National proceedings initiated before the transition period - The UPC interprets its relationship with national courts

Summary

The Unified Patent Court (“UPC”) has exclusive competence over certain types of patent disputes. The Brussels I Regulation (in-force, under various names, since 1973) was recast to clarify how these exclusive competences would interact with the general rules on jurisdiction and the enforcement of judgments within the EU.

In this decision the UPC considered its jurisdiction under the Brussels I Regulation (recast) and the Unified Patent Court Agreement (“UPCA”) with regard to parallel national revocation proceedings that had been initiated before the entry into force of the UPCA. It considered that the interests of claimants initiating revocation proceedings before and after the entry into force of the UPCA are distinct. It reasoned that a party initiating proceedings in a national court before the entry into force of the UPCA should not be barred from filing a lawsuit before the UPC because at the time of initiating the national proceedings it was not clear if and when the UPCA would enter into force and when the UPC would become operational. At that time, a claimant could not make a choice between the UPC and a national court. In contrast, such a choice would have been available to a claimant which initiated proceedings during the transitional period.

Background

The Brussels I Regulation (Council Regulation (EC) No 44/2001), originated in 1968 as the “Brussels Convention” and has been in-force, under various names, since 1973. Its primary purpose was to create a unified legal framework within the European Economic Community (EEC), and later the European Union (EU), for facilitating the mutual recognition and enforcement of judgments across member states.

The Brussels I Regulation aimed to provide clear and predictable rules for determining which national courts had jurisdiction over civil and commercial disputes involving parties from different EU member states. This was intended to resolve issue of competing lis pendens and prevent conflicts of jurisdiction, ensuring that cases were heard in the most appropriate forum.

Another of the Brussels I Regulation’s main goals was to ensure that judgments made in one member state would be recognized and enforceable in other member states without the need for re-litigation. This facilitated the free movement of judgments across borders, supporting the internal market by providing legal certainty and predictability for businesses and individuals engaged in cross-border activities within the EU. Reducing the risk of inconsistent judgments was seen as essential to the smooth functioning of the internal market and for fostering economic integration.

The Brussels I Regulation also sought to streamline legal processes and reduce the costs and complexity associated with cross-border litigation. By having a uniform set of rules, parties could more easily understand their rights and obligations, and legal practitioners could operate more effectively across different jurisdictions.

Regulation (EU) 542/2014 entered into force simultaneously with Regulation (EU) 1215/2012 in 2015, forming the Brussels I Regulation (recast). Regulation (EU) 1215/2012 introduced various amendments to the Brussels I Regulation in the interests of clarity and to further enhance access to justice. Articles 29, 30, 31, and 32 of the Brussels I Regulation (recast) provide clarity within the context of jurisdiction and the enforcement of judgments in civil and commercial matters within the EU. The aim of these articles can be summarised as follows:

1. Prevent Parallel Proceedings: Articles 29 and 30 aim to avoid the inefficiency and potential conflicts arising from parallel proceedings and related actions in different member states by establishing clear rules on jurisdiction.
2. Facilitate Interim Relief: Article 31 ensures that parties can seek urgent provisional measures in any member state, providing flexibility and immediate protection regardless of where the main proceedings will be held.
3. Clarify Definitions: Article 32 provides a uniform definition of a judgment, facilitating consistent application and recognition across member states.

These articles, however, were formulated to prevent conflicts of jurisdiction between courts of member states. The UPC is not the court of a Member State in this sense but is, instead, considered a “common court” (see below). Additional articles (Articles 71a, 71b, 71c and 71d) were therefore introduced into the recast regulation by Regulation (EU) 542/2014 with the aim of regulating the relationship between Regulation (EU) No 1215/2012 and the UPCA by providing rules clarifying the international jurisdiction of the UPC. These additional articles may be summarised as follows:

1. Common court: Article 71a expands the meaning of court for the purposes of the Regulation to “courts common to several member states”, and sets out under what circumstances a court is deemed to be a common court. Article 71a expressly identifies the UPC as a “common court”.
2. Jurisdiction of a common court: Article 71b stipulates how the jurisdiction of a common court should be determined.
3. Applicability of Articles 29 to 32: Article 71c stipulates to which proceedings Articles 29 to 32 of the Brussels I Regulation (recast) should apply. Of particular relevance to the present case, Article 71c stipulates that Articles 29 to 32 “shall apply where, during the transitional period […] of the UPC Agreement, proceedings are brought in the Unified Patent Court and in a court of a Member State party to the UPC Agreement”.
4. Relevant judgments: Article 71d clarifies the operation of the rules of enforcement and recognition as they apply to judgments handed down by common courts.

As a result, when the UPCA was signed by 25 EU member states in 2013, the Brussels I Regulation (recast) included provisions to accommodate the UPC, which would handle disputes concerning European patents and European patents with unitary effect.

Nokia Technology GmbH V Mala Technologies Ltd.

On 2 May 2024, the Paris Central Division of the UPC issued a decision concerning the jurisdiction and the applicability of the Brussels I Regulation (recast) in the context of a patent revocation action brought before the UPC.

