NOTABLE CASES & POTENTIAL IMPACT
MYSTROMER AG V REVOLT ZYCLING AG
In June 2023, bicycle manufacturer myStromer AG filed a petition with the UPC alleging that its competitor, Revolt Zycling AG, had infringed myStromer’s patent covering an electric bike design. MyStromer sent a cease-and-desist letter to Revolt Zycling and requested a preliminary injunction against Revolt Zycling within the same day. In response, Revolt Zycling filed a protective letter with the court, arguing that Revolt Zycling had not infringed the patent and that myStromer’s rights with respect to the patent were exhausted in accordance with UPC Agreement Article 29, but Revolt Zycling did not, for example, argue against validity of the patent. The UPC issued its decision granting myStromer AG’s preliminary injunction the same day that the petition was filed, in ex parte proceedings, that is without giving Revolt Zycling any opportunity to add to the arguments put forward in the protective letter. The injunction was effective immediately, but myStromer was required to post a €500,000 bond within a short period after the date of the decision, and Revolt Zycling was subject to a €250,000 fine if it violated the injunction. Revolt Zycling did not appeal the preliminary injunction.
- The UPC has shown that it is capable of reacting quickly to requests for ex parte preliminary injunctions. Urgent applications may be granted within the same day that they are filed.
- Filing a protective letter to stave off the issuance of an ex parte preliminary injunction is a strategic decision subject to both advantages and disadvantages depending on the circumstances. Strong arguments in a protective letter may convince the UPC to hear the defendant before ordering a preliminary injunction. Alternatively, weak arguments in a protective letter may embolden the UPC to issue a preliminary injunction where the UPC otherwise may have been inclined to wait to hear the defendant’s side of the story.
10X GENOMICS V NANOSTRING
On June 1, 2023, Harvard College and its licensee 10x Genomics, Inc., filed an application with the UPC Munich Local Division requesting a preliminary injunction against NanoString Technologies, Inc., and its affiliates, which were alleged to have infringed Harvard College’s unitary patent. The asserted patent involves a method for detecting analytes “in a cell or tissue sample.” The applicants challenged the defendants’ embodiments related to the detection of RNA as infringing the applicants’ patent. On September 15, 2023, the Munich Local Division issued a preliminary injunction after an oral hearing. This was the first preliminary injunction issued in the UPC system that was not decided on an ex parte basis. In deciding in favour of 10x Genomics, the court found the following:
- The interests of 10x Genomics in enforcing its patent rights outweighed the interests of NanoString.
- Monetary damages would be insufficient to redress the damages caused by NanoString’s infringement.
- The asserted patent claims were sufficiently likely to be valid.
- There was “sufficient certainty” that NanoString had infringed the asserted patent claims.
According to the court, the defendant bears the burden of proving by a “preponderance of probability” that the patent is invalid. NanoString appealed the preliminary injunction; a decision by the UPC Court of Appeal is pending.
- In interpreting the validity of patents, the UPC appears to have taken an approach that is not necessarily aligned with some European national courts, but instead closely follows the standards set by the European Patent Office.
- Patentees seeking injunctions within UPC countries may find greater success in the UPC than in European national courts. For example, German courts apply a standard of review that is less favourable to patentees than the UPC’s standard of review in determining whether defendants have met their burden to prove invalidity in the context of disposing of a preliminary injunction motion.
AIM SPORT VISION AG V SUPPONOR OY
AIM Sport filed a statement of claim for infringement action against Supponor on July 5, 2023, and shortly thereafter filed an application for a preliminary injunction. AIM and Supponor are competitors that offer virtual advertising services that allow sports broadcasts to superimpose location-appropriate ads on sport stadiums to effectively target members of a global audience. The UPC Helsinki Local Division held an oral hearing in which both AIM’s preliminary injunction and Supponor’s preliminary objection to AIM’s statement of claim were argued. Ultimately, the court did not reach the merits of the case because the court found that it lacked jurisdiction. In accordance with the UPC Agreement’s opt-out regime, AIM had opted its non-unitary patent-in-suit out of the UPC system. Before filing the UPC action against Supponor, AIM attempted to withdraw its earlier opt-out. However, based on the UPC Rules of Procedure and the UPC Agreement, the court found that this withdrawal attempt was unsuccessful because AIM had commenced infringement and invalidity litigation in German national courts before withdrawing its opt-out from the UPC system.
- In evaluating a patentee’s ability to renege on opting a patent out of the UPC system, it is important to consider whether the patentee has previously commenced litigation in European national courts. If such litigation has been commenced, then the patentee will not be able to subsequently come back to the UPC system after it opted out.
