13/06/2024
According to recent statistics released by the Unified Patent Court (available here), 373 cases have been received since the court opened its doors on 1 June 2023, including 134 infringement actions and 39 revocation actions. Cases are numbered however according to the make-up of the parties involved, meaning that litigation based on a single patent against multiple defendants will be assigned multiple case numbers. As a consequence, the statistics overstate slightly the number of patents being litigated.
In this article, we take a deeper-dive into the infringement actions launched at the Unified Patent Court (UPC), based on the underlying European patents being litigated, and present a break-down of the data by technology sector, applicant nationality, court division, and value of the action. For related insights, click here for our article focussing on five key developments of the UPC court system.
Technology Sector
According to the UPC case management system, just over 100 European patents have been litigated at the UPC In the first year. Based on the technology sectors, most disputes have arisen in the fields of telecommunications, medical devices and software / computing.
103 infringement actions were reviewed and categorised as follows: telecommunications (21 cases), medical (16 cases), software / computing (15 cases), electrical (13 cases), manufacturing (12 cases), life sciences (9 cases), consumer goods (6 cases), mechanical (4 cases), food technology (4 cases), and logistics (3 cases).
Location
Nearly three quarters of the infringement actions have been filed in Germany in the Local Divisions in Munich, Dusseldorf, Mannheim and Hamburg, with Munich proving to be the most popular court location by far. While it is still too early to know whether what role forum shopping will play in litigation strategy at the UPC, it is clear that litigants have already chosen to apply maximum pressure against defendants by pursuing multiple actions in different Local Divisions at the same time. A significant number of cases have also been filed in the Paris Local Division and the Nordic-Baltic Regional Court. Statistics from the UPC show that 50% of the actions filed at the UPC are in English. However, when looking at infringement cases, the dominance of the German courts means that this falls to just under 40%.
Nationality
In terms of the nationality, most infringement actions have been brought by European litigants, with the respective split of cases between the major European states (including the United Kingdom) being relatively flat.
After Europe, litigants from the United States account for 40 of the actions (see below for discussion), with Japan accounting for 12 (including Panasonic, FUJIFILM Corporation, Astellas, NEC), Korea accounting for 4 (Seoul Semiconductor, Seoul Viosys) and China for 2 (Huawei).
Europe, the United States and Japan are the top three filers of patent applications at the EPO, so it is not surprising to see this trend reflected in the litigation numbers at the UPC. However, (based on the data so far) United States litigants appear to account for a larger proportion of infringement actions at the UPC than their share of European patent applications filed at the EPO, suggesting that United States companies are more ready to enforce their rights, and to do so on a larger scale. Much of the United States litigation is due to a number of major disputes and ongoing litigation between companies like Edwards Lifesciences and Meril, 10x Genomics and NanoString, and DexCom Inc and Abbot. However, more than 10 of the infringement actions filed in 2024 have also been filed by United States based Patent Assertion Entities.
Patent Assertion Entities
Panasonic Holdings Corporation launched a series of actions against Xiaomi and Guangdong OPPO Mobile Technologies in July 2023 in the Munich and Mannheim divisions based on six European patents relating to mobile telecommunication system technology.
2024 has seen a further actions filed by a number of different patent licensing entities, most of which have been filed in the German courts in the telecommunications and the electronics space. Most Patent Assertion Entities are based in in the United States, such as Network Systems Technologies LLC (who have asserted three patents relevant to Integrated Circuit technology against various defendants), and Headwater Research LLC (who have asserted four patents relevant to Mobile Network technology against various defendants). Entities in the UK, Spain, Ireland and Finland are also active.
The role of patent assertion entities against large operating companies, and the importance of third party funded litigation as a trend in patent disputes before the UPC remains to be determined. The answer will ultimately depend on the readiness of the UPC divisions to find patents valid and infringed, and to award injunctions and/or significant damages against losing defendants.
Value of Actions
There is a wide range of values of actions filed at the UPC, ranging from €150,000 at the lower end up to a value of €100 million in the case of a Life Sciences dispute between Amgen v Sanofi. The distribution of the stated case values shows that it is most common for litigants to indicate values of between one half million euros and 4 million euros, with case values subsequently tailing off up to about 20 million.
Court fees at the UPC include a fixed fee component and an additional value based fee which varies from €0 (zero euros) for case values up to €500,000, up to an additional fee of €325,000 for case values of 50 million euros or more.
Fee shifting is possible at the UPC meaning that the losing party can be ordered to pay all or some of the legal fees of the winning party. However, the actual award of costs will depend on a number of factors, including the discretion of the court, fairness and proportionality. Although fee shifting may be an attractive feature for some litigants, litigants will still have to bear their costs (and possibly those of the defendant) in an unsuccessful action, and (since the award is open to the discretion of the court) may also not fully recover costs in a successful action. The readiness of the UPC divisions to apportion fees will be closely watched over the next one or two years as the court system becomes more established.
Connection with Oppositions at the EPO
Around a 30% of all of the patents litigated at the UPC have been or are the subject of ongoing Opposition Proceedings at the EPO.
From 1 June 2023, litigation had also begun on a number of European patents still in the 9 month post grant Opposition Period. As nearly all of those patents were subsequently opposed at the EPO, there are now several cases where the UPC divisions and the EPO will need to coordinate their actions in hearing parallel proceedings. Where this is not possible, we will likely see case law develop to handle situations in which an award is made by a UPC division on a patent that is subsequently found invalid by the EPO.
Coverage
While most commentators expected Ireland to become the 18th state to ratify the UPC Agreement, it seems that this position will now be taken by Romania. Romania ratified the agreement on 31 May 2024, and has confirmed that the agreement will enter into force on 1 September 2024. Meanwhile, Ireland delayed its 2024 referendum on UPC membership (which was scheduled for 7 June 2024) to avoid complications with the European elections. Some spectators believe that Ireland will not now hold its referendum until 2026, after the general election in 2025. When the UPC agreement enters into force in Romania, the market coverage of the corresponding Unitary Patent (covering 18 states) will be well over 300 million people.
Summary
The first year of the UCP has already proved that the new court system is attractive to litigants. However, many questions about its operation and effectiveness remain. We look forward to reporting on more of the questions and answers in coming months.
This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking any action in reliance on it.
