UPC arbitration: what businesses need to know about the PMAC

While businesses will need to wait until later in the year to obtain expert determinations or awards by arbitrators via the centre, they can now submit requests for proceedings through its case management system. The option to use the PMAC’s mediation services also became a live one on 12 May. The PMAC will have two locations: in Ljubljana, Slovenia; and Lisbon, Portugal.

Historically, arbitration has played a limited role in patent disputes. The prevailing view has been that issues relating to patent validity and infringement are best resolved by courts, which possess the authority to revoke or amend patents, with arbitration’s likely role being limited to the resolution of damages assessments or licensing terms such as in FRAND disputes.

However, below, we examine what the PMAC will offer businesses in more detail – and highlight how the option to resolve disputes via arbitration before the centre could play into business’ patent strategies, particularly following several recent developments which may open the door to broader use of alternative dispute resolution (ADR) mechanisms. 

The PMAC framework

Established under Article 35 of the UPC Agreement (UPCA), the PMAC provides a dedicated forum for resolving patent disputes through mediation and arbitration. The PMAC Rules were approved and adopted on 24 April 2026. 

While the PMAC cannot revoke or amend patents – a power reserved for the UPC – it enables parties to agree on settlement terms that may include limiting, surrendering or not asserting a patent, as permitted under Article 2 of the PMAC Arbitration Rules. These terms can be incorporated into a consensual arbitral award, which the UPC may confirm and enforce under Rule 365 of its Rules of Procedure (RoP). Awards are globally enforceable under the New York Convention, giving parties access to enforcement mechanisms in over 170 jurisdictions.

The PMAC also has the authority to grant interim measures, either as an arbitral award or an order, upon request. This procedural flexibility may be particularly valuable in urgent or cross-border disputes. Importantly, the PMAC’s jurisdiction is not geographically limited to UPC contracting member states.

The PMAC maintains a public list of accredited arbitrators and mediators from both UPC and non-UPC jurisdictions including the UK, and parties may nominate their own arbitrators, subject to approval. This supports party autonomy and allows for the appointment of arbitrators or mediators with relevant technical expertise suited to the industry sector the parties operate in.

UPC judge rapporteurs are required by the UPC RoP to encourage settlement during proceedings and will be able to refer parties to the PMAC at any point during litigation.

The PMAC as a forum for resolving FRAND disputes

The PMAC Rules contain dedicated ‘FRAND’ and enhanced confidentiality provisions, which may offer a more suitable venue for resolving licensing terms and royalty structures, especially in multi-jurisdictional FRAND disputes.

FRAND stands for ‘fair, reasonable and non-discriminatory’ and describes the terms on which holders of ‘standard-essential’ patents (SEPs) – patents linked to technical standards that cannot be implemented without using the patent – are commonly required to license their patents.

To determine a global FRAND licence royalty rate, parties often rely on, and therefore have to disclose, comparable licence agreements – and, sometimes, confidential deal documentation. These comparable licences often contain commercial information that is highly sensitive. Their disclosure is therefore often the subject of much argument before the courts, and they frequently become the subject of strict confidentiality provisions. PMAC proceedings are designed to be confidential, per Article 47 of the PMAC Rules, and as such these comparable licences would remain confidential. 

The PMAC also allows for expert determination in FRAND disputes, where the expert may opine on specific aspects of the dispute, such as the ‘essentiality’ of the SEPs, or assess what constitutes FRAND licensing terms.

Strategic use of arbitration in patent disputes

However, as the PMAC becomes established, it may influence how parties approach cross-border patent disputes – offering a compelling complement, or even alternative, to traditional litigation, in other sectors, particularly following the CJEU’s landmark decision in the case of BSH Hausgeräte.

In that case, the CJEU confirmed that courts of EU member states – including the UPC – may adjudicate infringement claims concerning foreign European patent (EP) designations, for example those applicable to the UK and Turkey, including validity challenges raised as a defence. While the courts of EU member states cannot revoke or amend EPs applicable in non-EU countries like the UK, they can assess validity on an ‘inter partes’ basis – in other words, to the extent it relates to the dispute between the parties before that court – as part of the infringement analysis.

Following this decision, in the case of Fujifilm v Kodak, the UPC’s Mannheim Local Division asserted jurisdiction over infringement of a UK EP designation. The UPC clarified that although it could rule on validity for the purpose of resolving the case in issue, revocation remained within the remit of the national authority, in that case the UK Intellectual Property Office.

These decisions, and subsequent awards of cross-border relief by the UPC and Munich Regional I Court, reflect a growing judicial openness in Europe to cross-border adjudication.  

As a result, the PMAC may be particularly strategically valuable in disputes where validity is raised as a counterclaim to infringement, but where the parties wish to resolve aspects of the dispute outside the UPC’s jurisdiction – for example, validity challenges concerning patents registered in commercially important non-UPC countries. This allows parties to tailor arbitration to their commercial and territorial interests.

However, this flexibility introduces strategic tension and highlights that arbitration is another tool available to litigants. A challenger confident in their position may prefer a public ruling invalidating the patent, clearing the path for broader market access. Conversely, a patent rights holder may wish to publicise a favourable decision to deter future challenges. In such cases, the confidentiality of PMAC proceedings may act as a disincentive.

Yet confidentiality can also be a strategic asset, particularly when both parties are uncertain of their position. In life sciences, for instance, arbitration may yield outcomes beneficial to both sides. A finding of validity and infringement could lead to a licence allowing market entry under agreed terms. Alternatively, if the patent is found invalid but remains on the register, both originator and generic or biosimilar competitors may benefit – the originator retains nominal protection, while the generic or biosimilar manufacturer avoids regulatory risks. In either scenario, the arbitration outcome remains opaque to outsiders, enabling commercially pragmatic solutions without public scrutiny.

Ultimately, the strategic use of the PMAC depends on parties’ appetite for risk, publicity, and procedural control, but it may offer a flexible tool for resolving complex, cross-border disputes outside those fields where arbitration traditionally plays a role, including in the life sciences sector.

Commercial and contractual dispute resolution: where the PMAC may add value

Patent disputes often extend beyond infringement and validity. In sectors like life sciences and technology, commercial and contractual issues – such as licensing terms, royalty structures, milestone payments, and termination clauses – are central to market access and revenue generation. These issues are not always well-suited to litigation.

In addition to the PMAC Rules, the centre has published model arbitration and mediation clauses, along with submission agreements, which provide businesses with an opportunity to review intellectual property agreements and ensure that, where appropriate, they include PMAC ADR clauses to align with UPC dispute resolution.

The PMAC offers a confidential, expert-led alternative for resolving contractual disputes. In industries like automotive and electronics, patent disputes often intersect with broader commercial disagreements – supplier obligations, indemnity clauses, and licensing scope. These multifaceted conflicts could benefit from arbitration’s flexibility and consideration by a panel with relevant industry expertise.

Proceedings in parallel

Importantly, PMAC arbitration can run alongside UPC litigation. Parties may arbitrate licensing or quantum issues while litigating validity and infringement. At interim conferences, UPC judges already encourage the parties to engage in the use of ADR, and the PMAC’s launch will likely harmonise this practice. In FRAND cases especially, arbitration may offer a more controlled and commercially viable alternative in a single forum.