“If there is now a ‘counterclaim gap’, what does this mean for the strategies of the parties, in particular the defendants, before the Unified Patent Court?”
In June 2023, as is widely known, more than 50 years of efforts to create a pan-European patent jurisdiction were finally successful and the Unified Patent Court opened its doors.
The structure of the unitary patent system is legally complicated and this article will not go into the details. The important thing at this point is that there were two traditions within Europe, namely, the German principle of separation (often wrongly called also “bifurcation”), according to which infringement actions and nullity actions were separate and handled at different courts, and the otherwise prevailing principle of unity, according to which infringement and validity are examined in the same proceedings. The defenders of the German system pointed out that, statistically, only half of all infringement actions result in a nullity action, i.e. the courts are spared unnecessary work. The defenders of the unitary approach pointed out the numerous (alleged or existing) inconsistencies in the German system (such as the “Injunction Gap”and “Angora cat”).
A Middle Ground
With the creation of the Unified Patent Court, it was believed that a middle ground had been achieved between the two concepts, such that it is possible to attack the legal status in infringement proceedings, but only if a counterclaim for revocation is filed. This counterclaim must be filed by the defendant together with the first submission in the infringement case, i.e. within three months after having received the suit.
It was expected that this would be the case in almost every trial, i.e., the German way would come to an end, but interestingly, the statistics tell a different story.
The Data So Far
The Unified Patent Court publishes its case numbers every month. The number of counterclaims exceeds the number of infringement actions but, as the court itself points out, this is a statistical distortion and is due to the fact that there are often several defendants and they each have to file a counterclaim individually.
If one removes these duplicates, it is now so that the number of patent infringement actions clearly exceeds the number of nullity actions. In the following, the official numbers for cases from May to December 2024 (always until the end of the respective month—earlier months were disregarded as to avoid any “hysteresis effects”) are shown:
As the counterclaims are filed with a time delay, it was to be expected that the number of claims would be higher – but the difference between the two graphs should then remain essentially the same. However, this is not the case, as the following graph shows:
So, it is apparent that the difference has risen from 71 in May 2024 to 107 in December 2024 – and this is clearly unexpected. If there was a 1:1 ratio of infringement suits to counterclaims, then this difference would at some point reach an equilibrium, but that is not the case; actually, said difference recently has increased quite sharply.
Part of this phenomenon can certainly be explained by the fact that, in some cases, before the deadline for filing a counterclaim expires, the parties reach an agreement and therefore a counterclaim is no longer necessary. However, is that sufficient to explain the numbers?
Worth Watching
Of course, the data at hand is still relatively small, but the trend is striking and should be monitored further. If there is now a “counterclaim gap”, what does this mean for the strategies of the parties, in particular the defendants, before the Unified Patent Court? Was the introduction of the middle ground, probably due to the need to find a compromise at the time, ultimately the ideal solution? We will continue to monitor the data going forward and report back at a later date.
Image Source: Deposit Photos
Author: belchonock
Image ID: 148797015
