A guide to the UPC and the UP - Flipbook - Page 50
and sell-off period and the licensee’s involvement in infringement and invalidity actions.
The conclusion must be that a LOR is an agreement that needs to be negotiated. This implies
that the parties are not only free to negotiate the terms of their licence, but also the applicable
law. However, unless the proprietor of the Unitary patent is happy with only appropriate
consideration without setting out the terms of the LOR in more detail, it is advisable to make
it clear that the patentee reserves its right to include in the licence agreement more detailed
obligations and rights to be negotiated, than merely the obligation to pay a licence fee.
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The patent owner does, it appears, have an obligation to negotiate in good faith. After all,
a discount on the renewal fees is given if a patent is designated as being subject to a LOR.
If a patent owner makes what are clearly unreasonable demands for concluding a licence
agreement, resulting in the fact that no licence agreement can ever realistically be concluded,
such demands might constitute an abuse of right.
Appropriate Consideration in a LOR
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Art.8(1) Unitary Patent Regulation provides that a LOR can be obtained in return for
“appropriate consideration”. Since this provision is contained in the Unitary Patent Regulation,
“appropriate consideration” is an autonomous EU law concept which is subject to interpretation
by the CJEU. 49
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Art.32(1)(h) UPCA provides that the Court has exclusive jurisdiction for disputes on the
compensation for a LOR as set out in art.8 Unitary Patent Regulation. The Court will not have
any further jurisdiction with any other dispute on that licence or on licences that are not LORs
as set out in art.8 Unitary Patent Regulation. Nonetheless, by assessing whether the licence fee
is appropriate, the Court will have to review all the relevant obligations and rights of the licence
agreement as the scope of the agreement will have a direct effect on the licence fee. The Court
can, and arguably must, refer questions of interpretation on such compensation to the CJEU
where appropriate.
Proceedings Before the Court
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The Court has exclusive competence for disputes regarding what constitutes an appropriate
level of compensation under the LOR. 50 If the patentee and the potential licensee cannot reach
an agreement, the proprietor can apply to the Court to determine the level of appropriate
compensation. 51 The applicant in such an action is required to pay a fixed fee of €3,000 and,
where the value of the action exceeds €500,000, a value based fee on the scale set out in
section II to the table of fees. 52 Both the fixed fee and the value based fee is payable at the time
of lodging the application 53 and the application is not deemed to have been lodged until both
have been paid. 54
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An application for compensation should contain: 55
– Particulars identifying the claimant and defendant; 56
49
50
51
52
53
54
55
56
Ibid.
art.32(1)(h) UPCA.
art.32(1)(h) UPCA. The Court has competence in relation to “actions for compensation” [emphasis added] for LOR which would
appear to preclude applications made by the licensee.
r.80(2) RoP referring to rr.132 and 133 RoP. See chapter 20 (Court Fees and Recoverable Costs) paragraphs 20-15 to 20-36 for
the ways in which the value of the action are calculated. Here the value of the action will be calculated on the basis of the
royalty rate applicable in the licence agreement.
r.371(4) RoP.
r.15(2) RoP.
r.80(1) RoP.
In accordance with r.13(a) to (d) RoP. See chapter 12 (Written Procedure) paragraphs 12-34 which sets out the contents of a
SoC in an infringement action.
© Bird & Bird LLP | May 2023
A Guide to the UPC and the UP 40
