Choice of Law and the UPC

Back in March, in a post titled UPC Choice of Law Principles for Damages, I noted a decision of the Mannheim Local Division of the UPC, Hurom Co. v. NUC Electronics Europe GmbH, setting out the following choice of law principles for patent infringement actions filed in the UPC:  "with regard to the determination whether substantive law as laid down in the UPCA or substantive national laws of the UPCA member states applies to acts allegedly infringing traditional European bundle patents, the following applies:

"a) to acts committed after the entry into force of the UPCA, the substantive law as laid down in the UPCA applies;

 

"b) to acts committed before the entry into force of the UPCA, the substantive national laws apply;

 

"c) to ongoing acts started before the entry into force of the UPCA and continued after the entry into force on 1 June 2023, the substantive law as laid down in the UPCA applies."

Furthermore, the court appears to consider damages rules as “substantive,” meaning that national law would apply to damages calculations for acts committed exclusively before the entry into force of the UPCA.

My post neglected to mention, however, a January decision of the UPC Court of Appeal, Fives ECL, SAS v. REEL GmbH, UPC_COA_30/2024 (Jan. 16, 2025), which decided the preliminary issue of whether the UPC has jurisdiction to hear isolated claims for damages, and if so whether this rule applies where the damages were suffered prior to the entry into force of the UPC on June 1, 2023.  The specific setting of this case was that the patent owner had obtained from a German national court a judgment of infringement, prior to June 1, 2023, and a declaration that the defendant would be liable for damages; but it thereafter pursued its damages claim before the UPC.  The UPC Court of Appeal held that the UPC was competent to hear the damages claim (but left open the question of whether national or UPC law would apply to that claim).  The principle established in the Mannheim decision, if correct, would hold that national law applies where the infringing activity occurred prior to June 1, 2023.  

The issues presented in these cases, including an analysis of Fives v. REEL itself, are discussed in a series of article published by Dr. Thomas J. Adam in the journal European Patent Litigation in Practice: “Reach-Back Damages” in the UPC:  Does the UPC have or, indeed, need a long arm to adjudicate on damages caused by patent uses that took place prior to the coming into force of the UPCA?, 3 EPLP 109 (2024); Which Substantive Law Does the UPC Apply as to “Reach-Back Damages”? Some General Thoughts and a Pragmatic Proposal, 3 EPLP 197 (2024); and “We’ll Take It from Here” – Calculation of Damages in the UPC Based on a National Infringement Decision and “Reach-Back” Damages:  Case note to UPC-CoA, 16 January 2025 – UPC_CoA_30/2024.  Dr. Adam’s analysis is consistent with the results reached in the two above-cited cases, if not every aspect of their reasoning.  The second article also discusses the question of what the relevant statute of limitations should be for claims that accrued prior to the entry into force of the UPC.  The UPC itself establishes a five-year statute of limitations (article 72), but Dr. Adam reasons that in these types of cases national law, if different, should apply in order to comport with the parties’ legitimate expectations.  That would mean, for example, that where the claim accrued under German law, the normal statute of limitations would be shorter (three years), except in cases in which the patent owner seeks residual damages under BGB article 252, in which case the statute of limitations is ten years (see, e.g., my previous post on the BGH’s Spannungsversorgungsvorrichtung decision here).     

Update (6-3-2025):  As noted on ip fray, just yesterday a different panel of the UPC Court of Appeal concluded, consistent with the court's January decision in Fives v. REEL, that the UPC has jurisdiction over a case alleging the infringement before and after June 1, 2023 of a non-opted out European Patent.  The new decision is XSYS Germany GmbH v. Esko-Graphics Imaging GmbH, UPC_CoA_156/2025,APL_8790/2025