The Unified Patent Court(“UPC”) became operational on 1 June 2023: it is a supranational court with exclusive jurisdiction for disputes relating to European patents with unitary effect and traditional European patents validated in the contracting Member States and in relation to which patent owners have not exercised their right to opt-out.

The opt-outprocedure allows proprietors of traditional European patents to exclude disputes relating to their patents from the UPC’s jurisdiction and defer them exclusively to national courts. The choice to opt-out can be revoked, provided that no national proceedings have been initiated relating to the patents involved, and must  be made within a period of seven years (extendable for a further seven years) starting from the third month before the UPC system becomes operational (the three month period prior to the start of operations during which the right to opt-out could already be exercised was referred to as the “sunrise period“). During the transitional period, traditional European patents will in any event be subject to the concurrent jurisdiction of the UPC and national courts; therefore, national courts will still be able to rule on the validity or infringement of traditional European patents, irrespective of whether patent proprietors have exercised their right to opt-out.

In creating a centralized system for patent disputes, the contracting States aimed at ensuring a uniform and territorially comprehensive protection for right-holders, limiting the costs of cross-border litigation and reducing complexity in comparison with traditional national systems.

To date, eighteen EU Member States have signed and ratified the Unified Patent Court Agreement(“UPCA”), while six States that have signed the UPCA but have not yet deposited their instrument of ratification; the latest being Romania, whose accession will take effect on 1 September 2024.

The UPC is competent for infringement and patent validity actions, as well as requests for damages, provisional and precautionary measures, and injunctions.

With respect to the structure of the Unified Patent Court, it comprises a Court of First Instance, composed of central, local, and regional divisions, each with specifically defined competences, and a Court of Appeal based in Luxembourg.

There are three central divisions of the Court of First Instance, located respectively in Munich (to which cases concerning chemical, metallurgical and engineering patents are allocated), in Paris (which is competent for litigation relating to inventions in the transport and industrial techniques fields, physics and electricity, as well as on supplementary protection certificates) and, following its recent opening, in Milan (which is competent for disputes on inventions in the fields of agri-food, phytosanitary, fashion, clothing and footwear, and pharmaceuticals, excluding patents with supplementary protection certificates).

The central division in Milan officially became operative on 27 June 2024, almost a year after the other two central divisions started their operations. As Milan replaced London, where the UPCA had originally envisaged as the location of the third central division, after the United Kingdom’s withdrawal from the European Union, the timing of its establishment is due precisely to the lengthy decision-making process and negotiations that followed. Italy’s central role in the patent landscape also contributed to the decision to locate the division in Milan: Italy is the third European State for number of patent applications filed each year, closely following Germany and France.

In addition to the three central divisions, the UPC is composed of local divisions, located in those UPCA Member States that have requested their establishment, as well as regional divisions, usually shared between two or more Member States that have not deemed it appropriate to establish a local division.

In addition to the Court of First Instance and the Court of Appeal, the UPC comprises a Registry, based in Luxembourg, and a Mediation and Arbitration Centre with offices in Lisbon and Ljubljana.

Each division of the UPC is composed of legally qualified judges and technically qualified judges, who work in synergy; the former have a legal background and often have had previous work experience in industrial property field, while the latter can claim experience in the technology sector, as well as a solid knowledge of civil law and legal procedures relevant to patent litigation. However, the latter will not substitute court-appointed technical experts, who can be appointed at any time to advise the Court on specific aspects of cases, as UPC proceedings of the past year have shown.

The allocation of competences between the divisions of the Court of First Instance depends on several factors, such as the type of action, the territory, the subject matter of the patent, and sometimes the parties’ choice. The central division is competent with respect to patent invalidity actions brought as a main claim and actions for a declaration of non-infringement. The local and regional divisions are competent for actions for declaration of infringement, counterclaims for invalidity – although these may be referred to the central division in certain instances – and preliminary proceedings. With regard to territory, the competent division will in most cases be determined on the basis of two criteria, subject to certain special cases, i.e., the defendant’s place of residence or the place where the infringement has taken place or is likely to take place.

One year after the system came into force, it is possible to assess cases brought before the Unified Patent Court: according to data updated to May 2024, 373 cases have been brought before the Court of First Instance, the majority of which are for  patent infringements, while 86 cases have been brought before the Court of Appeal.

Most cases have been filed before the German divisions in Munich, Düsseldorf and Mannheim. The remaining divisions, including Milan, Copenhagen, The Hague, Helsinki, Vienna and Brussels, have a minor number of cases, while the Lisbon and Ljubljana divisions had no cases as of May 2024, when the latest UPC report was made available.

With respect to the language of the proceedings, various criteria determine its choice: to date, English has been the most widely used language (50 percent), slightly ahead of German (44 percent), reflecting Germany’s leading role in the UPC system to date.

The so-called human necessities sector, which includes the phytosanitary and pharmaceutical sectors, ranks second among the industrial sectors with the highest number of disputes. With regard to this sector many cases have been brought by large pharmaceutical and biotechnology companies. One of the most prominent cases involved two large international biotechcompanies. The preliminary proceeding was brought before the local Munich division: the plaintiff claimed infringement of a European patent with unitary effect relating to a method for the detection of analytes. The German division accepted the plaintiff’s request in September 2023 and issued an immediately enforceable preliminary injunction on the basis of the likelihood of the validity and infringement of the patent. The defendant appealed the order before the Court of Appeal, which issued its decision in February 2024, overturning the judgment of the first instance court.

The legal principles set out by the Court in its decision are numerous, including the reference to the interpretative scope of the patent claims, whose wording was considered essential, but not sufficient to define the scope of protection of a patent: the description and drawings must also be taken into account and therefore play a central role. In addition, the Court considered the requirements for granting preliminary measures, in particular the issue of the burden of proof, confirming that it is up to the patent proprietor to prove infringement with a sufficient degree of certainty, while the defendant must prove that there is a greater likelihood that the patent is not valid.

The Unified Patent Court represents a historic turning point in the European patent litigation landscape, offering a quick and effective litigation system thanks to its centralized structure and high degree of specialization. We are confident that the recent opening of the central division in Milan represents a unique opportunity for Italy and for the industrial future of the country.

Authors: Gualtiero Dragotti, Laura Gastaldi, Massimiliano Tiberio, Camila Francesca Crisci