Infringement actions

The UPC Agreement provides some flexibility as to where a proprietor can bring an infringement action. A proprietor can decide which local or regional division to start an action in, provided that:

1. an infringement has taken place in the state of that division, or
2. the defendant has its domicile or principal place of business in the state of the division.

In the cases of multiple countries or multiple defendants, this enables the proprietor to forum shop to at least some extent.

Specifically, Article 33(1)(b) of the UPC Agreement states that in the case of multiple defendants an infringement action may be brought before the local division hosted by the contracting member state, where one of the defendants has its residence or principal place of business (or in the absence of residence or principal place of business, its place of business, or the regional division in which that contracting member state participates). Moreover, an action may be brought against multiple defendants only where the defendants have a commercial relationship and where the action relates to the same alleged infringement.

In SVF Holdco v ICPillar LLC (ORD_18817/2024 in UPC_CFI_495/2023) the issue of jurisdiction of a local division where there are multiple defendants was addressed. In this case, ICPillar brought an infringement action before the Paris local division against twelve defendants.

One of the defendants had their domicile in France, and the other defendants were based outside France: some in contracting member states, some in the EU but outside contracting member states, and others outside the EU.

Some of the defendants subsequently filed a preliminary objection, challenging the jurisdiction of the UPC local division of Paris. This was filed on the ground that there is no explanation as to why the Paris local division has jurisdiction for all defendants, given that some of the defendants are based outside of France, the contracting member states, and/or the EU. In addition, it was argued that the requirement of a commercial relationship between all the defendants had not been proven.

Given that one of the defendants had their domicile in France, the court held that this is a situation foreseen by Article 33(1)(b) of the UPC Agreement, that is, a case of multiple defendants with one having its residence in France. This is regardless of whether the other defendants are based inside or outside a contracting member state or the EU.

Hence, the court held that the only requirements to be met are:

1. the multiple defendants have a “commercial relationship” in the sense of Article 33(1)(b) of the UPC Agreement; and
2. the action relates to the same alleged infringement.

Regarding the first requirement, the court agreed with the defendants in that the requirement of a commercial relationship implies a “certain quality and intensity”. However, the court stated that “to avoid multiple actions…and the risk of irreconcilable decisions from separate proceedings, and to comply with the main principle of efficiency within the UPC, the interpretation of the link between the defendants should not be too narrow.”

The court found that “belonging to the same group (of legal entities) and having related commercial activities aimed at the same purpose (such as R&D, manufacturing, sale and distribution of the same products) are sufficient to be considered as “a commercial relationship” within the meaning of Article 33(1)(b) [UPCA]”. The court held that all of the defendants were part of the same corporate group at the time of development of the product that is the subject of the infringement action, and according to the court the whole group had a commercial activity dedicated to that product, so the court decided the link between all the defendants was sufficient to establish the existence of a commercial relationship of a certain quality and intensity. The first requirement was therefore met.

Regarding the second requirement, the court held that lack of proof of the reality of the alleged infringement and the involvement of each defendant in the alleged acts of infringement were matters to be considered later in the main proceedings. At the preliminary stage of proceedings it was sufficient for the claimant to show that the claim brought against all the defendants relates to the same alleged infringement. Thus, the second requirement was also met. Therefore, the court concluded that because one of the defendants was domiciled in France, all the defendants had a commercial relationship, and the action relates to the same alleged infringement, the internal jurisdiction of the Paris local division under Article 33(1)(b) of the UPC Agreement was justified.

Leveraging forum shopping benefits in multiple defendant UPC cases

As can be seen, the court was reluctant to provide a narrow interpretation of the commercial relationship requirement. The order also confirmed that in the case of multiple defendants, an infringement action can be brought before any local or regional division in which one defendant has their domicile or principal place of business, regardless of whether the other defendants are based inside or outside a contracting member state, or inside or outside the EU. Therefore, this order could pave the way for defendants being introduced into proceedings for the purpose of being in the jurisdiction of a particular court. This would further enable a proprietor to forum shop between different divisions of the UPC, depending on where the defendants are based.

Revocation actions

According to Article 33(4) of the UPC Agreement, a stand-alone revocation action must be brought before the central division of the UPC. However, a counterclaim for revocation in response to an infringement action must be brought before the same local/regional division as the infringement action, provided that both the infringement and revocation actions are between the same parties and relate to the same patent.

Since an infringement claimant has some flexibility to forum shop between divisions, it may be assumed that an infringement claimant will choose a division which they believe will be most favourable to them. Therefore, when bringing a subsequent revocation action, the revocation claimant may want to avoid the division chosen by the infringement claimant. Accordingly, strategies are being developed to obtain revocation actions in the central division, even when there are parallel infringement proceedings in a local division.

One example of such a strategy has been seen in Edwards Lifesciences Corporation v Meril Italy srl (UPC_CFI_255/2023). On 01 June 2023, Edwards Lifesciences Corporation brought an infringement action in the Munich local division against Meril Life Sciences Pvt Ltd (Meril India) and its German subsidiary Meril Gmbh (Meril Germany). Subsequently, Meril Italy srl (Meril Italy) brought a revocation action in relation to the same patent in the Paris central division. Meril Italy is a wholly-owned subsidiary of Meril India.

In response, Edwards Lifesciences filed a preliminary objection requesting that the revocation action be dismissed as inadmissible. Edwards Lifesciences argued that an infringement action between “the same parties” on the same patent was already pending before the Munich local division, and therefore the Paris central division lacked competency to hear Meril Italy’s revocation action under Article 33(4) of the UPC Agreement.

The competency of the Paris central division to hear the revocation action therefore depended on whether Meril India and its wholly-owned subsidiary Meril Italy could be considered as “the same parties” within the meaning of Article 33(4) of the UPC Agreement. Meril argued that Meril Italy is a separate legal entity and has separate headquarters from Meril India. As such, Meril Italy was not one of “the same parties” in the infringement proceedings before the Munich local division. The judge-rapporteur agreed, and concluded that Meril Italy was not the same party as its parent company, Meril India. This meant that the stand-alone revocation action could continue in the Paris central division.

Strategic advantages through subsidiary revocation actions

This decision offers defendants in infringement actions a potentially useful way of securing a revocation action in the central division. If the defendant has a subsidiary that is able to act before the central division, the defendant can use the subsidiary to bring a revocation action before the central division, even if there are pending infringement proceedings involving the parent company before a local division. This is likely to mitigate some of the advantages gained by the infringement claimant when choosing the forum for its actions. The battle for control of forum between infringement and revocation claimants is likely to be a feature of many UPC cases to come.

Case details at a glance

Decision level: Paris central division
Case: UPC_CFI_255/2023
Order/decision: ORD_578356/2023
Parties: Edwards Lifesciences Corporation v Meril Italy srl
Date: 13 November 2023
Decision: dycip.com/edwards-lifesciences-meril

Decision level: Paris local division
Case: UPC_CFI_495/2023
Order/decision: ORD_18817/2024
Parties: SVF Holdco v ICPillar LLC
Date: 11 April 2024
Decision: dycip.com/svf-holdco-icpillar