JURISDICTION
AND THE UNIFIED PATENT COURT
Following last week’s
general overview, this week’s post looks specifically at the jurisdiction of
the Unified Patent Court and its component divisions. Next week’s post will look at the early
stages of a claim, including the choice of forum. However, before choosing a forum, a claimant
must first establish whether and where they have jurisdiction to bring a claim.
Rights over which the
UPC has jurisdiction
The UPC will eventually
have exclusive jurisdiction over existing and prospective European patents, Unitary Patents and supplementary protection certificates (Art 3 of the Agreement).
In the case of European patents, decisions of the UPC will cover only
those contracting member states for which that patent is designated (Art 34). During the seven-year transitional period
following implementation of the UPC, national courts and the UPC will share
jurisdiction over the infringement and revocation of European patents (Art 83). Additionally, patentees may opt their
European patents (but not Unitary Patents) out of the competence of the UPC
entirely during the transitional period (Art 83(3)), meaning that only national
courts would be competent to hear claims relating to that patent.
Once opted out, patentees may opt back into the jurisdiction of the UPC any time they wish, i.e.
even after the transitional period has expired (Art 83(4)). Neither the Agreement nor the current draft
of procedural rules contain any disadvantage for a patentee where they opt out
and later opt back in. This arguably incentivises
patentees to opt-out to avoid pan-European revocation in the UPC Central
Division, only to opt back in when it is advantageous to enforce the patent
across Europe.
Relationship with the Brussels Regulation
and contrast with the Community Trade Mark
Before looking at the specific
jurisdiction provisions of the UPC Agreement, the background to certain
provisions of the current draft should be explained. The European Commission published a ‘non-paper’ in 2011, which expressed inter alia the Commission’s views on the
combined application of the recast of the Brussels Regulation and a previous draft of the UPC Agreement.
The Commission stated at p3-4 on the ‘non-paper’ that the:
“jurisdiction rules of the Brussels I
Regulation apply to the UPC. In
practice, this means that the UPC will have jurisdiction any time when a
national court of a participating Member State would have jurisdiction based on
the rules of the Brussels I Regulation.
The UPC would not have jurisdiction when no national court of a
participating Member State has jurisdiction pursuant to the Brussels I
Regulation (e.g. when jurisdiction pursuant to the Brussels I Regulation would
lie with the courts of a non-participating Member State);
The rules of the Brussels I Regulation
do not apply to the internal allocation of competences between the various
divisions of the UPC, which will be regulated by the UPC Agreement itself
With respect to Art. 22(4) of the
Brussels I Regulation [i.e.
which confers exclusive jurisdiction over questions of validity on the courts
of the Member State in which a part of an EP has been designated], insofar as European patents are concerned,
the UPC would have exclusive jurisdiction only with respect to those parts of
the patent which concern participating Member States. For the other parts, the
UPC would need to recognise the exclusive jurisdiction of other Member States.
[…]
The lis pendens rule of the Brussels I
Regulation does not apply between different divisions of the UPC.”
The Commission noted some specific
points requiring ‘careful attention’ (see p.4), recommending clarificatory
amendments to both the UPC Agreement and the recast Brussels Regulation. The recast Brussels Regulation makes no
reference to the UPC, although some limited amendments have been made to the
UPC Agreement.
The Commission recommended that a new
article be inserted, providing for the “applicability
of the Brussels I Regulation and specify that the UPC will have jurisdiction
any time a court of a participating Member State has jurisdiction on the basis
of the Brussels I Regulation.”
Article 31 of the final version of the UPC Agreement has been added,
which specifically refers to the application of the recast Brussels Regulation,
although the manner in which its specific provisions will apply is unclear.
By illustrative contrast, the Community Trade Mark Regulation (CTMR) expressly recognises its
relationship with the current Brussels Regulation. Recital 16 says that “[t]he provisions of [the Brussels
Regulation] should apply to all actions
at law relating to Community trade marks, save where this Regulation derogates
from those rules”, and Article 94 of the CTMR expressly states which
provisions of the Brussels Regulation either do not apply or are modified by
the CTMR.
