Building on our first article reviewing the differences between UPC and US practice across various stages of litigation (which you can read here), this time we focus on other key aspects of litigation in both jurisdictions, such as the appeal process, settlement, confidentiality, remedies, provisional and protective measures, and cost recoverability.
Paulina Kasprzak | Connect on LinkedIn | pkasprzak@hlk-ip.com
When it comes to the appeal process, the UPC and the US take slightly different approaches.
The UPC Court of Appeal is based in Luxembourg and hears cases before a multinational panel of judges. This panel typically consists of three legally qualified judges and two technically qualified judges with expertise in the relevant technology.
In the US, patent appeals are brought before the US Court of Appeals for the Federal Circuit, which operates with a three-judge panel. Unlike the UPC, however, the US system does not rely on technically qualified judges, as the Federal Circuit judges are generalist appellate judges without specific expertise in patent law.
Both systems allow a patent action to be settled at any stage, even during trial, providing parties with an opportunity to resolve their differences outside of court. This can help save time and legal costs and is actively encouraged. For instance, in the UPC, settlements can be facilitated through the Patent Mediation and Arbitration Centre, which was established to assist parties in exploring settlement options.
Another area where the two systems are similar is the approach to confidentiality. The UPC may order restrictions on the collection and use of evidence or, in exceptional circumstances, hold hearings confidentially.
Similarly, in the US, parties can enter into confidentiality agreements, or the court may enter protective orders governing how discovery is used and who has access to it, where such orders are not already automatically in place.
In the UPC, the claimant may be granted damages or an account of profits. The system awards non-punitive damages, focusing on compensating the claimant for the actual harm caused by the infringement. Several factors can be taken into account by the court when assessing the level of damages payable, including the patent proprietor’s lost profit, unfair profits made by the infringer and moral prejudice.
In contrast, the US legal system focuses on compensating the claimant for a prospective lack of earnings due to the patent infringement and allows for triple damages in cases of wilful infringement, serving as a strong deterrent and a punitive measure.
Both systems offer a range of other remedies. The UPC has the power to grant permanent injunctions, orders requiring infringing products to be recalled from channels of commerce or destroyed as well as declarations of infringement.
In the US, remedies are generally more straightforward and include injunctions and specified royalties in the event of potential future infringing activity.
Various provisional and protective measures are available in the UPC. These include, for instance, preliminary injunctions (granted to prevent actual or imminent infringement), the seizure or delivery up of goods suspected of infringing a patent, freezing orders (which freeze an alleged infringer’s assets to ensure the enforcement of a final judgment) and orders for the preservation of evidence (sometimes referred to as “saisie” orders) which can allow the patent proprietor to carry out physical inspections and sample collection when they are not yet in a position to prove infringement. On the other hand, the UPC also allows the filing of a protective letter as a pre-emptive defence against such measures, which ensures a fair balance between the rights of the patent holder and the alleged infringer.
Similarly, in the US, provisional measures such as preliminary injunctions and freezing orders are available, although the claimant’s burden of proof is high. However, protective letters are rarely accepted by US courts. Instead, parties typically file motions to dismiss or seek summary judgment to challenge weak claims.
Litigation under the UPC tends to be cheaper than in the US. This is partly due to the limited scope of discovery, limited number of applications, and a more streamlined process on the whole.
US patent litigation is notably more costly, with extensive discovery, high legal fees, and expert testimony contributing to the overall expense.
In terms of recoverability of costs, the UPC allows the winner to recover costs from the losing party, with apportionment of costs on an issue-by-issue basis.
In the US, by contrast, the general rule is that each party bears its own costs, even if they win, which can be a significant financial burden for all parties involved.
While the US and UPC patent litigation systems share similarities in their approach to settlement, confidentiality and provisional measures, they differ in other areas, particularly in cost and the winner’s ability to recover costs. Patent holders should carefully consider the advantages and challenges of both systems, as the choice of forum can significantly influence the course and outcome of a case.
In part one of this two-part comparative article series on UPC and US patent litigation, Paulina Kasprzak explores the differences between the two systems in the stages leading up to trial, focusing on infringement actions.
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This is for general information only and does not constitute legal advice. Should you require advice on this, or any other Unified Patent Court related topic, then please contact upc@hlk-ip.com or your usual HLK advisor.
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