2 October 2023
Taking into account the environmental impact of day-to-day business operations and the aim of businesses to contribute to a world that remains livable, modern businesses are setting sustainability goals and face challenges. Aiming for the best and most valuable innovation while holding on to Environmental, Social and Governance (‘ESG’) values, can be challenging but can also benefit patent proprietors and provide competitive advantages.
As discussed in our previous contribution, creating and implementing environmental-friendly innovations can be facilitated by the patent system, for example by applying for ESG-friendly patents, such as patents for meat substitutes.
Next to using the patent system for green innovations, ESG-goals can be achieved by limiting or preventing the waste of all kinds of recourses, such as raw materials, excess production and packaging in case of patent infringement. In the event an innovator (patent proprietor) is confronted with an infringing product or product that is the result of an infringing production method and litigation is initiated, it is common practice for the right holder to request the court to grant several corrective measures, amongst others the destruction of the infringing goods. This standard practice however results in the destruction of – sometimes – fully functional, high quality, but infringing goods.
With the launch of the Unified Patent Court (‘UPC’) and the introduction of the Unitary Patent on 1 June 2023, one decision of the UPC can lead to corrective measures in 17 EU member states, since 17 member states have ratified the UPC Agreement. The legal basis for corrective measures (including the destruction of infringing goods) can be found in article 64 (1) UPC Agreement. It includes that the UPC may order appropriate measures to be taken with regard to products found to be infringing. Article 64(2)(e) UPC Agreement states that these measures ‘shall’ include the destruction of the products and/or of the materials and implements concerned. The UPC Agreement does not exclude sustainable alternatives.
The call for alternative, sustainable solutions that equally meet the right holders interests, has been on the rise over the last years in practice. We see that parties are looking for sustainable solutions and out of court settlements.
In practice, we see several alternative measures are often considered, whilst carefully looking at the specifics of the case and moreover not giving in on the right holders interests, such as the following:
It is uncertain and questionable how and to what extent the UPC will consider alternative measures. We establish that practice has shown that parties more often are working towards more sustainable solutions and settlements and believe that stakeholders such as innovators may - under specific circumstances - benefit from considering alternative solutions in their legal strategy when it comes to patent infringement and litigation at the UPC. Moreover, ESG-friendly solutions in specific cases may also benefit right holders.