With the above points in mind, and
noting that the compatibility of the recast Brussels Regulation with the UPC
Agreement is not crystal clear, particularly regarding the ‘exclusive
jurisdiction’ provisions of the recast Brussels Regulation at Article 24(4), I
will now turn to the specific jurisdiction provisions of the UPC. The following
is based on the assumption that the Commission’s views as expressed in the ‘non-paper’
are correct.
Jurisdiction of local
and regional divisions - infringement
International jurisdiction of the UPC
is to be established in accordance with the recast Brussels Regulation and,
where applicable, the Lugano Convention (Art 31). The territorial jurisdiction of individual local
and regional divisions in infringement and injunction proceedings is to be
established by Art 33 in combination with the recast Brussels Regulation. Jurisdiction can be determined by reference
either to the location of the act of infringement or the residence or domicile
of the defendant(s). Art 33(1)(a) confers
jurisdiction on
“the local
division hosted by the Contracting Member State where the actual or threatened
infringement has occurred or may occur, or the regional division in which that
Contracting Member State participates”.
In many cases, the defendant will have
sold an accused product in several Contracting Member States, providing the
claimant with a choice of venues in which to bring a claim.
Art 33(1)(b) confers jurisdiction on
“the local division hosted by the Contracting
member State where the defendant or, in the case of multiple defendants, one of
the defendants has its residence, or principal place of business, or in the absence
of residence or principal place of business, its place of business, or the
regional division in which that Contracting Member State participates. An action may be brought against multiple
defendants only where the defendants have a commercial relationship and where
the action relates to the same alleged infringement.”
This latter provision could be seen as
combining Articles 4(1) and 8(1) of the recast Brussels Regulation, although
the wording of Article 8(1) is arguably broader in scope. The practical effects of these provisions
appear to be:
·
a
patentee can clearly sue a defendant in the country in which it commits an infringing
act. However, on a literal reading neither
Art 33(1)(a) nor the provisions of the Brussels Regulation allow a court to
take jurisdiction over co-defendants which have not committed infringements in
that given state.
·
a
patentee can clearly sue a defendant in the country of its domicile or place of
business. Jurisdiction can then be taken
over co-defendants based in other countries based on the domicile of the
‘anchor’ defendant under Art 33(1)(b) or Article 8(1) of the recast Brussels
Regulation (formerly Article 6(1)). The
extent of the jurisdiction over co-defendants is dependent on the
interpretation of either the terms ‘commercial relationship’ and ‘same alleged
infringement’ (Art 33(1)(b)) or whether the claims are “so closely connected that is expedient to hear and determine the them
together to avoid the risk of irreconcilable judgments resulting from separate
proceedings” (Article 8(1)). Member state and EU courts are familiar with
the latter formulation, but the scope of the wording of the UPC Agreement
remains untested.
Parties
may also agree to the jurisdiction of any division of the Court of First
Instance, including the central division (Art 33(7)). Where a party has no residence or place of
business in a contracting member state, the division of the contracting member
state where the infringement takes place and the central division have
jurisdiction (Art 33(1)).
Although
the manner of application of these provisions is as yet uncertain, they may present
a further solution to one of the concerns of stakeholders expressed during the
drafting of the UPC Agreement, namely the prospect of having to defend an
infringement action before a local division which is either inexperienced or
which might adopt an unjustly pro-patentee stance. Whilst the provisions relating to
multinational judicial panels (Art 8) are already designed to mitigate such
problems, in addition it could be possible to structure a company’s
distribution network to ensure that no acts are undertaken by a person having a
domicile or place of business within the territory of a ‘rogue’ local or
regional division.
