The UPC’s long reach — and what it means for funding European patent enforcement
At Erso Capital, we have watched the Unified Patent Court move from an untested forum to a central part of European patent strategy in a remarkably short time. The point is not simply that the court is busy. It is that its decisions are starting to reshape the economics of enforcement.
A claim that might previously have required a series of national actions can now, in the right case, be advanced in a single forum with the prospect of relief across a much wider commercial footprint. That matters for patent owners, but it matters just as much for those asked to finance the dispute.
The numbers tell part of the story. By the UPC’s second anniversary, the Court of First Instance had received well over 800 cases, including hundreds of infringement actions, revocation counterclaims and stand-alone revocation actions. The timetable is also important. The UPC was designed around compressed first-instance proceedings, with final hearings generally targeted within a year and decisions often following shortly afterwards.
For anyone funding litigation, that is not a procedural detail. Time is one of the most sensitive and expensive variables in a funded case. A forum that can determine infringement and validity quickly, and in more than one market at once, is materially more attractive than a fragmented enforcement campaign spread across several national courts.
The more interesting recent development, however, is jurisdictional.
The CJEU’s decision in BSH Hausgeräte v Electrolux confirmed that, where jurisdiction is founded on the defendant’s domicile, a court may hear infringement claims concerning foreign designations of a European patent even where validity is raised as a defence, subject to important limits on the effect of any validity assessment. The UPC has since begun to work through what that means in practice.
In Fujifilm v Kodak, the court at first instance went as far as granting relief in respect of the UK designation of a European patent. The UPC Court of Appeal has since overturned the infringement finding on the facts, but it confirmed the broader jurisdictional point: the UPC’s reach is not necessarily confined to UPC territory.
That is a significant development, but not a free pass. National law, comity and the distinction between having jurisdiction and exercising it still matter. For patent owners, the attraction is obvious. Relief from one proceeding can, in the right circumstances, affect a much wider commercial landscape than the UPC’s participating states alone. For a funder, that can concentrate value and shorten the route to a meaningful outcome. It can also change settlement dynamics, because a defendant may no longer be looking only at a single national market.
The risk sits in the same place as the opportunity.
Long-arm jurisdiction is still developing, and recent cases show that it can generate satellite disputes of its own. The interaction between UPC proceedings, EPO oppositions, national validity attacks and foreign courts needs to be modelled at the outset, not treated as an afterthought. Stays before the UPC are discretionary. Parallel proceedings can be a strategic tool, not just background noise. In standard-essential patent disputes, the tension is already visible, with UPC and English proceedings producing arguments over interim licences, anti-suit relief and the proper forum for FRAND issues.
That matters for funding. A case may look straightforward if the map is drawn only around UPC states. It may look quite different once Spain, the UK, EPO opposition timelines, parallel revocation strategy and potential anti-suit measures are put into the model. The budget, downside case and settlement assumptions need to reflect that reality.
There is also a life sciences point. Pharmaceutical and biotech patent owners were understandably cautious in the court’s early phase, particularly around preliminary injunctions and pre-launch conduct. Recent appellate guidance on what may amount to imminent infringement has not removed all uncertainty, but it has made the framework easier to assess. That should make the UPC increasingly relevant for carefully selected life sciences disputes, especially where timing and market entry are central to the value of the claim.
The conclusion for us is not that the UPC makes every European patent dispute fundable. It does not. The better point is that it gives serious patent owners a more coherent enforcement route than the old patchwork system, provided the jurisdictional and procedural complexity is faced honestly.
A broad injunction is a powerful asset. The work is in understanding what stands between filing and that result.
For claimants and law firms considering European enforcement, the UPC is now too important to sit outside the funding analysis. The question is no longer simply whether the court is fast or claimant-friendly. It is whether the case, the defendants, the patent designations and the parallel proceedings can be structured in a way that turns the court’s reach into real recoverable value.
If that is a conversation you are having, we would be happy to offer Erso’s perspective on risk, structure and funding options.
KEY CONTACTS
KEY CONTACT (USA)
James Blick jhb@ersocap.com
KEY CONTACT (UK)
Bob Knock bk@ersocap.com