UPC Long-arm jurisdiction
With the UPC set to open its doors on 1 June 2023, just how far might its reach extend?
Unless a European patent has been opted out of the UPC, the national courts and the UPC will share jurisdiction for patent infringement and revocation actions during the transitional period (Article 83(1) Unified Patent Court Agreement (“UPCA”). However, as part of the revision of the Brussels Recast Regulation (Regulation (EU) No 1215/2012, as amended by Regulation (EU) No 542/2014) to accommodate the UPC, new provision Article 71b(2) was introduced which, some say gives rise to a so-called “long-arm jurisdiction” for the UPC. 71b(2) provides that: “where the defendant is not domiciled in a Member State, and this Regulation does not otherwise confer jurisdiction over him, Chapter II [which grants the court jurisdiction on non-domicile bases] shall apply as appropriate regardless of the defendant’s domicile. Application may be made to a common court [such as the UPC] for provisional, including protective, measures even if the courts of a third State have jurisdiction as to the substance of the matter;”.
So does this mean the UPC can grant interim relief with respect to foreign patents? There are a number of possibilities:
- Since articles 1 and 3 of the UPCA limit the UPC’s powers to unitary patents and European patents not opted-out, it seems very unlikely that the UPC will have jurisdiction to grant interim injunctions with respect to, for example, US patents;
- However, some suggest the UPC could grant interim injunctions for European patents in non-EU/EEA territories, such as the UK, Spain or Turkey;
- Whilst others say that the provision simply means that to the extent the UPC has jurisdiction over an alleged infringement (e.g. taking place within a Contracting Member State), the fact that the alleged infringer is domiciled within a third country and subject to their jurisdiction does not preclude the UPC from granting preliminary measures to restrain the infringement.
Further, Article 71b(3) of the Brussels Recast Regulation goes on to say: “(3) where a common court [such as the UPC] has jurisdiction over a defendant under point 2 in a dispute relating to an infringement of a European patent giving rise to damage within the Union, that court may also exercise jurisdiction in relation to damage arising outside the Union from such an infringement. Such jurisdiction may only be established if property belonging to the defendant is located in any [Contracting] Member State…”.
To those of an expansive disposition, 71b(3) signals that the UPC may consider itself to have jurisdiction over non-Contracting Member States, in relation to non-EU, EP designations (e.g. the UK or Turkey), so long as there is also infringement within the EU and the defendant [group] has assets within the reach of the UPC. This is a version of the Dutch-style pan-European relief approach, with which we have become familiar. According to that view, if the claimant has one defendant who is infringing an EP in the UPC area and a related defendant (with some (group) assets in the EU) who is infringing in the UK, then he can go to the UPC, include both defendants as parties and get pan-European relief, including over the UK defendant.
A plainer reading of Article 71b(3), however, might be that it is not concerned with infringing acts occurring outside a Contracting Member State, but merely with damage arising in such a third country from the infringement which is taking place within a Contracting Member State (as indicated by the words "from such an infringement")? And Article 34 of the UPCA would seem to support a less expansive view of the UPC’s jurisdiction. It says that “Decisions of the Court shall cover, in the case of a European Patent, the territory of those Contracting Member States for which the European Patent has effect”, which appears to limit the Court’s jurisdiction to European patents in Contracting Member States.
As can be seen, there is room for argument and dispute on these subjects and no doubt there will be plenty of both, after the UPC‘s doors open for business. But if the UPC decides that the Dutch view is right and it can embrace actions concerning non-EU territories, then will the courts in those non-EU territories simply accept that, or might they grant anti-suit injunctions to prevent it? As always, “it depends”, but when asked to speculate on the question, the UK judges, for example, have not seemed particularly inclined to grant such anti-suit injunctions, if the court before which the pan-European + UK relief is pending is a “civilised” court; and the UPC is considered to be such a court.
There is another conundrum too: if the UPC sought to apply ‘’UPC law" in relation to acts undertaken in a non-member state territory, then that would probably increase the chances of an anti-suit response from the local court. However, if not UPC law, then how would the UPC apply the local law in question, within the constraints of the UPC system and what effect would the UPC’s need to acknowledge the supremacy of the CJEU have, when the latter would have no oversight of, or control over, the local (e.g. UK) law in question?
What seems clear is that when the UPC opens for business, the limits of its extra-territorial reach are going to be tested. It is just a question of when. The UPC, and the CJEU on appeal, will determine what those limits are. However, seeking to exercise extra-territorial influence over non-participating territories, like the UK or Spain, may well trigger protective measures being sought in those territories in the form of anti-suit injunctions. Whether the anti-suit injunctions sought are in fact granted though, is another matter. But we should not forget that the UK, for example, has itself been willing to grant pan-European relief in the right circumstances, i.e. where there are related actions for infringement in UK and EU courts. This was so under the recast Brussels Regulation but also under the common law, under the Mozambique principle and the Lucasfilm v Ainsworth cases. More recently, the English Patents Court has shown a willingness to at least consider (if not to rule upon) arguments concerning the validity of foreign patents, insofar as that consideration is necessary to resolve other issues in dispute before it – e.g. the contractual construction of a licence agreement, so long as there is no direct challenge to the validity of the foreign patent per se - see Chugai Pharmaceutical Co Ltd v UCB Pharma SA [2017] EWHC 1216 (Pat), and Otsuka Pharmaceutical Co., Ltd v GW Pharma Limited & GW Pharmaceuticals Limited [2022] EWHC 1012 (Pat).
Given the UK courts’ willingness to opine on the proper extent of foreign rights, and as there is no bar from contracting states doing so under the Brussels Recast Regulation, the UK courts might consider questions concerning the ambit of foreign-designated European patents and possibly even unitary patents. And if that is right, then as far as the UPC is concerned, why might it not do the same?
For further information please contact, Mark Shillito, Rogier de Vrey, Irene San Martin or your usual CMS contact.
