UPC Court of Appeal Clarifies Rules on Conditional Counterclaims for Revocation

WISECODE Take

Many business owners believe that facing patent litigation in Europe requires unconditionally filing a revocation counterclaim, which demands a massive budget. In fact, patent litigation is a game of resource allocation where balancing defense and offense tests a company's financial wisdom. This is akin to buying an option in financial investing, securing future hedging space with minimal premium. In the dispute between US medical device company Emboline and Italian competitor AorticLab over EP 2 129 425, the UPC Court of Appeal (case ID: UPC_CoA_40/2026) confirmed that a defendant can file a conditional counterclaim for revocation. This means the defendant only triggers the substantive review of the revocation if infringement is found, successfully saving unnecessary litigation costs. For Taiwanese companies entering the European market, this procedural clarification reduces initial financial pressure. While previous practices might have exhausted resources in the first instance, the new ruling allows precise budget allocation. However, if the plaintiff appeals a non-infringement finding, the defendant must also file a conditional appeal within the deadline to avoid losing their defensive rights. We suggest two strategies for companies facing European patent disputes. First, conduct a patent portfolio health check to assess infringement risks and defense costs in Europe. Second, flexibly utilize conditional counterclaims as a financial hedging tool to dynamically adjust litigation budgets and avoid premature spending. Litigation is like investing; precise cost control is key to surviving global market battles. Intellectual Classic provides professional patent portfolio health check services to help you tailor cost-effective IP defense strategies, though we recommend consulting a professional team for individual case evaluations.