First experiences with the UPC system

Prof. Dr. A. Hüttermann, Michalski Hüttermann & Partner, Düsseldorf

After three months of entry into force, many users have made their first experiences with the UPC system. In this article I will give an overview as well as some (strictly personal) impressions on the UPC system as it presents itself so far.

1. „opt-outs“

Many colleagues – and my firm is no exception – have had busy times organizing the preemptive “opt outs” according to Rule 5.12 UPC. This started from informing the clients about the UPC system and their possibilities, organizing feedback and finally timely registering the preemtive “opt-outs” with the UPC.

The difficulties in this process were manifold, starting with the identification of the IP rights that could be opted out, answering the numerous questions that arose from the clients, the registration in the CMS system of the UPC – which is necessary to file the “opt-out” – and finally the actual application for the “opt-out”, where many colleagues will have used service providers.

In particular, the difficulties concerning the registration with the CMS system of the UPC led, as is known, to the fact that the start of the whole system was delayed by two months. For quite a while, it was even unknown from which company accepted security cards could be obtained at all – and when the corresponding list was finally published, not many were surprised at the small number of providers, who in turn often had problems coping with the applications that were rushing at them.

In the meantime, however, significantly more providers have joined the list, but registration with CMS is still anything but simple and often relatively time-consuming.

According to the data at hand, approximately 500.000 “opt-outs” were registered during the so-called “sunrise-phase”, i.e. the time when the UPC had started to accept such requests and the opening on 1 June 2023,Cf. eg (note that probably not all “opt-outs” that were filed before 1 June were registered already by the court, so the number of 500,000 seems more realistic) which would be a third of all “opt-outable” patents, which is estimated to be 1,5 million.Source: Klaus Grabinski, lecture at the VPP Frühjahrstagung in Dresden, 4 May 2023. Please note that other sources (e.g. the Kluwer Patent Blog) come to different numbers. I will leave it to the reader to decide whether in view of the relatively low numbers of unsolicited nullity actions (cf. part 3) all of this was a bit of “Parturient montes, nascetur ridiculus mus”

2. Unitary Patents

As is generally known, there had also been the possibility of early application for unitary patents, as well as applications that ensured that the publication of the grant would only take place after the system had come into force. Statistical data on Unitary Patents is available on the EPO’s “Unitary Patent Dashboard”Available here: and according to said dashboard, already in January the first of said requests for unitary patent protection were filed. The numbers, however, start to rise only from June on, when the UPC came into force. At the time of writing of this article (8 August 2023), 6021 requests for Unitary Patents were received at the EPO, with 5784 already accepted.

Unfortunately, the EPO does not provide figures on how many conventionally validated patents were applied for in the same period. When considering how to classify these figures, it helps to keep in mind that according to the 2022 Annual Report, 81754 were granted by the EPO in 2022, i.e. about 6800 per month. If one assumes - by way of a rough estimate – that approx. 14,000 patents should have been granted in the period from June onwards and neglects the applications up to then, one arrives at a quota of approx. 40%, which only can be called a success, taking into account that before the introduction of the UPC more than 70% of all validated patents were validated in Germany, France and the UK only and the UK does not form part of the UPC system.

When taking a closer look at the data available, it is interesting to see that three fields, i.e. “Infrastructure and Mechanic”, “Health” and “Materials and Production”Unfortunately the EPO does not precisely state, which IPC classes it subsummizes under these fields lead the areas where Unitary Patents are requested, with approx. 20% each.

Quite striking is the nationality of applicants that request Unitary Patents. Here Europe clearly is way ahead, Germany with 1207 patents being the most Unitary-Patent-savvy country. Interestingly, the US with 880 patents also takes interest, whereas Asia so far avoids Unitary Patents – it is interesting that there are more unitary patents from Sweden (301) than China (298), more from Denmark (252) than Japan (184) and more from Finland (140) than South Korea (123) although for each of these pairs the number of patent grants is quite the opposite.

Finally some language observations: The distribution of procedural languages of the European patents for which Unitary Patents were filed more or less follows the overall distribution with English being 71%, German 22% and French 7%. For the latter two an English translation is necessary and thus of course English has the major share of the language used as the translation for informational purposes according to the EU 1260/2012. Spanish with 28% and German with 21% follow, all other languages have lesser importance. The large number of Spanish translations does not surprise – Unitary Patents are often sought after for patents where a large territorial coverage is needed and then often either a validiation into Spain, where a translation is mandatory, is conducted in parallel or a parallel application in a Spanish speaking country in Latin America, prominently Mexico, exists (or both); thus is is only efficient to use the Spanish text that is needed for other purposes anyway.

3. The UPC

In contrast to the relatively decent figures for unitary patents, the Unified Patent Court has not yet really taken off. According to the CMS, at the time of writing 37 cases are pending before the UPC, two of them applications for preliminary measures and five unsolicited nullity actions. These numbers, however, seem not be fully accurate – complaints about the usability of the CMS and electronic register are everywhere – and some cases not in the list, but it is a fair assumption to say that in the first two months of establishment less than 50 cases were filed, i.e. about 25 per month.

This is more than the UK received in 2022 (with 35 cases)Source: also for the Düsseldorf cases but considering that 373 new infringement suits were filed in Düsseldorf alone in 2022, i.e. 31 per month, the figures are somewhat sobering.

