- The Unified Patent Court requires all litigation to be dealt with in a proportionate manner, including consideration of methods of alternative dispute resolution where appropriate.
- Parties may, at any time in the course of proceedings in the Unified Patent Court, conclude their case by way of settlement.
- The Patent Mediation and Arbitration Centre has been established to encourage parties to engage in mediation and/or arbitration to resolve disputes. It is likely that this body is an addition to, rather than replacement of, other applicable mediation and arbitration bodies, and has its own rules of procedure.
- The Unified Patent Court may, at the request of the parties, confirm and enforce settlements and arbitral awards by consent.
Does the Unified Patent Court promote methods of alternative dispute resolution?
The general principles of the Unified Patent Court (UPC) require all litigation to be dealt with in ways which are proportionate to its importance and complexity. The Unified Patent Court Agreement (UPCA) and Rules of Procedure (RoP) then make specific provision for alternative dispute resolution (ADR).
To ensure proportionality, the UPC has the powers to conduct active case management. The UPC has both general and specific powers of case management. The specific powers include:
- Encouraging the parties to co-operate with each other during the proceedings;
- Identifying the issues at an early stage;
- Encouraging the parties to make use of the UPC’s dedicated Patent Mediation and Arbitration Centre (further detail below); and
- Helping the parties to settle the whole or part of the action.
The UPC is also required to explore with the parties the possibility of settlement in any interim hearing. To facilitate a settlement, the UPC can also defer the oral hearing of an action.
The most basic form of alternative dispute resolution is negotiated settlement between the parties.
In UPC proceedings, the parties may, at any time in the course of proceedings, conclude their case by way of settlement. Where the parties have concluded their action by way of settlement, they shall inform the judge-rapporteur.
Save for the purpose of enforcing the terms of any such settlement agreement, no statement or document made for the purposes of settlement may be relied on as evidence by the UPC, or by the parties in proceedings before the UPC or any other court, unless expressed to be made on an open basis and freely disclosable.
An express limitation on negotiated settlements is that a patent may not be revoked or limited by way of settlement.
Mediation and Arbitration
The UPCA also established the Patent Mediation and Arbitration Centre (the “Centre”). The Centre’s Rules of Operation of the Mediation and Arbitration Centre were published on 8 July 2022. The Centre has its seats in Lisbon and Ljubljana (but mediation and arbitration proceedings can be organized elsewhere). The working languages of the Centre are English, French and German.
At any stage of proceedings in the UPC, and specifically at the interim hearing, the UPC may encourage parties to make use of the Centre to settle some or all aspects of the dispute by mediation or arbitration.
To encourage parties to make use of the Centre, the RoP also provide that limitation and prescription periods are stayed during the mediation process (meaning that a potential claimant can agree to mediation or arbitration without the risk that a limitation period could expire during the mediation proceedings).
The rights of the parties to engage in mediation or arbitration proceedings with providers other than the Centre are not directly addressed in the UPCA or RoP. Although it is not entirely clear at this stage, it appears likely that parties are able to choose alternative mediation or arbitration providers.
Again, an express limitation is that a patent may not be revoked or limited in mediation or arbitration proceedings.
Will the Unified Patent Court enforce outcomes of alternative dispute resolution?
Parties can request that the UPC confirms the terms of any settlement or arbitral award by consent (irrespective of whether it was reached using the facilities of the Centre or otherwise). The parties may also request that the UPC confirms an agreed costs award or request the UPC to decide on costs to be awarded.
Specifically, the RoP provide that the UPC may confirm terms of settlement or arbitral award by consent which oblige the patent owner to limit, surrender or agree to the revocation of a patent or not to assert it against the other party and/or third parties. It is not currently clear how this applies in light of the UPCA’s limitations, noted above, that patents may not be revoked or limited by way of settlement, mediation or arbitration. One possible interpretation is that terms which seek to revoke or limit patents only have effect inter partes. Alternatively, terms which seek to revoke or limit patents may immediately have effect inter partes but may gain effect as against the rest of the world once confirmed by the UPC.
If the Parties ask to have the settlement confirmed by the decision of the UPC, that decision can then be enforced in the same way as a final court decision. It is likely that this is also the case for any arbitral award by consent. The decision may also be entered on the register, though the UPC may order that the details of the settlement are confidential at the request of the parties.
No provision is made for the UPC to confirm the terms of arbitral awards other than those by consent. Such arbitral awards shall instead be enforced under the New York Convention.