Has a single UPC action yet been stayed in view of a parallel EPO opposition? The court is very reluctant to be delayed by EPO opposition proceedings and remains patentee-friendly in its general approach.
Introduction
The Court of Appeal in its decision (ORD_61000/2024)[1] of 21 November 2024 provides guidance for the first time on when the Court may stay an infringement action, in view of a parallel EPO opposition where the validity of the same patent is being contested.
As Dehns already reported earlier this year[2], the UPC will not stay a central revocation action in view of a parallel EPO opposition as a matter of principle.
The exception provided by Article 33(1) UPCA and Rule 295(a) RoP is that a stay “may” be granted if an EPO decision is due rapidly, but this has been applied narrowly so far.
In its latest Order, the Court of Appeal differentiates between revocation and infringement proceedings. The Court of Appeal found that a stay should be considered more carefully for infringement proceedings, but even then the Court can (should?) adopt alternative measures as appropriate, such as adaptation of the UPC timetable.
Whether or not a stay is granted depends on the balance of interests of the parties and the specific circumstances of the case, such as the stage of the opposition proceedings, the stage of the infringement proceedings and the likelihood that the patent will be revoked in the opposition proceedings.
Commentary
The Court of Appeal in its earlier decision (ORD_25123/2024) [3] considered the defendant’s application for a stay in a UPC central revocation action in view of a parallel EPO opposition. It was held that the UPC should avoid a stay to revocation proceedings as a general principle, to keep to the court’s goal of a final oral hearing within one year. This is because decisions in which the UPC and EPO issue different validity rulings are not irreconcilable. The ruling bodies are expected to take an earlier decision into account, with a later decision to revoke the patent prevailing.
The Court of Appeal’s latest decision (ORD_61000/2024)[4] concerns a request for a stay of UPC infringement proceedings in view of a parallel EPO opposition. This is explicitly contrasted with the situation of parallel revocation and opposition proceedings, since there is a risk of conflict where infringement is concerned. In particular, such a conflict would arise if the EPO were to revoke a patent that has already formed the basis for an infringement order e.g. UPC injunction. This applies whether or not a counterclaim for revocation is also filed at the UPC (as was the case here).
Alternative ways to accommodate a parallel EPO opposition
The Court of Appeal held that a stay of infringement proceedings can be used to avoid such a conflict, but highlighted that there are alternative ways to prevent conflicting decisions without ordering a stay.
In the case under appeal, the discretionary power provided by Article 33(1) UPCA and Rule 295(a) RoP to grant a stay was available, since the EPO opposition decision was evidently due rapidly (with the opposition hearing already scheduled for the same week as the UPC infringement hearing). The Court of Appeal held:
“The remaining question is whether the Court should exercise its discretion to order a stay of the infringement proceedings in this case, taking into account the interests of the parties and the relevant circumstances of the case. In this context, it is important to emphasize that there are alternative ways to prevent conflicting decisions without ordering a stay at this stage of the infringement proceedings.”
Suggestions for adapting the UPC infringement proceedings, to account for an expected validity outcome at the EPO, include:
Both EPO opposition and appeal decisions are relevant
The parties had submitted comments about whether the “rapid” decision in EPO opposition proceedings that is referenced by Rule 295(a) RoP is intended to be a first instance decision of the Opposition Divisions or a final decision of the EPO’s Technical Boards of Appeal. The UPC Court of Appeal has now clarified that this can be a first instance decision, but with the potential for appeal also being relevant:
“When considering the specific circumstances of the case, such as the stage of the opposition proceedings … and the likelihood that the patent will be revoked in the opposition proceedings … the fact that the expected EPO decision is not a final decision and is likely to be appealed is just one of several factors that may be taken into account.”
Based on this guidance, it seems unlikely that a first instance EPO decision revoking a patent will be allowed to completely block a UPC injunction via a stay. However, the UPC may apply some creative measures to adapt the course of infringement proceedings to the situation at the EPO.
The Court of Appeal has referred this case back to the Court of First Instance (Nordic-Baltic Regional Division) to further consider the request for a stay in the specific circumstances.
[1] https://www.unified-patent-court.org/sites/default/files/files/api_order/1489E85F68E59B2FE33595F6F6FA26D8_en.pdf
[2] First UPC Court of Appeal Order on a Stay – Dehns
[3] Appeal Decision | Unified Patent Court (unified-patent-court.org)
[4] https://www.unified-patent-court.org/sites/default/files/files/api_order/1489E85F68E59B2FE33595F6F6FA26D8_en.pdf