Not surprising, the center of the action is Germany with 24 out of the 33 cases where the plaintiff had a choice (= which are not unsolicited nullity actions which need to be filed at the central division). What is to some extent unexpected is that Munich is the local division with the most cases so far, followed by Mannheim and then Düsseldorf. For German litigation cases Düsseldorf receives more cases than the other two combined, so one would had expected a bigger share of the cake to go there. Reasons for this are presumably two-fold:

  • Judge Pichlmaier, one of the judges of the chamber of the Landgericht München I, who was responsible for the famous CJEU referral C-44/21 concerning preliminary injunctions, is one of the presiding judges at the Munich divison. Therefore it is not surprising that – in the expectation that the Munich division would take a more lenient (or as others say: less ideologic) view concerning the requirements on the validity of a patent – applications for provisional measures were filed there. The first order of the Düsseldorf division (cf. later) surely has the potential to change this practice in the future, however.
  • A non-neglectible share of patent infringement cases that were fled involve FRAND terms. Here the Munich (and also Mannheim) courts in recent German patent litigation were seen by many as being more patentowner friendly as their Düsseldorf counterpart, so this is suspected to be another reason why plaintiffs chose Munich (and to a lesser degree Mannheim) over Düsseldorf.

From what is known, the UPC has seen its first settlements already (three parallel cases in automation technology). More interesting are the first final orders already issued by the court and here the Milan and Düsseldorf division were involved.A more detailled discussion of these orders will be published in GRUR Patent – albeit in German – in a separate article

In MilanUPC_CFI_127/2023 of 13 June 2023 and UPC_CFI_141/2023 of 14 June 2023 the division issued two inspection orders – both of them by the same applicant and based on the same patent but against two different competitors – in the context of a trade fair. The orders, as also set out in the rules, largely follow the “Düsseldorf Procedure” known by the German courts,[^Cf Hüttermann, Unitary Patent and Unified Patent Court, 1st edition, Wolters Kluwer 2023, para 1530 et seqq.[ i.e. (summarized) that an expert (here an engineer based in Milan) would help the bailiff to inspect certain machines and that this expert would later on write an expert report that could – unless the court decides otherwise – only be seen by the attorneys and one person from the applicant, but a strict NDA and prohibition to use this information for other purposes would apply.

Notworthy is that both orders were issued one day after they were requested and without hearing the other party, i.e. ex parte.

More noteworthy is maybe the first ever ex-parte preliminary injunction order by the UPC, issued by the Düsseldorf division.UPC_CFI_177/2023 of 22 June 2023 Here especially the following seems interesting:

  • The injunction was issued ex-parte, which is insofar remarkable that in all other preliminary injunction cases of which further details are known the other party was involved and oral hearings were summoned. However, same as with the Milan cases, the request was made in the context of a trade fair and there had been a saisie (albeit not with the UPC, but in Switzerland), a warning letter and a protective letter with the UPC. Said protective letter, however, had been sent to the other party on the same day as the request was filed – which was remarkably issued on that very same day, 22 June 2023, as well.
  • The patent was deemed to have sufficient legal validity, although no opposition or nullity action had been filed against it, which is somewhat against the Düsseldorf tradition that – following the “Harnkatheterset” decisionOLG Düsseldorf, InstGE 12, 114 ‒ Harnkatheterset, cf also Böhler, GRUR 2011, 965 and OLG Düsseldorf, Decision vom 30.9.2010 ‒ I-2 U 47/10 ‒ Gleitsattelscheibenbremse II, cf also Hüttermann, Unitary Patent and Unified Patent Court, 1st ed. Wolters Kluwer 2023, para 1501 et seqq. – requires such a procedure or otherwise sufficient indication that the validity of the patent is beyond doubt. The fact that the patent had been issued in 2015 with no following opposition or nullity and that the opposing party had raised no validity doubts in its protective letter was obviously considered sufficient.
  • A request directed to “all countries of the UPC where the patent is in force” was not allowed, only a request directed to “Germany, Netherlands, France and/or Italy”. Here, interestingly, the applicant (as he later admitted) made a mistake: The patent was also in force in Austria, but that was forgotten to be requested. A later application to correct the first order via a correction according to Rule 353 was, however, denied by the UPC.UPC_CFI_177/2023 of 30 June 2022

From a practical point of view the CMS and IT system of the UPC is widely reported to have its difficulties and inconveniences, interesting not only for the users,but also for the judges.Cf. personal discussion of the author with Hon. Judge Peter Tochtermann in the context of the 2nd VDI/VPP-Seminar on the Unitary Patent System on 20 June 2023 Especially the fact that also the judges are not entirely happy with the way the IT works gives hope that improvements are on their way.

4. Summary

In summary, the unitary patent system has seen an excellent start (as far as unitary patents are concerned) and a somewhat slower beginning (as far as the Unified Patent Court is concerned). IT has not completely failed as many had feared, however the difficulties at the end of the “sunrise period” were unmistakable and the CMS system like the Register is in urgent need of overhaul. If the Unified Patent Court is to become the most important patent court in the world, as many assume, there is still a lot to be done – but the court has not even been in office for the famous 100 days yet. In any case, the decisions known so far generally point in the right direction.