NOTABLE CASES & POTENTIAL IMPACT
NANOSTRING TECHNOLOGIES, INC. V 10X GENOMICS, INC.
Topics: standard for preliminary injunction; claim construction; evaluating an inventive step
On February 26, 2024, the UPC Court of Appeal (CoA) issued its inaugural substantive ruling, overturning a preliminary injunction previously granted by the UPC’s Local Division Munich on September 15, 2023. This decision enables NanoString Technologies, Inc. to resume operations in most European markets.
The CoA’s decision centered on the preliminary conclusion that the patent asserted by 10x Genomics, Inc. likely lacks an inventive step. It determined that a prior art document (D6) disclosed all features of the patented method except for its application to analytes “in a cell or tissue sample.” The CoA determined this application would be obvious to a skilled person based on D6 alone or in combination with another document (B30).
The CoA clarified key substantive issues, including the approach to claim construction, the standard for granting a preliminary injunction and the evaluation of inventive step. It emphasized that patent claims are crucial for determining the scope of protection and must be interpreted using the description and drawings.
Regarding the standard for a preliminary injunction, the CoA clarified that a likelihood of both infringement and validity is required, balancing the need for certainty with the risk of harm to the defendant. While the applicant is always tasked with the burden of proof for entitlement and infringement, the party with the burden of proof regarding validity varies depending on whether the court hears the defendant.
On the merits for invalidity, the CoA found the Local Division Munich’s patent validity evaluation incorrect, determining that a skilled person would have reasonably expected success using the claimed method. Rather than strictly applying the “problem/solution” analysis common before the European Patent Office (EPO), the CoA relied on its own analysis of the understanding and capability of a skilled person, as reflected in the prior art references. This decision underscores the CoA’s commitment to shaping legal standards across the UPC, even if it requires correcting the work of the Local Divisions.
TAKEAWAYS:
- This case emphasizes the importance of precise and clear patent claims, which serve as the basis for determining the scope of protection. Ambiguities within claims can lead to disputes and affect the outcome of legal proceedings.
- Courts must strike a balance between the interests of patent holders and potential harm to defendants when considering preliminary injunctions. A “more likely than not” standard is applied to both infringement and validity, and the analysis must consider the patent’s validity, ensuring sufficient certainty while preventing undue harm to either party.
- The CoA demonstrated its active role in interpreting patent claims and evaluating inventive step, relying on its own technical judges rather than either party’s expert, and in diverging from strict adherence to the EPO’s problem/solution analysis. This highlights the CoA’s commitment to shaping legal standards and ensuring consistency across UPC proceedings.
GUANGDONG OPPO MOBILE TELECOMMUNICATIONS CORP. LTD. AND OROPE GERMANY GMBH V PANASONIC HOLDINGS CORPORATION
Topics: language of proceedings; acceleration of proceedings; appeal decision without technically qualified judges
In July 2023, electronics company Panasonic Holdings Corporation filed an infringement action with the Local Division Mannheim against the defendants, Guangdong OPPO Mobile Telecommunications Corp. Ltd. (OPPO) and OROPE Germany GmbH. On November 27, 2023, the UPC rejected the defendants’ request to change the language of the proceedings from German to English. Faced with a December 22 deadline in the Local Division Mannheim proceeding to file their statement of defense in German, OPPO and OROPE appealed the decision to the CoA and requested an acceleration of the appeal, pursuant to Rules 9.3(b) and 225(e) of the UPC Rules of Procedure (RoP), which would require Panasonic to respond in only five working days.
Days before the defendants’ deadline to file their statement of defense, the CoA rejected their appeal, finding that the interests of Panasonic and the principles of proportionality, fairness and equity outweighed the interests of OPPO and OROPE. The CoA emphasized that OPPO and OROPE had used their full 15-day appeal period and yet sought a substantially shorter period for Panasonic’s response. As a result, OPPO and OROPE were forced to submit their statement of defense in German, and Panasonic received the standard 15-day period to respond.
The CoA’s decision also addressed an important practical question: whether the CoA can rule without technically qualified judges on the panel when the appeal does not involve technical issues. Despite Article 9.1 of the Agreement on a Unified Patent Court (UPCA) requiring any CoA panel to consist of three legally and two technically qualified judges – based on an analogous application of UPCA Article 9.2 – the CoA determined that technically qualified judges were not necessary in appellate proceedings dealing with purely procedural questions. The CoA emphasized the need for a flexible and balanced application of the RoP, consistent with Recital 6 of the UPCA, which ensures rapid decisions, efficiency and cost-effective proceedings.
