Nullity proceedings in the UPC system

The Unified Patent Court (“UPC”) is exclusively competent for actions for revocation of patents and SPCs and counterclaims for revocation of patents and SPCs. “Patent” in this context means European patents (classical “EP”s) as well as European patents with unitary effect (the newly formed “UP”s). However, during a transitional period of seven years after the UPCA enters into force, a revocation action of a European patent or an SPC based on a European patent may still be brought before national courts or other competent national authorities.

In addition, unless an action has already been brought before the UPC, during said seven-year transitional period the proprietor of or applicant for an EP granted or applied for prior to the end of the transitional period, as well as a holder of an SPC based on an EP, can opt out this EP and respective SPCs from the exclusive competence of the UPC.

Territorial and Material Scope

While decisions of the UPC on UPs cover the territory of all EU Member States participating in the UPCA, decisions on European patents cover only the territory of the Contracting Member States of the UPCA for which the European patent has effect. Partial revocation of the patent in all these states is possible (Rule 118.3 RoP).

Where to bring revocation actions

As a rule, revocation actions are heard before the central division (Art. 33 Sec. 4 UPCA). However, if an infringement action between the same parties relating to the same patent has been brought before a local or a regional division, the revocation action has to be brought before the same local or regional division (Art. 33 Sec. 4 UPCA). If the revocation action is brought as a counterclaim  while infringement proceedings are pending, this has to be done of course before the local or regional division dealing with the infringement proceedings. In this case, the concerned local or regional division may under its own discretion:

• request the allocation of a technically qualified judge and proceed with the infringement action as well as the counterclaim for revocation (Art. 33 Sec. 3 lit a UPCA);
• refer the counterclaim for revocation to the central division and suspend or proceed with the infringement action (Art. 33 Sec. 3 lit b UPCA); or
• if the parties agree, refer the whole case to the central division (Art. 33 Sec. 3 lit. c UPCA).

Against whom shall the action be brought

The action for revocation has to be directed against the proprietor of the patent (Rule 42.1 RoP). A counterclaim for revocation is therefore not possible in an infringement action brought by a licensee (Art. 47.5 UPCA).

Course of the proceedings

The proceedings before the UPC in first instance consist of three stages: written, interim and oral procedure. 

During the written procedure, the pleadings are exchanged. After the Statement for revocation is lodged, which amongst others has to contain the requests, the grounds for revocation as well as the evidence relied on (Rule 44 RoP), the defendant has one month to lodge a Preliminary objection concerning the jurisdiction and competence of the UPC, the competence of the division and the language of the Statement of claim (Rule 19 RoP), which in general follows the language of the patent (Rule 45 RoP).

The Registry invites the claimant to correct any deficiencies within 14 days of service of the notification of the Preliminary objection (Rule 19.5 RoP). Having given the parties the right to be heard, the judge-rapporteur decides as soon as practicable on the Preliminary objection (Rule 20.1 RoP).

In general, independently from the Preliminary objection, defendant has to file the Defence to revocation within two months of service of the Statement for revocation (Rule 49.1 RoP), including – if relevant – an Application to amend the patent and a Counterclaim for infringement (Rule 49.2, 50.2, 50.3 RoP).

The claimant has two months from the service of the Defence to revocation (including Counterclaim, Application to amend the patent) to reply to the Defence to revocation, the Counterclaim for infringement and the Application to amend the patent (Rule 51, 56.1 RoP).

The defendant has another month from the service of the Reply to answer in his Rejoinder to the Reply the matters raised in the Reply including issues on the Counterclaim for infringement and on the Application to amend the patent (Rule 52, 56.3 RoP).

Finally, the claimant has one month from the service of the defendant’s Rejoinder to lodge a Rejoinder with regard to Counterclaim issues as well as arguments regarding the Application to amend the patent raised in the defendant’s Rejoinder (Rule 56.4 RoP). After that, the written procedure is closed (Rules 58, 35 RoP). Further written pleadings may only be exchanged with the consent of the judge-rapporteur (Rules 58, 36 RoP).

This regime also applies for the invalidity arguments in case a counterclaim for revocation is filed.

In the interim procedure, the judge-rapporteur prepares the oral hearing (Rule 101 RoP) and may order an interim conference – held in general by telephone or video conference (Rule 105 RoP) – to clarify questions with the parties (Rules 103, 104 RoP). The interim procedure in general takes three months of the closure of the written procedure (Rule 101.3 RoP).

The oral procedure follows the interim procedure. An oral hearing date is set as soon as practicable after service of the Statement of defence (Rule 28 RoP). If no such date has been sent before, it is to be set during the interim procedure, giving the parties at least two months’ notice unless the parties agree to a shorter time period (Rule 108 RoP).

The UPC shall give the decision as soon as possible after the closure of the oral hearing, ideally within six weeks of the oral hearing (Rule 118.6 RoP).

Thus, according to the Rules of Procedure, there are only about nine months between the filing of the lawsuit and the oral hearing. A judgment should be available after around ten and a half months.

Substantive law 

The UPC bases its decision on Union law, the UPCA, the EPC, other international agreements applicable to patents and binding on all Contracting Member States and national law. The substantive law defining reasons for invalidity is therefore mainly found in the EPC. Accordingly, the main grounds for invalidity are lack of novelty, lack of inventive step, insufficiency of disclosure, added matter as well as lack of patentability and unlawful withdrawal.

Costs

Court fees for a revocation action before the UPC according to the current proposal for the fee schedule amount to 20k EUR (fixed fee). For a counterclaim for revocation, the fee is the same as for the infringement action subject to a fee limit of 20k EUR. The maximum limits for recoverable lawyers' fees lie between up to 38k EUR (value in dispute up to 250k EUR) and up to 2 Mio. EUR (value in dispute more than 50mio. EUR). 

The UPC's tight deadline regime in invalidity proceedings is likely to be challenging for both future invalidity plaintiffs and defendants. In addition, it remains to be seen how the UPC will interpret the grounds for invalidity of the EPC, to what extent it will follow the standard of the EPO and what significance the fact will have that judges from the entire UPCA territory from different jurisdictions and with a correspondingly different understanding of the law will have to create a uniform case law before the UPC. Compared to for instance nullity proceedings before the German Federal Patent Court, it is to be expected that nullity plaintiffs will have to overcome higher hurdles than before in order to argue lack of inventive step, should the UPC adopt the problem-solution approach and the could-would approach of the EPO. Courts in the Netherlands and Belgium on the other hand already apply EPO case law in this context: should the UPC adopt a similar route, national case law of such jurisdictions may provide some insight on how the UPC may decide.