Understanding bifurcation in UPC proceedings

What is bifurcation?

Bifurcation of patent cases is the practice by which the cases are divided between courts, with proceedings to determine whether a patent has been infringed decided separately to those for determining whether the patent is valid or not.

Most national courts in Europe, including the UK and French courts, use a non-bifurcated system in which a single court assesses infringement and validity, and typically determines both issues in a single judgement. The clear exception is Germany, in which proceedings are bifurcated with local courts able to determine infringement but not validity; instead validity determination requires a decision from the federal court.

In the bifurcated German system, the infringement case judgement is typically handed down before the validity judgement, because the infringement case is typically filed first and the local courts work faster. The differing timing of the judgements can lead to an injunction gap, which can be over a year in some cases, in which a patentee can obtain an injunction based on what is later found to be an invalid patent to the obvious detriment of the alleged infringer. We understand that the reforms to the German Patent Act in 2022 should reduce the impacts of the injunction gap.

How can bifurcation arise at the UPC?

The first and perhaps most important point to note is that the UPC is by default a non-bifurcated system. However, as with many aspects of the UPC, it’s not quite as straightforward as that.

Where a counterclaim for revocation is filed, in response to an infringement action brought at a local or regional division, that local or regional division has the option:

1. to refer the revocation claim alone to a central division,
2. to refer the infringement and revocation claims to a central division, or
3. to keep both claims.

The first of those three options would result in bifurcated proceedings.

Another, perhaps less common bifurcation scenario would arise if a revocation action were to be filed first at a central division; in response the patentee could file a separate infringement action at a local division. Bifurcation is therefore possible at the UPC, but it’s by no means the default scenario.

How has the Court handled this?

The evidence so far is naturally limited as the Court has only been open for business for just over a year. However, personal experience in conjunction with a review of published decisions suggests that the local and regional divisions have so far been keen to retain both the infringement and revocation actions where possible, often in the name of procedural expediency.

For defendants, retention of revocation claims at local or regional divisions may raise an issue. It’s likely that the patentee selected the local or regional division to hear the case based on a belief that division will give the patentee the best chance of success, which is clearly counter to the wishes of the defendant. What can the defendant do in these instances? Well, one potential option has been showcased by the cases between Meril and Edwards Lifesciences.

In response to an infringement claim from Edwards in the Munich local division, Meril filed invalidity counterclaims before the Munich local division. The Italian subsidiary of Meril, which is not a party to the Munich case, then filed a standalone revocation action against the same patent in the Paris central division.

The UPC ruled the standalone revocation action admissible, indicating that for companies with subsidiaries there may be options to have revocation actions heard in preferred central divisions.

A word of warning, though. Although the standalone revocation action was ruled admissible, the Munich local division elected to refer the counterclaims to the Paris central division, and the Paris central division ultimately addressed the counterclaims for revocation and the standalone revocation action in a single hearing. A decision (ORD_598365/2023) was issued by the Paris central division towards the end of July 2024; the patent was maintained in amended form. The decision includes a discussion of the parallel local division and central division proceedings (see paragraphs 16 to 23), indicating that how to handle such situations is to be determined on a case-by-case basis in consideration of several factors.