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We are gradually approaching the take-off of the UPC system, so it is worth taking a closer look at a topic that is certainly not the most tangible, but is indeed very important. We are talking about the international jurisdiction of the Unified Patent Court, the UPC. Especially at the beginning of the new system, either you will want to try the new system or you will be dragged into proceedings before this new court. The decisive question, however, will be whether the UPC is authorized to hear this case. This question is determined by international jurisdiction.
What is important to mention for our audience is that the international jurisdiction does not determine which division of the UPC can hear a case. This question is governed by the internal jurisdiction of the UPC which is governed by the agreement on a unified patent jurisdiction, the UPCA.
This is a very good point, Anita, and we will certainly devote a separate episode to the internal competence of the UPC. To come back to international jurisdiction, we must look at EU Regulation No. 1215/2012 in its current version, which has been amended to include the UPC in the jurisdictional system of EU members and to which the UPCA refers to. During this podcast, we will simply use the term “Brussels regulations”. In some cases, determining international jurisdiction is straightforward. However, especially if the parties are domiciled or domiciled in different countries, this can be a complex issue. A range of regulations apply and countries fall into different categories when determining international jurisdiction. For example, there are European Union member states that participate in the UPC system, EU member states that are not contracting member states of the UPCA, contracting states of the Lugano Convention and Third States which may or may not be EPC Contracting States. We will try to explain in a simplified way which circumstances can found the international competence of the JUB, without of course claiming to cover all the particular cases. To say it in advance, the framework of the UPC foresees a number of roads leading to the UPC, but whether “all roads really lead to Rome” remains to be seen, as the saying goes.
The first avenue that may lead to UPC jurisdiction may be a person’s domicile or, in the case of corporations, their registered office. If a defendant is domiciled or established in Germany or France, for example, i.e. in countries which are both EU member states and UPCA member states, he is a clear case. Here, the Brussels regulation states that the JUB has jurisdiction where the courts of the EU member state would have jurisdiction. A company with its registered office in Germany or France can therefore be sued before the JUB, because the JUB, as a “common court”, is considered a national court of this Member State. Nadine, what about defendants domiciled or established in EU member states but not UPCA members, such as Spain or Poland, or domiciled or established in a Lugano member state, such as Switzerland and Norway?
To these countries we cannot apply the new section of the Brussels Regulations, therefore the international jurisdiction of the UPC cannot be derived from a party’s domicile or seat in these countries. But that’s not the end of the story. Because, in addition to the general jurisdiction mentioned above, the Brussels Regulation, respectively the Lugano Convention, provides for several special grounds of jurisdiction. In my opinion, the special jurisdictions will be the most used grounds for the international jurisdiction of the UPC. Perhaps most important in patent infringement cases is where the injurious event occurred. If the place of damage or place of action is in a UPCA member state, the potential infringer may be sued before the UPC, regardless of their place of residence. Thus, the reason for the place where the harmful event occurred will most likely cover any infringement of a unitary patent and/or a European patent and will allow the JUB to be internationally competent to hear and decide a case.
There are, however, other grounds of special jurisdiction which are worth mentioning and which increase the attractiveness of the new system for claimants. For example, several defendants can be summoned before the JUB when only one of them, known as the “main defendant”, is domiciled or has its registered office in a Member State of the UPCA. The precondition is that the claims are so closely linked that they should be heard together to avoid the risk of irreconcilable judgments. In other words, if the same act of infringement is at issue, it makes sense to hear those claims together. It should be noted that this special competence is reflected in the internal competence of the UPC – but with a slightly different wording. For a UPC Local Division to hear a case with multiple defendants, it is mandatory that a business relationship exists between the defendants. It remains to be seen whether and to what extent this linguistic difference can lead to different interpretations. The UPC may also be competent for disputes arising from the operation of a branch, subsidiary or other establishment. Another advantage of the new system is that, for preliminary measures, the question of international jurisdiction can be set aside. This may lead to an increase in preliminary injunction applications covering cases where the UPC would otherwise not have jurisdiction. Now that we have mainly discussed UPC’s international jurisdiction with a particular perspective on patent infringements, let’s look at the validity side. According to the Brussels regulation, the JUB will have exclusive competence to determine the validity of a unitary patent and, once the transitional period is over, also of any European patent that has not been opted in. But there is of course also a limit. The UPC cannot rule on the validity of the European patent insofar as it has been validated in an EPC member state that is not a UPCA member state, such as Poland. However, it is rather a question of the territorial scope of a UPC decision. But didn’t Nadine save a special and quite intriguing subject for the end?
Yes indeed, and I have to admit that I am quite curious to test this in future conflicts. There is another particular aspect called “long-term jurisdiction” with respect to damages. Under certain conditions, the UPC has the discretion, in patent infringement cases, to exercise its jurisdiction with respect to damages occurring outside the European Union. First of all, the UPC must have jurisdiction, for example when a defendant has infringed a European patent on the territory of the UPCA. In addition, this defendant must have assets on the territory of the UPCA. These goods must correspond to the damage outside the territory of the EU or exceed it. Finally, the dispute must have a sufficient connection with the State where the property is located. Although it may seem easy, the main challenge will be defending against such a claim. These defenses can include anti-prosecution injunctions and of course whether such a decision can be enforced in a non-EU state (eg the UK).
Looking back, we really covered a lot in this episode of our podcast. So, let’s briefly recap the main takeaways:
The international jurisdiction of the UPC is easily established if the defendant is domiciled or has its headquarters in the territory of the UPCA.
If the harmful event occurs on the territory of the UPCA, the UPC is also competent at the international level.
Closely related claims can be used to constitute the international jurisdiction of the JUB.
For preliminary injunction proceedings, we do not need to pay attention to the question of which court is actually competent for the main proceedings.
The UPC will be exclusively competent for the validity of a Unitary Patent and ultimately of all European Patents.
Long arm jurisdiction may lead to claims covering damages outside of EU territory.