The Unified Patent Court – 2023 Decisions in a Nutshell

Authors: Vilhelm Schröder and Jasmin Metwally

Introduction

The Unified Patent Court (“UPC”) has had its doors open since June 2023.  The Court has handed down over 160 decisions, each contributing to the evolving landscape of patent law in Europe. In this blog post, we will take a closer look at some of the most significant decisions so far (not all of the decisions are final).

Jurisdiction: Ineffective Withdrawal of Opt-Out

The Helsinki Local Division issued a decision (UPC_CFI_214/2023) concerning an infringement action and provisional measures application which were based on a European patent that had been opted out from the competence of the UPC by the claimant on 12 May 2023. The opt-out was withdrawn by the claimant on 5 July 2023, and on the same date, the claimant lodged its statement of claim, including the preliminary injunction application. When the withdrawal of the opt-out was made, there were national proceedings related to the patent pending in Germany.

The Court had to determine the temporal scope of Article 83(4) UPCA and corresponding Rule 5.8 of the Rules of Procedure (“RoP”) in respect of national proceedings. The claimant argued that Article 83(4) cannot apply to national actions filed before the entry into force of the UPCA. The defendant argued that the withdrawal of the opt-out was ineffective since Article 83(4) UPCA should not be interpreted to be restricted to national cases filed after the entry into force of the UPCA.

The Court sided with the defendants and concluded that the withdrawal of the opt-out was ineffective due to the national infringement and invalidity proceedings brought before the German national courts. Hence, the opt-out for the patent in suit was effective and the UPC lacked competence. Furthermore, the Court concluded that the Court’s reading of Article 83(4) UPCA is in line with Rule 5.8 RoP, because under Rule 5.8 RoP, the application to withdraw shall be ineffective in respect of the patent in question, irrespective of whether the national action is pending or has been concluded. The German national actions were pending on the date of the withdrawal of the opt-out on 5 July 2023.

The decision has been appealed and is not final.

First Preliminary Injunction in the Life Sciences Sector

The UPC issued its first decision on a request for provisional measures, ordering NanoString Technologies to cease infringing a unitary patent owned by Harvard College and licensed to 10x Genomics. The decision (UPC_CFI_2/2023), dated 19 September 2023, was delivered by the Munich Local Division in the proceedings concerning EP 4 108 782, a patent for a method of detecting analytes in a cell or tissue sample.

The patent at issue is part of a patent family that covers a novel approach for in situ analysis of RNA and proteins using detection reagents and decoder probes that produce a temporal order of signal signatures. The patent family was developed with public funding from the US National Institutes of Health (NIH), which raised some legal issues regarding the licensing obligations of the patent owner.

The claimants, Harvard College and 10x Genomics, alleged that NanoString and its subsidiaries were directly and indirectly infringing the patent at issue by offering and using the “CosMx Spatial Molecular Imager” and the associated detection reagents and decoder probes. The claimants sought a preliminary injunction to prevent further infringement and to preserve evidence.

The defendants contested the validity, infringement, and necessity of the provisional measures. They argued that Harvard College had failed to comply with the requirements of the US Bayh-Dole Act, which regulates the rights and obligations of federally funded inventions, and that NanoString had a licence claim under US and European law. Furthermore, the defendants claimed that the patent at issue was invalid for lack of novelty, inventive step, and sufficiency of disclosure and that the contested products and methods did not fall within the scope of the patent claims. Moreover, they asserted that the provisional measures were not necessary, as the claimants had delayed their request, had no legitimate interest in the injunction, and had not provided adequate security.

The UPC rejected the defendants’ arguments and granted the provisional measures. The Court was convinced, with a preponderant likelihood, that the patent at issue was valid and infringed by the defendants. The Court also found that the provisional measures were necessary, as the claimants would suffer irreparable harm if the defendants were allowed to continue their infringing activities. The Court did not accept the defendants’ licence claim, as it was not supported by sufficient evidence or legal reasoning according to the Court. The Court also dismissed the defendants’ objections to the admissibility and standing of the claimants as well as to the wording and scope of the injunction.

The decision provides some guidance on the standard of proof and the factors to be considered when ordering provisional measures as well as on the interpretation and application of the UPC Agreement. The decision is subject to appeal by the defendants.

Ex Parte Inspection Orders

The UPC has granted several inspection orders and evidence seizures. For instance, in its order UPC CFI N. 286/2023, the Local Division of Milan issued an ex parte order for preserving evidence and inspecting premises in a patent infringement case involving a method and an apparatus for producing a lattice girder.

The claimant alleged that the defendants were producing, promoting, and selling an apparatus which infringed its patent and filed two identical applications for preserving evidence and inspecting premises before the Milan Local Division of the UPC, where it intended to start proceedings on the merits of the case. The claimant requested an ex parte order (i.e. without hearing the defendants) to obtain a detailed description of the allegedly infringing machinery and process and a preservation and disclosure of all the relevant digital media and data related to the product.

The UPC granted the ex parte order, finding that the claimant had sufficiently proved its rights based on a valid patent and had provided reasonable evidence to support the claim of infringement. In addition, the UPC considered that there was urgency and a risk of destruction of evidence if the defendants were given prior notice of the application. Thus, the Court ordered that the claimant was allowed to inspect the premises of the defendants, with the assistance of two experts appointed by the Court and a bailiff, and to gather and preserve all the technical, promotional, and commercial documentation regarding the infringing apparatus. The Court also ordered on the basis of Article 58 of the UPCA that the access to any information and documents obtained by the experts was prohibited, to ensure the protection of confidential information, and that the claimant had to provide an adequate security for the legal costs and other expenses and compensation for any injury incurred or likely to be incurred to the defendants.

