The Unified Patent Court and Damages: Broad Powers, Procedural Flexibility, and the Road Ahead

The Unified Patent Court and Damages: Broad Powers, Procedural Flexibility, and the Road Ahead

So far the UPC is considered to be an injunction-centric jurisdiction, centralising proceedings before a single court to obtain a pan-European ban on infringing products. This powerful remedy has even been bolstered by the so-called long-arm jurisdiction of the European courts. However, the UPC is also fully equipped with all necessary means to award damages appropriate to the harm suffered by the patent holder (Article 68 UPCA). Now, with just over two years of operation, no decision has yet been issued granting a full award of damages, primarily because claimants have chosen the bifurcated approach permitted by the Rules of Procedure. Nevertheless, several decisions on this topic have been issued, offering some insight into the UPC’s overall approach and the preferred procedural routes for damages claims.

A broad basis for damages : the UPC’s broad approach to its jurisdiction

The UPC interprets its overall jurisdiction broadly, both temporally and geographically, thereby reinforcing the incentive for parties to seek damages before the UPC.

Indeed, to date, the UPC has approached its jurisdiction in a manner that allows it to take into account acts occurring over an extended period of time. For instance, the UPC Court of Appeal (CoA) has confirmed that damages can be sought for acts predating the entry into force of the UPC Agreement. It has also provided guidance on the applicable law for such acts. Furthermore, it clarified how damages claims will be handled, as it ordered the defendants  to provide to the claimant information about their profits and to render their accounts (UPC_CFI_159/2024, 11 March 2025). The CoA has even confirmed its jurisdiction to hear damages claims arising from acts of patent infringement following final rulings of national courts, including for acts committed before the UPCA entered into force, provided the relevant European patent remains in force (UPC_CoA_30/2024, 16 January 2025).

From the outset, the UPC has been granted a broad geographical jurisdiction. Article 71b(3) of the recast Brussels Regulation allows it to rule against non-EU-domiciled defendants for infringement of a European patent outside the European Union, under certain conditions. More recently, the CJEU’s BSH v Electrolux ruling now also allows the UPC to extend its jurisdiction against EU-domiciled defendants outside the territories of the UPCA signatories. This expanded jurisdiction has already been applied in UPC cases (UPC_CFI_702/2024, 21 March 2025) and is likely to make actions involving the UK parts of European patents a regular feature of UPC litigation. However, to date, no actual decision granting damages has been issued by the UPC. This is largely explained by the procedural route set out by the UPCA and Rules of Procedure (“RoP”), which leave the claimant with a choice.

Procedural routes: bifurcation or all-in-one ?

There are three procedural routes provided for in the RoP for the determination of damages, namely: (i) directly in the infringement proceedings, where the amount of damages or compensation is determined in the judgment on infringement (Rule 118.1); (ii) in separate proceedings without a procedure to lay open books (Rules 10(d) and 125–140); or (iii) in separate damages proceedings with a procedure to lay open books (Rules 10(d) and 125–134). Where damages are not determined in the judgment on infringement, the parties have one year from the service of a final decision to lodge an application for separate proceedings for the determination of damages.

So far, this route has been favoured by the parties, as after an injunction is handed down, parties will most often settle the case, including for past damages. This may explain the absence of decisions providing guidance on damage computation to date. This strategy may be revisited in the future once the UPC issues its first decisions on damages. The potentiality of high awards and well-reasoned and substantiated award claims may put additional pressure on defendants, who will then have a clearer sense of the financial risk on top of the injunction. The defendants  will also have to defend damage computation in parallel to their defence on infringement and validity in the short timeframe of the UPC proceedings.

This may be all the more the case as, in some countries such as France, the courts generally rule not only on infringement and validity but also on damages, providing a comprehensive judgment at first instance. The parties must develop their claims and defences on damages, sometimes including the exchange of sophisticated expert reports. This practice already offers a flurry of case law on the application of the rules on damages, implementing, just like the UPCA, the principles laid down in the Intellectual Property Rights Enforcement Directive (IPRED). This shows, that a very specialized and efficient court like the UPC would be able to deals with all issues in single proceedings.

This may also be facilitated by the fact that the UPC rules facilitate the gathering of the evidence needed to compute damages.