In
such circumstances, a patentee would still be able to sue the infringing distributor
in the ‘rogue’ division in respect of acts taking place within that country/region,
and in respect of acts performed by that same defendant in other contracting
member states. However, in order to take jurisdiction over other defendants
associated with that distributor, the claimant would have to commence
proceedings in either the division of the distributor’s domicile or the
domicile of one of its co-defendants. A company or corporate group could therefore
potentially ring-fence its operations in the event that, say, a particular
court became the go-to venue for non-practising entity litigation. Such a strategy would not deprive a patentee
of the possibility of fairly asserting its patents under the UPC – a defendant
or an entity with which it had a ‘commercial relationship’ would be very likely
to have a place of business in at least one contracting state, or proceedings
could be commenced in the central division – but it may be possible to mitigate
against unfair forum shopping to some extent. The efficacy of such a strategy would be
dependent on national laws relating to accessory liability, however (see below).
A
defendant may lodge a preliminary objection within one month of service of a
statement of claim to challenge the jurisdiction and competence of the UPC or
the competence of a particular division (currently, Procedure Rule 19).
Accessory liability and jurisdiction
As noted in 2009 by Mr Justice Arnold (at p.8 of the linked document), the
Agreement does not contain any provisions about accessory liability, meaning
that questions of the ‘procurement’ of infringement and joint tortfeasorship
may fall to be determined under national laws, which are not harmonised across
the EU. For example, if a patentee
wished to sue the US parent of a UK-based infringer in the UK local division, it
would have to make out a case under the applicable English law that the parent was either a joint
tortfeasor or had procured the acts of infringement, i.e. assuming the US
parent had not directly performed any infringing acts in the EU. Such a determination is, under English law,
dependent on the facts of the individual case.
Other countries will have their own approaches to these issues, and
concepts of separate corporate personality versus ‘single economic entity’
approaches may differ between the national laws of the contracting states. Such national rules would need to be taken
into account when designing any ‘ring-fencing strategy’.
Competences of the
divisions of the UPC
The UPC has ‘exclusive
competence’ in respect of the specified types of actions listed in Art 32(1),
including infringement, revocation, declarations for non-infringement and
preliminary injunctions. Entitlement
proceedings are not included, which remain within the competence of national
courts (Art 32(2)). As lack of
entitlement is itself a ground of revocation under the national laws of many
contracting states, entitlement may potentially be raised as part of a
revocation claim or counterclaim. There
is no express provision for the making of declarations as to matters such as
the essentiality of a patent to a given
standard, although
such declarations might be sought either as a defence to an infringement action
or as part of a declaration for non-infringement.
The most significant difference in
competence between the different divisions of the First Instance is that
actions for revocation and declarations of non-infringement may only be brought
before the central division, and not before local or regional divisions (Art 33(4)).
Local and regional divisions are, however, competent to hear revocation
counterclaims (Art 33(3)). A local or regional
division may either:
·
hear
both the infringement claim and revocation counterclaim together;
·
hear
only the infringement claim and refer the revocation counterclaim to the
central division, also known as ‘bifurcation’. The next post in this series
will look at bifurcation under the UPC in more detail; or
·
refer
both parts of the claim to the Central Division (Art 33(3)).
Article 33 also details with
situations where infringement and invalidity proceedings are already pending
before other divisions of the UPC (Art 33(2), (4), (5) & (6)).
If there is no local or
regional division for a given contracting member state, then actions shall be
brought before the central division (Art 33(1)).
The CJEU
Article 21 relates to
the role of the Court of Justice of the EU.
Except for the biotech directive and the supplementary protection
certificate regulation, the substantive laws relating to the infringement and
validity of patents are largely untouched by EU law. There has been a deliberate and concerted
attempt to avoid the jurisdiction of the CJEU in substantive patent law
matters, and specific provisions relating to infringement laws were removed
from the Regulation on creation of the Unitary
Patent. As the UPC Agreement is not technically an
instrument of EU law, the substantive infringement provisions will also, at
least in theory, fall outside the competence of the CJEU. Time will tell if the CJEU will nevertheless
take jurisdiction over these matters.
