It’s been almost a decade since 24 EU member states signed their agreement to take forward plans for a common Unified Patents Court (UPC), but as more and more key milestones are met, the UPC’s own implementation roadmap confirms that the court is likely to be open for business in June 2023.

The UPC is designed to provide uniform protection for rights under European Patents and the new, single European Patent with Unitary Effect (UP) whether held by owners or licensees. It establishes a single litigation system amongst Contracting Member States (currently all EU member states save for Spain and Poland) for actual or threatened patent infringements, declarations of non-infringement, and provisional measures and injunctions.

Crucially, UPC judgments will take effect and can be enforced across every Contracting State. This is in sharp contrast to the position today where a party may need to separately challenge or seek relief in every jurisdiction in which its rights are being compromised, and then, if successful, plan for separate enforcement.

The UPC will have a significant presence across the EU: 14 First Instance courts have been announced in 11 Contracting Member States; an Appeal Court will be based in Luxembourg; and there are plans for specific mediation and arbitration centres in Lisbon and Lubljana.

Universal protection from here on in?

Convenience, universal protection and efficiency are obvious drivers behind the plans. Of course, it will take some time for litigants and their lawyers to become familiar and comfortable with the court and its powers. It’s also important to note that the territorial scope of UPs, and in turn, judgments of the UPC, will only take effect in Contracting States which ratified the UPC Agreement prior to the grant of the UP, so some parties may have to accept a patchwork of remedies for some time to come.

Some commentators have also already pointed to tactical decisions which parties may make by opting in or out of the court’s auspices. (There is a choice to convert existing European patents to UPs; or to opt out by expressly removing certain European Patents from the court’s jurisdiction). For example, patent-holders anticipating challenges may prefer to opt out, forcing their opponent to spend the time and costs of pursuing in every relevant national court.

Positive factors – especially for smaller/ start up businesses?

We would nevertheless expect to see the UPC, if successful, forging over time a proportionate, “one-stop” litigation regime which protects IP rights across the EU.
A few facets point to particular benefits for smaller or newer businesses and individuals, precisely the type of party for which a challenge to IP rights can be make-or-break. For example, the dedicated mediation and arbitration centres signal a policy decision to commit to commercial and proportionate compromise in appropriate cases, rather than push on to trial. Similarly, issue fees will be fixed (save for a value-based element for claims over Euros 500k); and the UPC will operate on a regime of capped recoverable costs.

As we see in other jurisdictions where fixed costs are in play, there is more choice for litigating parties, and more chance of a level playing field. Where there are limits to legal costs, the economics of third party funding become viable even at the modest end of the market. Nevertheless, the UPC’s rules of procedure demonstrate an intention to progress cases on a swift timetable, which means that litigants will need access to experienced and well-resourced law firms – which may be out of reach of some parties unless they have the support of legal finance.

Having seen a continual rise in demand for funding for tech and life-sciences IP cases in both the USA and Europe, Erso Capital launched its dedicated $500m IP assertion facility in September 2022. We have already seen a keen interest in our facility from international IP lawyers who are preparing their practices for the launch of the UPC court and the diversity of litigants it may bring to them. Access to Erso’s capital pool to provide non-recourse finance for patent holders, or to support law firms offering patent litigation contingency fee arrangements, could unlock access to the court for a wide range of litigants.

Contact us for further information.