NOTABLE CASE & POTENTIAL IMPACT
FIRST UPC PRELIMINARY INJUNCTION UPHELD: MAMMUT SPORTS GROUP AG AND MAMMUT SPORTS GROUP GMBH V. ORTOVOX SPORTARTIKEL GMBH
Topics: first ex parte preliminary injunction upheld by Court of Appeal; prosecution history
On September 25, 2024, in a landmark decision, the UPC Court of Appeal (CoA) affirmed an ex parte preliminary injunction issued by the Local Division Düsseldorf against Mammut Sports Group AG and Mammut Sports Group GmbH. This is the first time a preliminary injunction has been upheld and enforced by both a lower division and the CoA. The Local Division Düsseldorf had issued the ex parte preliminary injunction in December 2023 for Mammut’s accused infringement of ORTOVOX Sportartikel GmbH’s EP3466498, directed to a search device and methods for locating avalanche victims. As a result, Mammut was barred from selling its accused Barryvox avalanche rescue devices in all UPC countries where the patent is validated (i.e., Austria and Germany in this case). ORTOVOX then filed an infringement suit against Mammut in a main proceeding. Mammut counterclaimed for revocation of the patent.
In April 2024, Mammut unsuccessfully attempted to overturn the ex parte order. In its appeal to the CoA, it reiterated and elaborated on its various invalidity contentions but, as the CoA explained in the opinion’s detailed analysis, those arguments were unpersuasive. Relying on the 10x Genomics, Inc. v. NanoString Technologies, Inc. decision that overturned the grant of a preliminary injunction, the CoA affirmed the lower division’s determination that the patent was more likely than not infringed and valid. Here, the CoA held “there are no significant doubts” about the invention being sufficiently disclosed and valid despite Mammut’s arguments to the contrary. It also affirmed the Local Division Düsseldorf’s holding that the accused device, the Barryvox S2, literally infringed despite Mammut’s argument that different Barryvox S2 variants exist.
TAKEAWAYS:
- The CoA’s first affirmance of a preliminary injunction applied the same “more likely than not” standard previously clarified in 10x Genomics v. NanoString Technologies. There, the CoA overturned a preliminary injunction based on a finding that the asserted claims were likely invalid. Here, the CoA used the same standard but found the likelihood of infringement and validity to be stronger.
- When determining the likelihood of infringement and validity, the court should only consider the submissions made in the actual proceedings for interim measures (i.e., the preliminary injunction proceeding itself) and not consider any submissions made in the main proceedings (e.g., in Mammut’s defense to the main infringement action or in the counterclaim for revocation). As with the availability of ex parte hearings, this restriction is an applicant-friendly rule that limits the extent to which the respondent can challenge the injunction on appeal.
- The UPC does not require a showing of irreparable harm. Under Rule 212.1 of the UPC Rules of Procedure (RoP), which allows the UPC to issue ex parte preliminary injunctions, a court may order an ex parte injunction “in particular” if a delay would likely cause irreparable harm to the applicant. However, in contrast to the US standard for preliminary injunctions, the finding of irreparable harm is not a necessary condition for the UPC to issue an injunction.
- The CoA declined to take a position on the use of prosecution history in claim interpretation, indicating that consideration of that history would not change the interpretation of the claims in this case. The CoA thus left alive a divergence of approaches in local court decisions. On one hand, in this case, the Local Division Düsseldorf took the position that the file history should not be considered in claim interpretation, whereas in SES-Imagotag SA v. Hanshow Technology Co. Ltd., the Local Division Munich ruled that the file history can be used in claim interpretation.
FEATURED ANALYSIS
THE UPC’S FIRST YEAR: A REVIEW OF ITS PERFORMANCE, ITS IMPACT ON EUROPEAN NATIONAL PATENT COURTS, AND US PERSPECTIVES
One year after its inauguration, the UPC has begun to reshape the patent litigation landscape in Europe, providing an opportunity to evaluate whether the UPC has achieved its goal as a venue for streamlined patent enforcement across the EU Member States. From the outset, the UPC promised faster, more efficient proceedings with the potential to harmonize European patent law.
