Legal Commentary

Final UPC Rules of Procedure approved – with some important changes

The UPC’s Rules of Procedure have gone through many interactions since the first draft in 2009. The last – 18th! – draft dated from 2017. Further amendments were proposed at the inaugural meeting of the UPC’s Administrative Committee in February. The European Commission has also reviewed the draft. In an Opinion dated 22 June 2022, it welcomed the Rules as providing “a comprehensive, adequate and balanced framework” for UPC proceedings, and provided a small number of relatively minor comments.

18 July 2022 by Simmons & Simmons LLP

A revised version of the UPC's Rules of Procedure has been formally adopted by the Administrative Committee at a meeting on 8 July 2022 and published soon after on the UPC's website. A revised version of the UPC's Rules of Procedure has been formally adopted by the Administrative Committee at a meeting on 8 July 2022 and published soon after on the UPC's website.

Now, a revised version of the Rules has been formally adopted by the Administrative Committee, at a meeting on 8 July 2022. An amended table of court fees was also adopted. Both the revised Rules and revised table of fees will enter into force on 1 September 2022. Documents from the Administrative Committee’s meeting have been published on the UPC’s website here. The amendments to the Rules and accompanying explanatory notes are here. The amended table of fees is here. A consolidated version of the Rules will be published over the summer, before their entry into force.

As well as some tidying up, the amendments include some important changes, some perhaps more welcome than others. They include new provisions on opt outs, videoconferencing, access to the register and confidentiality clubs.

We review our top five, and a couple of runners up.

All together now! Opting out (Rule 5)

Opt-outs are one of the ‘hot topics’ of the UPC, with many patentees currently considering whether or not to opt European patents (EPs) out of the court’s jurisdiction. For those who decide to opt out, a change to Rule 5 may make their lives just a little harder.

The current version of Rule 5 requires an application to opt out to be made in respect of “all of the Contracting Member States” for which an EP/application is granted/designated. This, and the equivalent rule for withdrawing opt-outs, will be amended to refer to “all of the states”. The existing wording is said to be “inconsistent with the indivisibility of the application to opt out” and “implies that the UPC solely has jurisdiction over [UPC states], which is not the case”. The new wording also avoids a ‘moving target’ of proprietors, as and when additional states ratify the UPC Agreement.

However, the changes mean more due diligence to ensure that not only proprietors of all the UPC designations, but also those of other EU states (e.g. Spain, Poland) and non-EU European Patent Convention states (e.g. UK, Switzerland, Turkey), opt out. It may also require dealing with designations outside of a patentee’s main ‘European’ commercial market that may have been assigned to third parties.

Nevertheless, given an opt-out may not be effective if it fails to meet the requirements, it will be important to get this right.

I didn’t do it! Unauthorised opt-outs (Rule 5A)

A more welcome change for patentees is a mechanism to address unauthorised opt-outs or withdrawals. The UPC will not conduct identity checks on the proprietors listed in applications to opt out or withdraw an opt-out, and the process will not be restricted to registered proprietors. There has therefore been concern that there could be illegitimate opt-outs – or, particularly, illegitimate withdrawals of an opt-out to expose a patent to attack in the UPC. New Rule 5A is intended to address this.

If there has been an unauthorised opt-out/withdrawal, the proprietor may apply to remove it, giving reasons. The Registrar will decide on the application “as soon as practicable”. If it is accepted, the unauthorised opt-out/withdrawal will be deleted. There is also a mechanism to seek review of the decision. However, if an opt-out/withdrawal was genuinely unauthorised (rather than, say, the proprietor’s administrative error), it seems likely that a short explanation from the true proprietor will convince the Registrar.

Smile, you’re on camera! More videoconferencing (Rules 112, 104)

One major change in litigation practice during the covid pandemic has been increased use of remote hearings. While this has brought technical challenges and some light relief, such as the US attorney unable to disable his ‘cat’ filter, videoconferencing seems here to stay. It is likely to be particularly useful for short or urgent hearings, or where parties have difficulty travelling. As the UPC will be a paperless court, with written submissions made electronically, it seems well suited to remote hearings. Amendments to Rule 112 (Conduct of the oral hearing) and Rule 104 (Aim of the interim conference) make provision for their wider use.

New Rule 112.3 allows the court to permit a party or representative to attend a hearing – or the court to hear a party or witness – by videoconference. It also permits the oral hearing to be heard entirely by videoconference either if all the parties agree or if “the Court considers it appropriate to do so in exceptional circumstances”. As examples of such “exceptional circumstances”, the accompanying notes suggest travel restrictions and disproportionality (with the example of a long journey for simple and short oral proceedings).

Rule 112.3 also states that, in all cases, the oral hearing is to be transmitted (in picture and sound) to the court room. The notes explain this is to ensure that “the principle of publicity” is respected. In other words, members of the public can watch from the court room, even if the whole hearing is heard remotely. This requirement does not expressly refer to separate witness hearings, but Rule 115 states that both the oral hearing and separate witness hearings are to be open to the public, so it must be understood as extending to both.

