UPC impact clear one year in

Judith Krens and Maureen Daly of Pinsent Masons were commenting after the UPC revealed that 373 cases had been initiated before it in its first year of operation. Further, the European Patent Office (EPO) revealed that more than 29,000 unitary patents applications were made within the first year of operation, with more than 28,000 of those requests having already been registered  – this represents around a quarter of the total number of European patent applications it has received in the past 12 months.

Krens and Daly were among a panel of experts that hosted a recent event to mark the first anniversary of the UPC. The event was hosted by Pinsent Masons in partnership with litigation data analysts Solomonic as part of London International Disputes Week. 

At Pinsent Masons’ event, there was overwhelming agreement among the panelists that the UPC, though still in its infancy as a new court, has been a resounding, though not unqualified, success so far. This, they said, was borne by the greater than expected extent of litigation already happening before the court and the substantial interest from businesses in obtaining unitary patents.

Dublin-based Daly said: “There has been very broad engagement with the UPC across different sectors, but activity has been more pronounced in some sectors like medtech, where companies have already been involved in UPC litigation and more than 12% of unitary patent applications filed have concerned medical technology – more than any other technological field. This is in part because a lot of medtech companies are SMEs, and the unitary patent and UPC system provides a great opportunity for them to enforce rights or access new markets, being a quick and cost-effective way of achieving commercial certainty.”

Krens, based in Pinsent Masons’ Amsterdam office, said that owners of pharmaceutical companies have been slower to engage with the UPC, perhaps cognisant of the risk that their so-called ‘blockbuster’ patents for medicinal products may be knocked out through a single revocation decision in the UPC. She highlighted that in cases where European patents have been opted out of the UPC’s jurisdiction, generic medicine manufacturers have to raise revocation proceedings in each of the UPC participating states that the patent applies in to achieve the same effect as a single revocation action can have before the UPC.

However, Krens said: “Despite early beliefs that it would be a number of years before the pharma sector engaged with the UPC in traditional innovator versus generic disputes, we have recently seen the first such action in a case in which Pinsent Masons is acting and which concerns the cancer drug cabazitaxel.”

So far, much of the litigation before the UPC has been initiated before local divisional courts in Germany – 54 infringement cases were filed before the Munich local division alone between 1 June 2023 and 31 May 2024, with a further 74 counterclaims for revocation also filed before that court in the same period – the inflated number of revocation counterclaims is because each defendant to an action must file a separate counterclaim. More than 100 other infringement actions and counterclaims for revocation have been filed across other UPC local divisions in Düsseldorf, Mannheim and Hamburg.

In contrast, just 10 infringement actions and 16 revocation counterclaims arising in the first year of the UPC’s operation were filed before the local division in Paris, though 38 revocation actions came before the Paris central division court.

Among the other filings, there were 17 actions lodged before the Nordic-Baltic regional division of the UPC; eight sets of proceedings initiated before the local division in Milan; and 10 filed in The Hague. Six other actions in total were filed before UPC divisions in Brussels, Helsinki, Copenhagen and Vienna, respectively. No UPC cases have been brought so far in Lisbon or Ljubljana.

The panel at Pinsent Masons’ event discussed whether the way UPC cases are carried out would be shaped by German patent law and procedure given the heavy involvement of German divisions of the UPC in developing early UPC case law, or more generally, the impact of UPC judges’ national experience – the so-called ‘couleur locale’. However, they agreed that it was too early to see trends in this regard and that there were examples where the court has appeared, so far, to be forging its own path, including the approach the UPC has taken to granting preliminary injunctions. 

The panel also agreed that there is already evidence that the UPC becoming operational has served as a pressure point in patent disputes that span across different jurisdictions. The settlement in the multi-jurisdictional dispute between Ocado and AutoStores may be an example in this regard.

Despite the level of activity seen to-date, the panelists said there have been teething problems with the new court system. Reflecting on their own experience of using the system over the past year, they highlighted continuing issues with the UPC case management system, although they said that the UPC and UPC judges have been engaging positively with users of the system to ensure its success in the long term.

Krens said: “Lawyers and businesses are navigating the differences with national procedures, such as the fact that pleadings are front loaded compared with, for example, the UK, and the need to meet the tight deadlines set by the court. Indeed, the court is aiming to meet the promises of handing down decisions within 12 months of proceedings being issued. In this regard, there have been no UPC decisions on substantive patent law yet – the first year has focused on preliminary measures and procedural issues, like transparency and access to documents – but some of the first substantive decisions are expected to be handed down in July.”

Daly added: “Whether the 12-month timescale will be met in the future, particularly given the demand placed on the Munich local division, remains to be seen. However, additional judicial appointments are expected to help with this.”

The UK does not participate in the UPC system, and cannot do so as a non-EU member state following Brexit. The fact that businesses can now obtain unitary patents covering 17 – soon to be 18 – UPC states had prompted questions as to whether the UK, previously the second biggest market for registering European patents before Brexit, would diminish in importance as a major global jurisdiction for registering and enforcement patent rights. However, Edward Bird, chief executive of Solomonic, highlighted at the event how the company’s own data revealed that the UPC has largely unaffected UK patent litigation.

The Solomonic data also showed how UPC proceedings are currently marked by a degree of uncertainty, as limited documents – in terms of parties’ pleadings – are being shared by the court compared to the Intellectual Property and Enterprise Court or Commercial Court divisions of the High Court of England and Wales, where UK patent disputes are commonly litigated. The panelists agreed that, despite this, a recent decision of the UPC’s Court of Appeal arguably advocated a less restrictive approach to granting third parties access to documents, and its implementation may help assuage the criticisms facing the court’s approach to transparency. 

There was consensus that it would be unreasonable to expect an entirely new court system to be without teething problems in its first year. However, as the substantive issues begin to appear, the panelists agreed that the focus will move away from operational issues to the development of substantive UPC law. They said it is clear, however, that as unitary patent filings and UPC actions have exceeded expectations, businesses should prepare for the UPC's growing role in global patent risk management.

The panel at the Pinsent Masons event also included Emmanuel Gougé, Marc Holtorf, Carissa Kendall-Windless and Sarah Taylor. Jules Fabre, also of Pinsent Masons, shared his thoughts on the impact of the UPC one year in with the Times in an article published today.