The UPC’s growing influence is most evident in the shift in caseloads and parties’ strategic litigation choices. This change has raised important questions about the long-term impact on traditional patent litigation venues, such as German national patent courts.
As companies and legal practitioners have begun to navigate this new regime, we review the UPC’s performance after its first year and assess its effectiveness, challenges, and the broader implications for European national patent courts through the lens of another patent regime change in the US, which implemented streamlined validity challenges nearly a decade earlier.
The UPC’s Original Ambitions
The idea for the UPC can be traced back to the 1973 European Patent Convention, which established European patents across the European Union. Rather than functioning as a singular patent, the European patent operated as a bundle of national patents subject to national renewal fees, enforcement, and validity challenges. Recognizing this inefficiency, the European Commission (EC) began considering unification proposals in 2000, which led to the unitary patent system and the later establishment of the UPC in 2023.
Before the UPC’s establishment, disputes involving European patents were heard by the European Patent Office (EPO) and national courts, often leading to inconsistent rulings across jurisdictions and contributing to legal uncertainty. The UPC was envisioned to centralize these disputes, offering a forum for both “classic” European patents and patents with unitary effect. Its primary ambitions were to reduce the cost of parallel litigation across multiple jurisdictions, enhance legal certainty through harmonized case law, and provide litigants with more expedient and efficient proceedings.
Indeed, before the UPC came into force, the EPO announced that “the procedure is designed so that first instance judgments can be handed down within a year or so of the filing of the claim.”
To meet this ambitious one-year mark, the Agreement on a Unified Patent Court (UPCA) and RoP were crafted to frontload and streamline proceedings. For instance, there are strict requirements under Rules 13 and 29 of the RoP for the plaintiff’s statement of claim, which must include proposed claim interpretations, if any, and be accompanied by copies of every cited document. Similarly, there are strict requirements under Rules 23 to 25 of the RoP for the defendant’s statement of defense, which must be prepared and filed within three months and include any challenges to the plaintiff’s proposed claim interpretation. Any requests for preliminary injunctions are also handled within the same one-year period, but the UPC may decide costs and damages after the main proceedings.
The RoP were also designed to provide only limited discovery, if any. For instance, a party may request limited additional evidence from the other party or a third party under Rule 190 of the RoP. On a reasoned request, the UPC may order the other party to produce evidence that is needed to substantiate the claims of the requesting party. Rule 191 of the RoP grants the UPC the power to order the production of such information to the requesting party but only to the extent “reasonably necessary for the purpose of advancing that party’s case.”. Thus, these rules provide both UPC plaintiffs and defendants with limited opportunities to collect additional evidence from the other party to prove their case.
Based on the fast-track procedural framework, the EC, in a pre-UPC study, predicted “high-uptake” and “low-uptake” scenarios for the use of the UPC, depending on the extent to which patent holders would opt out of UPC jurisdiction or embrace the new system. Only seven cases were expected in the first year in the low-uptake scenario whereas 123 cases were expected over the same period in the high-uptake scenario.
Evaluating the UPC After One Year: Speed
By nearly every measure, the UPC has significantly outperformed projections on its use in the first year. By the end of May 2024, the UPC received a total of 373 cases, with 134 infringement actions, 165 counterclaims for revocation, 39 revocation actions, and 32 applications for provisional measures. Parties filed actions in 14 different UPC divisions and at least one patent from each of the eight classes was asserted in an infringement action. Given this diversity in UPC venues, it’s not surprising that English was the predominant language in proceedings.
Like German national courts, the UPC divisions in Germany have proven to be extremely popular relative to divisions in other countries. More than 60% of all infringement and revocation actions were filed in a Local or Central Division in Germany, with approximately a third of all infringement actions being filed in the Local Division Munich.
Some UPC courts outside of Germany were also busy in their first year. The Central Division Paris received nearly 90% of all revocation actions, and the CoA in Luxembourg received 63 appeals from the lower court actions.
