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Message from the President Joshua Dalton

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Digital Image Creation Using AI Risks Copyright Infringement

USPTO to Terminate the After Final Consideration Pilot Program 2.0

Unified Patent Court - Highlights from the Last Six Months

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2024 Ⓒ Boston Intellectual Property Law Association

NEWSLETTER ARCHIVE

Volume 55, Issue 3

Unified Patent Court - Highlights from the Last Six Months

By Matthew Naylor, Sean Jauss, Lucy Coe and Daniel Yin, Mewburn Ellis

The Unified Patent Court, currently covering 18 European Union member states, has now been in operation for over a year. It is producing a fast-developing body of case law, with interesting points of difference compared to national courts and the European Patent Office.

Below is a summary of notable decisions handed down by the UPC over the last six months, covering a variety of procedural and substantive points of law. It will be of interest to practitioners considering how best to handle their clients’ patent and third-party rights in Europe.

May 2024: Preliminary injunctions at the UPC – get your defence ready

In this case, a preliminary injunction was awarded by the Düsseldorf Local Division of the UPC in 10x Genomics v. Curio Bioscience.

Following the guidance of the UPC Court of Appeal in another 10x case, the Local Division considered infringement and validity according to the balance of probabilities. As has been seen in other preliminary injunction applications, the court’s analysis was detailed, at least on the question of infringement.

10x argued that Curio’s Seeker Spatial Transcriptome Mapping Kit infringed both independent claims 1 and 14 of the subject patent. The outcome of the court’s analysis was that claim 1 was probably not infringed by Curio, but that claim 14 probably was. The court made it clear that their view about claim 14 was close to certain, at least based on the information available to them.

The court took the opportunity to discuss the scope of protection and how the claims should be interpreted. The description of the patent certainly should be used in interpreting the claims, in particular those parts of the claims that discuss the purpose of different structural or method features of the claims. However, this first instance court pushed back firmly against any suggestion that the file wrapper should be used for claim interpretation. There had been a previous decision by the Munich Local Division that used the A publication of the patent application to assist with claim interpretation. Maybe simply as a matter of judicial good manners, the Düsseldorf Local Division declined to criticise this approach, but did not endorse it.

Curio had raised objections to the validity of the patent based on four prior art documents and based on an added matter objection against claim 1. The court considered the disclosure of this prior art but decided that claim 14 is probably valid. They declined to consider the validity of claim 1.

In light of the court’s analysis, they granted the preliminary injunction to 10x based on the exact wording of claim 14. The preliminary injunction included a requirement for Curio to make a penalty payment of up to Euro 100,000 for each contravention of the injunction per day. The court was persuaded that there could be irreversible damage to 10x’s market share without the preliminary injunction.

The timing of the circumstances of the case was also interesting. 10x persuaded the court that they had not known about the infringement of the patent before October 2023. Clear knowledge was established by 10 November 2023. The preliminary injunction application was filed on 4 December 2023. The court said that filing the preliminary injunction application within 1 month of having all the knowledge and documents that reliably enable a promising legal action is fast enough to have acted with the required urgency.

Curio attempted to persuade the court that 10x should have known about Curio’s activities in the market far earlier in 2023, and therefore that 10x had not moved fast enough. On the evidence, however, this argument failed. Although there was plenty of evidence of Curio’s activities, there was no clear evidence of the awareness of 10x to these activities. The court accepted the assertion that Curio may have been flying under the radar in the market to some extent.

Key Takeaways

This case illustrates the willingness of the UPC to award preliminary injunctions, although only after a relatively detailed consideration of infringement and validity. The claimant should act with suitable urgency, but the court is willing to allow significant time for the claimant to gather the relevant information and assess the case before filing the application for a preliminary injunction.

On the other hand, the defendant is under exceptional time pressure to search for prior art and to pull together their argument for non-infringement and invalidity. It is becoming clearer and clearer that when a company knows that they may be at risk of infringing a patent under the jurisdiction of the UPC, they must take early action, at least to prepare the substance of their case for non-infringement and invalidity. This can be put on record in the form of a protective letter to try to avoid an ex parte preliminary injunction.

June 2024: Should we stay or should we go on?

The UPC Rules of Procedure (RoP) give the court wide discretion to order a stay of proceedings in various circumstances. The first example listed in the RoP for this is where there are parallel EPO opposition proceedings against the same patent. The RoP make it clear, however, that the mere existence of an EPO opposition is not enough – the UPC may only order a stay where a decision in the EPO opposition proceedings is “expected to be given rapidly”.

