SMEs and the UPC: Cost as a Barrier to Access to Justice

In an episode of Silicon Valley, a start-up receives a visit from a patent holder with no industrial activity. The patent is vague, the demand is set just below the cost of litigation, and settlement becomes the only rational outcome. The fiction describes a real mechanism: once the cost of proceedings exceeds what is at stake, substantive law stops deciding the case.

The Unified Patent Court was not designed to produce that effect. Its structure nonetheless exposes SMEs to it, for a simple reason: access is expensive, and legal aid, as the Agreement organises it, is not open to them.

What a UPC case really costs

Since 1 January 2026, the fixed fee for an infringement action is EUR 14,600 and EUR 26,500 for a revocation action, both supplemented by value-based fees. The fee for an application for evidence preservation rose from EUR 350 to EUR 5,000. The new fee table provides in return that small and micro enterprises pay half the fees, against 60% previously.

Court fees are only the visible part. The main exposure is the other side's representation costs, which the losing party bears within the ceilings set by the Administrative Committee decision of 24 April 2023, up to EUR 2 million per instance. The Court may also order security for costs under Rule 158 of the Rules of Procedure, and paying it may by itself deter a small company from bringing or fully defending a case.

For a company with a few dozen employees, these items, together with technical, translation and travel costs, often exceed the commercial value of the product at issue. Whether to litigate then becomes a cash-flow decision.

Legal aid closed to companies

Article 71 of the Agreement reserves legal aid to a "party who is a natural person" and who is unable to meet the costs of the proceedings, wholly or in part. Rules 377 to 380 of the Rules of Procedure govern the application, the substantive conditions and withdrawal, and the Administrative Committee decision of 27 September 2023 sets the thresholds, deductions and instalments.

The scheme is built for individuals: disposable income, dependants, capped instalments. An SME with no cash left has no access to it, whatever its actual situation, purely because of its corporate form. An inventor who has not incorporated may apply; the same inventor, once the company is formed, may not.

What the Convention and the Charter require

The European Court of Human Rights has held since Airey v Ireland (9 October 1979, no. 6289/73) that Article 6 § 1 guarantees a right of access to a court that is practical and effective, not merely theoretical, which may call for assistance where cost makes that access illusory.

EU law goes further on the point that matters for SMEs. In DEB (C-279/09, ECLI:EU:C:2010:811), decided on 22 December 2010, the Court of Justice held that the principle of effective judicial protection enshrined in Article 47 of the Charter does not make it impossible for legal persons to benefit from legal aid, which may cover both the waiver of advance payment of costs and the assistance of a lawyer. The court must assess the subject matter of the dispute, the prospects of success, what is at stake for the applicant and the complexity of the case and, for a legal person, its form, its financial capacity and that of its shareholders.

The Agreement takes a narrower position than the Charter allows. As the UPC is a court common to the participating Member States, that gap will not stay theoretical for long once an SME is refused legal aid for the sole reason that it is a company.

What can change without amending the Agreement

Several levers lie with the Administrative Committee or with the Court's own practice. Security for costs can be assessed in the light of the size of the party targeted and the risk of pushing it out of the proceedings. Recoverable cost ceilings can be lowered where the value of the dispute is small and the imbalance obvious. A simplified track for technically straightforward cases would cut both time and cost. Finally, the protective letter remains, for an SME that fears an application for provisional measures, the cheapest way to avoid an order made without argument.

Extending legal aid to small legal persons requires amending Article 71, and therefore the agreement of the Member States. The debate deserves to be opened, failing which the unified court will remain, for part of Europe's industrial fabric, a court that is accessible only on paper.

Key takeaways

• Since 1 January 2026, the fixed fee for an infringement action before the UPC is EUR 14,600, halved for small and micro enterprises.
• The main financial exposure remains an order to pay the other side's representation costs, capped at up to EUR 2 million per instance.
• Article 71 of the Agreement reserves legal aid to natural persons.
• The DEB judgment (CJEU, 22 December 2010, C-279/09) accepts that a legal person may be granted legal aid under Article 47 of the Charter.
• An SME facing an application for provisional measures can file a protective letter, at a cost far below that of full proceedings.

Frequently asked questions

Can an SME obtain legal aid before the UPC?

No. Article 71 of the Agreement reserves legal aid to natural persons. A company cannot obtain it, even in financial distress.

What fee reductions exist for SMEs?

Small and micro enterprises have paid half the procedural fees since 1 January 2026, against 60% under the previous table.

What does an SME risk if it loses before the UPC?

It bears its own costs and, within the ceilings set according to the value of the dispute, the winning party's representation costs. The Court may also order it to provide security for costs during the proceedings.

How can a company guard against an application for a preliminary injunction without full proceedings?

Filing a protective letter with the Registry puts its arguments on record in advance and reduces the risk of an order made without the company being heard.

Dhenne Avocats defends SMEs and industrial groups before the Unified Patent Court, from assessing financial exposure to defence strategy and settlement. Talk to us.

This article is an original and substantially updated adaptation of an analysis by Matthieu Dhenne first published on the Kluwer Patent Blog on 21 July 2025: From Pied Piper to the UPC: The Vulnerability SMEs Face Before Unitary Justice.