The UPC is off to a ‘flying start’ but faces critical decision over transparency
It’s been nearly six months since the Unified Patent Court (UPC) opened its doors and, so far, it appears to be riding high.
With more than 100 cases filed at the venue to date, the court’s performance—both in terms of attracting and processing cases—has greatly exceeded initial expectations. Yet questions over its transparency have cast a shadow over this early success.
At LSPN Europe, held yesterday in London, Laila Beynon, associate director of dispute resolution at Regeneron threw a spotlight on the issue, calling on attorneys “to lobby the UPC” to persuade the court to enhance its transparency and provide de facto public access to case documents and hearings.
“I'm not sure where that line will be drawn but there really should be public access, upon request, to certain documents, apart from exceptional circumstances, and it's very difficult to define a set of reasons that are appropriate and that aren't,” said Beynon.
Questions regarding its transparency—or lack thereof—have dogged the UPC right from the beginning.
Just before the court’s launch in June, technical glitches in the UPC case management system provoked concerns about how accessible it would actually be.
Fast forward a few months later, and two opposing UPC judicial decisions have led to a clamour for greater clarity over what case documents should be accessible to which parties, and on what basis.
Contradictory decisions
Confusion emerged in September when Judge-rapporteur András Kupecz of the UPC’s Munich central division branch denied an access request relating to a revocation action filed by Sanofi against an Amgen patent, European patent EP3666797, citing the absence of a “legitimate reason”.
A day later, he rejected a similar application in another case—Astellas Institute for Regenerative Medicine v Healios KK, Riken & Osaka University—on the same grounds.
Kupecz referred to the UPC’s Rules of Procedure, holding that a “legitimate reason” is required for making written pleadings and evidence available to a member of the public.
As Rachel Fetches, partner at HGF, explains: “The final draft of the Rules of Procedure reduced the transparency of UPC proceedings by restricting third party access to written pleadings and evidence and making access subject to a reasoned request.”
According to these rules, a mere “wish” from “a natural person to form an opinion” on the validity of a patent out of a “personal and a professional interest” cannot be accepted as a sufficiently concrete, legitimate reason to grant access.
Notably, Kupecz failed to see why access “would be useful, let alone necessary” in order to fulfil a wish of forming an opinion on the validity of the patent.
“The applicant can study the patent and its (public) prosecution history as well as the prior art without access to what the parties to the proceedings have submitted,” opined Kupecz.
Autostore case prompts access question
But then a month later, a twist: the UPC local division in Stockholm, Sweden, granted an applicant access to documents in Autostore’s patent infringement case against Ocado.
Ocado promptly lodged an appeal against the decision by the Nordic-Baltic Division, arguing that this access contravenes the precedent set by Munich.
Following the fallout, the UPC Court of Appeal in Luxembourg is now looking at the critical question of which documents in a UPC case can be made public.
As Thomas Prock, patent attorney, partner and UPC representative at Marks & Clerk, points out: “Access to documents has long been a controversial issue, even before the UPC was established”.
“It appears that practitioners understand the need for transparency, so it is somewhat baffling that the court has decided to go in the opposite direction.” - Jeffery Langer, Zoeller
“Given the high level of interest in this topic, not least from professionals wanting to understand how the new courts work, it is not surprising that the Court of Appeal is getting involved early on,” says Prock.
According to Fetches, the hearing will be a key test for many parties—especially international companies—who are interested in litigating at the UPC but “have felt frustrated by the court’s perceived lack of transparency to date”.
One such exasperated attorney is US-based Jeffery Langer, general counsel at Zoeller, a waste management technology company.
Lawyers, he contends, need to be able to understand any decision no matter where they are —and quickly.
As Langer tells WIPR, “Transparency is needed to understand the court’s judicial line of thought and to guide best practices.
“Without transparency, it will be challenging for practitioners to guide their clients— whether they are on the offensive or defensive side.
“And without this guidance, the court will become a less attractive option to those who may otherwise use the court because it will create uncertainty across continental Europe.”
