Damages before the UPC: from compensation to a market reference

Every infringement trial produces two answers: a binary one, the patent is infringed or it is not, and a continuous one, that of value. European litigation long treated the second as an appendix to the first. The Unified Patent Court reverses that order: the question of the amount becomes a trial in its own right, and the figure that emerges does not serve the parties alone.

The first damages determination proceedings have now been decided. They draw a demanding line: liability is worth nothing without a constructed economic file, and the amount awarded, public and reasoned, becomes a market reference. Before the Unified Patent Court, compensation ceases to be an appendix to the infringement action: the amount of damages becomes a reference in its own right.

The architecture: Article 68 UPCA and Rules 125 et seq.

The framework is compensatory, not punitive.Article 68 UPCA aims to place the injured party in the position it would have been in absent the infringement: lost profits, profits unfairly made by the infringer, moral prejudice, or a lump sum based on the royalties that would have been due.

The procedure, for its part, is two-staged. Rule 118.1 of the Rules of Procedure allows the Court to set the amount in the decision on the merits; failing that, Rules 125 et seq. organise a separate procedure for the determination of damages, which the claimant must initiate within one year of the final decision on infringement. That second phase is a full evidentiary trial, with the possibility of an account of profits (laying open of books, Rules 141 et seq.) and of an interim award covering the costs of the quantification proceedings (Rule 119).

The structural consequence deserves to be weighed: for the first time in Europe, a single forum can fix, in a decision covering up to eighteen States, the amount of damages owed for the unauthorised working of a protected technology, whether it is covered by a unitary patent or by a classical European patent that has not been removed from the system.

What the first decisions show

Three cases set the tone. In Fives ECL v REEL, the Court of Appeal first confirmed (order of 16 January 2025, UPC_CoA_30/2024) that the UPC may set damages independently of prior national decisions; the Hamburg local division then (11 February 2026, UPC_CFI_274/2023) dismissed a claim of approximately EUR 6.5 million for lack of verifiable documentation supporting the damage theory, even though liability was established. Infringement was proven; value was not.

Bhagat v Oerlikon teaches that knowledge of harm and proof of harm are two different things: the Court of Appeal (9 December 2025, UPC_CoA_8/2025) set aside an award of EUR 15,000 for reputational harm based on general assertions. Finally, Quantificare v Canfield (Düsseldorf local division, 23 April 2026, UPC_CFI_559/2024 and UPC_CFI_106/2025) granted EUR 20,000 in provisional damages to cover the costs of the forthcoming quantification proceedings, refusing to confine Rule 119 to situations of financial hardship: the quantification phase is a fully fledged litigation stage, to be funded and prepared as such.

The common thread is constant: the Court presumes nothing. It awards what is demonstrated, line by line, and rejects what is merely asserted.

From compensation to a market reference

An amount set by the UPC does not stay in the file. Public and reasoned, it becomes portable: it enters licence negotiations, acquisition models, portfolio valuations, financing memoranda and cross-border settlement discussions. Unlike a market price, which aggregates dispersed information, the judicial figure is fixed at a set date, on a closed record: it operates less as an equilibrium than as an anchor, and the first anchors weigh heavily in a still limited set of comparables.

The geographical reach of that anchor is expanding. Following the Court of Justice's BSH Hausgeräte v Electrolux judgment (C-339/22, 25 February 2025), the UPC Court of Appeal held in Kodak v Fujifilm (2 June 2026, UPC_CoA_882/2025 among others) that Article 34 UPCA is not a jurisdictional ceiling: the Court may hear infringement claims concerning non-UPC designations of a European patent, applying the relevant foreign law. This so-called long-arm jurisdiction widens the damages base accordingly. And in the field of standard essential patents, Panasonic v OPPO (Mannheim local division, 22 November 2024, UPC_CFI_210/2023) showed that the Court does not sidestep the FRAND question and reasons in terms of a range of rates rather than a single figure: pricing the technologies the parties failed to price themselves falls to it.

For proprietors: build the number from the writ

The operational lesson is immediate: quantification can no longer be assembled after victory on liability. The economic file is designed from the outset of theinfringement action, and it must contain:

• contemporaneous price, sales and margin data, kept in verifiable form;
• evidence of customer switching and price erosion attributable to the disputed acts;
• comparable licences and an analysis of available lawful alternatives;
• an explicit causal theory linking each head of damage to the acts of infringement.

Fives ECL v REEL puts a price on economic analysis left implicit: approximately EUR 6.5 million claimed, zero awarded, liability nonetheless established.

For defendants and third parties: quantum as a battlefield

For the defendant, the mirror image is sharper still. The damages phase is not only about reducing the award in the case at hand: it is about preventing a figure from becoming an external reference point, invocable tomorrow in other negotiations. That requires attacking the causal model, the royalty base, apportionment and the comparability of licences with the intensity usually reserved for contesting infringement. Confidentiality itself becomes strategic: UPC decisions are published on the official database of decisions and orders, while pleadings and evidence fall under a distinct access regime; controlling what enters the pool of comparables is part of the defence.

For investors and litigation funders, finally, the value of a damages claim lies in its expected quantum, discounted for legal risk, delay and costs: UPC practice will progressively supply those parameters, as two years of case law already suggest. forum choice now takes that into account: the question is no longer only where to litigate infringement, but where and how damages will be assessed.

Key takeaways

• Article 68 UPCA sets a compensatory standard: the UPC awards what is demonstrated, never what is merely asserted.
• Quantification may proceed separately (Rules 125 et seq.), to be initiated within one year of the decision on the merits, with an account of profits available.
• Fives ECL v REEL (Hamburg, 11 February 2026): a claim of approximately EUR 6.5 million dismissed for lack of verifiable documentation, despite established liability.
• Quantificare v Canfield (Düsseldorf, 23 April 2026): provisional damages can fund the quantification phase, with no requirement of financial hardship.
• A public, reasoned amount becomes a market anchor: licences, valuations and settlements will refer to it.
• After Kodak v Fujifilm (CoA, 2 June 2026), the base can extend to non-UPC designations: the stakes of quantum exceed the eighteen participating states.

Frequently asked questions

Should damages be quantified from the infringement action onwards?

The claim may be decided in the decision on the merits (Rule 118.1) or referred to separate proceedings. But in both cases, the economic evidence must be built from the outset: contemporaneous data, explicit causation, comparables. The first decisions deal severely with files assembled after the fact.

Does the UPC award punitive damages?

No. Article 68 UPCA adopts a strictly compensatory standard: the aim is to restore the injured party to its position before the infringement, through lost profits, the infringer's profits, moral prejudice or a lump sum based on the royalties due.

What is the laying open of books?

In damages determination proceedings, the claimant may request disclosure of the infringer's accounting records to establish the basis of the harm. The Court rules on that request under Rules 141 et seq. of the Rules of Procedure.

Can an interim award be obtained before the final determination?

Yes. Quantificare v Canfield confirmed that an interim award may be granted to cover at least the expected costs of the quantification proceedings (Rule 119), without the claimant having to show particular financial hardship.

Dhenne Avocats conducts litigation before the UPC with damages strategy built in from the writ: construction of the economic file, damages determination proceedings, defence of quantum and confidentiality. Talk to us.

This article is an original and substantially updated adaptation of an analysis by Matthieu Dhenne first published on Kluwer Patent Blog on July 7, 2026: The UPC Damages Moment: When Compensation Becomes Price Discovery.