UPC Blog Series: Part 3 – The Essentials of UPC Protective Letters

To make the best out of the ongoing sunrise period which started on 1 March 2023, our experts from different jurisdictions will share their insights through this blog series on topics that may have received less attention in the ongoing lively UPC/UP discussion.

The third part of our UPC blog series is about protective letters.

The basics of protective letters

A protective letter is a brief filed with the court by a party who believes they could be at risk of being subjected to preliminary measures (including preliminary injunctions) without having been heard by the court first, i.e., on an ex parte basis. To prevent this from happening, such party would set out in a protective letter a statement as to why it believes such ex parte order should not be issued. As such, a protective letter is, in essence, a pre-emptive statement of defence. The letter may include arguments of invalidity or non-infringement of the patent(s) at issue or other points of more procedural nature (akin to a balance of convenience, urgency or necessity test). Typically, the letter is aimed at provoking an oral hearing to determine the request for preliminary measures.

Protective letters are common in few European countries (e.g., Germany, The Netherlands, Belgium). In most EU countries, protective letters are not recognised in law and as such it has been unclear whether submitting them to courts will bring any desired results. The UPC system, however, will make protective letters part of the legal system in all EU member states that have signed and ratified the UPC Agreement (17 at first). Therefore, parties and legal practitioners, especially those having no prior experience with protective letters, should familiarise themselves with the system of protective letters to the UPC.

The UPC framework for protective letters

The general legal framework of protective letters to the UPC is provided in Rule 207 of the Rules of Procedure. Said rule, in essence, allows any natural or legal person who is concerned by a patent and who considers it likely that a provisional measure may be lodged against them before the UPC in the near future, to submit a protective letter (Rule 207.1).

The protective letter should be labelled as a “Protective letter” and be filed with the Registry of the UPC in the language of the patent. It should contain, amongst other things, information on the presumed applicant, defendant(s), the number of the patent at issue and any prior or pending proceedings (such as revocation proceedings) (Rule 207.2). In addition, the protective letter may contain an indication of the facts relied on, including challenges of facts expected to be relied on by the applicant, invalidity arguments, written evidence, and arguments of law including reasons to reject the application for provisional measures (Rule 207.3). The defendant submitting the protective letter must pay the official protective letter fee, currently set at EUR 200 (Rule 207.4).

Provided that the requirements for the protective letter are met, the Registry of the UPC will record the date of receipt, assign a number to the protective letter and provide details to all UPC divisions (Rule 207.5). Hence, the protective letter will be effective in the entire UPC territory through one submission.

At this time, the protective letter is not publicly available. If no application for a provisional measure against which the protective letter was filed is lodged within six months from the date of receipt of the protective letter, the protective letter shall be removed from the UPC’s register (Rule 207.9). The party who submitted the protective letter may apply to extend the protective letter by another six months, upon payment of the related protective letter extension fee, currently set at EUR 100.

If an application for a provisional measure is subsequently lodged with the UPC, the Registry will forward a copy of the protective letter to the appointed panel or single judge (Rule 207.8). Similarly, if the application for a provisional measure is already pending before the time of filing the protective letter, the Registrar will inform the judge or panel about the filing of the protective letter (Rule 207.5(d)).

Importantly, at the time the protective letter is provided to the panel or judge with an application for provisional measures, the applicant for provisional measures shall, as soon as practicable, also receive a copy of the protective letter from the Registry (Rule 207.8). Thereafter, the protective letter becomes public to third parties too at the UPC register (Rule 207.7). This does not have to mean that the full content of the letter will be made publicly available, especially as regards any confidential information in the protective letter (Rule 262 A), although this will require confirmation from the UPC.

Upon examination of an application for provisional measures, the UPC shall, in particular, consider summoning parties to an oral hearing if a relevant protective letter has been filed by the defendant but there is no obligation for the UPC to do so (Rule 209.2).

Both Rule 194.6 (Application for preserving evidence) and Rule 209.2 (Application for provisional measures) provide that, if the patent asserted in support of such applications is the subject of a protective letter, the applicant may withdraw the application.

Implications and considerations

The UPC Agreement foresees that provisional relief (including preliminary injunctions) can be ordered even without hearing the defendant first. Being subjected to such ex parte injunction (and accompanying penalties in case of non-compliance) may exert considerable pressure on, or even cause significant harm to, a defendant’s operations.

