Infringement claimants are not getting UPC forum all their own way

Co-Author: Geert Theuws

The ‘bifurcation’ of the Unified Patent Court first instance into local (and one regional) divisions and a central division have made forum-shopping an important consideration in proceedings before the court.

A feature of this is the different rules that apply to the forum of infringement and revocation actions (as well as counterclaims).

On paper, at least, these rules appear to place the advantage of forum choice with the infringement claimant. However, recent cases have featured tactics that challenge this advantage.

They also raise some of the case management challenges that have resulted from the bifurcated jurisdiction and the attitude of the judges to these so far.

Two starting points for infringement and revocation

The jurisdictional provisions in Article 33 UPC Agreement and Rule 75. 3 RoP provide two basic starting scenarios for UPC infringement and revocation actions when they concern the same patent and the same parties. These hinge on the order in which the infringement and revocation claims are lodged:

• Infringement action filed first: any revocation must be filed by counterclaim in the same division, as the infringement claim.
• Revocation action filed first: this must be filed in the central division, but the infringement claim can be filed in a local or regional division, or the central division.

Even in the second scenario, if the revocation claimant wants to counterclaim against the infringement action (which it may have to if it has no other infringement defence) then it must do so in the same division as the infringement claim. The central division action shall then be stayed pending a decision of the panel hearing the action for infringement pursuant to Article 33 (3) UPCA (Rule 75.3 RoP).

It can be seen from these rules that the infringement claimant has considerable control over forum (within limits to where the infringement occurred or the defendant’s domicile).

The result is a general forum-shopping advantage to the infringement claimant.

Can the revocation claimant take back control?

When a revocation counterclaim has been lodged in a local or regional division in response to an infringement action, can it get back to the central division? And, why would it want to?

The answer to the latter question is that the infringement claimant can be relied upon to have chosen a division which it has calculated will be favourable. Ergo, it should be avoided by the revocation claimant. Additionally, the central division revocation procedures have the potential to result in a faster decision.

So, how to escape? The answer, in theory, is Article 33(3)(b) UPCA. This gives the local or regional infringement division the discretion to refer the revocation counterclaim to the central division. The infringement action may then be continued in parallel or stayed.

Moreover, Article 33(3)(c) enables the local or regional division to refer the whole case to the central division.

There must be, however, some reason for these divisions to do this. A number of cases already show that the local or regional division would prefer to keep both infringement and revocation counterclaims. Most recently, the reasons for this were repeated by the Local Division of The Hague in Plant e-Knowledge v Arkyne¹ , as follows:

Such a joint hearing of the infringement action and the counterclaim seems to be appropriate in particular for reasons of procedural expediency and avoids the risk of delay that might be involved with bifurcating. It is also preferable because it allows both issues – validity and infringement – to be decided on the basis of a uniform interpretation of the patent by the same panel composed of the same judges.

In this case, both parties also agreed. But this reasoning can be expected to apply in similar cases where they do not.

Two cases where the revocation claimant has used different tactics

Rather than rely on Article 33(3)(b), tactics have developed to secure revocation actions in the central division despite parallel infringement cases locally. These are based on the way different parties can be used in the central and local division actions.

Amgen against Sanofi-Aventis and Regeneron

In the dispute between Amgen and Sanofi-Aventis, three Sanofi companies began litigation in the UPC by filing a stand-alone revocation action in the Munich section of the central division against Amgen’s EP 797 patent².

Subsequently, Amgen lodged an infringement action against these three companies, plus a fourth company, Regeneron, in the Munich local division³. Regeneron lodged a revocation counterclaim in that action, but the three Sanofi defendants did not.

This created parallel and essentially identical revocation actions in the local division and the central division.

The claimant of the infringement action and all four defendants subsequently agreed that the revocation counterclaim should be referred to the central division, and it was held that unanimous requests by all parties will be granted unless strong counter-arguments require otherwise.

Significantly, however, the Munich local division said that there were no strong counter-arguments, because the referral to the central division avoided duplication of revocation actions⁴.

The importance of only Regeneron lodging a counterclaim in the infringement action was underlined by the court. It stated that if all four defendants had lodged counterclaims in the Munich local division, the central division would have been obliged to stay all its actions under Rule 75.3.

By complete contrast, as it turned out, the revocation claimant not only kept the revocation actions away from the local division that the infringement claimant had chosen, but reached a position where the local division, while not staying the infringement proceedings for the time being, would consider the possibility of staying the infringement action under Rule 37.4 pending a decision on invalidity by the central division.

Edwards Lifesciences against Meril

In the dispute between Edwards Lifesciences and Meril, Edwards first lodged proceedings against two Meril defendants in the Munich local division, for infringement of its EP 825 patent⁵.

Later, a third company, Meril Italy, lodged a revocation claim against the patent in the Paris section of the central division⁶.