Through October 15, 2024, the UPC issued 12 decisions on the merits as part of revocation actions, counterclaims, or infringement actions. These first final decisions handed down by the Central Division Paris, Central Division Munich, Local Division Munich, and Local Division Düsseldorf show that the UPC has kept close to its promise to hear cases within a year and issue written rulings within six weeks of the hearing. See Rule 118(6) of the RoP. Among these 12 written rulings on the merits, the UPC met this benchmark in most instances, exceeding the six-week period by a week in three cases and by three weeks in one case. These results confirm that the UPC is delivering on its promise to hand down a final decision within about a year of filing.
In Meril Italy Srl v. Edwards Lifesciences Corporation, for example, a revocation action was brought by Meril before the UPC on August 4, 2023. The Central Division Paris handed down its first revocation ruling on July 19, 2024. In less than a year from filing, the UPC confirmed the validity of Edwards Lifesciences’ challenged patent.
Ten days later, on July 29, 2024, the Central Division Paris issued a final decision in another revocation action, BITZER Electronics A/S v. Carrier Corporation, just 13 months and one day after BITZER Electronics filed the action on June 28, 2023.
The Central Division Munich also met the targeted one-year timeline for an oral hearing. In Sanofi v. Amgen, Inc., the UPC revoked the challenged patent just 13 months after the revocation action was filed on June 1, 2023.
The speed with which these decisions have been delivered is noteworthy.
Focused on the objective of speed, with merits hearings held in about a year, the UPC tends to reject requests to stay or delay proceedings. The UPC has the discretion to stay proceedings pending the outcome of parallel actions, such as those before the EPO. But this discretion has not been frequently exercised. For instance, the Local Division Munich has explained that “the [UPC] has the discretionary power to stay proceedings pending any relevant decision by the EPO, provided that such a decision is expected promptly. There must be a concrete expectation, meaning a foreseeable date, and the decision should be rendered before the UPC is expected to issue its own ruling.”
These early results demonstrate the UPC’s efficiency compared to traditional national courts.
In France, for instance, it typically takes approximately 18 months to obtain a first instance judgment, with longer delays in appeal. The UPC’s ability to streamline these proceedings may incentivize more litigants to choose it over national courts for patent disputes, thereby accelerating the UPC’s prominence in patent litigation in Europe.
Adjustments and Challenges of the UPC: Central Division Milan, New Local Divisions, and New Judges
Following the UK’s withdrawal from the EU, the UPC faced the challenge of redistributing the cases initially intended for the Central Division London, which planned to have jurisdiction over cases related to human necessities (IPC Class A) and chemistry (IPC Class C). These types of cases were temporarily reassigned to the Central Division Paris and Central Division Munich, respectively.
Today, cases related to chemistry are handled by the Central Division Munich and those related to human necessities are handled by the newly created Central Division Milan. Italy presented its candidacy to host a new section of the Central Division in Milan on September 10, 2020. Three years later, on September 27, 2023, the UPC amended the UPCA to create the new Central Division Milan and reallocate the competences of the former London section to the seat and the two sections of the Central Division.
Shortly afterwards, on June 26, 2024, the Central Division Milan officially opened its doors to handle all subject matters related to human necessities (comprising of the pharmaceutical and medical device industries, agriculture, food, tobacco, home appliances, clothing, wood and furniture, firefighting, sports, and gaming) except for relevant supplementary protection certificates as these will fall under the Central Division Paris’s jurisdiction.
The presiding judge of the Central Division Milan is Andrea Postiglione, who was appointed deputy advocate general at the Supreme Court of Italy (Corte di Cassazione) in 2024 where he continues to deal with IP and competition matters. Among the latest judges to arrive, Anna-Lena Klein is a new legally qualified judge at the Central Division Milan, having served as a judge at the Regional Court of Munich since 2014. She works alongside Marije Knijff, a legally qualified judge currently serving at the Hague District Court.
These new appointments are no coincidence. The Central Division Milan is composed of professionally trained judges with IP experience. Much like the other Central Divisions, this composition of the Central Division Milan is multinational, with judges from outside the country in which the court is located. Taken together, these changes reflect the UPC’s desire to keep the same preestablished schemes of the former Central Divisions to maintain its focus on efficiency, speed, and the quality of decisions.
With the opening of the Central Division Milan, the UPC has reverted to its originally intended form of three central divisions (i.e., Milan, Munich, and Paris).
