt-out applications, then it is not possible to verify whether an opt-out is valid or not. This matters because if an opt-out is not correctly made, it would mean that the patent would fall under the UPC’s jurisdiction and therefore proceedings may be brought before the UPC rather than national courts. 

Fabre said: “This important issue was raised with the UPC on 22 June 2023 by Pierre Véron, on behalf of certain associations that have the status of observers in the UPC Administrative Committee – namely, Business Europe, epi, EPLAW and EPLIT – and it is hoped that the UPC Registrar will clarify the court’s position and give unrestricted immediate and direct access to opt-out applications documents as soon as possible.”

Last month, experts at Pinsent Masons highlighted how many pharmaceutical patent holders were looking to opt out existing European patents from the UPC’s jurisdiction – or at least patents related to their key assets. They pointed out potential downsides to this approach – including that the case law of the UPC would be shaped by reference to patents in other sectors – potentially to the disadvantage of pharmaceutical patent holders.

Ian Turner of Pinsent Masons said, however, that it looks likely that some of the early case law of the court will be determined by reference to pharmaceutical patents.

“Despite many commentators being of the view that life sciences companies may not engage with the new court in its early days, life sciences patents are already playing a prominent role in the UPC,” Turner said.

Three UPC actions have been filed by 10x Genomics, an innovator company – against NanoString in the Munich local division and against Vizgen in the Hamburg local division. The company is seeking UPC territory-wide preliminary injunctions. One of the actions involves the assertion of a newly granted unitary patent. Turner said it appears to be the first case lodged before the UPC concerning the assertion of a unitary patent.

In another case, filed at the Munich section of the central division, Sanofi is seeking the revocation of a patent owned by Amgen which relates to medication used for lowering cholesterol. The dispute is said to be worth €100 million. On the same day, as the UPC opened for business, Amgen sued Sanofi for infringement of the same patent at the Munich local division.

“Given the value of this dispute, and the fact that this action is part of wider hard fought global proceedings, it is expected that it may lead to some interesting early UPC decisions, potentially including how to align separately filed revocation and infringement proceedings” Turner said.

Japanese pharmaceutical company Astellas Pharma has also raised revocation actions in two related cases against patents jointly owned by Helios and the University of Osaka.

Cases lodged before the UPC that do not involve life sciences companies include infringement proceedings lodged against Autostore in respect of two Ocado-owned patents. Two separate actions have been raised – one before the Düsseldorf local division, the other before the Milan local division. Koninklijke Philips has also filed an infringement action before the Munich local division against Belkin in a consumer electronics case, while Tesla is the target of two infringement actions, raised by Avago in the Hamburg local division and Broadcom in the Munich local division. A further case lodged before the Munich local division involves Chinese device manufacturer Huawei.

The UPC does not have competence to hear cases concerning, or rule on, European patents that have been opted out of the UPC, or national patents. Additionally, certain EU jurisdictions, including Spain, Poland, Croatia, Ireland or Hungary, have chosen not to participate in the UPC or not ratified the UPC Agreement yet. Further, the UPC system is not open to the UK as it is no longer an EU member state. Turner said: “Businesses must therefore be prepared to continue litigating before national courts where appropriate, and UK national patent litigation will continue to play an important role in business strategies.”

Turner said businesses will need to make strategic decisions as to the most appropriate jurisdiction – including the UPC – in which to bring an action depending on business objectives. He said multiple factors will feed into such decisions, including the likely timeframe by which a matter may reach trial and the court may hand down a decision. UPC actions are expected to be relatively quick, and, pursuant to the court’s Rules of Procedure, are expected to come to trial within 12 to 14 months. The trials for these early-filed UPC cases are therefore expected to take place in summer 2024. 

“Patent practitioners across all jurisdictions will be awaiting these early life sciences decisions with bated breath,” Turner said. “They are technically complex cases and will undoubtedly provide some guidance as to how the UPC may manage such cases. They may also provide insights into how the court applies its evidence rules – including in relation to seizures, experiments, expert evidence and production orders – and how these may impact the court’s adherence to the tight 12-14 month timeframe for a trial and decision.”

The likely speed of UPC proceedings is a benefit of the court, but Turner said that there is some recent evidence that, in some circumstances, businesses may be able to litigate patents in the UK in a similar timeframe to the UPC.

“In the UK, recent disputes between Pfizer and GSK, and Seoul Semiconductor and General Electric show it is possible to reach trial in the UK within a year, even without the case being expedited. The UK is therefore still an attractive forum for resolving technically complex disputes in a timely manner,” he said.

“The UPC Rules of Procedure were drafted with the input of UK practitioners and so in part had that inquisitorial approach to litigation in mind. Even though the UK is no longer participating in the UPC, certain litigants will no doubt be trying to emulate the power of disclosure, via production of evidence orders, and hearing of oral expert evidence that are a key feature of UK patent litigation. As well as speed, it is the predictability of the procedural rules that will be important to the success of the UPC as well as the reliability of its judgments as judged against well respected national courts that will still be hearing the same disputes in parallel, such as the UK,” Turner said.