UPC Preliminary Injunctions – Background, Trends and Lessons Learned

2024 Week 34

No-one wants to be on the receiving end of a UPC preliminary injunction. The tussles over this powerful interim remedy at the UPC have been among the most spicy so far in the near 15-month active history of the UPC.

So we thought this would be a good time to take a look back at the body of case law to date on UPC preliminary injunctions. While sample size is still relatively small, there are already a few key features and trends emerging from the 11 cases analysed for this blog – see the table below for a list of the cases. The first simple observation is that there is an almost 50:50 split between granted and refused PI applications. Of the 11 cases, the UPC refused four applications (though a fifth was granted at first instance and then overturned on appeal) and granted the remaining six.

This blog is unapologetically lengthy because there is lots of say – we hope that readers will take in the points of interest to them but also use this as a resource.

Beyond this relatively even split, we have also observed patterns in how the UPC considers and approaches the following key issues: temporal urgency and ex parte orders; the level of detail examined when making preliminary assessments of infringement and validity; and the approach to issuing orders for security for damages.

1.    Distribution of granted vs refused PIs

While the numbers don’t indicate that the UPC is more inclined to grant or refuse PI applications, it does demonstrate a willingness to order injunctions (including ex parte – such as in myStromer v Revolut and Ortovox v Mammut) where the facts of the case indicate it is appropriate and necessary.

The UPC’s approach to determining whether a PI is appropriate differs from the UK courts where applications for interim injunctions are assessed based on the limbs of the American Cyanamid test¹ and are often stymied by the questions:

-    will damages be an adequate remedy, i.e. if the defendant is infringing and is permitted to continue without the interim injunction? and;
-    where does the balance of convenience lie, i.e. is it more convenient to maintain the status quo and not alter the parties’ current activities?

The UPC’s method is determined by Rules 211 and 212 of the RoP² and Article 62 of the UPCA³. PI applicants must provide evidence of their standing as the patent owner, of the patent’s validity and of the existing or imminent infringement. The court will weigh up the parties’ interest and consider the potential harm likely to result from deciding to grant or not to grant the PI. Finally, as amply demonstrated by the first instance and appeal decisions in 10x Genomics v NanoString, the court will determine whether there is ‘sufficient certainty’ that the patent at the heart of the dispute is both valid and infringed. 

2.    Temporal urgency and ex parte orders

It is essential for patent owners to act promptly once they become aware of the infringing activity but they must also assemble the evidence to assess whether they have a ‘promising legal action’ (refer to 10x v Curio). This suggests a need for balance, and that the UPC would not respond well to an application that has been filed quickly but before the patent owner has taken sufficient steps to ensure they have a case. So how has the UPC been balancing these points?

myStromer AG v Revolut Zycling

myStromer applied for a PI on an ex parte basis in respect of EP2546134 alleging infringement by Revolut’s pedelec (electric bike).

Revolut had previously announced its disputed OPIUM series of speed pedelecs on its website, stating that they would be ready for delivery in April 2023 (though due to delays, none of the bikes had materialised by this date). On 21 June 2023 however, Revolut displayed sample OPIUM series bikes for test rides at the Eurobike 2023 trade fair in Frankfurt and directed customers to online order forms. 

MyStromer responded promptly by filing a PI application the very next day (22 June 2023) and the court agreed that any delay would indeed be likely to cause irreparable harm to myStromer because of the high-profile nature of the trade fair. The UPC granted the PI against Revolut ex parte.

As a side note, although the order was made ex parte, Revolut had in fact filed a protective letter with the UPC on 19 June 2023 in which it argued the grounds on which it considered that its OPIUM series did not infringe myStromer’s patent, but the court did not consider these arguments sufficient to outweigh the need for an ex parte order.

10x Genomics v NanoString 

We examine this case further at section 3 below, but it also has relevant takeaways regarding determining an applicant’s temporal urgency. 10x filed its request on 1 June 2023, the earliest possible date given this was day one of the UPC. While there was no question of a 10x delay, the court emphasised that had it needed to consider it, the ‘timer’ for assessing a delay will start running as soon as the applicant becomes aware of the infringing or intended infringing activity.

10x Genomics v Curio Bioscience

10x applied for a PI to stop Curio’s infringement of EP2697391 covering a method for localised / spatial detection of RNA or DNA in tissue samples through its “Seeker Spatial Mapping Kit”.

Curio’s kit had been on the market for several years, so they argued this meant 10x had unreasonably delayed application for provisional measures. However, 10x were able to supply evidence to demonstrate that in fact, they had only learned of Curio’s kits in November 2023 (specifically via a videoconference dated 10 November 2023⁴). By making the PI application on 4 December 2023 therefore, the court agreed they had acted promptly to investigate the products and filed as soon as they had ‘all the knowledge and documents that reliably enable a promising legal action’ which the court considered to be the earliest reasonable time.