Rule 104(h) supplements new Rule 112.3. It has been amended to permit the judge-rapporteur at the interim conference to order, after consultation with the presiding judge and the parties, the oral hearing or any separate witness hearing to be held wholly or partly by videoconference.

Now a little less public: access to the Register (Rule 262)

Advocates for open justice are likely to be disappointed by the changes to Rule 262 (Public access to the register). These are apparently in response to a legitimate desire to comply with the GDPR. However, they seem slightly heavy handed, and change the earlier presumption that all documents on the Register should be open to the public.

The previous Rule 262.1 provided that pleadings, evidence and orders and decisions of the court were to be publicly available, unless a party had requested confidentiality. Under the new version, pleadings and evidence will now only be made available “upon reasoned request”, following (where applicable) deletion of personal data. A decision will be taken by the judge-rapporteur after consulting the parties. This is similar to the approach of the German courts and the CJEU. The parties may still, separately, request that information in the documents is kept confidential, under what is now Rule 262.2.

In a welcome move, however, a proposal at the Administrative Committee’s February meeting that would have required a reasoned request to obtain even the court’s orders and decisions – with a suggestion that only “a collection of important UPC decisions” would be published – has been rejected. Instead, orders and decisions will be published automatically, after redaction of any personal or confidential information.

Practitioners will be pleased to be able to search all decisions, rather than just those deemed important by the court. However, many will still want to be able to see the evidence and pleadings underlying the decisions, as for example they can at the EPO. While the redaction of personal and confidential information is clearly sensible, requiring a reasoned request to obtain evidence and pleadings does not seem strictly necessary. Those favouring openness will hope the new requirement is a low bar, and permits access not only for professional, academic and media interests, but also the general public. There may also be circumstances where third parties are interested in a case without wanting the parties to know (for example, if they are concerned about being sued for infringement or attacking a patent) and will want to be able to gain access without disclosing their identity.

The procedure for a party to request that information is kept confidential has also been amended. Given that pleadings and evidence will not now be public by default, parties will no longer have to request confidentiality upfront. Instead, after a request for public access, there will be a 14-day period to request confidentiality before anything is released.

Let’s keep this between ourselves: confidentiality clubs (Rule 262A)

Patent litigation often requires the disclosure of commercially sensitive material or trade secrets – such as details of an allegedly infringing process or financial information needed to calculate damages – and so litigants are likely to welcome Rule 262A (Protection of Confidential Information).

The new rule allows a party to request that certain information in its pleadings, or the collection and use of evidence, be restricted or prohibited, or that access to information is restricted to specified individuals – i.e. so-called ‘confidentiality clubs’. The applicant must explain why it considers restrictions are justified, and the court – having taken comments from the other party – will in particular consider whether the applicant’s reasons “significantly outweigh” the other side’s interest in full access.

The notes indicate that such restrictions will be reserved for exceptional cases. Nor will the UPC countenance ‘external eyes only’ arrangements. Under Rule 262A.6 at least one natural person nominated by each party, as well as their representative, must have access.

A few other bits and pieces…

The UPC’s rules for seeking cooperation from other courts in taking evidence have been updated and consolidated. Rule 173 now covers seeking judicial cooperation not only with EU member states (adding a reference to recast Regulation (EU) 2020/1783 on taking evidence), but also with third countries. For those, the UPC will follow the Hague Evidence Convention, other international agreements or – where no such convention applies – national law. Rule 202, which dealt with letters rogatory to non-EU courts, has thus been deleted.

The provisions for seeking a saisie have also been tidied up, making it clear in Rule 194.1 that the court may decide to hear the defendant to an ex parte. This was implicit in Rule 194.5, which requires the court to warn the applicant of its intention and give it the option to withdraw its application instead, but any ambiguity is resolved. The procedure in Rule 194.4 for extremely urgent applications – where the standing judge may make an immediate decision – has been aligned with the equivalent for provisional measures (Rule 209.3).

The rules already provide that appeals against procedural decisions requiring leave of the Court of First Instance under Rule 220.2 are not eligible for suspensive effect. An amendment to Rule 223 now indicates that any ‘discretionary review’ of such decisions by the Court of Appeal under Rule 220.3 will similarly not have suspensive effect, nor will costs appeals under Rule 221.3. On a related note, Rule 370 (Court fees) has been amended to make clear that fees will be payable for procedural appeals under Rule 220.2 and costs appeals under Rule 221.4.

And finally, just in case a judge has shares in the other side, is married to opposing counsel or just isn’t quite as even handed as they should be, Rule 346 has a revised procedure for objections under Article 7 of the Statute of the UPC, concerning judicial impartiality. Any complaint of lack of impartiality must now be raised “as soon as reasonably practicable”. Otherwise it will be deemed waived, to avoid such allegations being held back for later, tactical, use. The new procedure is also less administratively burdensome for the court. Objections will now be referred to the Presidium only in difficult cases, with the decision otherwise being taken by the President of either the Court of First Instance or Court of Appeal, as applicable. It’s up to the panel assigned to the case to decide whether or not to continue proceedings in the meantime.