TAKEAWAYS:
- Requests to shorten time periods in the UPC should be filed as early as possible. UPC judges will consider the legitimate interests of the other party and only grant reasonable requests.
- The CoA will apply the UPC’s RoP in a flexible manner. Appeal proceedings that don’t involve technical issues may be decided without technically qualified judges.
EMERGING LEGAL ISSUES
PRELIMINARY INJUNCTIONS AT THE UPC, IN THE US AND ABROAD
While the preliminary injunction standards at the UPC and in the US, Germany and France each require some probability of success on the merits, the flexibility of these standards and the relevant factors vary. Patentees should be mindful of these distinctions when selecting a venue and pursuing injunctive relief.
THE UPC
As previously mentioned, the CoA recently overturned a preliminary injunction issued in 10x Genomics, Inc. v. NanoString Technologies, Inc. and clarified the standard for granting one at the UPC. Seeking to strike an appropriate balance in the burden of proof at summary proceedings, the CoA explained that the preliminary injunction applicant must provide “reasonable evidence to satisfy the court to a sufficient degree of certainty that the applicant is entitled to institute proceedings,” “that the patent is valid,” and “that his right is being infringed, or that such infringement is imminent.” The sufficient degree of certainty standard requires the UPC to find that it is “more likely than not that the applicant is entitled to initiate proceedings and that the patent is infringed.” This standard is not met if it is more likely than not that the patent is invalid.
The applicant has the burden of proof for its entitlement to initiate proceedings and infringement. Unless the proceedings are conducted ex parte, the alleged infringer has the burden of proof for invalidity. In determining whether to grant the injunction, the UPC has the discretion to weigh the interests of the parties and the potential harm to either party resulting from the grant or refusal of the preliminary injunction. The UPC has described this analysis as a flexible inquiry based on the certainty of infringement and validity, the need to issue an injunction because of factual and temporal circumstances, and the potential harm to the alleged infringer.
THE US
In the US, a party seeking a preliminary injunction must establish four factors:
- It is likely to succeed on the merits.
- It is likely to suffer irreparable harm in the absence of preliminary relief.
- The balance of hardships tips in its favor.
- The injunction is in the public interest.
The first two factors are often the most important.
Like an applicant at the UPC, a patentee in the US must show that it will likely prove infringement and withstand any validity challenge. The alleged infringer has the burden to come forward with evidence showing a “substantial question” for invalidity, but the patentee has the ultimate burden to show a likelihood of success on the merits of its infringement claim. This substantial question test differs from the sufficient degree of certainty standard at the UPC.
While factors two and three – irreparable harm and balance of hardships – may be considered by UPC judges when determining whether to grant a preliminary injunction, factor four – the public interest in an injunction – is unique to the US. In the US, the court considers short-term public interests (e.g., the guaranteed availability of innovative products in the market) and long-term public interests that may be considered by European courts (e.g., the enforcement of patent rights). As a result, most preliminary injunctions granted for patent infringement in the US involve patentees who practice their inventions. By contrast, whether the applicant in the UPC is a nonpracticing entity has no significance “for the entitlement to file a request” for injunctive relief under Articles 47 and 62(2) of the UPCA. (See also 10x Genomics, Inc. v. NanoString Techs. Inc., UPC CFI 2/2023, at p.93 (Sept. 19, 2023).)
Germany
To obtain a preliminary injunction in Germany, an applicant must demonstrate the existence of a claim for injunction and the need for an injunction.
Although the applicant is not required to provide full evidence of its claim, it must substantiate the facts of its claim and prove infringement with a high degree of probability. Additionally, the court must be “sufficiently certain” of the patent’s validity. Accordingly, the applicant must substantiate validity in an ex parte proceeding, whereas the defendant must establish the patent’s invalidity in an inter partes proceeding, which typically requires that the patent be challenged in an opposition or revocation proceeding unless it is unreasonable to expect such a challenge at the time of the application.
The need for a preliminary injunction requires that it be necessary and appropriate to avert significant harm to the applicant. A preliminary injunction may only be necessary if (1) there is urgency and (2) balancing the interests of the applicant and the alleged infringer favors the applicant. Under the first factor, the applicant may not wait a long time before filing an application. This requirement mirrors the UPC’s interest analysis, in which the UPC considers whether the applicant unreasonably delayed filing its request.