Accepting that 10x did not have the requisite knowledge of Curio’s allegedly infringing kits until 10 November 2023 despite the kits being available prior to that date, the UPC went on to consider at length, whether 10x’s ignorance had been the result of gross negligence or wilful blindness. The UPC concluded that maintaining a lack of knowledge, must be considered equivalent to having positive knowledge. Having said this, the court stressed that the patent owner is not under a ‘general obligation to observe the market’ but that as soon as they become aware of specific circumstances that suggest an infringement, they are expected to take all measures readily available to them and to further clarify the circumstances.

Dyson Technology v SharkNinja

Dyson filed for a PI against SharkNinja on the grounds that its products infringed its patent EP2043492 for a hand-held cleaning appliance. In this case, Dyson became aware of SharkNinja’s infringing products in early September 2023 following their presence at the IFA trade show in Berlin. However, they only submitted their application on 27 September 2023. 

The court considered that some delay, between becoming aware of allegedly infringing products and filing the application, is necessary for the claimant to carry out an investigation and make an analysis on infringement. In some of the clearest guidance we have received on the timeliness of provisional measures applications, the court explicitly stated that a delay of up to 2 months should not result in a finding there had been an ‘unreasonable delay’ under Rule 211(4). 

While Dyson v SharkNinja has given us a 2-month rule of thumb, urgency and what constitutes an unreasonable delay will always need to be considered on the facts (as demonstrated by Amycel v redacted’s 12-month delay discussed below). However, what sets the timer running will always be the patent owner’s knowledge of an infringement, provided they haven’t been wilfully negligent in avoiding that knowledge.

Ballinno B.V v UEFA and Kinexon

Ballinno applied for a PI in its action against Kinexon alleging infringement of EP1944067 for a method for detecting a contact with a ball by a first player in games and sports. Kinexon argued that Ballinno (via its predecessor Invit B.V.) had been aware of its activities and of its in-ball Kinexon System (the ‘Connected Ball Technology’) since September 2023 and that they had in fact written to Kinexon in October, warning them of the existence of its patent rights. However following Kinexon’s denial of infringement in November 2023 it took no further action until three months later when in February 2024 Ballinno sent a further letter, attaching a draft PI application. Taking a dim view of Ballinno’s lack of activity, the court considered that there had been numerous triggers that should have motivated them to investigate the infringement and take steps towards legal action. Failing to do so contributed to the court’s finding of unreasonable delay⁵. 

Amycel LLC v redacted UPC_CFI_195/2024 (decision 31 July 2024)

This case sits at the far end of the timeliness spectrum and serves as an excellent example of how the facts of the case may impact the court’s assessment of temporal urgency. Amycel, first became aware of the (imminent) infringement of its EP1993350 B2 for brown mushrooms for commercial production by the defendant (details redacted for confidentiality in the papers) in The Netherlands in late July 2023. However, they only filed their application for a PI 12 months later. They were able to argue that the 12-month delay was justifiable, because they had to obtain evidence about the specific strains to anticipate the arguments that the defendant would be likely to make, and the nature of the samples meant that cultivation was a time-consuming process. 

The court was persuaded by Amycel’s arguments and concluded that they had commenced proceedings as soon as they had gathered the necessary evidence.

Abbott Diabetes Care v Sibio [Action on EP2713879]

This case also considered temporal urgency – but from the perspective of the defendant!

This case concerns Abbott’s product patent for a continuous glucose monitoring device, designed to be worn on-body and Sibio’s entry into the European marketplace with a similar and allegedly infringing CGM device in September 2023. 

The parties were already familiar with each other and in fact, on 15 May 2024 (only one week before the hearing) Sibio unilaterally offered Abbott a declaration that it would cease any infringing activities and withdraw from the protected jurisdictions. Apparently, this declaration was the reason behind Sibio’s surprising decision not to put forward written arguments contesting the validity or infringement of Abbot’s patent for the PI hearing. Instead, they focussed on arguing for dismissal of the application because they had already provided a declaration that they would cease their activities. At the hearing itself however, they also unexpectedly departed from their written submissions to argue that Abbott had unreasonably delayed in seeking provisional measures, having been aware of Sibio’s activities for at least 6 months. 

The court dismissed Sibio’s arguments and stated that the comments on Abbott’s delay were in fact themselves ‘inexcusably late’, inconclusive and lacking in substance. The court granted Abbott’s PI and as the unsuccessful party, Sibio was ordered to bear Abbott’s court fees.

3.    Preliminary assessment on substantive matters 

From its very first PI decision (10x Genomics v NanoString) the UPC has shown that it will carry out highly detailed assessments and analyses of the substantive matters of infringement and validity to determine the likely outcome on validity and infringement, before deciding to grant or refuse a PI. This is a very different approach to most national courts who generally leave the examination of those technical issues for the final hearing. 

Cup&Cino v Alpina

In this case, Cup&Cino applied for a PI in respect of Alpine’s coffee machine incorporating milk frothing functionality, claiming infringement of EP3398487. The UPC examined the scope of the patent and the features of the milk frothing function in Alpine’s machine and determined that the contested aspect did not come close to the relevant claim of Cup&Cino’s patent. Ultimately the UPC rejected the application on the grounds that it had no doubt that Alpine’s coffee machine did not infringe Cup&Cino’s patent.

