The UPC system:

Transitional period

Dr. Ulrich Blumenröder, LL.M.

21 October 2013

The exclusive jurisdiction of the UPC is not as exclusive as it

appears. During a transitional period, a plaintiff will be able to decide
on whether to file suit before the UPC or a national court. During that
same period, patent owners will also have the option of making sure
that their patents will not be handled before the UPC.

Transitional Period
This exclusive jurisdiction of the UPC is not
as exclusive as it appears. During the
transitional period provided for under Article
83(1) UPCA (7 years or prolonged to 14
years, see Article 83(5)), a plaintiff will be
able to decide on whether to file suit before
the UPC or a national court. During that same
period, patent owners will also have the
option of making sure that their patents will
not be handled before the UPC. A patent
owner can file an opt-out application for a
specific patent.
Nonetheless, nothing is as straightforward as
it appears at first sight.
1. Transitional Period - Dual Jurisdiction
Article 83(1) UPCA provides
During a transitional period of seven
years after the date of entry into force of
this Agreement, an action for infringement
or for revocation of a European patent or
an action for infringement or for
declaration of invalidity of
supplementary protection certificate
issued for a product protected by a
European patent may still be brought
before national courts or other competent
national authorities.
It can be taken that such dual jurisdiction is
only available for traditional European patents
and for certain of the actions listed in Article
32, namely infringement and revocation
actions (including counter claims
2
revocation, Article 32(1)(e)). Actions for
declaratory non-infringement (Article
32(1)(b)), for compensation for licenses
(Article 32(1)(h)), concerning decisions of the
EPO (Article 32(1)(i)) and relating to the use
of the invention prior to the granting of the
patent (Article 32(1)(g)) can definitely not go
before the national court.
Note: Dual jurisdiction is not available
for all actions, latest opinions need to be
checked before filing.
The first open issue concerns actions for
damages or compensation deriving from
the provisional protection conferred by a
published European patent application
(Article 32(1)(f)). This action is not listed in
Article 83(1) UPCA. Thus, on its face,
damage claims have to be filed with the UPC.
This literal interpretation is fostered by Article
83 UPCA. It is not only silent regarding
damages, Article 83 UPCA is also completely
a tacit on the compensation mentioned in
Article 32(1)(f). Moreover, any analogous
application of another Article (here “Action for
Infringement” in Article 83 UPCA) is usually
not admissible. Hence, attempts to dismiss
jurisdiction for damage claims in national
courts will have to be expected.
However, they should not prevail. Article 32
for UPCA is silent on claims for corrective
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measures as listed in Article 64 UPCA (i.e.
recall and destruction), while this Article 64
UPCA explicitly lists “corrective measures in
infringement proceedings”. Neither
Article 32 UPCA express anything about the
court’s power to order the communication of
information as mentioned in Article 67.
Nonetheless, it is obvious that the court shall
render decisions in this respect. Since
Articles 64 and 67 UPCA are listed in the
same section of the UPCA as Article 68
regarding damages, it appears that Article 32
UPCA considers corrective orders
communicate information and the like as
integral part of an infringement proceeding.
Likewise a damage award should
considered an integral part as well. As a
result, the infringement actions listed in
Article 83(1) UPCA are not limited regarding
remedies and include damages
compensation awards.
Yet, Article 32 UPCA cannot be “argued
away” to all extents. If all actions of Article 32
UPCA should be available in front of the
national court during the transitional period,
Article 83(1) UPCA would have been worded
differently. Thus, Article 32 has to be
construed in that separate actions for
damages based on existing infringement
decisions will no longer be allowed in front of
the national court. Rather, such actions need
to go before the UPC. At first sight, this
should be rather a rare instance. Yet, in some
countries such as Germany, infringement
3
actions only include a motion to declare that
damages are to be paid, being understood
that the actual amount will be claimed in a
does separate additional action. Such separate
additional action for damages will likely not
be permitted before the national (typically
German) court. Thus, (German) plaintiffs
deciding to sue with the national court should
take cautionary measures, i.e. to include the
suit for damages into the infringement action
by an action by stages (in German:
“Stufenklage”).
to
The second open issue concerns “actions
for provisional and protective measures
be and injunctions” Article 32(1)(c) UPCA, i.e.
preliminary injunctions. It appears to make no
sense to allow the plaintiff to file infringement
actions on the merits with the national court,
and but to not allow preliminary injunctions.
However, the wording of Article 32(1)(c)
UPCA is clear. Thus, Article 62 UPCA has the
headline “Provisional and Protective
Measures” and refers to “injunctions against
alleged infringers”. Moreover, Article 63
subsequently refers to “permanent
injunctions”, wherein “a decision is taken
finding an infringement”. Thus, the UPCA in
its structure as well as Article 32(1) UPCA
distinguish between “an infringement action”
and a “provisional and protective measure
action”. This distinction is mirrored in Article
83(1) UPC. Only the infringement action is
mentioned. Hence, making sense or not, the
plaintiff runs a substantial risk with filing
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motions for preliminary injunctions with the of those countries where the national
national court. The risk does not include infringement actions have already been filed.
motions for inspection, known as “saisie-
contrefaçon”, Anton-Piller-Order or Fax-Card- With a pocket deep enough, many
Decision. Such motions are mentioned in constellations are possible. To avoid one
Article 60(1)-(4) UPCA. And Article 62 on constellation or the other a patent owner or a
provisional and protective measures only competitor might consider filing before
refers to paragraphs (5)-(9) of Article 60 particular courts. The most common idea
UPCA providing for the duty to lodge security mentioned for the competitor of a patent
and the like. Such motions are preparations owner is to file a motion for non-declaratory
for an infringement suit on the merits. They judgment to ensure jurisdiction of the UPC.
will still fall within the dual jurisdiction of the On first sight this does not stop the patent
UPC and national court during the transitional owner to file an infringement action in a
period. national court. Article 83 UPCA does not rule
anything to the contrary. However, Article 29
2. Dual Jurisdiction - Consequences EU-Regulation 1215/2012 on jurisdiction
makes suits with the same subject matter
Initially, a “normal” controversy starting with a inadmissible. And an infringement action
warning letter will proceed as before pertains to the same subject matter as the
enactment of the UPCA. Yet, the options suit for declaratory judgment for non-
provided by the transitional period are infringement. It is the concept of the Torpedo-
tempting when court actions are to be filed. case law.1
(Even though in the end the options are less Note: During transitional period actions
wide spread than they appear.) in different national courts and UPC
pertaining to the same patent and
An infringement action of the patent owner defendant are possible.
before a national court in a first country can
be followed by a revocation action before the Hence, those potential defendants wanting to
UPC. The patent owner might feel induced to
file a further infringement action in a national 1
The Italian decision of 28 May 2013 in The General
court of a second country. He can also decide Hospital Corporation (Massachusetts General Hospital)
and Palomar Medical Technologies Inc. vs. Asclepion
to bring an infringement action before the Laser Technologies GmbH (“General Hospital vs.
Asclepion”) finding for jurisdiction of Italian courts for
UPC seeking injunctive relief and further non-infringement of foreign patents even without a party
residing in Italy only confirms this principle.
measures. The patent owner will merely have
to formulate motions excluding the territories

