UPC Report 03|25

UPCA or national law – the temporal divide

The Mannheim Local Division has delivered clarifications on what law is applicable to infringements that ended before and those that continued after the UPCA entered into force (decision of 11 March 2025 – UPC_CFI_162/2024):

The UPC must apply national law to infringements committed before the UPCA entered into force on 1 June 2023 and concluded before that date, it decided (Article 3, letter (c) UPCA). The Mannheim Local Division did not address the question of whether the court must investigate national law ex officio or the parties had to present arguments. However, it was in the claimant’s interest to advance its own arguments on national law, it held.

For acts of infringement that take place after the UPCA entered into force, the UPCA is primarily applicable. National law serves only to fill gaps, for example in licensing contract law or on non-harmonised limitation period matters. In the view of the Mannheim Local Division, this priority of application of the UPCA applies to both unitary patents and European bundle patents. Claimants therefore principally have free choice of court (UPC or national court, Article 83(1) UPCA) during the transitional period until 31 May 2030 – but by making this choice, can also specify the applicable law: The UPCA before the UPC or national law before a national court. That applies at least before national courts, which are generally not supposed to apply the UPCA in national infringement proceedings (see Karlsruhe Higher Regional Court, judgment of 14 February 2024 – 6 U 232/22). This choice can have practical implications on patent infringement by equivalent means, on which the (limited) available case law indicates certain divergence from German jurisprudence (see UPC Report 12|24 | Gleiss Lutz).

The UPCA was also applicable to acts of infringement that started before the UPCA entered into force and continued after 1 June 2023, the Mannheim Local Division found. The ongoing nature of the infringement meant that retroactive application would not be unlawful. A formalistic approach to establishing whether an infringing act was ongoing must not be applied; what was decisive was not whether an ongoing infringement could be referred to in terms of separable acts, but rather whether the infringer could have stopped the infringement when the UPCA entered into force, yet decided to continue. However, for reasons of equity, the Mannheim Local Division allowed the parties to rely on national laws where they were more favourable than the UPCA. It was up to the parties to argue the more favourable legal position and its application in the specific case (which would require that the party in question knows the more favourable national law in the Member States involved). 
 

Territorial competence of local divisions

The Brussels Local Division has decided that a local division’s competence over an application for provisional measures does not necessarily require that the defendant has committed an act of infringement in the Contracting Member State of that local division; it is sufficient that the applicant asserts and, if necessary, provides evidence that the defendant’s infringing products reached customers in the Contracting Member State hosting the local division in question, Article 33(1), letter (a) UPCA (order of 21 March 2025 – UPC_CFI_582/2024). The fact that one of the two defendants is domiciled in another Contracting Member State does not result in the local division of the other Contracting Member State having primary competence. The insightful discussion of the competence regime in Article 33(1) UPCA and its relationship with Article 7(2) Brussels I Regulation culminates in the conclusion that the applicable set of rules allow for forum shopping; different local divisions could have parallel jurisdiction for one and the same case. The restrictive interpretation of Article 7(2) Brussels I Regulation (Recast) advocated by the ECJ in Melzer v. MF Global (C-228/11) was not directly applicable to Article 33(1) UPCA, it said.
 

Necessity as a separate requirement for preliminary injunction

The UPC Court of Appeal has decided that procedure for provisional measures can only be applied if, in the circumstances of the case in question, a decision on the merits cannot be awaited. Otherwise, provisional measures are not “necessary” (see Rule 206.2(c) RoP) – irrespective of whether the patent has been infringed – and the applicant is to be referred to proceedings on the merits, which provide more procedural safeguards (order of 24 February 2025 – UPC_CoA_540/2024). The burden of proof for the necessity of a preliminary injunction lies with the applicant.

In the case decided, the Court of Appeal denied the necessity of the preliminary injunction because the contested embodiment had already been on the market for several years when the patent at issue was granted. The fact that a trade fair at which the defendant had announced its participation was imminent did not make the preliminary injunction necessary in the circumstances of the case. The requested preliminary injunction would not have maintained the status quo – which was not unlawful until the patent at issue was granted – but rather would have changed the status quo on the market. In the view of the Court of Appeal, the applicant did not sufficiently substantiate that the requested provisional measures were necessary to protect its market share or its prices or for any other purposes (preventing stockpiling of the contested product by customers or with a view to pending public tenders).
 

Urgency in respect of injunction proceedings concerning unitary patents

The Brussels Local Division has ruled that proceedings on the merits are the norm and proceedings for provisional measures are the exception. An interim injunction should only be granted in exceptional circumstances relating to a temporal or factual necessity. In any event, the applicant must not act negligently or hesitantly and must submit its application for an injunction without delay the moment it becomes reliably aware of the alleged infringing actions and is able to file an objectively promising application. In the case of a unitary patent, this may mean that the application must be filed before unitary effect is registered (order of 21 March 2025 - UPC_CFI_582/2024).

The date on which unitary effect is entered in the register is not decisive when assessing urgency. The starting point is instead the date of publication of the grant of patent; the applicant can and must file a promising application for a preliminary injunction without delay from this point in time and cannot wait for registration of unitary effect. In the cased decided, the grant of patent was published on 12 June 2024. The patent proprietor then filed a request for unitary effect on 2 July 2024, which was registered on 23 August 2024. The application for provisional measures was filed on 2 October 2024, which the Brussels Local Division held to be too late.
 

Security for legal costs imposed on Chinese parties

The Munich Local Division has granted a defendant’s request to impose security for costs on a claimant pursuant to Rule 158 RoP on the grounds that the claimant was domiciled in China (order of 19 March 2025 - UPC_CFI_425/2024). The Munich Local Division regarded China as a country that fails to meet its obligations under the Hague Service Convention, making enforcement of the UPC’s decision on costs unlikely or unreasonably difficult. The judge-rapporteur based his decision not only on UPC experiences but also on those of the German courts. It can be assumed that, on request, local divisions will generally require Chinese claimants to pay security for legal costs. The UPC also allows security for costs to be imposed on defendants (Rule 158 RoP). Based on the Munich Local Division’s reasoning, a Chinese defendant company could also be ordered to provide security for legal costs, although the hurdles here would be higher than in the case of security for costs from a claimant (see order of 3 December 2024 – UPC_CFI_140/2024 and UPC Report 1|2025).
 

Timely payment of court fees

Pursuant to Rule 15.2 RoP, a statement of claim shall not be deemed to have been lodged until the court fees have been paid. This applies mutatis mutandis to counterclaims for revocation (Rule 26 RoP), protective letters (Rule 207.4 RoP) and other procedural acts. Munich Local Division has now ruled that what matters for the purposes of Rule 15.2 RoP, and thus for the timeliness of the procedural act, is not receipt of the fees in the court’s account but when payment occurs (order of 11 March 2025 – UPC_CFI_201/2024). Exactly what is meant by “payment” was not specified by the Munich Local Division but, in practice, it likely refers to receipt of the payment order by the payer’s bank, whereby payers generally have the option of an instant transfer.