10x Genomics v NanoString

At first instance, 10x applied for a PI against NanoString, alleging that its spatial molecular imager (CosMx) infringed EP4108782.
 
In a very lengthy decision, the UPC Local Division granted the PI on the basis that, although⁶ it is required to have ‘sufficient certainty’ that the patent in the dispute is valid and infringed, the court considered the standard of likelihood should be lower for a PI than for a final injunction. The justification being that it is a provisional, not a final measure and only has a limited level of discovery requirements. The UPC stated that a ‘likelihood bordering on certainty cannot be demanded’. 

On appeal the CoA did not disagree with the first instance court’s assertions on the standard of likelihood for provisional versus final injunctions. However, it overturned the PI because following analysis of the patent, it concluded that it was in fact ‘predominantly probable’ that 10x’s patent was invalid for obviousness. 

VusionGroup SA v Hanshow Technology

VusionGroup applied for a PI, alleging that Hanshow’s products infringed EP3883277. The court refused to grant the PI because it was not satisfied that infringement could be made out with a sufficient degree of certainty. On appeal, this decision was upheld, supporting the 10x v NanoString approach to the standard of likelihood on infringement. 

Abbott Diabetes Care v Sibio [Action on EP3831283]

This application was filed in parallel with Abbott’s successful PI in respect of EP2713879. In contrast, this PI was refused on the grounds that the court considered the patent more than likely invalid for added matter.

4.    Cross-undertakings in damages

If, at the final hearing, the patent owner is ultimately unsuccessful (either because the patent is found to be invalid or not infringed) the court will revoke the PI and the defendant may seek compensation for its PI-induced damages.

Beyond the UPC, the approach to damages for the injuncted party depends on the jurisdiction of the court. In common law jurisdictions like the UK, the PI applicant is usually required to give a cross undertaking in damages under which, if the third-party successfully defends their case, they agree to pay a defined sum to compensate the third-party for losses suffered under the PI. This is also the approach taken at the UPC where it is referred to as ‘adequate security for appropriate compensation’ under Rule 211(5) RoP. 

In many civil law jurisdictions however, such as France, Germany and Spain, as well as China, such damages are instead assessed on a strict liability basis (i.e. the defendant does not have to establish any fault on the part of the patent owner and simply makes its claim on the basis that it has suffered heads of loss under the PI).

From the cases analysed, we have seen that, if the UPC decides to grant a PI, it may order the patent owner to provide ‘adequate security for appropriate compensation’ to the defendant if the PI is later revoked (i.e. the typical common law rather than civil law jurisdiction approach). However, it has demonstrated that, in line with the UPCA and RoP, this is a discretionary power and the UPC will exercise it only when considered necessary. In 10x Genomics v Curio Bioscience for example, the UPC ordered security for damages, but declined to do so in its first instance decision in 10x Genomics v NanoString.

5.    Lessons learned?

This is clearly still an evolving area but naturally (in view of speed and urgency of typical PI applications) it is the area of substantive practice of the UPC that is most fully developed. 

It is clear that the patent proprietor needs to act with adequate urgency, but can still take sensible amounts of time to assemble its case for a PI application without detriment. 2-3 months will usually be OK and more time may be allowed in the right circumstances. 

The UPC will look at the substance of the case, albeit on a summary assessment basis. The court will need to be satisfied that it is more likely than not that the patent is valid and infringed. 

Finally, the patent proprietor should be prepared to offer security to compensate the defendant for damage caused by the PI in the event that the patent is ultimately found to be invalid and/or not infringed in the main proceedings.

1. American Cyanamid Co (No 1) v Ethicon Ltd [1975] UKHL 1 (05 February 1975) – The test is: is there a serious issue to be tried? Will damages be an adequate remedy if the defendant's conduct is not restrained (and equally, will the defendant be adequately compensated by the claimant’s cross-undertaking in damages if the injunction were granted and infringement not made out? And where does the balance of convenience lie?
2. Rules of Procedure of the Unified Patent Court
3. Agreement on a Unified Patent Court
4. On 10 November 2023, a videoconference was conducted with the Senior Business Director of Curio for the EMEA countries where he confirmed the possibility of delivery of the contested embodiments to Germany, France and Sweden but also subsequently sent a PDF document containing further information about the Defendant and its products. This was considered to be the point at which knowledge of the infringement was acquired. The time between 10 November and 4 December 2023 was considered reasonable delay, during which 10x clarified the circumstances and investigated ahead of submitting their application for a PI.
5. Interestingly, the court emphasised that although art. 62(2) UPCA and RoP 211(3) do not explicitly require that the preliminary injunction must be urgent, the urgency of the action must be considered when it exercises its Rule 209(2)(b) RoP, Rule 209. 1 RoP. (and the overall requirement to have regard to unreasonable delay in seeking provisional measures under 211(4) RoP)
6. Article 62(4) UPCA and Rule 211(2) RoP