Exciting UPC update for Milan

On 26 January 2024, the Headquarters Agreement was signed by the President of the Court of Appeal of the UPC, Klaus Grabinski, and the Director General for Europe of the Italian Foreign Ministry, Nicola Verola, formally confirming the location of the third section of the Central Division of the UPC in Milan. See the Ministry's press release here. 

Italian Deputy Prime Minister and Minister of Foreign Affairs and International Cooperation, Antonio Tajani commented, "the signing of this agreement represents another significant step in the Italian Government's efforts to promote the protection of industrial property, a crucial element for the growth and competitiveness of our country"; also adding that "with the Headquarters Agreement - the first in Europe since the Patent Court came into operation - Italy wishes to strengthen its cooperation with the UPC and undertakes to ensure that the UPC offices in our country can operate under the best conditions".

This agreement follows the decision of the UPC's Administrative Committee, in June 2023, to establish the third seat of the UPC's central division in Milan. This seat replaces that previously assigned to London prior to the UK leaving the UPC system.  The other seats of the central division are Paris and Munich. The Milan seat is expected to start accepting cases within a year of the June 2023 announcement from the Administrative Committee.

The Italian Government clearly considers this a win, with Italian Deputy Prime Minister stating that "with the Headquarters Agreement - the first in Europe since the Patent Court came into operation - Italy wishes to strengthen its cooperation with the UPC and undertakes to ensure that the UPC offices in our country can operate under the best conditions". However, in practice, given that the judges must be multinational and that it is expected that most proceedings will be heard in English, the locale of the third section of the Central Division in Milan will likely only have limited effect on cases heard there.

In light of this amendment, the responsibilities of the former London section have been reallocated to the Paris seat and the two sections of the Central Division. The revised Annex II of the UPCA now reflects the new allocation of competences (the former London competences highlighted in bold):

• MILAN SECTION: (A) Human necessities (which comprise the pharmaceutical and medical device industries, agriculture, food tobacco, home appliances, clothing, wood & furniture, fire-fighting, sorts & gaming), without supplementary protection certificates.
• PARIS SEAT: (B) Performing operations, transporting (D) Textiles, paper (E) Fixed constructions (G) Physics (H) Electricity, supplementary protection certificates
• MUNICH SECTION: (C) Chemistry, metallurgy, without supplementary protection certificates (F) Mechanical engineering, lighting, heating, weapons, blasting.

In practice, this means that the new Milan Central Division will take on cases about IPC (A) patents (with no SPC), which under the current arrangement are filed in the Paris Central Division. Looking at UPC cases so far (up to 31 Jan 2024), Paris has been by far the busier of the two central divisions; receiving 20 revocation actions plus the only action for a declaration of non-infringement (compared to Munich's 4 revocation actions). Under the new agreement and once Milan is up and running, the majority of Paris' revocation actions (and the declaratory action) would have been filed in Milan. The number of actions so far suggests a strong interest in the UPC from the medtech field (e.g. patents covering medical devices, infusion pumps and e-cigarettes). With IPC class (A) likewise featuring prominently in the uptake of European patents with unitary effect, the data so far point to Milan being a busy central division.

"This is a very exciting time for the UPC. Such developments happened exactly on time as predicted last June and as of next June we should therefore see even more UPC cases in Milan, which until now have been handled excellently by the local division. The UPC, in its supranational vocation but with the different souls of the adhering countries within it, is therefore taking full shape and will undoubtedly produce a very cultured, careful and quick jurisprudence". Stefania Bergia, Partner, Milan.

"It is pleasing to see that the UPC is maturing quickly. With over a hundred cases pending, spanning a wide range of technologies and including matters both for SME's and for global conglomerates it shows that the system meets with industry's demands. As one of the major economies in Europe, it is only fitting that Italy now takes its place in this system with the launch of its Central Division in Milan. This will also have positive effects for Paris, which will then have increased capacity to handle the increasing volume of tech matters following the growing interest in European litigation in the context of global licensing disputes. Our Italian team headed by Stefania Bergia is the most experienced UPC team in the market, and therefore well suited to assist clients in all matters before the Milan Central Division. Equally, this goes for the wider Simmons & Simmons patent team, having established offices in all locations of the UPC's Central Divisions in Milan, Munich and Paris". Bas Berghuis van Woortman,  Partner and Head of the international patents team.

Do not hesitate to reach out to Simmons & Simmons legal experts to learn more about the UPC, and discuss how these changes can impact your intellectual property strategy.