Update IP, Media & Technology No. 85
99 days UPC – First Conclusions for Companies
On 1 June 2023, the new European Unified Patent Court (UPC) started its work. Since then, more than 50 cases are pending there and the court has already handed down its first decisions. What does this mean for companies? We provide concrete tips.
Observation: Court enforcement works well
The new court system is being accepted. Small and medium-sized companies are also filing lawsuits there. So far, it is mainly divisions in Germany, Italy and Scandinavia that are being called upon. The local division in Düsseldorf issued an injunction for a medium-sized company (bicycles sector) in a trade fair case, even without prior oral hearing. Milan granted requests for preservation of evidence. It confirms what we had anticipated: The new court is proving attractive to patent owners. So far, it decides very swiftly. It still has capacities, so that we expect this to remain the case in the near future.
Conclusion for patent owners: Opt-out not a must, unitary patent is attractive
There are hardly any central revocation actions so far, namely a total of six as of the end of August 2023. Those who have not yet declared the opt-out do not need to do so now as a rule. For the exceptions and the background, see our explanations here. The possibility of a central revocation action should also not deter anyone from using the "unitary patent" option. Quite the contrary. Our advice: Use the unitary patent! And, if necessary, also the Unified Patent Court.
Conclusion for potential infringers: It is often better not to file a protective letter
The new court system knows the institute of a so-called protective letter. In German law, this possibility has been known for a long time. For most other participating member states, it is new. In the "bicycle case" mentioned above, the local division in Düsseldorf issued a preliminary injunction, despite (or precisely because of?) an existing protective letter. The misconception persists that a protective letter prevents an injunction from being issued without prior oral proceedings. This may have been the case in the past. Nowadays, the opposite is often the case. This is because the court already knows the defendant's arguments through the protective letter. Therefore, the court often no longer considers it necessary to hear the defendant again. This puts potential defendants in a psychological dilemma: On the one hand, they want to protect themselves as best they can. It is therefore difficult to leave the possibility of a protective letter unused. On the other hand, experience shows that a protective letter is often even counterproductive. By filing a protective letter, one makes one's own hearing superfluous and thus even increases the probability that the court will quickly issue a preliminary injunction. In addition, in a protective letter, one usually comments on characteristics of the product or process. There is a risk that these statements will be held against you later, perhaps in a completely different context. Therefore, our advice: As a rule, do not file a protective letter, or file only a very limited one. And be careful with detailed out-of-court statements, because they can have a similar effect. It is often more important to conduct intensive prior art research and work out workarounds.
Risk management remains important
Any company can be sued in this new court. This court is decisive, and its decisions often have a greater impact than the previous decisions of national courts. Thus, there is a new and additional risk. Companies must respond to this with their risk management, out of self-interest and because they are legally obligated to do so. Management that fails to comply with this obligation can become personally liable. We already referred to this in our Update IP No. 82 of May 25, 2023. We have compiled concrete tips here.