The UPCA has already anticipated the addition of new divisions if the UPC’s workload continues to grow. Either seven years after the effective date of the UPCA or when the UPC decides 2,000 infringement actions (whichever the later), the UPC must consult with users on the functioning, efficiency, and cost-effectiveness of the UPC system and on users’ trust and confidence in the quality of the UPC’s decisions. Based on this consultation and an opinion of the UPC, the UPCA may be revised to improve the functioning of the UPC, including the addition of new Central Division section(s).
As the UPC system is set to evolve, it remains to be seen whether it will be able to live up to its stated ambitions in the long run. In the short term, the UPC anticipates its evolving caseload rather than waiting to be overwhelmed. At the end of May 2024, a court of first instance received a total of 373 cases. Three months later, at the end of August 2024, the court of first instance docket counted 476 cases.
In response to the evolving caseload of the courts of first instance, the Presidium of the UPC decided to adjust the working time of certain part-time judges starting in September 2024. Judges at the Nordic-Baltic Regional Division, Local Division Hamburg, and Local Division Ljubljana will be increased in the coming months. In parallel, the working capacity at the CoA has also been adapted, as announced by the UPC on July 18, 2024.
The UPC also showed foresight into the number of judges needed to keep pace with its growth. In October 2019, the UPC initially announced the appointment of 85 judges, legally and technically qualified. Today, that number has grown substantially. As of June 26, 2024, the UPC had 117 active judges (42 legally qualified and 75 technically qualified).
Since then, the UPC announced that several judges joined in July 2024: one technical judge each in the Local Division Vienna, Local Division Copenhagen, Local Division Manheim, and Local Division Hamburg; four technical judges in the Local Division Munich; and two legally qualified judges in the Central Division Milan. These new announcements show that the UPC is giving itself the means to achieve its objectives of being the fastest, most efficient, and one of the most attractive jurisdictions. As a result, the UPC has begun to impact the activity of national patent courts.
Implications for National Patent Courts: Declining Case Loads and Competition With National Courts
The UPC’s growing attractiveness and efficiency have had immediate repercussions on the national courts of certain of its member states. In Germany, for example, the seven patent specialist courts “only” received 601 new cases in 2023, which represents a 23.6% decline from the previous year.
Other factors may also impact this steep evolution. One of the most active German national courts in the 10 years before the launch of the UPC was the Düsseldorf Landgericht court. This court previously adjudicated nearly 50% of all patent infringement cases filed in Germany. However, the total number of cases before the Düsseldorf Landgericht court has been declining since 2021.
This decline in German national court patent cases may also be explained by the fact that most of the actions brought before the UPC so far are located in Germany. UPC divisions in Germany saw their caseload increase steadily, according to UPC reports. For instance, the Local Division Munich counted 68 active cases in January 2024 and 174 in August 2024 whereas the Local Division Düsseldorf counted 26 active cases in January 2024 and 75 in August 2024.
However, the trend in national patent court filings is not uniform across all jurisdictions. For instance, the number of patent lawsuits before French courts has increased slightly, by six cases between 2022 and 2023, despite the fact that 90% of UPC activity in its Central Divisions was seen in the Central Division Paris.
Faced with competition from the newly established UPC, national courts across Europe might choose to adapt and develop responsive strategies (e.g., by refusing to stay national proceedings until resolution of a UPC case or even revoking patents while revocation actions are pending before the UPC).
Such a movement already seems to be emerging in the UK, which remains outside the UPC system, where the High Court of Justice has received requests to accelerate proceedings in cases with parallel UPC litigation. In Texas Instruments Inc. v. Network System Technologies, LLC, the High Court granted such a request and agreed to expedite the trial, mindful of the incoming UPC decision on the same patent. Similarly, US courts have received and granted requests to accelerate proceedings with parallel UPC litigation. For instance, in 10x Genomics, Inc. v. Vizgen, Inc., Judge Matthew Kennelly ordered the parties to confer on an accelerated schedule for a litigation regarding antitrust allegations to reach a decision before the expected resolution date at the UPC.[1]
Despite this recent evolution, it remains to be seen what impact the UPC will have on national courts. We may be witnessing the early signs of a decline in national courts’ involvement in patent adjudication, alongside the efforts of such courts to limit this shift and maintain their role in European patent enforcement.
