UPC Court of Appeal Upholds Jurisdiction Over Pre-Agreement Infringements

This article discusses a significant decision by the Unified Patent Court (UPC) Court of Appeal regarding the jurisdiction of the UPC over patent infringements that occurred before the UPC Agreement (UPCA) came into force and during a period when a patent was opted out of the UPC’s jurisdiction.Here’s a breakdown of the key points:

The Case:

Patent: EP 3742231, relating to a method of curing photo-curable printing plates.
Parties: ESKO (patent holder) and Xsys Italia (alleged infringer).
Timeline:
May 2023: ESKO opted out of the UPC’s exclusive jurisdiction. June 1, 2023: UPCA entered into force.
August 2024: ESKO withdrew the opt-out and filed infringement proceedings against xsys before the UPC’s Munich Local Division. ESKO’s claim covered alleged infringements occurring before and after the UPCA’s commencement, as well as during the opt-out period.
Xsys’s Challenge: Xsys argued that the UPC lacked jurisdiction for acts that predated the UPCA and those that occurred during the opt-out period,citing the principle of non-retroactivity and the prospective effect of opt-out/withdrawal.

The UPC Court of appeal’s Decision:

The Court of Appeal rejected Xsys’s jurisdictional challenge for several reasons:

1. Interpretation of the UPCA: article 32(1) of the UPCA, defining the UPC’s competence, has no temporal limitation. This is to foster a unified patent litigation system and avoid market fragmentation, aligning with the UPC’s overall objective. This interpretation is consistent with previous UPC decisions (e.g., Fives v. Reel).
2. Transitional Regime: During the initial seven-year transitional period of the UPC,both national courts and the UPC have concurrent jurisdiction. A patent holder’s choice of forum (UPC or national court) does not limit the UPC’s jurisdiction over the subject matter or the timeframe of alleged infringement.
3. Opt-out and Withdrawal: Withdrawing an opt-out restores the UPC’s full competence over the patent. This includes jurisdiction for acts that occurred before the UPCA’s entry into force and during the opt-out period.This approach prevents fragmentation and supports harmonization.
4. Applicable Law vs. Jurisdiction: The Court distinguished between determining jurisdiction (weather the UPC can hear the case) and determining applicable law (wich substantive law governs the acts). The latter is a separate issue to be addressed later in the proceedings.
5. No Referral to CJEU: The court decided not to refer questions to the Court of Justice of the European Union (CJEU), as it believed the outcome would remain the same even with a more favorable interpretation of international law for Xsys.

Implications and Key Takeaways:

This decision has significant implications for businesses in Europe:

forum Choice is Broad: During the UPC’s transitional period, patent holders have the flexibility to sue in either the UPC or national courts. Tho, this choice does not limit the UPC’s ability to consider infringement that occurred across different time periods. Opt-outs are Reversible: The withdrawal of an opt-out effectively “re-opens” the patent to the UPC’s jurisdiction for all past and future infringements, provided no national legal action is pending for that specific patent.
Strategic Patent Management is Crucial: Companies need to carefully review their patent portfolios and consider their litigation strategies in light of this decision. This means being mindful of the implications of opting out and the potential consequences of withdrawing an opt-out. Proactive management of patent rights is essential.

In essence, the UPC Court of Appeal has confirmed a broad and inclusive jurisdictional scope for the UPC, particularly concerning the impact of the opt-out mechanism and the UPCA’s entry into force. This provides greater certainty for patent holders and can encourage more unified enforcement of European patents.

What strategic adjustments should patent holders make to their enforcement strategies given teh UPCS jurisdiction over continued pre-June 1, 2023 infringements?

The Unified Patent Court (UPC) continues to solidify its position as a central forum for patent litigation in Europe. A recent decision from the Court of Appeal has clarified a crucial aspect of its jurisdiction: its power to hear cases concerning patent infringements that occurred before the UPC Agreement entered into force, but continue after.This ruling has significant implications for businesses holding or challenging patents, particularly those involved in ongoing disputes. This article breaks down the key takeaways from this landmark decision, focusing on the implications for patent litigation, UPC jurisdiction, and pre-agreement infringement.

Understanding the core Issue: Continued Infringement

The central question before the Court of Appeal was whether the UPC had jurisdiction to rule on infringements that began before June 1, 2023 (the date the UPC became operational) but persisted afterward. Opponents argued that the UPC’s jurisdiction should be limited to infringements occurring after its establishment. The Court of appeal firmly rejected this argument, upholding the lower court’s decision and establishing a precedent for continued infringement claims.

This is a critical distinction.The UPC isn’t simply re-litigating past events. It’s addressing ongoing harm resulting from actions initiated before its existence. Think of it like a leaky faucet: the initial leak might have started before the plumber arrived (the UPC’s establishment),but the plumber (the UPC) can still fix the ongoing damage.

Key Arguments and the Court’s Reasoning

The Court of Appeal’s reasoning centered on the interpretation of Article 33 of the UPC Agreement. This article outlines the Court’s jurisdiction, and crucially, doesn’t explicitly limit it to infringements occurring after the agreement’s entry into force.

Here’s a breakdown of the key arguments and the Court’s response:

Argument: Limiting jurisdiction to post-UPC infringements would create a loophole allowing infringers to escape accountability for ongoing harm simply because the infringement began before June 1, 2023.

Court’s Response: The Court agreed, stating that such an interpretation would undermine the UPC’s purpose of providing a unified and effective system for patent enforcement.

Argument: The UPC lacks the authority to address events that occurred before its creation.

Court’s Response: The Court clarified that it’s not revisiting past events, but rather determining the ongoing consequences of those events. The focus is on the continuation of the infringement, not the initial act.

Relevant Keywords: UPC Agreement,Article 33,patent enforcement,infringement claims.

Implications for Patent Holders and Defendants

This ruling has far-reaching consequences for both patent holders and those accused of infringement.

For Patent Holders:

Expanded Enforcement Options: Patent owners now have a powerful tool to address ongoing infringement, even if it began before the UPC’s establishment.

Centralized Litigation: The UPC offers a centralized forum for litigating across multiple participating member states, streamlining the process and potentially reducing costs.

proactive Enforcement: Patent holders should review existing infringement concerns and assess whether the UPC provides a more advantageous venue for pursuing claims.

For Defendants:

Increased Exposure: Companies previously believing they were shielded from UPC jurisdiction for pre-June 1, 2023 infringements now face potential litigation.

Strategic Considerations: defendants must carefully evaluate their exposure and develop a robust defence strategy, considering the UPC’s unique procedures and potential for pan-european injunctions.

* Due Diligence: Thorough freedom-to-operate analysis is now even more critical, especially for products launched before the UPC’s inception.

Practical Tips for Navigating the New Landscape

Given this ruling, here are some practical steps businesses should take:

1. Review Existing Patent Portfolios: Identify patents potentially subject to ongoing infringement.
2. Assess Ongoing Infringement: Determine if any pre-June 1, 2023 infringements are continuing.
3. Evaluate UPC Venue: Consider whether the UPC is a favorable venue for pursuing or defending infringement claims.
4. Monitor Competitor Activity: Stay informed about competitor products and activities that