23 February 2022
When it opens, the Unified Patent Court's (UPC) ‘long-arm’ jurisdiction appears to give the court power to award damages for infringements over certain defendants domiciled outside the EU and a similar power to award preliminary injunctions. This article examines the reach of these powers for those who would like to use them, and avoid them.
The ‘long-arm’ jurisdiction of the Unified Patent Court (UPC), introduced to the Brussels Regulation No 1215/2012 as amended by Regulation 542/2014, gives the UPC jurisdiction over defendants domiciled outside the EU for acts of patent infringement committed within the territories covered by the court (Article 71(b)(2)). It also introduces the power, subject to a number of limitations, for the UPC to award damages arising from infringement of a European patent in certain jurisdictions outside the EU (Article 71(b)(3) Brussels Regulation).
In other words, the UPC can concern itself with acts of infringement of a European patent in non-EU European Patent Convention countries: Albania, Bosnia, the Former Yugoslav Republic of Macedonia, Iceland, Monaco, Montenegro, Norway, Serbia, Switzerland, Turkey and the UK. It does not apply, however, against defendants who are domiciled in Lugano Convention states: Iceland, Norway and Switzerland.
Article 71(b)(2) and (3) actually state as follows, as the jurisdiction of the UPC shall be determined as follows:
As regards the second of these powers, jurisdictions may only be established if property belonging to the defendant is located in any Member State party to the instrument establishing the common court and the dispute has a sufficient connection with any such Member State.
As stated in Article 71(b)(3), where the UPC has jurisdiction in relation to infringement damages over a defendant occurring within the UPC, in sub-paragraph (2), it “may also exercise jurisdiction in relation to damage arising outside the Union from such an infringement” (A jurisdiction which, within its limits, overrides the Court of Justice authority in Shevill v Presse Alliance (C-68/93) (7 March 1995)). Apart from the limitations on the countries and defendants this provision applies to (see above), it is subject to the requirement that “property belonging to the defendant is located in any Member State party to the instrument establishing the [UPC] and the dispute has a sufficient connection with any such Member State.”
It has been commented that, though this jurisdiction is discretionary, the travaux préparatoires make it clear that the words in relation to damage arising outside the Union from such an infringement” were intended to refer to the result of an infringement committed outside the territory of the EU, which could be, for example, the UK or Switzerland. Less clear is what this means in practice. For example, does it imply that the UPC could decide on an infringement of a UK patent, under English law, in order to decide what damages flow from that infringement? These questions will need to be worked out in the context of real cases in the UPC.
The requirement for a “connection” to a member state in which there are defendant’s assets is also unclear. Would it allow the jurisdiction to apply if the defendant has assets in, for example, Belgium, but the infringement takes place in Italy and that is where the defendant is sued?
While the scope of the long-arm power needs to be clarified by the UPC, it suggests a powerful extra tool in the hands of patent owners and their exclusive licensees. For potential defendant companies domiciled outside the EU who are concerned about the implications of the long-arm jurisdiction, but who wish to market within the territories covered by the UPC, the asset requirement suggests that pan-European infringement findings may be avoided by locating their R&D facilities, warehouse etc in the UK or Switzerland or to domicile themselves in Switzerland (a Lugano Convention country).
There is more. Article 71(b)(2) establishes the jurisdiction of the UPC over non-EU domiciled defendants, which is not in itself unusual for a European court. But, it also adds the words “Application may be made to a common court for provisional, including protective, measures even if the courts of a third State have jurisdiction as to the substance of the matter” (underline added). As such, it purports to give the UPC the power to exercise its discretion to grant a preliminary injunction (or other measures such as search and seizure) in respect of activity in again, for example, the UK and Switzerland.
The result is, in effect, a cross-border preliminary injunction against non-EU EPC countries. In this case, holding assets outside the UPC territories would not appear to assist a potential defendant to avoid the reach of the UPC.
We have concluded elsewhere that a similar cross-border preliminary injunction, covering the UK and UPC participating countries, is justiciable in the English court under English law principles, carrying advantages of speed and an emphasis on balance of convenience factors over merits factors. If the English court and the UPC were to take up these respective cross-border jurisdictions, it would raise the interesting prospect of conflicting preliminary injunctions, which would have to be settled on a who-got-their-first basis under jurisdictional rules.
Patentees and their exclusive licensees will want to explore the potential opportunities provided by the long-arm jurisdiction of the UPC where it can enhance a strategy of one-stop-shop enforcement in the new court. For companies that are concerned about the possibility of the long-arm preliminary injunction jurisdiction, it underscores the importance of early patent revocation to ‘clear the way’ of relevant patents. Such a revocation action could be brought in the UPC in respect of a unitary patent or in any national court against the national designation of a European patent that has been opted-out (but could be at risk of being opted-in). Another interesting strategic option would be to back up a UPC revocation with a quick revocation in the English Patents Court against the UK-designation of a relevant European patent which is equivalent to a unitary patent or European patent not opted-out of the UPC. Such a revocation decision could then be used to influence the UPC should it later consider the merits factors of awarding a preliminary action on that patent.
Want to find out more? Look out for Paul England's forthcoming publication 'Can the English Patents Court order a cross-border preliminary injunction?' in the Journal of Intellectual Property and Practice.
by multiple authors
by multiple authors
by multiple authors