In his view, the problem first became apparent before Kupezc’s decision in September, when the court granted a swift ex parte injunction to bicycle manufacturer myStromer against its competitor RevoltZycling in June.
“The court there indicated that Revolt's protective letter—a prophylactic measure meant to prevent a court granting an ex parte action—was insufficient and chose to grant the requested ex parte injunction,” says Langer.
However, he adds that it has not been possible to get a copy of the court's order to understand why the court found Revolt's letter insufficient.
“Without access to the court's order, one is left to wonder what is sufficient in a protective letter that would have forestalled the ex parte grant. In other words, this leaves counsel unable to provide concrete guidance to clients on this fairly fundamental practice point.”
“It remains unclear”, he argues, “why the court here chose not to grant access”.
Culture clash creates expectation gap
The crux of the issue is that, as it currently stands, the level of access to UPC documents is significantly lower when compared to that offered by the European Patent Office proceedings or in UK patent litigation.
Nonetheless, it is equivalent to, or in some cases higher, than the level of access allowed by many of the European national patent courts.
Consequently, depending on their location and jurisdictional experiences, attorneys have markedly different views when it comes to the UPC Rules of Procedure and their effects.
Daniela Kinkeldey, partner at Bird & Bird tells WIPR that such safeguarding by the courts when it comes to accessibility is simply the norm in jurisdictions such as Germany.
“We're used to having to show a legal interest when making an inspection into an infringement case. And the same is true for the federal patent court. So we're familiar with that concept.”
Her colleague, Italy-based partner Giovanni Galimberti, echoes this view.
“While transparency is important, it should not mean that everybody has the right to look into all of the documents and papers relating to a party.
“In certain types of patent litigation, there are documents that are confidential, eg, standard essential patent litigation where the judges are looking at the licensing agreements reached by one party with others in previous years,” he says.
“The UPC seems to be transparent in general—this of course does not necessarily mean that the third parties should have access to all documents in pending proceedings.”
On the other hand, others believe that the UPC’s approach has created uncharted, and often tricky, territory for many attorneys who are used to vastly different systems.
“There is a real divergence in practice on this transparency question,” says Zoeller’s Langer. “At the EPO, the submissions in oppositions are made public almost automatically, as they are in US litigation.
“It appears that practitioners understand the need for transparency, so it is somewhat baffling that the court has decided to go in the opposite direction.”
David Holland, a partner at Carpmaels & Ransford and Fellow of the Chartered Institute of Patent Attorneys, agrees that the situation has created a grey area that has been increasingly hard to navigate.
“Most of the authorised UPC representatives are European patent attorneys, including many based in the UK, and— so they and their clients—are used to the high level of transparency provided by the EPO and UK patent registers,” he explains.
“But UPC judges have considerable discretion when deciding on requests for documents, so in practice, different first instance divisions have approached this question in different ways.”
That is why, he explains, “everyone in the profession keenly awaits the UPC Court of Appeal decision”.
UPC’s ‘crucial’ next step
For Darren Smyth, partner at EIP, the UPC has an opportunity to uphold a central tenet of open justice—ensuring the public has a satisfactory understanding of the legal process by providing citizens with access to proceedings, data, advice, and information.
“There is a very strong desire from the public to have access to documents filed on a case relatively easily, on the basis of no more than that they are interested,” he explains.
“Academics and practitioners alike are keen to study how the UPC cases go, and the decisions and orders alone only give a part of the picture. The UPC has the opportunity to be pioneering here, and it would be a shame if they chose not to.”
Fetches notes that the UPC’s next step could clearly define what direction it is likely to take, and, ultimately, what type of litigation forum it aspires to be.
“The UPC has got off to a flying start and for the initial confidence to build, the court’s approach to open justice will be key.
“While it is important to ensure that genuinely confidential material is protected,” she concludes, “the Court of Appeal’s decision on how to approach such requests will be critically important because it will indicate how open and transparent proceedings at the UPC will be.”
LSPN was held on Tuesday, November 21 at BMA House in London. LSPN North America Spring 2024 will be held on April 10-11, 2024 in Boston, MA.
To register or for more information click here: https://www.lspnnorthamerica.com/.
