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Freshfields Risk & Compliance

| 7 minute read

Draft Arbitration Rules of PMAC: A New Chapter in European Patent Dispute Resolution

On 4 June 2025, the Patent Mediation and Arbitration Centre of the Unified Patent Court (Centre) launched a public consultation to gather feedback on its draft arbitration rules (Draft Rules). The Centre was established by the Agreement on a Unified Patent Court (UPCA). The Draft Rules outline a comprehensive set of procedures for conducting arbitration proceedings under the auspices of the Centre. In this series of blog posts, we will explore the key features of the Draft Rules and analyse how they are designed to facilitate effective dispute resolution within the framework of the Unified Patent Court (UPC). In this first blog post, we will take a closer look at the type of disputes to which the Rules will apply. 

Jurisdiction

The UPCA provides that the Centre ‘‘shall provide facilities for mediation and arbitration of patent disputes falling within the scope of [UPCA]’’. The Centre is thus specifically designed to complement the work of the UPC by offering an alternative dispute resolution forum for certain patent disputes. Reflecting this purpose, the Draft Rules require that cases submitted to the Centre maintain a nexus to the UPC’s jurisdiction. Article 2 of the Draft Rules refers to the ‘‘scope of application’’ instead of jurisdiction and provides that the Centre offers ‘‘support in the resolution of disputes relating to European patents, European patents with unitary effect and supplementary protection certificates for which UPC is competent pursuant Article 32 of the UPCA and related disputes’’. 

Thus, a dispute falls within the Centre’s so-called jurisdiction only if the UPC has jurisdiction over the dispute or if there is a link to the UPC’s jurisdiction. The UPC’s jurisdiction, and hence also the Centre’s jurisdiction (and the jurisdiction of arbitral tribunals conducted under the Centre’s auspices), covers 

  • actions based on European patents (European patents are so called “bundle-patents’’ that can provide protection in up to 39 countries, which include EU member states (at present, 19 joined the UPC) plus 12 non-EU countries such as the United Kingdom, Norway, Switzerland, and Turkey based on where the applicant chooses to validate the patent), as well as 
  • European patents with unitary effect, ie patents that are not a bundle of national rights, but a truly cross-national patent with automatic effect in all UPC member states; or
  • Supplementary Protection Certificates, which are extensions of European patent rights, e.g. for medicinal products (Regulation (EC) No 469/2009). 

In terms of types of actions, the UPC has jurisdiction over, inter alia, the following actions: infringement actions and related defences and counterclaims concerning licences, declaratory actions for non-infringement, revocation actions to invalidate a patent and a number of specific but less common patent-related actions. 

Additionally, Article 2(1) of the Draft Rules expands the scope of disputes administered by the Centre to ‘‘related disputes’’, which would typically refer to disputes that are connected to the main issue being arbitrated. In this context, this phrase suggests that such disputes might extend beyond the strict jurisdictional scope set out in Article 32 of the UPCA. However, it is unclear whether “related disputes” would allow the Centre to administer subject matter disputes outside of Article 32 of the UPCA or whether it could administer disputes outside of the UPC territory. The latter could include, for instance, worldwide licensing disputes or disputes related to entire patent portfolios and not just a single or limited number of patents, provided there is a link to a European patent or unitary patent within the UPC’s remit. A broad jurisdiction offers the Centre flexibility in handling a wide range of disputes, which fits the political agenda of establishing the Centre as a key venue for international patent arbitration. 

The Centre’s objective of broadening its competence is also evident in Article 2(3) of the Draft Rules. This article allows the parties to agree that “any other disposable right or obligation factually or legally linked to the dispute be included in the arbitration”. The Draft Rules do not, however, clarify the relationship between these “other” rights and obligations under Article 2(3) and the “related disputes” pursuant to Article 2(1), nor do they determine which rights and obligations can only ever be made subject to an arbitration with the consent of both parties. 

Given the potential breadth of the terms “related disputes” and “factually or legally linked”, it may be worth suggesting in the consultation response that these terms be clarified or illustrated with examples to ensure consistent interpretation and application, and to clarify the boundary between the innate jurisdiction of the Centre (and any arbitral tribunal operating under its auspices) and potential extensions of such jurisdiction for which the parties agreement is necessary. 

