Electrolux one year on: what does the long-arm jurisdiction of the UPC mean for the UK?

UPC grants first UK injunction…

In Fujifilm Corporation v. Kodak GmbH and Others (UPC_CFI_365/2023), and (UPC_CFI_359/2023) the Mannheim division applied the CJEU’s Electrolux reasoning in a case concerning the UK part of a European Patent Convention (EPC) patent. It concluded that, if it has jurisdiction over a defendant because of the defendant's domicile in a UPC Agreement member state, it may also rule on whether the defendant's activities in the UK infringe an EPC patent granted by the European Patent Office (EPO) and validated in the UK (an EP(UK) patent). In other words, the jurisdictional reach of the UPC can extend into the UK.

…but only granting states can declare patents invalid

Importantly, the UPC accepted in Fujifilm that it cannot revoke UK patents with erga omnes effect; only the granting state can declare a patent invalid and remove it from the register. The UPC’s assessment of validity in relation to EP(UK) patents is limited to an inter partes analysis undertaken only as a prerequisite to determining infringement, so will only take effect as between the parties. Nonetheless, the UPC took the further step of granting the first injunction extending to the UK. This underscores the practical impact of the UPC's growing cross-border reach.

Invalidity defences can be raised without separate revocation actions

Fujifilm also confirmed that defendants may raise invalidity defences within UPC proceedings without initiating separate UK revocation actions. This allows parties to resolve all issues arising in a dispute within a single forum, reducing procedural complexity and cost. However, any finding on validity binds only the parties and has no effect on the status of the patent in the UK register.

This approach was also followed in HL Display v Black Sheep Retail Products. In this case, the Hague local division of the UPC made an inter partes finding that the patent in question was valid and that it had been infringed. It granted a permanent injunction covering all territories covered by the patent which included UPC countries, EU but non-UPC countries and non-EU countries. These judgments underscore the appeal of the UPC for cross-border patent litigation.

UPC diverges from established UK principles

The position taken by the UPC contrasts with established UK case law. UK courts consider questions of infringement and validity to be closely connected and have traditionally resisted artificial separation of the two issues, a view the CJEU shared prior to Electrolux. This shift risks producing inconsistent outcomes in different courts on identical subject matter and raises the real possibility of increased bifurcation between infringement and validity proceedings.

Where do intermediaries stand?

A recent development is the referral by the UPC Court of Appeal to the CJEU in Dyson v Dreame of the question of long-arm jurisdiction and intermediaries, this time involving a non-EU based entity, its activities in Spain, and the role of its authorised representative in Germany. Dyson initially brought an action for provisional measures, including a preliminary injunction in UPC countries and Spain (a non-UPC country), for infringement of its unitary patent relating to its “Airwrap” hair treatment device. It sought these against (i) Dreame International Hongkong Limited (Dreame), (ii) its official distributor in Germany, (iii) an affiliate in Sweden and (iv) its authorised representative in the EU, Eurep GmbH (Eurep), which is based in Germany. The injunction was granted in UPC states but only granted in Spain in respect of certain older products offered by Dreame. Dyson appealed the first instance order arguing that the injunction should apply to all products in Spain too. Dreame appealed arguing that the order should be set aside and that the application for provisional measures be rejected in its entirety. The Court found in favour of Dyson and issued provisional measures against Dreame, its German official distributor and Swedish affiliate relating to all products in UPC states however it stayed parts of the proceedings that relate to acts of Dreame in Spain and the actions of its authorised representative in the EU pending a referral to the CJEU.

In its referral, the Court of Appeal has asked for clarity on whether the UPC has jurisdiction over Dreame’s activities in Spain due to its authorised representative being domiciled in Germany. This involves examination of the interplay of Article 8(1) and Article 71b(2) Regulation 1215/2012; the former allowing a defendant to be sued where another defendant is domiciled to avoid the risk of irreconcilable judgments resulting from separate but closely connected proceedings, and the latter providing for enforcement of judgments given by other member states in the exercise of jurisdiction provided for in a convention. The CJEU’s view on whether an alleged infringer and alleged intermediary are in the same in situation of fact and law so as to trigger the risk of irreconcilable judgments and therefore give the UPC jurisdiction will be of great importance to companies distributing within the EU, and EU intermediaries of these companies, going forward.

The Court of Appeal also asked the CJEU whether it has jurisdiction to grant a pan-European preliminary injunction and a preliminary injunction against Eurep as an “intermediary” whose services are used by Dreame to infringe. This is in view of the representative not being a direct infringer and here having no practical ability to control the infringing acts, it being simply appointed as an authorised EU representative to fulfil Dreame’s legal obligation to have such a representative in the EU.

The UPC is also seeking clarification on whether it can grant preliminary injunctions against companies based in EU member states that are outside the UPC system, where those companies also market products in UPC member states through websites that are identical apart from the language.

Unfortunately, these questions are unlikely to be answered for several years, leading to a longer period of uncertainty, particularly as regards EU-appointed intermediaries.

Practical implications

Whilst questions remain, it is important to be aware of the following:

• The UPC may now assess alleged infringement of EP patents validated in the UK, provided it has personal jurisdiction over the defendant.
• Validity assessments by the UPC will be inter partes only, but may still influence litigation strategy, settlement leverage and commercial risk.
• Parties may raise invalidity defences in the UPC without commencing parallel UK actions, simplifying cross-border disputes.
• There is a growing risk of divergent outcomes where UK and UPC courts consider similar issues.
• Litigants should consider whether the UPC's expanded reach presents opportunities or risks in relation to their pan-European enforcement and defence strategies.

The extent to which this jurisdictional expansion will result in increased bifurcation remains to be seen. The developing case law should be monitored closely, particularly in cases involving UK designations of European patents.