Language of the Proceedings

In the order UPC_CFI_239/2023 of the Hague Local Division, the applicant requested for a change of the language of the main proceedings from Dutch into English. By their statement of claim lodged on 12 July 2023, Plant-e Knowledge B.V. and Plant-e B.V. had brought an infringement action against the applicant, i.e. the defendant in the main proceedings.

Pursuant to recital 321.1 of the RoP, “If a party wishes to use the language in which the patent was granted as language of the proceedings, in accordance with Article 49(5) of the UPCA, the party shall include such Application in the Statement of Claim, in the case of a claimant, or in the Statement of Defence, in the case of a defendant. The judge-rapporteur shall forward the Application to the President of the Court of First Instance.” Subject to Article 49 (5) UPCA, the use of the language in which the patent was granted as the language of the proceedings can be decided “on grounds of fairness and taking into account all relevant circumstances including the positions of parties in particular the position of the defendant.”

The Court noted that it is not disputed that both parties have a good command of English, which is one of their working languages and also the language in which the exchanges prior to the infringement action have been conducted, as it appears from the documents submitted along with the statement of claim and through the links cited in the request. The Court concluded that being sued before the Court in a language that they do not master is to be considered an important inconvenience for the applicant even if the applicant is being represented by Dutch representatives. This implies, according to the Court, that all the preparatory discussions and work are handled in English, whereas the whole submissions have to be translated, which represents considerable time and costs even if facilitating solutions can be used. Furthermore, the Court pointed out that it has to be taken into consideration that the respondents did not put forward any particular justification for not agreeing to the requested change. Thus, the Court concluded that the application shall be granted and the language of the proceedings changed into English.

Definition of a Party

In its order UPC_CFI_255/2023, the Paris Central Division took a stance on the concept of a party. Pursuant to Article 33 (4) of the UPCA, certain actions referred to in Article 32(1)(b) and (d) shall be brought before the central division. If, however, an action for infringement as referred to in said article between the same parties relating to the same patent has been brought before a local or a regional division, these actions may only be brought before the same local or regional division. 

In the above-mentioned case, the applicant, Edwards Lifesciences Corporation, filed a preliminary objection to challenge the competence of the Paris Central Division to hear the revocation action brought by the respondent, Meril Italy Srl, under the same patent that is subject to an infringement action between the applicant and the respondent’s parent company and its subsidiary before the Munich Local Division.

The UPC had to assess whether the respondent is a different party from Meril India and/or Meril Germany. However, the UPCA does not contain a definition for a party in this context. Thus, the Court held that Italian national law should be applied to assess the concept of a party. Ultimately, the Court found that the respondent and the other Meril entities were not the same parties according to the literal interpretation of Article 33 (4) UPCA and the Italian national law.

As the parties were not considered the same parties, the Court concluded that the Paris Central Division was competent to hear the case. The Court emphasised that the framework of the Unified Patent Court does not preclude the possibility of a patent being challenged by various entities, even those connected through organisational ties or commercial relationships. These entities can present different claims, even if they are based on the same grounds of invalidity. Moreover, the Court highlighted that the UPCA and RoP provide a range of mechanisms to manage the potential issue of parallel proceedings occurring within different divisions of the UPC.

First Decision of the Court of Appeal

The Court of Appeal gave its first decision (UPC_CoA_320/2023) on 13 October 2023. In the decision, the appellant challenged the Munich Local Division’s decision that rejected their request to extend the terms for lodging a preliminary objection and a statement of defence in an infringement action initiated by the respondent. The appellant argued that the statement of claim was not complete and validly served on them, as the annexes referred to in the statement of claim were not attached to it or uploaded in the Case Management System (CMS) simultaneously. The appellant also claimed that the terms for their defence should start from the date they received the annexes.

The Court of Appeal held that the statement of claim complied with the requirements of the Service Regulation and Rule 13.1 of the RoP, as it enabled the appellants to understand the subject matter and cause of action. In addition, the Court of Appeal held that Rule 13.2 of the RoP, which requires the claimant to supply a copy of each of the documents referred to in the statement of claim at the same time, serves the purpose of ensuring fairness and equity between the parties.

However, unlike the Munich Local Division, the Court of Appeal ordered the terms for lodging a preliminary objection and a statement of defence to be extended and calculated from the date the annexes were uploaded by the respondent. Furthermore, the Court of Appeal considered that the failure to comply with Rule 13.2 of the RoP was sufficient to justify an extension of the terms, regardless of the nature and content of the annexes. The Court of Appeal also rejected any other requests on appeal.

What Is to Come in 2024?

The UPC is moving forward with full speed. Most of the local division actions have been launched in Germany. In the interest of diversity and in light of the competence of the UCP and its pan-European nature, it would be positive if more cases were filed in the other local divisions in the years to come.

This year, it will be particularly interesting to read the decisions from the Court of Appeal, which will play a very important role in shaping the future of European patent litigation. It will also be interesting to see how the central divisions rule in the invalidation cases.