CUP&CINO KAFFEESYSTEM V ALPINA COFFEE SYSTEMS GMBH
CUP&CINO filed an application with the UPC for a preliminary injunction on June 27, 2023. The technology in the asserted patent involved a “method and device for producing milk foam.” After filing the application, CUP&CINO opted the patent-in-suit out of the UPC system. Nevertheless, the UPC Vienna Local Division found that this procedural hiccup did not deprive the court of jurisdiction to hear the request for a preliminary injunction. The court based this conclusion on its interpretation of the UPC Agreement, which provides that “[u]nless an action has already been brought before the Court a proprietor of . . . [a] European patent . . . shall have the possibility to opt out from the exclusive competence of the Court.” Ultimately, the court did not grant the applicant’s preliminary injunction because the court found that the applicant had not proven with sufficient certainty that the defendant had infringed the patent-in-suit.
- Applications for preliminary injunction and applications for infringement constitute “action[s]” under the UPC Agreement. Such actions may continue to be subject to the UPC’s jurisdiction even after the patentee opts their patent out of the UPC system.
Note: Decisions on preliminary injunctions are the focus of the recent notable cases because the UPC has not existed long enough for actions on the merits to proceed to judgment. In fact, the majority of pending cases are actions on the merits.
EMERGING LEGAL ISSUES
The UPC provides a new venue for patent litigation across all 17 ratified EU Member States. The court represents a significant shift in patent litigation in the European Union and is poised to impact the global patent strategy of both US and multinational companies.
THE NEW PROCEEDINGS TIMELINE
UPC proceedings are structured to be fast and efficient. The goal is to conclude final oral hearings on infringement and validity issues within one year, while recognizing that complex cases may require more time.
This puts the UPC ahead of even the fastest forums in the United States, such as the International Trade Commission and the Patent Trial & Appeal Board. As a result, findings at the UPC, even for actions filed after a parallel litigation or inter partes review in the US, could conclude first and thereby influence those US proceedings. A full timeline of a UPC case from filing through appeal can be seen below and downloaded here.
The accelerated timeline of UPC actions presents unique challenges to litigants, both for infringement and validity issues. Because of the aggressive deadlines, parties must marshal their evidence at the outset of a case, before even making their first filing—and sometimes in a matter of months. Once a case has been filed at the UPC, the rules of procedure work to ensure that the case is ready to be heard as soon as nine months after filing, and a written decision on the merits is issued within six weeks of an oral hearing. Accordingly, an entire UPC infringement action may be completed in less than one year.
In infringement cases, when the defendant has been served, they have three months to file a “Statement of defence.” That statement must include any evidence supporting the defendant’s contentions. If the defendant wishes to argue that the asserted patent claims are invalid, they must also file a counterclaim for revocation of the patent at that time.
Unlike litigation in the US (where the discovery process allows a party additional time to develop noninfringement and invalidity theories) the UPC schedule expects parties to be in command of their litigating positions almost at the outset. Once a party is notified that it has been accused of patent infringement, responding to the claims can consume a party’s resources and disrupt a company’s operations. This creates a built-in advantage for patent holders, who can take the time to collect evidence and build a case before filing.
HOW TO PREPARE
Companies wishing to do business in one of the ratified UPC Member States would benefit from monitoring the competitive patent landscape, preemptively obtaining Freedom to Operate opinions and collecting prior art to challenge competitor patents. Though such opinions carry limited evidentiary weight in the UPC, they can provide companies a head start on their defensive actions. Much of the relevant analysis will be readily available to litigation counsel and can save companies both time and money at the outset.
The section reflects data that entered the register as of January 15, 2024.
NUMBER OF CASES ON UPC REGISTER BY TYPE
NUMBER OF CASES ON UPC REGISTER PER DIVISION
LANGUAGE OF UPC PROCEEDINGS
FIRST INSTANCES OF CASES PER MONTH IN 2023
*December data may be incomplete as cases from that month were still entering the register by the time of this publication.
INFRINGEMENT CASE VALUES
We provide real-time insights on UPC filings, decisions and other related developments. Check out the latest below.
Evaluating Europe’s New IP Court: How the UPC Is Doing So Far and What’s to Come, IP Watchdog, December 20, 2023
UPC Court of Appeal Hands Down First Decision at Breakneck Speed, IAM, October 26, 2023
The UPC Means Business: Latest Patentee Wins Preliminary Injunction, On the Subject, September 25, 2023
A Win for Patentees: UPC Issues First Reasoned Decisions, On the Subject, August 24, 2023
Our lawyers regularly participate in industry-leading conferences and events to assess the UPC’s progress and equip companies with the knowledge they need to navigate the new court. Below are the programs from last quarter where we discussed the UPC.
LSPN Europe 2023 | The Unified Patent Court: The New Era, November 21, 2023
OCIPLA Virtual Program | The Unified Patent Court: Initial Cases, November 16, 2023
Life Sciences Dealmaking Symposium 2023 | IP Workshop: Asset Valuation and the Changing International Landscape, November 9, 2023
IAM Connect: UPC 2023 | Using the New Court System to Maximum Effect, October 17-18, 2023
6th Annual International IP Summit | EU’s Unified Patent Court, October 12-13, 2023
Want to discuss your UPC strategy? Contact a member of our UPC team in the Authors section below.