UPC’s Court of Appeal Holds That the UPC Can Determine Damages for a Previous National Infringement
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UPC’s Court of Appeal Holds That the UPC Can Determine Damages for a Previous National Infringement

In a recent order in case UPC_CoA_30/2024, the UPC’s Court of Appeal ruled that the UPC is competent to decide on an action for determination of damages where a national court has established infringement of a European patent, thus overturning the order of the Court of First Instance (Hamburg Local Division). The Court of Appeal also provided helpful clarification regarding its jurisdiction to decide on acts of infringement committed before the UPCA entered into force.

The dispute in question began in 2022, prior to the commencement of the UPCA, when French company Fives brought an infringement action against German competitor REEL at the Düsseldorf Regional Court (Germany). The action related to the German part of EP1740740, which protects a compact service module for installations for the electrolytic production of aluminium. The Düsseldorf Regional Court’s final (unappealed) judgment was that REEL had infringed Fives’ patent and was obliged to pay damages resulting from the infringement.

One year later, after the UPC had opened its doors on 1 June 2023, Fives brought an action at the UPC, Hamburg Local Division, for the determination of the damages suffered due to REEL’s infringement (which had previously been established by the Düsseldorf Regional Court). It is interesting that Fives chose to bring the action at the UPC, instead of the Düsseldorf Regional Court, presumably in the hope of receiving a more favourable or timely damages award. One speculative explanation is that a UPC judge might be more willing to hear a damages expert than in the German courts.

Following a preliminary objection by REEL that the UPC did not have jurisdiction to determine such damages, the Hamburg Local Division rejected Fives’ action. The Local Division’s reasoning was that Art. 32(1)(a) UPCA confers jurisdiction on the UPC to determine damages only after a prior action for patent infringement has been brought before the UPC, and that Art. 32(1)(f) UPCA establishes jurisdiction only for actions for damages based on the provisional protection conferred by a published European patent application.

In overturning the order issued at first instance and referring the case back to first instance for determination of damages, the Court of Appeal considered the following:

  • The UPC’s jurisdiction over separate actions for damages is neither excluded nor expressly prescribed by A 32(1)(a) UPCA, as interpreted in accordance with the Vienna Convention.
  • 32(1)(f) UPCA, which provides that the Court shall have exclusive jurisdiction for actions for damages based on the provisional protection conferred by a published European patent application, does not require that the liability for such payment be established by the UPC first. In the Court’s opinion, this speaks favourably to the UPC being competent for separate damages actions where infringement has already been established.
  • Many contracting member states have systems that involve an initial step of determining infringement, followed by a separate step of quantifying damages. The same approach is anticipated in the Rules of Procedure (RoP).
  • Admittedly, the Rules treat applications for the determination of damages as ancillary to actions for infringements from a procedural standpoint. However, the Rules were likely drafted with patents having unitary effect in mind, for which a national judgment establishing infringement followed by a UPC case for the determination of damages would not occur.
  • The Rules provide for adjudication in scenarios where the existence of an infringement does not need to be assessed in law and in fact by the Court, for instance where the existence of an infringement is undisputed between the parties and the conflict lies solely in the determination of the amount of damages. The Court saw no reason to treat the situation in the present case differently.

In conclusion, the Court held that its competence includes a separate action for determination of damages after a national court has established the existence of an infringement of a European patent. The Court also confirmed that there was nothing in the UPCA to prevent the UPC from deciding on acts of infringement committed before the entry into force of the UPCA. Rather, the only requirement was that the European patent invoked must still be in force as of entry into force of the UPCA (1 June 2023).

This decision opens the door to the possibility of forum shopping between national courts and the UPC for actions of determination of damages, at least during the transitional period. However, as the Court noted, this was already anticipated as a possibility in the transitional regime. It should be mentioned that this decision does not extend the UPC’s jurisdiction to determining damages where a national court established infringement and the European patent had been opted out of the jurisdiction of the UPC.