In the ongoing revocation action brought by Nokia Technology GmbH against Mala Technologies Ltd., a preliminary objection filed by Mala Technologies required the UPC to examine its relationship with the national courts of member states.

Key Points:

1.    Jurisdiction and Preliminary Objection

• • Mala Technologies filed a preliminary objection challenging the jurisdiction of the UPC in a revocation action concerning their patent EP 2 044 709 B1, arguing that the case should be handled under the jurisdiction of the German national courts since a revocation action concerning the same patent had already been filed by Nokia Solutions and Networks GmbH & Co with the German Federal Patent Court and the decision of this court was under appeal at the German Federal Court of Justice.
  • Mala Technologies Ltd. asserted that jurisdiction should be determined based on the Brussels I Regulation (recast), specifically Articles 29 to 32, which deal with parallel proceedings and the risk of conflicting judgments.
  • Nokia Technology GmbH opposed the preliminary objection, arguing that the UPC had proper jurisdiction under the UPCA and that the Brussels I Regulation (recast) did not preclude the UPC from hearing the case.
    

2.    Court's Analysis and Decision:

Jurisdiction and Application of Brussels I Regulation (recast):

• • The UPC rejected the argument that it lacked jurisdiction under Articles 29 to 32 of the Brussels I Regulation (recast), noting these articles applied to the co-ordination of related civil proceedings in member states with the aim of avoiding parallel proceedings resulting in irreconcilable decisions. Though Articles 29 to 32 are not directly applicable to the UPC (as illustrated by the need for Articles 71a-71d), the scope and manner of application of Articles 29 to 32 to the UPC are determined and appropriately established by Articles 71a-71d and the UPCA.
  • As a general principle, according to Article 71b the jurisdiction of a common court (of which the UPC is an example) is similar to the jurisdiction of the courts of the member states. However, Article 71b does not provide a rule for the general application of Articles 29 to 32. Determining this falls to Article 71c which, by stating “Articles 29 to 32 shall apply where […]”, exclusively determines the circumstances in which Articles 29 to 32 apply.
  • The UPC emphasized that Article 71c(2) specifically addresses the transitional period (as defined by Article 83 UPCA) and applies Articles 29 to 32 only to proceedings initiated in both the UPC and a court of a Member State party to the UPCA during this period. That was not the situation in this case as the German revocation action was filed prior to the UPC's operational start. In this regard, the UPC refused to extend the scope of Article 71c(2) beyond its literal meaning - the wording “during the transitional period” cannot be read to mean “before the transitional period”.

Parallel Proceedings and Risk of Conflicting Judgments:

• • The UPC stated that there is no general principle within the UPCA that precludes the UPC from asserting jurisdiction in revocation proceedings merely because other proceedings relating to the same patent are pending before other courts. On the contrary, revocation proceedings may be brought before the UPC even if an opposition before the European Patent Office (EPO) is pending. The UPC stated that there was no reason why the same principle should not apply to national courts (absent a legal rule to the contrary).
  • The UPC considered that the interests of claimants initiating revocation proceedings before and after the entry into force of the UPCA are distinct. It reasoned that a party initiating proceedings in a national court before the entry into force of the UPCA should not be barred from filing a lawsuit before the UPC because at the time of initiating the national proceedings it was not clear if and when the UPCA would enter into force and when the UPC would become operational. At that time, a claimant could not make a choice between the UPC and a national court. In contrast, such a choice would have been available to a claimant which initiated proceedings during the transitional period.
  • On the risk of conflicting judgements, the UPC considered that the independence of national and international courts carried with it an innate risk of potentially contradictory judgments being issued by the various courts. However, that risk is merely the result of the sovereignty of the respective jurisdictions. The UPC considered it reasonable to assume that this “general rule of sovereignty of each national and international jurisdiction” was considered by the legislators when formulating the UPCA.

No Stay of Proceedings:

• • Mala Technologies requested a stay of proceedings until the German Federal Court of Justice made a final decision on the German revocation appeal. However, the UPC denied this request, stating that there was no legal basis for such a stay under either the UPCA or the UPC's Rules of Procedure.
  • The UPC emphasized that the relevant provisions for staying proceedings in cases involving EPO opposition proceedings did not apply here, as those provisions require an imminent decision from the EPO. In the present case there was no indication that a decision of the German Federal Supreme Court was imminent.

Rejection of Preliminary Objection:

• • The UPC rejected the preliminary objection filed by Mala Technologies, which sought to have the revocation action declared inadmissible based on the prior German proceedings. In doing so the UPC ruled that Articles 29 to 31 of the Brussels I Regulation (recast) were not applicable to the present proceedings.

Implications

This decision clarifies the interpretation of transitional provisions under the Brussels I Regulation (recast) in the context of the UPC's jurisdiction. It underscores the UPC's authority and jurisdiction in handling patent revocation cases to which these provision apply, even when parallel proceedings exist in national courts.

The decision is a significant precedent for future cases involving jurisdictional challenges and the interplay between proceedings before national courts and those before the UPC. 

This article was first published by The Patent Lawyer earlier this week, which can be found here.