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ascertain exclusive jurisdiction of the UPC for
infringement matters can do so by filing a suit
for a declaration of non-infringement. At any
stage of the proceeding, however such
potential defendants can decide to challenge
the patent in suit before the UPC or national
courts.
2.1. National Revocation Action as
Reaction to UPC-Infringement Action
It would make little sense for a defendant
before the UPC to rely on national courts for
invalidity actions.
The UPC can be confronted with
infringement action (or a suit for declaration
of non-infringement) and national invalidity
suits in all countries to which the infringement
suit pertains. If the UPC considers the
arguments raised in the national invalidity
suits to be convincing it may make use of a
number of Rules.
- It can apply Rule 295 (k) allowing the
court to stay a proceeding “in any other
case where the proper administration of
justice so requires”. With so arguing a
defendant opens the floor for a number of
undecided questions, the main one being
whether the principles of Rule 37.4 shall
apply, i.e. whether in case of a high
likelihood of invalidity a stay until a final
decision on validity is called for. The title
of Rule 37.4 (“Application of Article 33(3)
of the Agreement”) calls for not applying
5
Rule 37. A stay in light of national
invalidity suits has nothing to do with
Article 33(3) of the Agreement. While the
UPC might be inclined to apply the same
principles as listed in Rule 32.4, there is
hope the UPC would consider filing of
many national invalidity suits to show the
attempt to prolong proceedings and would
therefore be very reluctant to stay.
The question becomes even more virulent
in a constellation, however, where the
UPC deals with an infringement action
and national revocation actions in fewer
countries than are subject to the
an
infringement action. The UPC can hardly
stay arguing that proper administration of
justice so requires. Where a patent is not
challenged, the UPC will have to assume
that it is valid. The traditional European
patent is not actually a “bundle of patents”
as is often said. Yet, it has the same
effect as a national patent in each of the
countries where it is validated. Despite
determination of patent infringement
according to Article 25 of the UPCA, a
claim for injunctive relief can have
different results in each country – for
instance due to different results of
national revocation actions (other reasons
my be national rights to prior use, a
license granted for a particular territory, or
older rights invalidating the European
patent only for the territory of a certain
country). Hence, if a patent is not
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challenged, the UPC will have to find for
infringement for the respective country
and consider staying the proceedings with
respect to other countries. A rather
“unpleasant” result. The UPC might try to
avoid it by not staying at all using Rule
295 (k).
- The UPC might also invoke Rule 118.3
giving the UPC large discretion when
rendering its decision.
Rule 118.3 (b) explicitly refers to “the”
revocation procedure, i.e. the revocation
procedure before the UPC. Hence, the
stay or suspension mentioned in Rule
118.3 (b) does not appear to be possible
based on this Rule.
Rule 118.3 (a) Alt.1 grants the power to
render a decision under the condition that
the patent is held valid. Again, however,
the Rule refers to “the” revocation
procedure.
It is Rule 118.3 (a) Alt.3 which might give
the UPC an option to deal with the
situation. It grants the UPC the power to
render its decision “under any other term
or condition”. It is yet another provision
leaving patent owners and potential
defendants in doubt about the meaning
and the application of the Rules. Rule
118.3 (a) Alt. 3 is not meant for national
revocation actions since revocation
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actions are addressed in Alt.1. However,
Alt.3 appears to be meant for issues not
explicitly foreseen but nonetheless
justifying to render a decision under a
condition. Since the Rules do not refer to
national revocation actions, it is more
likely that the UPC will allow application of
Alt.3 in the case of national revocation
actions. Having said this, it is far from
certain that the UPC will apply Alt.3 as a
standard. The UPC may (not must) render
its decision under a condition. Hence,
where the UPC gets the impression that
filing a national revocation action is
without merit or that it was meant to slow
down the process and thereby impair the
principles of fairness and equity,
rendering a decision under the condition
of a certain result of a national revocation
action becomes less likely.
The UPC not staying will in many cases result
in a final decision before there is any national
decision on the national revocation action.
National laws having a tradition of bifurcation
tend to solve the problems arising from such
a situation by allowing rehearings. Germany
does so on the basis of § 580
Zivilprozessordnung (“Restitutionsklage”) –
yet only within five years. Countries having
no tradition of bifurcation do not deal with the
situation that often. It can happen, however,
where third parties challenge the validity of
the patent in separate proceedings and the
patent is actually invalidated rendering a

