The straw man lives on in the UPC

The Paris seat of the UPC Central Division has confirmed a question of strategic importance to parties seeking patent revocation: the meaning of “same parties”.

Why is that important? 

The jurisdictional rules of the UPC generally favour infringement claimants by allowing them to choose the division in which they bring a claim. Any later revocation action relating to the same patent and between the same parties must follow the infringement action into the same division as a counterclaim.

But if the parties are different, an initiating claim can still be filed in the central division against the same patent. That could be important because the revocation procedure is, at least on paper, faster.

So, how is “same parties” interpreted?

In Edwards Lifesciences v Meril Italy, the Paris court held that Meril Italy is not the “same party” as its Indian parent company, Meril Life Sciences Pvt. Ltd. This was despite the fact that the subsidiary was newly created and wholly owned, organised, directed, conditioned, and conformed to the strategic plan of the corporate group by the parent.

This meant the Italian subsidiary could file a fresh revocation action in the central division against Edwards’ patent, as well as the parent filing a revocation counterclaim to the infringement action in the Munich local division where it is being sued.

The court notes that this decision is consistent with the case law of the EPO, which permits a ‘straw man’ to act for some other person unless it is an abuse of process.

The court also acknowledges that this parallel action in the central division provides a reason why the local division might transfer the revocation counterclaim to the central division, to bring the two revocation proceedings together and avoid inconsistent decisions. 

And this is the key point:

As a result, in some cases, this will be a potential strategic tool for revocation claimants. It could enable them to steer revocation actions to the central division, where they might be able to revoke the patent before proceedings conclude on infringement in the local division.