“Understanding the Impact and Implications of the New Unified Patent Court System”

The Unified Patent Court (UPC) has been in operation for nine months now, and despite initial skepticism, it has been widely adopted by litigants. The Court’s goal is to provide a quicker, more cost-effective, and efficient process for resolving patent disputes. However, the reality is that the new Court will co-exist with the old, national patent jurisdictions for at least the next seven years, resulting in an overall system that is currently more complex and high-risk than the previous one.

The UPC aims to deliver highly effective relief to plaintiffs who prevail, particularly in the form of injunctions. This makes it highly attractive to patent holders globally, especially considering that the Court should be far more cost-effective than pursuing litigation in other jurisdictions, such as the U.S. or UK.

The impact of the UPC cannot be overstated. Indeed, this impact has already been felt by Nanostring Technologies, the first company to be the subject of an inter partes preliminary injunction decision in the UPC, which shortly thereafter entered into insolvency.

As of February 2024, the court has seen more than 210 cases filed, including more than 80 infringement actions and 25 independent revocation actions. Emergency relief has been widely applied for, with more than 20 applications in seven months. Furthermore, more than 100 decisions have already been issued, a clear signal that the Court is working and working quickly.

However, despite the benefits of the Court from a patentee’s perspective, many clients are proceeding with considerable caution in relation to the transition. For defendants, the pace at which the UPC operates and its high stakes mean that advanced planning is needed. Parties cannot afford to wait until they are sued before starting preparations. Instead, as soon as a company is aware that a potential case is brewing, they must proactively assess their position and align their defensive strategy and arguments.

Early adoption of the new system has taken place across a wide range of technologies, although the technology sector has featured more heavily than others. The life sciences sector was expected to hold back from using the Court, and largely that is what has happened. However, early signs of significant uptake of litigation by tech companies in the UPC has also been seen, with many major patentees, as well as Non-Practicing Entities (NPEs), taking action.

While it is still early days, it is immediately apparent that neither claimants nor defendants can afford to ignore the UPC, as its adoption has been quick and the Court is already delivering rapid results. Parties can expect for UPC litigation to occur in parallel with national European (and wider, for example U.S.) litigation. The UPC therefore clearly needs to be factored into any global patent litigation strategy moving forward.

In conclusion, the UPC, despite its complexities and high-risk nature, has proven to be an effective and efficient system for resolving patent disputes. Its quick adoption and the rapid results it delivers make it a crucial component of any global patent litigation strategy. However, caution and advanced planning are necessary, particularly for defendants, to navigate the high stakes and fast pace of the UPC. As the UPC continues to operate alongside national patent jurisdictions, it will be interesting to see how the system evolves and what impact it will have on the global patent landscape.