France
In France, a summary judge may grant a preliminary injunction to prevent imminent patent infringement or stop actual patent infringement if the applicant (1) has the capacity to obtain a preliminary injunction (i.e., the applicant is the patent owner or, under certain conditions, a licensee), and (2) presents reasonably available evidence to support its claim that the patent has likely been infringed or that such infringement is imminent. However, the applicant is not required to provide hard proof of infringement to obtain a preliminary injunction. The judge will typically not consider the validity of the patent – even if it is contested by the alleged infringer – unless the patent is clearly and indisputably invalid or there is a serious cause for cancellation, such as for a lack of inventive step.
Like at the UPC, the judge may consider the balance of hardships when determining whether to grant a preliminary injunction in inter partes proceedings. However, the standard for ex parte preliminary injunctions in France is high and rarely met in practice because the applicant must show why an ex parte injunction should be granted (e.g., by showing that a delay is likely to cause irreparable harm to the patent holder or that there is a risk of the alleged infringer removing all or part of the infringing goods).
ROLE OF TECHNICAL EXPERTS IN UPC PROCEEDINGS
The UPC system provides technical aid by offering technically educated personnel, such as technically qualified judges and technical experts.
There are currently 105 judges at the UPC, which consists of 37 legally qualified judges and 68 technically qualified judges. Pursuant to the UPCA, legally qualified judges shall possess the qualifications required for appointment to judicial offices in a contracting member state. They are responsible for interpreting and applying the law. By contrast, technically qualified judges must have a university degree, proven expertise in a field of technology and proven knowledge of civil law and patent litigation procedure. Patent lawyers make up a majority of the 68 technically qualified judges.
Specialties of the Technically Qualified Judges
Additionally, the UPC can appoint (per Rules 185 to 188 of the RoP) or the parties can nominate (per Rule 181 of the RoP) technical experts who have a duty to provide their respective expertise to the court. Thus, both the UPC’s experts and the parties’ experts can provide evidence.
Further, if the UPC deems the presented evidence insufficient, it may appoint its own experts to provide expertise for specific aspects of the case, pursuant to UPCA Article 57(1). For this reason, the UPC keeps an indicative list of experts with the Registrar under UPCA Article 57(2).
Experts typically submit their opinion as written expert reports, but pursuant to the UPCA and the RoP they can also be heard and questioned in person. However, questioning shall be limited to what is necessary, pursuant to UPCA Article 53(2). An extensive expert examination or even a cross-examination in UPC proceedings is unlikely due to the tight schedule and time limits on oral hearings, which shall be completed in only one day, pursuant to Rule 113(1) of the RoP.
Additionally, the UPC’s Central Division and the CoA are staffed with at least one technically qualified judge, while the Local and Regional Divisions can add a technically qualified judge to their panel if necessary. Therefore, UPC judges are likely to rely on their own expertise, especially the knowledge and experience of the technically qualified judges, rather than consult a court expert or rely on a party’s expert. As a result, technical experts will likely play a different role in UPC proceedings than they do in other jurisdictions, such as the US or the UK, that do not typically have technically qualified judges.
RECENT FILINGS
This section reflects data that entered the UPC’s register as of March 19, 2024.
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 CASES PER MONTH IN 2023 AND 2024
INFRINGEMENT CASE VALUES
LATEST INSIGHTS
We provide real-time insights on UPC filings, decisions and other related developments. Check out the latest below.
UPC Court of Appeal Issues First Decision, Overturns Preliminary Injunction, On the Subject, March 1, 2024
Legal Lens on the Unified Patent Court, February 2024
Composition of the UPC COA Panel on Procedural Questions and Rejection of a Request to Shorten a Time Period, GRUR-Prax 2024, 99, February 26, 2024
SEPs, Medical Devices, E-Cigarettes: Biggest UPC Battles Reveal Broad Court Remit, JUVE Patent, February 7, 2024
SPEAKING ENGAGEMENTS
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BIPLA 4th Annual Symposium | Unified Patent Court: Initial Cases, April 10, 2024
LSPN North America Spring 2024 | Unified Patent Court, May 8-9, 2024
UPC TEAM
Have questions or want to discuss your UPC strategy? Contact Hon.-Prof. Dr. Henrik Holzapfel, Chuck Larsen or Diana Pisani.