previous infringement decision (and possibly
a decision on damages due to
infringement) wrong. British law “solves” the
problem by giving deference to the principle
of res iudicata. The defendant could have
challenged the patent but did not do so. The
decision against him is final and stays so. A
hard law, but not all different from German
law. German law provides for the same if the
deadline of five years has expired.
The UPCA provides for a rehearing in its
Article 81. The article, however, lists only a
certain number of situations which will likely
have to be construed as enumerative. It even
does not deal with the issue. A later
revocation of a patent is not among them.
Article 81 (1) (b) UPCA even mentions a final
decision of a national court as a reason for a
rehearing. Yet, such national decision must
pertain to “an act which was held, …, to
constitute a criminal offence”. Rarely, a
decision of a national court to revoke a patent
is based on an act constituting a criminal
offense. Obviously, the drafters of the UPCA
did not want to allow a rehearing due to a
later revocation of the patent in suit. Given
the British national concept, this is not
violating equity either. The fact that the
problem can arise more often under the
transitional regime cannot allow for a different
construction. Firstly, the drafters refrained
from implementing a rule for the transitional
period. Secondly, a defendant in
infringement proceeding has the possibility to
7
avoid the result by filing a revocation action
such before the UPC and finally, overruling the
apparently rather clear wording by applying
the rules of mutatis mutandis with respect to
such a new law is difficult to justify.
Consequently (or coincidentally), the Rules of
Procedure do not provide anything different in
its Rules 245 et seq.
Fortunately, the final finding of the above
problem is of secondary importance. A
defendant in an infringement action before
the UPC will think twice before taking the risk
of having to convince the UPC to stay in light
of national revocation actions or even to
accept a rehearing in light of a national
revocation decision. She will bring the
revocation action before the UPC.
2.2 UPC-Infringement Action following
National Revocation Action
The above findings are disturbing in cases
where litigation starts with one or more
national revocation actions. Nothing stops the
patent owner to force the defendant into an
infringement action before the UPC. Yet,
given the above, the consequence will often
be that the defendant will at least feel forced
into a revocation action before the UPC. If
instructed given the principles of fairness and
equity influencing a decision under Rule
118.3 (a) Alt.3, the danger of being
confronted with a final – irrevocable –
an
decision in an infringement action irrespective
of the result of a national revocation action
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should be less significant. But not many

practitioners will advise an alleged infringer to
rely on a national court for revocation if the
infringement is dealt with before the UPC.

2.3 Summary

Any defendant of an infringement action

before the UPC will have to consider the
above. In general this will result in a
revocation action before the UPC. Article 83
UPCA and dual jurisdiction do not keep what
they say on its face. Rather dual jurisdiction is
mainly for the patent owner. As a rule of
thumb if the patent owner wants to have
everything with the UPC both infringement
and validity will be handled there. The
defendant can only truly choose where the
patent owner wants to litigate nationally. In
this case the defendant can file the
revocation action either nationally or before
the UPC.

Note: If an infringement action is

pending before the UPC, the revocation
action should be brought.

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