The Unified Patent Court and the new economics of enforcement

Two years after opening its doors, the Unified Patent Court (UPC) is transforming both European patent litigation and the financial structures behind it. Speed, reach and harmonized procedure are changing how rights holders and corporates plan and fund disputes. For many, litigation finance is becoming an integral part of strategic case management, combining capital discipline with procedural efficiency.

Efficiency, reach and early lessons from the UPC

The UPC offers a single forum for enforcement across 17 EU states and has already demonstrated remarkable speed. First-instance decisions are often delivered within a year, while preliminary injunctions can come in a matter of months. In Burford’s 2025 UPC Roundtable, Emmanuel Larere (Gide Loyrette Nouel) observed, “within less than four months it is possible to block operations across Europe.” Vittorio Cerulli Irelli (Trevisan & Cuonzo) and Andrew Bowler (Bristows LLP) likewise noted the court’s focus on fast, uniform relief.

This efficiency gives patentees leverage, but it also shifts costs forward. The UPC’s front-loaded procedure—requiring detailed pleadings, expert input and translations early—creates significant expenditure at the start of proceedings, particularly for multi-patent or technically complex cases.

Front-loaded procedure, front-loaded costs

Where national cases once spread expenses over several years, the UPC compresses them into the first 6–12 months. Even well-capitalized companies must reconcile this with fixed annual budgets. Legal departments may recognize enforcement as commercially necessary, yet finance teams must manage the liquidity impact.

In practice, legal risk becomes financial risk. Both CFOs and general counsel must weigh the impact of UPC actions on cash flow, earnings and shareholder optics. The “loser pays” system compounds this challenge: losing parties may reimburse not only their own costs but also their opponent’s.

Defendants face parallel pressures, but on a different timeline. A UPC judgment applies across multiple countries simultaneously, and injunctions can be swift and far-reaching. This magnifies the financial consequences of a single adverse ruling. Financial pressure on defendants peaks near the end of the UPC action—precisely when patent owners may gain leverage to settle or secure a business advantage. Yet reaching that point requires significant early expenditure, which can deter even strong claims.

For public companies, the implications are broader still. Analysts increasingly scrutinize litigation liabilities and capital allocation. Offloading costs to a funder preserves predictability in financial statements. Funding converts what might otherwise be a volatile, open-ended cost center into a contingent arrangement, aligning better with investor expectations for disciplined capital deployment.

Financing as a strategic tool in UPC litigation

At its simplest, litigation funding transfers the financial risk of litigation to a third party in exchange for a share of any recovery. More importantly, it unlocks strategic optionality: businesses can choose to litigate, license or settle from a position of strength rather than necessity.

Funders’ involvement also signals independent validation of a case’s strength, which is useful both internally and in settlement negotiations. For corporate claimants, this approach transforms unpredictable legal outlay into a contingent financial arrangement, aligning legal action with broader corporate planning.

Portfolio and monetization models gain traction

Beyond single-case funding, corporates increasingly use portfolio facilities that bundle multiple matters (offensive and defensive) under one capital arrangement. This diversifies risk and provides flexibility to allocate resources as cases progress.

Monetization funding can also offer upfront capital based on expected recoveries from pending or future cases. This effectively converts legal claims into assets, releasing liquidity for R&D, restructuring or other strategic purposes. In the context of the UPC, where proceedings move quickly and judgments cover multiple states, monetization offers unprecedented agility.

Patent divestiture strategies are also expanding. Companies such as BlackBerry and Intel have sold large patent portfolios to monetization specialists, often retaining a share of future recoveries. Legal finance can facilitate similar transactions in Europe, supporting both divestment and enforcement of strong patent families within the UPC framework.

A funder’s view

For funders, the UPC offers a more predictable environment for assessing risk. Cases move quickly, rules are harmonized and the commercial outcomes of judgments can be significant. As precedent develops, particularly from the German local and central divisions, predictability will continue to improve.

A focused UPC campaign can generate meaningful leverage within global disputes. For example, a European patentee may use UPC proceedings to accelerate settlement discussions in U.S. or Asian parallel actions. Conversely, where a target operates largely within Europe, a UPC-only approach can achieve global outcomes with comparatively lower cost and duration.

Integrating funding early in case strategy

As Tobias Wuttke (Bardehle Pagenberg) observed, “the UPC is a front-loaded system; pleading and ambush tactics have no place.” Early planning is therefore essential—not only procedurally, but financially. Engaging funders during case assessment allows for better budgeting and external validation of case strength.

Experienced funders also bring insight into procedural strategy and international coordination. Their perspective as repeat players helps patent owners align litigation timing and jurisdictional mix with overall commercial objectives—without being limited by internal budget constraints.

Funding’s wider impact on the European IP market

Litigation finance is shaping not only individual cases but the broader IP ecosystem. By turning contingent litigation rights into measurable assets, funding improves corporate financial flexibility and supports more strategic IP management.

For SMEs, the combination of the UPC’s simplified procedures and available financing is particularly powerful. As Vittorio Cerulli Irelli noted, the UPC provides “market-wide remedies effective across a region of roughly 400 million consumers.” Funding enables smaller innovators to pursue enforcement they could not otherwise afford—enhancing access to justice and promoting fair competition across the European market.

Conclusion: finance meets procedure in Europe’s patent system

The UPC has changed the structure and rhythm of patent litigation in Europe. Its consolidated jurisdiction, accelerated timelines and broad remedies concentrate both opportunity and risk. Litigation funding allows rights holders to navigate this environment confidently, transforming cost into strategy and aligning financial and legal planning.

As case law develops and investor familiarity increases, legal finance will become an essential part of patent enforcement in Europe. The UPC not only changes how litigation is conducted but also redefines how patents are valued and financed.

For German businesses looking to get started with patent monetization or assess funding opportunities, our team is available at info@burfordcapital.com.