Europe’s unified patent court draws companies seeking one-stop shop

Every other Thursday, after lunch, Pierluigi Perrotti sits in his office in Milan and joins a call with his fellow judges from Europe’s Unified Patent Court. Since the UPC opened on June 1 last year — more than a decade after the regulations underpinning it were agreed — this “Judges’ Corner” meeting is used by the group to iron out issues and ensure operations are running as they should.

“There is great expectation on the UPC,” says Perrotti, the presiding judge of the court’s Milan local division. He first applied to be on the UPC’s bench more than ten years ago — and the time it took for the UPC to begin its work is an illustration of “the hurdles that this institution met before starting to run effectively”, he explains.

Under the EU’s unitary patent system, companies can apply for one patent and use one legal system through one court, the UPC, to cover 17 jurisdictions in the trading bloc.

The aim is to streamline the process for inventors and save time and money for applicants by centralising litigation, rather than having the same battles fought in parallel across multiple countries.

By most accounts, the UPC’s inaugural year has gone well. As of the end of May, 373 cases had been filed with the court, according to the latest data — indicating companies’ willingness to use it.

“In pure numbers, the court has been a runaway success,” says Alex Wilson, a patent litigator at Powell Gilbert, a law firm specialising in IP litigation. “The trickle of patent infringement cases in the first months has turned into a steady stream. Patent owners from most major industries have put their European patents in the UPC basket.”

Early adopters of the court include electronics and mobile phone companies such as Panasonic and Nokia, which are respectively suing smartphone maker Xiaomi and ecommerce giant Amazon for patent infringement.

In terms of its structure, the UPC has both central and local or regional divisions. Local divisions handle more routine work, such as patent infringements. Central divisions primarily deal with the revoking of patents completely.

Different ‘central’ divisions of the court hear particular types of case. For example, Paris is the go-to court for patents involving electricity and civil engineering, while Munich is responsible for mechanical engineering and weapons.

Milan will upgrade from being a local division of the UPC to also becoming the network’s third central division later this month. Its role will officially expand to become the venue responsible for patents involving “human necessities”, such as pharmaceutical and medical devices.

Patent owners from most major industries have put their European patents in the UPC basket.

Ireland is now looking to join the system as a local UPC division to deal with European patent disputes. With Brexit having caused the UK, one of the key supporters of the UPC, to leave the system, many UK patent lawyers have become Irish-qualified in anticipation of having a venue closer to home. A referendum on Ireland’s participation in the UPC, scheduled to take place last week, was delayed, however — to avoid a clash with the European and local elections.

Liz Cohen, an intellectual property partner at law firm Bristows, believes the UPC “is still finding its feet in some respects.” She cites some examples of inconsistent decision making but believes these should be “ironed out over time”, as the UPC’s Court of Appeal, in Luxembourg, clarifies the “correct approach to be taken on various issues”.

One other criticism levelled at the UPC is that it has, on occasion, lacked transparency. For example, it was initially slow to make public some of its decisions and orders, and countries have taken some divergent approaches — fewer court documents being published in Germany and Italy, say, than in Sweden and the Netherlands.

However, an April UPC Court of Appeal ruling in favour of greater transparency has given practitioners hope that its workings will be more open. “The practice following this decision should be substantially harmonised between courts,” says Sebastian Moore, partner and head of intellectual property at Herbert Smith Freehills.

One remaining big test for the UPC is to what extent pharmaceutical companies will be willing to litigate their patents in its court system. But some lawyers argue that Big Pharma was always going to be slower to use the UPC framework, due to the huge ramifications for any company if a patent were to be revoked, in one swoop, across so many jurisdictions.

Perrotti looks to the future with considerable optimism, though. The UPC has “an increasing caseload”, he notes, which demonstrates the success of the new court set-up so far. “I think that the players are getting confident in the system,” he says.