IP Insights: UPC defense strategies

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Tilman, the UPC is going to open its doors soon. In my mind, this court is a real game changer, since the leverage of a UPC injunction is simply huge. It’s time to start developing efficient defense strategies. What measures would you consider already at this stage?

The UPC makes risk management a top priority. For example, protective letters should be considered to avoid ex-parte preliminary injunctions at the UPC. The recent case law of the Court of Justice of the European Union suggests a rather generous approach for PI-matters – which should also apply at the UPC given that the UPC has to follow EU case law. I also expect that the UPC will entertain a rather generous approach regarding the urgency requirement, at least as compared with the German practice.

Avoiding an ex-parte PI and bringing important defense arguments early on to the Court’s attention is certainly a must. Additionally, there are means of defense that would prevent the patentee from bringing its infringement action with the UPC. However, these means are only available if the EP patent in question was opted out.

Right. Art 83(4) of the UPC Agreement provides for what I call an “opt-out torpedo”: Locking in the patentee by bringing a national action at a national court. Thus, opting-out the entire patent portfolio from the jurisdiction of the UPC entails the risk that the value of the portfolio decreases. That means that enforcing the EP Patent at the UPC may be excluded forever. Thus, a selective, strategic opt-out should be considered in my mind.

Yes, the “opt-out torpedo” is certainly a conceivable scenario and I would choose a venue that allows for strawmen actions, requires little court fees and entails a small cost reimbursement exposure. In my mind, then the “opt-out torpedo” is very similar to the classical declaratory judgement – DJ – torpedo action.

Indeed, a classic DJ torpedo action is possible at the the UPC, since the UPC is considered to be a common court to the member states and therefore is treated like a national court of a member state. But let’s face it: a classic DJ torpedo action is really a rare animal in the zoo.

Many clients would like to know whether one could block a UPC infringement action by filing a prior national nullity action – do you think this is a viable option?

Unfortunately, that won’t do the trick. But the UPC is likely to consider the outcome or the reasoning of a national invalidity action when deciding on counterclaim for revocation or a standalone revocation action. So, early proactive revocation actions are an important tool in the defensive box.

Another means of defense could be filing a DJ action for non-infringement at the Central Division of the UPC. However, such a DJ action entails the risk of provoking the patentee into filing an infringement action at a Local Division of their choice. If such an infringement action is filed within a three-months time window after the DJ action was filed, then it takes precedence over the DJ action for non-infringement. Thus, the DJ action will not bring you in the driver’s seat in a pending dispute. But what about revocation actions? Would you rely on filing a counterclaim for revocation which is filed at the Local Division where the infringement action is pending? Or would you prefer filing a standalone revocation action with the Central Division of the UPC?

Filing a counterclaim for revocation is certainly a must to have a say in the infringement case. However, one should not solely rely on that. It may be smart to have someone else– like a strawman – file a standalone revocation action to make use of potential division competition. However, the flip side is an increased cost risk.

Absolutely, since a “loser pays” system applies to the recoverable attorney fees, and these fees are based on the value of the action which can be significant for revocation actions.

For that reason, one should also consider EPO oppositions, because the administrative fees there are minimal and cost reimbursement for attorneys’ fees is just theoretic option.

If I were to summarize the defensive situation, I would say it’s more complex than ever. However, making this complexity your friend – this is the mission for every defense team.