Jurisdiction of the UPC: Can the UPC decide on infringement in non-UPC member states?

At the time of writing, 18 EU member states have ratified the UPC agreement. In contrast, the European Patent Convention (EPC) has 39 member states, so a European patent can be validated far more widely than the territory covered by the UPC. Before the UPC opened its doors, a lively discussion was had within the profession regarding the question if UPC decisions can have applicability in non-UPC states. 

In a recent decision, the Düsseldorf Local Division of the UPC provided a first answer to the question as to whether the UPC would also extend its long arm jurisdiction to questions of infringement of patents that are outside of the 18 UPCA countries. Specifically, in a dispute between Fujifilm Corporation and Kodak, Fujifilm claimed infringement of one of its European patents by a number of members of the Kodak group (all resident in Germany). Notably, the European patent at issue was only validated in Germany and the UK. Fujifilm’s infringement claim covered both the German and the UK validations. Conversely, however, Kodak’s counterclaim for revocation in the UPC only covered the German validation of the European patent. Critically, Kodak had not in parallel sought to revoke the UK patent in the UK courts. 

The Düsseldorf Local Division held that it does have competence to decide on infringement of the UK validation of this European patent. 

By way of historical context, this follows numerous past examples of national European Courts granting relief in relation to questions of infringement of foreign patents – including granting pan European injunctions (most favoured by the Dutch Courts using their Kort Geding procedures) and pan European declarations of infringement/non-infringement (favoured by the UK Courts – such as in Actavis v Lilly and Lilly v Genentech). However, no European court has thus far sought to seize jurisdiction over a claim for revocation of a foreign patent – and rightly so. To do so would be contrary to a key provision of the Brussels Regulation (the Regulation that governs jurisdiction of Courts in Europe – but which has been held to have certain extra-territorial effects – see the key decision in Owusu) namely Article 24(4) which bestows exclusive jurisdiction on national courts to determine questions of validity of patents in their jurisdiction.

The seminal CJEU decision in GAT v LUK confirmed, however, that this restriction does not apply to questions of patent infringement, paving the way for a single national European courts to hear consolidated infringement proceedings covering numerous patents from different European countries. This is precisely what happened in the Actavis v Lilly case – famous of course for slightly different reasons. 

The reformulating of the Brussels Regulation and the enactment of the UPC agreement were found to have done nothing to change this. When reformulating the Brussels Regulation, articles were added to it to clarify that the UPC is a common court governed by the Regulation. In conclusion, the jurisdiction of the UPC is no more limited than the jurisdiction a national court enjoyed before the UPC opened its doors.

In view of the above, the Düsseldorf Local Division found that it is competent to determine questions of infringement of the UK validation of Fujifilm’s European patent. Ultimately, however, it did not matter, given that the Düsseldorf Local Division found the German validation of the patent to be invalid and so that the question of infringement of the German validation did not arise. What is interesting is that even though the Düsseldorf Local Division had no jurisdiction to determine questions of validity of the UK designation, it nevertheless held that similar validity standards would be applied by the UK courts. And thus, through the side door, it avoided making a finding and granting any relief on infringement of the UK validation because of its doubt as to its validity. It appears that the Court was swayed by the fact that the UK court was not seized of the question of validity. Kodak may have counted themselves fortunate – the issue of the long arm reach could have been avoided if they had simply filed a revocation action in the UK. In that case, it would have been highly unlikely that the UPC would have entertained a bifurcated hearing on infringement of the UK designation.

The first instance decision may of course be appealed, but it nevertheless provides an early indication of the potential reach of UPC decisions not only within the UPCA countries but also extending out to non-EU non-UPC states.