Parallel national and UPC proceedings after the Court of Appeal decision in Mala v. Nokia

During the seven-year transitional period, both the UPC and national courts have parallel jurisdiction to hear infringement and invalidity actions. In principle this could result in parallel proceedings in different countries and consequently in irreconcilable decisions. Recent emerging case law has shown how the UPC will approach these situations.

A common case presents as follows: A company starts a revocation action before a national court. Another company, usually belonging to the same company group, subsequently files a UPC revocation action regarding the same patent. As the UPC revocation action overlaps with the national revocation action, there is a risk of irreconcilable decisions.

In such cases where national proceedings are already pending, the UPC must decide whether it has jurisdiction and whether it should stay the proceedings. The key issue is the interpretation and applicability of Art. 29 to 32 and Art. 71c (2) of the Regulation (EU) No 1215/2012 (Brussels I recast Reg.), which provide the rules for the courts of the EU Member States on how to coordinate civil proceedings which are identical or related to each other and are pending simultaneously in different Member States.

A decision by the Court of Appeal has ruled that the UPC must also consider national proceedings which were already pending before the entry into force of the UPCA on 1 June 2023. We also have first guidance on cases in which the UPC would stay proceedings due to a parallel national revocation action.

National proceedings pending before 1 June 2023 to be taken into account

While the Central Division Paris held the view that it did not have to take into account parallel national proceedings which were started before 1 June 2023 (CD Paris, Mala ./. Nokia, 2 May 2024, UPC_ CFI_484/2023), the Local Division Paris ruled that these national proceedings were relevant (LD Paris, Abbott ./. Dexcom, 4 July 2024, UPC_CFI_230/2023).

The Court of Appeal provides clarity and states that the court must examine its jurisdiction and stay the proceedings even in cases where the national proceedings were pending before the entry into force of the UPCA (CoA, Mala ./. Nokia, 17 September 2024, UPC CoA_227/2024). For the Court of Appeal, it is the parallel nature of the proceedings that is decisive, and not the date on which the proceedings were commenced. This ensures that the purpose of the Brussels Ia Regulation, namely, to avoid conflicting decisions, is achieved.

Under which circumstances will the UPC decline jurisdiction or stay proceeding?

The Court has to decline its jurisdiction if the proceedings are identical, i.e. if they involve the same cause of action and the same parties, Art. 29 (3) Brussels I recast Reg. Regarding cases in which the parallel proceedings are brought by companies belonging to the same company group the Court of Appeal refers to the established case law by the European Court of Justice (ECJ 19 May 1998, C-351, ECLI:EU:C:1998:242, Drouot) according to which parties can be regarded as the same parties, if they have indissociable interest.

However, according to the Court of Appeal and the Central Division Munich (CD Munich, NanoString ./. Harvard College, 17. October 2024 – UPC_CFI_252/2023) parties belonging to the same group of companies do not have such an identity of interests, that they should be considered as the same party.

If the proceedings are not identical, the Court may stay the proceedings, if a related action is pending before a national court, Art. 30 (1) Brussels I recast Reg.

In the case before the Court of Appeal (“Mala”) and a case before the Central Division Munich (“Nanostring”) the parallel proceedings before the UPC and the national court were considered to be related actions, as both the national and the UPC revocation action concerned the revocation of (at least) the same part of the European bundle patent and both proceedings were based on largely similar facts, grounds, arguments and auxiliary requests. The parties to the national and UPC proceedings were further considered related as they belonged to the same group of companies and had the same parent company.

In “Mala” the Court of Appeal stayed the proceedings. As the national proceedings were in their final stage pending before the Federal Court of Justice, while the UPC proceedings were at an early stage pending before the first instance of the UPC, it was not necessary to stay the UPC proceedings for a long period of time in order to await the final national decision. The court also considered it cost effective to avoid UPC revocation proceedings in case the parties would settle on the basis of the national revocation proceedings.

In “Nanostring” the Central Division Munich did not stay the UPC proceedings. In the view of the Central Division the interests of the parties and procedural economy outweighed the risk of irreconcilable decisions. The parties unanimously requested the court to decide on the UPC revocation action as they needed legal certainty as soon as possible and the UPC revocation action in first instance was already at an advanced stage, the Central Division was ready to decide, while the national revocation proceedings pending appeal at the Federal Court of Justice were at an early stage. Therefore, no decision could be expected at national level within the next year. The Central Division Munich was also not in favor of a partial stay with regard to the German part of the European patent due to the principle of procedural efficiency. Furthermore, the Central Division considered that it would be cost efficient to proceed with the UPC revocation action, as the parties could settle the “national” case on the basis of the UPC decision. Finally, the Central Division reached the same conclusion as the Federal Patent Court. Thus, at least for the time being, there was no risk of irreconcilable decisions.

Outlook and strategic considerations

For the claimant, before commencing a UPC revocation action, it is important to check whether national revocation proceedings are pending, as these could lead to the UPC (partially) declining its jurisdiction or staying the revocation proceedings. One of the key factors is the stage of the UPC and national proceedings. If a decision by the national court is expected soon, i.e. the national proceedings are well advanced while the UPC proceedings are still in their infancy, it is likely that the UPC revocation proceedings will be stayed.

The defendant can raise these issues in a preliminary objection, since - according to the CoA - they should generally be decided at an early stage of the proceedings. However, the court may decide to deal with the preliminary objection in the main proceedings.

In the light of the above decisions, it also seems unlikely that the UPC Courts will consider a partial stay for the part of the European patent which is subject to parallel national revocation proceedings. One strategy could be to carve out this national part of the European patent from the UPC revocation action beforehand, in order to have the UPC proceed and not decline its jurisdiction or stay the proceedings.