In Bitzer v. Carrier, the UPC Court of Appeal gave this topic a good hard look and it is clear from their decision that they want to reinforce the basic intended benefits of the UPC – providing high quality and fast decisions in European patent litigation. The case provides a particularly simple and clear comparison between ongoing UPC revocation proceedings and EPO opposition proceedings, since these were launched at the same time and have identical parties and the same substantive arguments.

On 28 June 2023, Bitzer filed an EPO opposition against Carrier’s patent, this being the very last day of the 9 month EPO opposition period after the date of grant of the patent. The EPO opposition is based on all realistic available grounds (lack of patentability in view of the prior art, lack of sufficiency of disclosure and added subject matter). However, the main attacks rely only on prior art. Carrier initially responded to the EPO opposition by requesting acceleration of the opposition.

The day after filing the EPO opposition, on 29 June 2023, Bitzer filed a revocation action at the UPC Central Division, although the actual start of proceedings at the UPC was seemingly delayed by some procedural issues.

On the substance of the cases, at least for claim 1 of the main requests, the UPC revocation proceedings and the EPO opposition proceedings appeared to be identical. However, despite this, the UPC Court of Appeal decided that a stay should not be granted.

The UPC revocation action hearing was scheduled for slightly less than one year from the start of UPC proceedings. This is exactly as envisaged when the UPC was set up, and to be fair is fast by European judicial standards and certainly faster than most EPO proceedings.

The UPC Court of Appeal considered that staying the UPC proceedings was not warranted because the EPO oral proceedings were scheduled for 4 months later, and this could not reasonably be considered to be suitably “rapid” in context. Although the EPO had accelerated the EPO opposition proceedings, this did not change the UPC Court of Appeal view.

The UPC Court of Appeal were also not particularly worried by the risk of conflicting decisions from the UPC and the EPO on the same facts. They observed that if either the UPC or the EPO revoke the patent, in whatever sequence, then the patent is revoked (at least in the UPC states). They did not address, however, the question of what happens if the UPC allows an amended version of the patent in one form and the EPO allows an amended version of the patent in a different form. Then, presumably, the timing of the decisions from the UPC and the EPO will matter.

Key Takeaways

This decision from the UPC Court of Appeal is not surprising given various preceding cases from the courts of first instance of the UPC on this topic. The fact that the UPC revocation action hearing had already been scheduled and the EPO opposition division oral proceedings were scheduled for several months later led to the UPC Court of Appeal considering that there would be no benefit in delaying the UPC proceedings.

After this decision, in August 2024, the UPC Paris Central Division (CD) issued their decision on Bitzer’s revocation action against Carrier’s patent – the patent was maintained in amended form. In the meantime, the EPO is gearing up for its accelerated (and imminent) opposition division oral proceedings in October, having already issued its preliminary opinion in that opposition case.

These cases are therefore poised at an interesting moment. The UPC have maintained the patent as amended in Auxiliary Request 2, at first instance. The EPO’s preliminary opinion is that these same claims are invalid for lacking novelty. But the EPO’s preliminary opinion was issued before the UPC decision came out.

As we have seen in other cases, the UPC is not shy of disagreeing with the EPO opposition division, even on the same prior art and arguments. Now we have the same question in reverse – the EPO opposition division has seen the UPC decision on the same prior art and same claim amendments. It will be interesting to see if they change their mind in view of the UPC decision.

July 2024: UPC overturns EPO opposition division decision on the same prior art

DexCom v. Abbott was notable for being one of the first written decisions on a main action for infringement and validity. It concerned infringement and validity of Dexcom’s patent. The case is particularly interesting because the same patent was itself the subject of an EPO opposition, with Abbott being the opponent. The EPO rejected the opposition in May 2023 and no appeal was filed.

Not only were the two sides essentially the same in the UPC as in the EPO opposition, but Abbott also relied on identical prior art. The court carried out a detailed analysis of the prior art and decided to take document D1 as the closest prior art. The court had a different interpretation of the technical disclosure of D1 compared with the EPO opposition division. As it turned out, this was highly significant to the outcome of the case.

The court decided that claim 1 as granted was novel over D1, as had the EPO opposition division, but their analysis led to them to conclude that the technical difference over with D1 was narrower. The court very clearly used the problem and solution approach to inventive step, but their formulation of the objective technical problem was merely “choosing a protocol” for carrying out a step of the claim. In the circumstances, the lack of ambition required by this statement of the problem made a finding of lack of inventive step inevitable.