Edwards disputed whether Meril Italy was in reality the “same party” as the parent company Meril Life Sciences Pvt. Ltd, which was one of the defendants in the Munich local division. If it was, the stand-alone revocation claim would be impermissible under Article 33 UPCA.

The Paris section held that Meril Italy was not the same party as its parent company⁷. This was despite the fact that the subsidiary was found to be newly created and wholly owned, organised, directed, conditioned, and conformed to the strategic plan of the corporate group by the parent.

The result was that the stand-alone revocation action could continue in the central division, in parallel to revocation counterclaims lodged by the defendants in the infringement action in Munich, despite having been lodged later.

The court also acknowledged that this parallel action in the central division could provide a reason why the local division might transfer the revocation counterclaim to the central division (see further below).

Consequences

What happened next in Amgen?...

Once the parties had agreed to have the cases dealt with together by the central division, the biggest issue was how to align the referred revocation counterclaim with the stand-alone revocation claim, given that the latter was considerably further advanced compared to the former.

Firstly, the judge-rapporteur would allow both actions to be heard at the oral hearing date already fixed in the revocation action⁸. This was on condition that both parties were “on the same page” where it concerned the grounds for revocation, arguments, facts and evidence. In particular:

• all such facts, grounds, arguments and evidence were to be made known to all parties and accepted as submitted by the claimants in both cases. All defences raised by Amgen were deemed to have been raised in both actions against all claimants;
• all pleadings and applications (including the application to amend and auxiliary requests) were similarly deemed to have been submitted in both actions.

Further tidying up submissions were permitted. After that, the parties agreed to make identical submissions in both cases. Only costs would be dealt with separately.

The revocation actions were thus completely aligned in the central division. At the same time, the local division proceeds with the infringement action, but reserves the right to reconsider the possibility of suspending it.

…and in Meril’s dispute with Edwards?

The ongoing separation of the local division revocation counterclaim and the central division revocation claim created a problem for Edwards.

Edwards found that it needed a second round of auxiliary requests to amend its patent in the revocation case, in order to address arguments raised by Meril in its counterclaims in the infringement proceedings. These counterclaims had been filed after the deadline for submitting the statement of defence to the revocation action, and so it had not been possible to align its defence in this regard any earlier.

When using its discretionary powers in this respect⁹, the court balanced the following considerations:

• on the one hand, a subsequent amendment of a patent may lead to more efficient proceedings, narrowing the subject-matter and simplifying procedures, as well as safeguard the patent proprietor when controlling the scope of protection of its patent; and
• on the other hand, the admission of subsequent requests to amend the patent may force an extension of the time taken to allow the parties to arrange their consequent defence, and may undermine the right of defence.

In this case, these factors weighed against permitting the amendments¹⁰. As it had done previously in this case, the court referred the ability of the local division to refer the counterclaim for revocation to the central division under Article 33(3) UPCA, and potentially suspend the action for infringement.

The court also highlighted Rule 295(m), which may also be used to allow one of the divisions to stay its proceedings until the decision of the other division and then to decide on validity accordingly.

In general, the court said, the UPC framework does not exclude a patent from being attacked by different parties, with different claims, on different grounds and before different divisions. In these situations, the purpose of consistency of the decisions is safeguarded by the above provisions and the patent proprietor is not required to have its defences in the different proceedings aligned.

As a result, the proceedings would address the invalidity grounds alleged by the claimant without taking into account the further auxiliary requests proposed by Edwards.

Edwards requested that the revocation action be heard together with the counterclaims for revocation brought by the other Meril parties before the Munich local division, pursuant to Rule 340(1), but the court rejected this.

The clear message to Edwards was that the Munich court should use Article 33(3) to refer the revocation claim to the Paris central division or Edwards should agree this with Meril.

Infringement claimants are not getting forum all their own way

In both the proceedings described, the revocation claimant has successfully, or is poised to, take control of forum by moving its claims to the central division. The infringement claimant has probably lost some the advantages that are sought in choosing the forum for its action. However, this can only be assessed at the end of the proceedings. It will be very interesting to see how the two court cases develop and how the UPC system will deal with the challenges they pose, in particular how the local divisions involved will exercise their discretionary powers under Art. 33 UPCA.

_{¹ UPC_CFI_239/2023 (16 February 2024).}

^{2 _{UPC_CFI_1/2023.}}

^{3 _{UPC_CFI_14/2023.}}

^{4 _{ORD_392/2024, UPC_CFI_14/2023 (2 February 2024).}}

^{5 _{CFI_15/2023.}}

^{6 _{CFI_255/2023.}}

^{7_{ORD_578356/2023, UPC_CFI_255/2023 (13 November 2023).}}

^{8 _{ORD_10396/2024, ORD_10398/2024, UPC_CFI_1/2023, UPC_CFI_14/2023 (27 February 2024).}}

^{9_{Under Rule 30(2) Rules of Procedure.}}

^{10_{ORD_7184/2024, UPC_CFI_255/2023 (27 February 2024).}}