Bifurcation at the UPC
One of the most fundamental decisions to be made during the development of the Unified Patent Court (UPC) was whether to adopt a bifurcated system like in Germany, in which infringement and validity of a patent are decided by different courts, or a non-bifurcated system like in France, in which the same court can decide on infringement and validity of a patent within the same proceedings.
I. In principle: no bifurcation
Ultimately, the UPC adopted a non-bifurcated system. As set out in Art. 32 UPCA, the UPC has competence for infringement actions as well as for revocation actions. Revocation actions are standalone actions in which the validity of a Unified Patent or, during the transitional period, a European Patent with Unitary Effect that has not been opted out, is challenged. If an infringement action is pending, the validity of the asserted patent can also be challenged by raising a counterclaim for revocation. If a revocation action or a counterclaim for revocation is successful, the UPC has the power to revoke the patent, either entirely or partly (Art. 65 UPCA). Thus, in principle the question of infringement and validity of a patent is decided by the same court under the UPC.
However, there are scenarios in which the decision on infringement and validity are nonetheless not made by the same UPC body in the same proceedings. Such scenarios can arise in case of a counterclaim for revocation in a pending infringement action as well as in case of a standalone revocation action. Also, during the transitional period the validity of European Patents can still be challenged at the EPO or at national courts (in the latter case the respective national part).
II. “Bifurcation” following a counterclaim for revocation
The way both infringement and validity of the same patent become disputed is typically that the patent proprietor files an action of infringement of the patent and then the defendant challenges the validity of this patent as a “defence” against the assertion. At the UPC, the defendant in an infringement action can challenge the validity of the asserted patent directly within the pending infringement action through a counterclaim for revocation. Upon such counterclaim of revocation, the Local or Regional Division handling the infringement actions has the discretion to proceed with both the action for infringement and the counterclaim for revocation (Art. 33 para. 3 lit. a UPCA).
Thereby, the Local or Regional Division can prevent the “bifurcation” of the questions of infringement and validity.
However, the Local or Regional Division may also refer the counterclaim for revocation to the Central Division (Art. 33 para. 3 lit. b UPCA). This option leads to a “bifurcation” of the questions of infringement and validity after all.
It remains to be seen to which extent the Local and Regional Divisions will make use of this option.
III. “Bifurcation” following standalone revocation actions
More complex, and actually not in all details regulated by the UPCA and the RoP, is the situation following a standalone revocation action. A standalone revocation action must be brought before the Central Division (Art. 33 para. 4 UPCA). Under a “fully non-bifurcated” system, an infringement action based on the challenged patent would thus have to be brought before the Central Division as well, so that the same body decides on validity and infringement of this patent. However, the UPCA provides that an infringement action based on a patent against which a standalone revocation action is pending with the Central Division may still be brought before any other competent division (Art. 33 para. 5 UPCA). This means that an action for infringement of a patent does not have to be brought before the Central Division, which is already handling the validity of this patent, but can also be brought before a competent Local Division or Regional Division.
Thus, if a standalone revocation action was brought first, the patent proprietor has the option to manually “bifurcate” the questions of infringement and validity.
In this situation, there are two options to “re-combine” the questions of infringement and revocation:
Firstly, the Local or Regional Division may refer the infringement action to the Central Division with the agreement of the parties to the infringement action (Art. 33 para. 3 lit. c UPCA).
However, at least the patent proprietor will likely refuse the agreement in this situation, since they intentionally brought the infringement action before the Local or Regional Division and not before the Central Division, even though this would have been possible.
Secondly, the defendant in the infringement action can raise a counterclaim for revocation in addition to the already pending main revocation action. This option is not precluded by the UPCA and even explicitly confirmed by Rule 75 RoP. The Local or Regional Division then has the discretion to proceed with both the action for infringement and the counterclaim for revocation (Art. 33 para. 3 lit. a UPCA), thus “re-combining” both issues. The Rules of Procedure explicitly names the “counterclaim for infringement” (R 49.2 lit b)), which can be filed together with the defense to the Revocation Action.
However, the UPCA and the Rules of Procedure do not clearly provide what happens with the main revocation action in such situation.
If the infringement and revocation actions remain “bifurcated”, either because the defendant in the infringement proceedings did not raise the counterclaim for revocation or because the Local or Regional Division refers the counterclaim for revocation to the Central Division, the Local or Regional Division arguably has the discretion to either suspend or proceed with the infringement proceedings, although the UPCA and the RoP leave room for interpretation on this question as well. According to another opinion, the possibility for the Local or Regional Division to exercise their discretion to stay proceedings may depend on whether a counterclaim for revocation has actually been filed.
IV. “Bifurcation” in case of validity actions at the EPO or a national court
During the transitional period, i.e., the first seven years after the start of the UPC, the validity of European Patents can still be challenged at the EPO or, for national validations, at the competent national courts.
Filing an opposition at the EPO or an invalidity action at a national court is not precluded by the option to file a revocation action or a counterclaim for revocation at the UPC. However, the national invalidity proceedings block the invalidity proceedings (between the same parties) before the UPC for this national part of the European Patent. A pending opposition at the EPO does not preclude the filing of a revocation action or a counterclaim for revocation at the UPC (Art. 33 para 8 and 10 UPCA). Thus, it is possible during the transitional period that the question of validity of a patent is decided by a different court than the question of infringement. A pending infringement or revocation action at the UPC may be stayed pending the invalidity action at the EPO or a national court (Rule 295 RoP), although it remains to be seen to which extent and under what conditions the UPC divisions make use of this option.
For more information about the Unified Patent Court and the Unitary Patent, please visit our dedicated UPC page.