Key Takeaways

It is interesting to see the UPC reach a different decision to the EPO opposition division in relation to the same patent with the same parties and relying on the same prior art. The key turning point was the UPC’s technical assessment of the closest prior art document. Without being drawn on which tribunal is technically correct here, what can clearly be seen is that the UPC will take an independent and fresh look at the cited prior art reach their own determination of its relevance.

For companies who have previously been unsuccessful in trying to invalidate a European patent in an EPO opposition, this decision from the UPC makes it clear that having another go at revoking the patent, even with the same prior art and essentially the same arguments, may lead to a different overall result.

August 2024: Let’s talk about saisies

Unlike common law jurisdictions, such as England and the US, there is no discovery at the UPC. Instead, it is for the claimant to secure the necessary evidence to support their case. To address this difficulty, some EU countries have judicial tools that allow a claimant to secure evidence from the defendant. The most notable example is the saisie contrefaçon procedure available in France to allow the claimant’s representatives and a bailiff to enter the defendant’s premises, and to search for and secure information identified in the order relevant to the patent case. The UPC Agreement incorporates this legal principal of the French saisie in the form of an “order to preserve evidence” and an “order for inspection”.

In Progress Maschinen v. AWM and SCHNELL, Progress filed an application in the UPC Local Division Milan for preserving evidence and for inspection against both the defendants, AWM and SCHNELL. This was among the first saisie applications and even the Local Division seemed unsure about how the evidence should be handled and the time limits that applied to the parties. The first instance decision in relation to the saisie application was appealed by Progress.

The UPC Court of Appeal (CoA) confirmed that the purpose of a saisie is not merely preservation of evidence but disclosure of that evidence to the applicant. However, that disclosure is not unconditional. It can be subject to the protection of confidential information. The court must hear from the defendant on the request for disclosure even if the defendant does not object to the saisie order itself.

Accordingly, the UPC CoA held that:

(i) The Local Division was wrong to say that Progress had failed to make a request for disclosure. The request for disclosure was inherent in the saisie application. (ii) The defendants were right to argue that the Local Division had to hear them and offer them the opportunity to make a confidentiality request before authorising the disclosure of the evidence to Progress. (iii) The time period for filing the action on the merits “runs from the date on which Progress gains access to the evidence following the specific order on the request for disclosure or the date of the final order rejecting that request”. Therefore, the time period for bringing the action on the merits had not started to run. The infringement action that Progress had filed was therefore started on time and there were thus no grounds for revoking the saisie order.

Key Takeaways

A UPC saisie is a powerful tool for securing evidence held by a defendant to prove a case, but it is underused and may be unfamiliar to those grounded in common law. If you want to apply for a saisie order at the UPC, our top tips are:

(i) You need to have “reasonably available evidence” to support your application.

(ii) If you are requesting the order ex parte, explain why this is necessary.

(iii) Be proactive in requesting disclosure of the expert report if the court is slow in ordering this. (iv) Be prepared to deal with a request from the defendant to revoke the order and for some or all of the evidence gathered to be subject to confidentiality restrictions. (v) Be clear on the deadline for when you must file the action on the merits to avoid the saisie order being revoked, which will result in the evidence being unavailable in proceedings.

September 2024: UPC Court of Appeal digs into the detail in a new preliminary injunction case

In Mammut v Ortovox, the UPC continued their trend in carrying out highly detailed assessments and analyses of the substantive matters of infringement and validity, before deciding to grant or refuse a PI. The decision also raised a number of interesting points of law that hint at how a UPC may arrive at a decision in a main validity and infringement action. Claim interpretation – use of the file wrapper: The UPC Court of Appeal once again emphasised that the description must be used to interpret the claims, but that the claims as interpreted define the scope of protection. The Local Division had said that the file wrapper should generally not be used in claim interpretation. The Court of Appeal were more circumspect and said that this was another case where they would not give a view on this issue. This is a point that needs clearing up, but probably the UPC Court of Appeal is waiting for the right case to come along. Inventive step: There was no mention or implicit following of the EPO’s problem and solution approach. The court decided that one prior art document led the skilled person away from a feature in the patent claims and therefore the invention would be considered inventive when starting from that prior art. However, it is interesting to see that the court did not engage in any detailed discussion of why the claimed solution would not be obvious to the skilled person starting from another prior art document put forward by Mammut. On the facts of the case, it may be that the same conclusion would have been reached, had the problem solution approach been applied when assessing inventive step. Late filed documents and arguments: At first instance, Mammut had filed a prior art document the day before the PI review hearing. The Düsseldorf Local Division had refused to admit it, as late filed. However, they also had some obiter dictum comments on its lack of relevance. The UPC Court of Appeal did not say that the Local Division was wrong not to admit this document, but exercised its own discretion and admitted it into the appeal proceedings. Mammut also attempted to file its own submissions from the main infringement and revocation action. However, these were only filed in the PI appeal proceedings rather than at the first instance PI proceedings and the Court of Appeal refused to admit them. The clear lesson here is to submit documents and arguments at first instance, even if late. If the first instance refuses to admit them, it is still possible that the Court of Appeal will allow them into the proceedings. However, filing such documents only in the appeal will mean that they are unlikely to be admitted. Weighing of interests: When deciding whether to grant a PI, and having reached the view that the patent is probably infringed and probably valid, the court considered various factors:

(i) No unreasonable delay – The UPC Court of Appeal declined here to give a fixed number of weeks or months in which to start a PI action. However, they did say that the patentee could only realistically start a PI action when they have enough evidence of likely infringement. Therefore, the start of any “delay” period is not necessarily the very first indication of possible infringement. On the facts, Ortovox acted quickly – filing a PI application within a few days. (ii) No requirement for irreparable harm – the UPC Court of Appeal commented that it is not sufficient for the defendant to argue that damages would be an adequate compensation for infringement. There is no need for the patentee to demonstrate a risk of irreparable harm if the infringement is allowed to proceed. The court commented that Mammut was depriving Ortovox of the market opportunity associated with patent protection by at least threatening to sell a competing product that infringes the patent. That seems a fairly low bar for a PI to be granted. (iii) Public interest – Mammut argued that there is a public interest in potentially life-saving devices being allowed onto the market. The court gave this argument short shrift in this case, saying that there are other devices available, including an Ortovox device.

Key Takeaways

This is not the end. There is the main action for infringement and revocation, still to be decided by the Local Division. Given the detailed consideration of infringement and validity carried out by the UPC Court of Appeal in the PI proceedings, it will be particularly interesting to see whether the Local Division feels bound, or persuaded, by the Court of Appeal’s reasoning on the same or similar facts.

October 2024: A pro-patent decision on infringement and validity

In Seoul Viosys v Expert Klein, the patentee Seoul Viosys sued two related companies (Expert) for patent infringement on the basis that Expert market a smartphone which incorporates a specific LED into the camera module. The patent defines details of the structure of the LED.

The UPC Local Division did a full analysis of claim interpretation, infringement and validity and came to the conclusion that the patent is valid and infringed. The details of UPC’s reasoning is beyond the scope of this article, but the decision is notable for the following reasons:

Claim interpretation and infringement: The court once again demonstrated that the content of the description is absolutely key in interpreting the claims. It was a clear explanation in the description that a “layer” defined in the claims could in fact be presented as a composite layer of sub-layers of different metals that led to the finding of infringement.

Inventive Step: The UPC did not follow the EPO’s approach to inventive step. Despite many uses of the terms “problem”, “solution” and “motivation”, the structure of the approach of the UPC was different to the EPO. Here, in our view, the outcome is probably materially different to what the EPO would have decided on the same prior art.

Added subject-matter: Even more starkly, the approach of the UPC Local Division to added matter was significantly more generous to the patentee than the EPO approach. In our view, it is difficult to say that the combination of features in granted claim 1 would meet the EPO’s test of being directly and unambiguously derivable by the skilled person, using common general knowledge, from the original grandparent application. However, on another divisional case in the same family, the same UPC Local Division decided that the granted patent was invalid for added matter.

Key Takeaways

This seems to us to be the most patent-friendly decision on the merits so far at the UPC. Two clear takeaways are that the content of the description is critical in the court’s interpretation of the claims, and that the UPC is assessing validity in a different way to the EPO’s approach, particularly on inventive step and added matter. So, even if you have a struggle to persuade an EPO examiner to allow your patent, once granted, those struggles do not necessarily mean that the patent is weak. The UPC will make up its own mind.

Conclusions

In the first year of operation of the UPC, most of the decisions and orders from the courts concerned procedural issues and preliminary injunctions. Now that the court has been in operation for long enough, there are an increasing number of substantive decisions on the merits. The UPC decisions are well-reasoned and detailed. The cases discussed here are only a small sample of the most interesting.

It is apparent that the UPC will make up its own mind on issues of infringement and validity, with the EPO’s approach to validity not necessarily being followed in all cases.

It is prudent to carefully consider the advantages, and potential drawbacks, of the UPC alongside the national courts and European Patent Office, when considering offensive and defensive patent strategies in Europe.