Perspectives on the US Patent System and IPR Procedure
The UPC’s expedited alternative to traditional patent infringement lawsuits in Europe is similar to the role of inter partes reviews (IPRs) at the Patent Trial & Appeal Board (PTAB), which was established by the 2011 Leahy-Smith America Invents Act in the US to provide a faster alternative to patent validity determinations.
IPR proceedings, like procedures before the UPC, are designed to resolve disputes more swiftly. For example, US district court patent cases typically take three years to reach trial[2] whereas validity challenges before the PTAB typically take only 18 to 20 months to reach a final written decision.
In the past year, the UPC has shown trends similar to those seen at the PTAB after the introduction of IPR proceedings. The PTAB particularly experienced large increases in case filings within the first three years after its initial decisions were generally favorable to patent challengers, with a total of 96 IPR challenges filed in 2012, 702 in 2013, 1501 in 2014, and 1654 in 2015 (see Figure 1 below).[3] As the PTAB delivered on its goal of providing a more streamlined procedure for knocking out invalid patents, the usage of IPRs dramatically rose. The increased use of IPR proceedings has also had a profound impact on US courts, which have largely experienced a decrease in patent cases since 2014, except for modest increases in 2015 and 2020 and a minor increase in 2021.[4]
Figure 1: UPC Incentives and Projected Usage
The rapid surge in IPR filings also led the US Patent & Trademark Office to expand its panel of administrative patent judges (APJs) to handle the increased caseload. Whereas the predecessor to the PTAB had only 80 APJs, the PTAB today comprises more than 200.[5]
Observers will be on the lookout to see if national patent courts in Europe will choose to stay patent infringement proceedings pending the outcome of UPC cases – like many US courts do with IPRs – or if they will follow a similar approach as some other US courts, which issue accelerated case schedules so that cases may proceed in parallel with IPRs.[6] This approach is not to be ruled out as it seems to be gaining traction in Europe with the recent decisions from the High Court of Justice mentioned above.
The evolution of European national courts’ strategies in response to the UPC will likely become clearer in the coming years, but it is already undisputable that the UPC has met its goals (at least the ones set for its first year of business).
Ultimately, the usage of the UPC will likely be driven by its early decisions. If those decisions deliver on the proposed goal to provide a faster, more efficient court for providing relief to patent plaintiffs, the UPC’s usage should increase. If, however, the early decisions are not materially better for plaintiffs than were the national court mechanisms, then the usage will perhaps be more limited.
Julien Autret also contributed to this report.
RECENT FILINGS
This section reflects updated data regarding UPC usage, taken from the UPC’s register as of September 30, 2024.
Note: McDermott collects the data in the Recent Filings section directly from the UPC’s register and is not responsible for the accuracy of the data.
NUMBER OF CASES ON UPC REGISTER BY TYPE
*The number of counterclaims for revocation cases does not necessarily reflect the UPC’s true case load because the UPC’s Case Management System required several defendants in infringement proceedings to launch their own counterclaim for revocation, even if the substance of the counterclaims was fully identical across the parties. This inflates the number.
NUMBER OF CASES ON UPC REGISTER PER DIVISION
LANGUAGE OF UPC PROCEEDINGS
FIRST INSTANCES OF INFRINGEMENT AND REVOCATION CASES PER MONTH IN 2023 AND 2024
*September 2024 values are incomplete.
INFRINGEMENT AND REVOCATION CASE VALUES
HIGHLIGHTS FROM McDERMOTT'S UPC TEAM
OUR WORK
- On October 15 and 16, 2024, the McDermott UPC team argued its third and fourth hearings before the Court in Paris.
LATEST INSIGHTS
- Legal Lens on the Unified Patent Court, September 2024
- Legal Lens on the Unified Patent Court, August 2024
UPC TEAM
Have questions or want to discuss your UPC strategy? Contact Hon.-Prof. Dr. Henrik Holzapfel, Chuck Larsen, or Diana Pisani.