Such guidelines regarding the powers of the arbitral tribunal under Article 2(1) will likely help arbitral tribunals exercise their jurisdictional powers pursuant to Article 24 in more reliable and predictable manner. Such guidelines would also likely help arbitral tribunals in the first few years in developing a body of reliable precedents more quickly. In order to further enhance legal certainty and transparency, the Centre may further wish to adopt a practice of publishing anonymised awards to guide the users of the Centre.

Application for arbitration

According to Article 2(4) of the Draft Rules, ‘‘an application for arbitration can be made by the parties to a dispute or by the one of the parties with the express consent of the other parties or following a recommendation by the UPC or other competent authorities to resolve the dispute’’. This provision raises many questions that should be answered before the Draft Rules can be adopted.

Firstly, it is unclear what ‘‘application for arbitration’’ entails. This term is uncommon in arbitration practice, and the Draft Rules do not define it. When read in conjunction with Section 2 (Referral to ADR by the UPC) and 3 (Self-referral to ADR by the Parties) of the Draft Rules, this could be interpreted in several different ways: 

  • an application to the UPC court to have the matter referred to arbitration (which would likely not be workable in the absence of any arbitration agreement between the disputing parties),
  • an agreement of the parties to refer a pending litigation before the UPC court to arbitration or other ADR mechanisms,
  • a request for arbitration made by the claimant and communicated to the respondent party; this is, of course, how arbitration proceedings are initiated under standard international practice. 

The lack of a clear definition creates uncertainty as to what an application for arbitration is really intended to regulate, and what consequences are meant to follow once an application has been made.

Secondly, the Draft Rules do not specify the entity to which the application should be addressed. 

Thirdly, in the scenario where the ‘‘application’’ can be made following the recommendation of the UPC or other competent authorities, there is ambiguity as to whether the application is to be made by the recommending authority itself or by one or more of the parties. Allowing the UPC or any other authority to make such an application on its own, or based solely on the consent of one party, would, however, be inconsistent with established international arbitration principles of consent to arbitration and party autonomy. Indeed, in order for parties to be deprived of the right to a public court of law, like the UPC, major arbitration laws, and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) require a clear and unambiguous waiver from both parties, typically in the form of an arbitration agreement or an otherwise formalised submission to arbitration. In addition, under Article 6 of the European Convention on Human Rights (ECHR), an agreement from the parties is also required to waive, in principle, the rights to a fair trial under Article 6 of the ECHR.

In light of these ambiguities, it is essential that the Draft Rules be revised to provide legal certainty.

Confirmation of consent-based arbitral award by the UPC Court

Pursuant to Article 2(2) of the Draft Rules, “the UPC shall, if requested by the parties, by decision confirm the terms of any settlement or arbitral award by consent” which is reached under the auspices of the Centre. This includes terms obligating the patent owner ‘‘to limit, surrender, or agree to the revocation of a patent or not to assert it against the other party and/or third parties”. 

This provision creates an additional mechanism for the enforcement of arbitral awards by consent, and ensures that parties do not have to rely exclusively on the  New York Convention (and its national implementation legislation) in order to enforce awards. An award by consent may thus be confirmed as a UPC judgment, and hence becomes directly enforceable in the contracting member states, who are all parties to the Brussels I Regulation which governs the recognition and enforcement of judgments in civil and commercial matters across the EU. 

This mechanism could be important especially considering that such awards may also include those that oblige the patent owner to limit, surrender, or agree to the revocation of a patent, or commit not to assert the patent against the other party and/or third parties, which are typically rights that are not necessarily freely arbitrable under national law in many jurisdictions.

While the authors of the Draft Rules will no doubt have considered to extend the privilege of converting all arbitral awards, not just awards by consent, into a UPC judgment, it may be worth considering and testing whether there are other circumstances in which other arbitral awards may also be converted into UPC judgments. It may, for example, be the case that a party wishes to convert an arbitral award into a UPC judgment after (i) a challenge of the award failed or (ii) the period for any challenge has expired or (iii) a recognition and enforcement action in a particular jurisdiction was successful. 

Conclusion

While the Draft Rules provide a promising framework for integrating arbitration into the UPC system, there remain several ambiguities and areas that require clarification. The authors of the Draft Rules may wish to clarify the scope of arbitral tribunal’s powers to assume jurisdiction over related disputes beyond the narrower scope of the UPC’s competence, clarify the meaning of an application for arbitration within Article 2(4) and consider the support that the UPC Court may provide in enforcing arbitration awards rendered by the Centre beyond those that are only reached by consent. 

 

Tags

international arbitration, intellectual property