Gathering of evidence:  non-communication is dissuaded

The UPC has already proven to be very strict in the communication of information by defendants to let the claimant assess its damages. The CoA recently confirmed penalties of €2,500 to €10,000 per day of non-compliance, based on the value of the dispute (UPC_CoA_699/2025, 14 October 2025). It also confirmed that after non-compliance, the penalties are to be considered of punitive nature (UPC_CoA_845/2024, 25 May 2025). All information needed can therefore be obtained quite efficiently, with of course all safeguards on confidentiality for the defendant as confidentiality clubs are now quite common in the UPC.

Once all cards are in the claimant’s hands, how will they argue their harm ?

Computation of damages: a filed still to be shaped at the UPC

Article 68 of the UPCA is largely inspired by Article 13 of the Enforcement Directive, albeit with some additions. Notably, it is now expressly stated that the infringer shall not benefit from the infringement and that damages shall not be punitive. The interpretation of these additions will be significant, especially given that Article 13 of the Enforcement Directive was clearly intended to provide a stronger remedy for the harm suffered by the patent holder.

First, it is worth noting that the CoA recently provided clarification on the requirement under Article 68(1) to show that the infringer engaged in infringing activity either “knowingly, or with reasonable grounds to know”. It once again adopts an approach favourable to the patentee, ruling that since the infringer was an active stakeholder, it is “at least reasonably expected to monitor the patent landscape before exhibiting its product on the market and should have had reasonable grounds to know about the existence of the Patent and the infringing nature of the attacked embodiment”. Failure to do so was deemed at least negligent. The COA therefore held that the provision of Art. 68(1) UPCA would apply in this situation. This is again favourable to the claimant, as the infringer will almost invariably be considered an active stakeholder in the industry and will be presumed to have knowledge. However, the CoA did not grant further damages due to lack of evidence (UPC_CoA_8/2025, 9 December 2025).

On grant of damages, all three methods of calculating damages are set out in Article 68 UPCA: negative economic consequences, unfair profits, and other factors such as moral prejudice. The Article also provides for the possibility of awarding an “alternative” lump sum, which must not be less than the royalties that would have been due had the infringer requested authorisation. In one isolated decision, the UPC suggested that as long as it does not submit evidence of manufacture or distribution of products working the patent, its damages can only consist of lost license fees (UPC CFI 316/2024 UPC_CFI 547/2024, 10 December 2025). However, a number of issues remain to be clarified.

For example, the UPC will need to determine whether the award of a lump sum is at the court’s discretion, and in what circumstances it would be appropriate to do so. Another issue is whether a claimant can compel the court to award a lump sum in order to avoid lengthy and complex damages calculations. Further difficulties may arise in determining the appropriate royalty in the counterfactual scenario where the infringer would have been authorised. Since the infringer cannot benefit from the infringement, it would seem odd if, upon a finding of infringement, the infringer were simply required to pay what would have been due in the case of regular authorisation. For example, in France, it is admitted that in such cases, the royalty rate will be increased, 1.5, 2 sometimes 3 times in order to take the fact that the royalty has not been negotiated into account.

The UPC will also need to clarify how the various heads of damages are to be taken into account: whether they are mutually exclusive (i.e., only one head can be invoked, such as lost profits or the infringer’s profits), or whether they can be combined or mixed. Each approach must be assessed in light of the principle that the infringer cannot benefit from the infringement – meaning the infringer should not be left in a position where the damages payable are less than the actual benefit obtained – but also the principle that damages cannot be punitive, and thus cannot exceed the benefit obtained from the infringement. The court will need to take care to avoid double compensation or the use of conflicting counterfactual scenarios when assessing damages.

Finally, it will be interesting to see what choices are available to the claimant in selecting each head of damages, as, for example, calculating lost profits may require the claimant to disclose confidential information about the exploitation of its products.

All these factors will lead the parties and the court into complex economic discussions regarding market shares between competitors, substitution rates between infringing and non-infringing products, price erosion, the springboard effect, distribution power, and the importance of the invention in commercialisation, among others.

In conclusion, while the UPC is already an attractive forum due to its broad geographical coverage, it remains to be seen in practise exactly how attractive it will prove to be for damage awards. Much will depend on how the provisions for the calculation of damages under Article 68 UPCA are applied. So far the UPC has taken several steps that can be seen as favourable for claimants, through its broad approach to jurisdiction as well as the measures taken to encourage the rendering of accounts.