Hence, defendants may wish to take measures trying to avoid the risks associated to such ex parte injunctions. This is possible by filing a protective brief at the UPC, which is required to take it into account when deciding the eventual application for a provisional measure (Rule 209.2 (d)). As such, it seems likely that protective letters may become an important tool in litigation before the UPC. Relatively, a lot of attention is attributed to the protective letter system in the Rules of Procedure (see in particular Rules 194, 207, 208, 209).

Nonetheless, safe and effective usage of the protective letter option before the UPC may require some forward-thinking and a good understanding of the nature and operation of “UPC-style” protective letters.

Starting, first of all, with the language of the letter. The Rules of Procedure provide that the protective letter shall be submitted in the language of the patent. However, the language of the provisional measure application (and proceedings) it intends to anticipate is not necessarily that of the patent. While it is yet unclear how exactly this may play out, the party submitting the protective letter may wish to consider doing so under alternative languages or at the very least be prepared to organise translations.

Second, if various patents will be asserted in an ex parte application, the possible defendant may need to submit several protective letters. This implicitly follows from Rule 207.2, referring only to a protective letter for “the patent” at issue. This also follows from the requirement mentioned earlier, that the protective letter must be filed in the language of the patent (making it impossible to file one single protective letter for different patents if, for instance, they are prosecuted in distinct languages).

Thirdly, a possible defendant may be faced with jurisdictional questions, especially if the patent at issue concerns a European patent. Indeed, for European patents that have not been opted-out, the patent owner may apply for preliminary measures either before the UPC or before a national court during the transitional period. So, if a potential defendant wishes to anticipate all scenarios, protective letters should be filed at both the UPC and at the national courts. A protective letter only submitted with the UPC will obviously not be accounted for by the national courts. Even for European patents that have been subjected to an opt-out application from the jurisdiction of the UPC, a defendant should not rule out the idea of preparing and/or filing protective letters at the UPC. This is particularly important if there is a risk that the patentee may at some point withdraw the opt-out and subsequently file an ex parte application before the UPC.

Finally, even those lawyers and parties accustomed to the protective letter practice in their national courts should be mindful of the possible differences with the practice at the UPC. Obviously, it will take time to see how the UPC’s methods of dealing with protective letters will develop, but below are some examples where the protective letter practices may differ:

• Certain national courts may prefer a shorter protective letter or may have developed a sensitivity for certain procedural arguments and substantive non-infringement and/or invalidity arguments. The UPC will likely develop its own approach.
• Closely linked to that are the possible differences in substantive and procedural law, in particular when assessing whether a request for ex parte relief is well-founded. The arguments put forward in the protective letter will need to address the legal standard for granting ex parte relief, as set out in the Rules of Procedure. This standard may be different from that in certain national courts.
• The finality of the protective letter may be different depending on where it is filed: whereas certain national practices may limit the application of the protective letter to certain specific ex parte measures (such as preliminary injunction), protective letters at the UPC target “provisional measures”(Rule 207), which pursuant to A62 UPCA and Rule 211 can encompass not only applications for a preliminary injunction but also applications for the seizure or delivery up of the goods suspected of infringing a patent or for a precautionary seizure of the movable and immovable property, including the blocking of bank accounts and other assets. As is apparent from Rule 194.6 or Rule 200, these letters may also prove useful in the context of requests for ex parte applications for preserving evidence (A60 UPCA) or ex parte applications for freezing of assets (A61 UPCA).
• Importantly, the filing of protective letters at the UPC would, in principle, be disclosed to the public at large once they are disclosed to the applicant. This may trigger requests from interested parties to gain access to the arguments and prior art produced in those letters pursuant to Rule 262 (Public access to the register). This is a feature not currently known in German, Dutch or Belgian practice. While Rule 262A (Protection of Confidential Information) may provide for some safeguards, it remains to be seen if and how they are applied to protective letters at the UPC. Meanwhile, the risk of seeing part or all of the letter disclosed to third parties may urge parties filing such letters to carefully consider what arguments to put forward.

Given that a protective letter may be what makes the difference in preventing a business-critical ex parte injunction or other measure, parties should duly take into account this procedural tool when dealing with a potential claim for infringement before the UPC (and a growing number of national courts).