Irides: Weekly patent litigation update

The Irides Weekly Update is our round-up of patent litigation news highlights from around the world. Taking its name from the plural of “iris” - a nod to the ability of Irides to see what’s happening around the world.

Our latest edition - 20 September 2024 - is below:

UPC

UPC awards injunction against Directors of infringing entity.

On 13 September 2024, the UPC’s Munich Local Division (Munich LD) handed down its decision issuing an injunction against, among others, certain company directors of an infringing party in litigation between Philips and Belkin (UPC_CFI_390/2023).

The patent in suit, EP 2 867 997 (EP 997), titled “Wireless inductive power transmission”, concerns technology for the wireless charging of electronic devices. In an earlier action, the Düsseldorf Regional Court dismissed an action relating to the same patent holding it to not be infringed by Belkin’s product (a subsequent appeal to the Düsseldorf Higher Regional Court was dismissed on procedural grounds). A separate action to revoke EP 997 was dismissed by the Federal Patent Court in July 2024 although this decision is not final.

On 14 June 2023, Philips brought a parallel UPC action alleging that Belkin’s devices designed for inductive power transmission infringe EP 997. Belkin sought to argue that the UPC proceedings were not admissible due to the parallel nullity action pending in Germany. By the time of the Munich LD’s decision, the first instance decision of the Federal Patent Court had been handed down. The Munich LD recognised that a reason for a stay on proceedings existed, in theory, if the judgment of the Federal Patent Court were to be appealed to the Federal Court of Justice. However, the Munich LD, in denying the stay, pointed towards the requirements of r. 295(a) UPCA which states that a court may stay proceedings before a national authority where a decision in such proceedings (including subsequent appeal proceedings) may be expected to be given ‘rapidly’. The Munich LD noted that a decision of the appellate Court was not to be expected in the short term; therefore the application for stay was refused. The Munich LD further noted that the German proceedings only concerned the German designation of the EP 997. The Munich LD emphasised that UPC decisions on the legal status of a European patent apply to the territory of all contracting Member States for which the patent has effect.

Following the substantive hearing, the Munich LD held that EP 997 was valid and infringed, dismissing the revocation counterclaims by Belkin. The Court then moved to consider the appropriate remedy, in this instance, an injunction.

The Court held that an infringer is anyone who uses a patent contrary to Art. 25 and 26 UPCA without the consent of the patent proprietor. The Munich LD in adhering to the primacy of EU law referred to, and relied on, European trade mark case law to support its definition of ‘use’. In this action, of the six defendants; three were Belkin legal entities but there were also three natural persons named as Defendants: the managing director of the German subsidiary and two directors of the British subsidiary. The Court referred to the decision by the CJEU in the trade mark case of Christian Louboutin/Amazon Europe Core Sàrl et al (C-148/21, C-184/21). In this case, the Grand Chamber stated that the expression ‘using’ involves active behaviour and direct or indirect control of the act constituting the use. The CJEU identified the offering of infringing goods and their placing on the market as the type of behaviours characterising active use. Accordingly, in the view of the Munich LD, an ‘infringer’, within the meaning of Art. 25 and 36 UPCA, is anyone who actively carries out the acts of use in question (this includes any legal persons).

With regard to the three natural person defendants (i.e. the three directors), the Court held that they could also be held liable for participation in the infringement, despite no evidence being before the Court on how the directors participated in the patent infringing acts. Instead, the Court referred to Art. 63(1) UPCA, and the concept of ‘intermediary’, to support its conclusion. The Court cited the CJEU decision in Tommy Hilfiger Licensing LLC and Others v Delta Center a. s., (C-494/15) which held that an infringer “…offers a service which is likely to be used by another person to infringe one or more intellectual property rights, without it being necessary for him to have a special relationship with that person or those persons.". The Court held that it is not necessary for the intermediary to be the infringer. It is enough that the intermediary merely offers a service that is used for infringement and thereby creates a precondition for the infringer to be able to carry out their infringing act. A natural person who acts as managing director (or director) of a company that commits acts of use that infringe a patent can be considered an intermediary within the meaning of Art. 63 UPCA.

The Court held that the three legal entities were responsible for the disputed acts of use and the three natural persons were also liable for infringement by way of acting as intermediaries. An injunction was awarded against all six defendants.
 

CHINA

Implementation of patent term adjustment.

On 6 August 2024, the China National Intellectual Property Administration (CNIPA) issued an announcement adjusting certain patent fees, including those for patent term adjustment (PTA) requests. The PTA request fee is 200 RMB per patent, with an annual fee of 8,000 RMB due for the extended term, if the PTA is approved.

The PTA was introduced in China in 2020, and allows a patentee to request a PTA for unreasonable delays in the patent prosecution process, provided the delays were not caused by the applicant. However, the fees and procedure for PTA requests were previously unclear. The PTA was refined by implementation of the revised by the Patent Law Implementation Regulations and the revised Patent Examination Guidelines, which both took effect on 20 January 2024. These revisions clarified how to calculate the number of ‘unreasonable days’ and specified the procedure for submitting PTA requests, which must be submitted within three months of grant, and the associated fees paid. Further, guidance was provided on what constituted (i) reasonable delays, and (ii) unreasonable delays caused by the applicant.

Prior to the recent fee announcement, all PTA requests were pending review. Since then, the CNIPA has published a number of PTA decisions, granting PTA to 690 invention patents, with the extension duration generally spanning a few months. The PTA is now officially implemented in China.
 

UPC

Court of Appeal grants stay pending national action.

On 17 September 2024, the Court of Appeal of the UPC granted a stay pending conclusion of parallel German nullity proceedings in a dispute between Nokia and Mala. In April 2021, Nokia Solutions filed a revocation action in Germany against Mala’s patent, EP 2 044 709 (the Patent). Notably, at present the Patent only has effect in Germany, but previously was in force in other UPC jurisdictions. The German Federal Patent Court dismissed the German revocation action on 18 July 2023, upholding the patent in its entirety. Nokia Solutions filed an appeal against this decision on 15 January 2024 and the appeal is still pending. In the meantime, Nokia Technology (another company within the Nokia group) filed an action for revocation of the patent on 15 December 2023 at the Paris Central Division of the UPC. In light of the ongoing German appeal proceedings, Mala lodged a preliminary objection in the revocation action in the UPC asking the court to declare itself not competent and requested a stay until a final decision had been issued in the German proceedings. The Paris Central Division rejected the preliminary objection and Mala’s requests.

The Court of Appeal considered the correction interpretation of Art. 71c(2) of the Brussels I recast Regulation in this case, and therefore the applicability of Art. 29 to 32 of the Brussels I recast Regulation. Art. 71c(2) states that “Articles 29 to 32 of the regulation shall apply where, during the transitional period referred to in Article 83 of the UPC Agreement, proceedings are brought in the Unified Patent Court and in a court of a Member State party to the UPC Agreement.”. Mala argued that Art. 29 to 32 are applicable pursuant to Art. 71c(2); the express intention of the regulation is to avoid parallel decisions of a national court and the UPC. There is no reason why national proceedings that were initiated before the transitional period should be dealt with differently to national proceedings brought after 1 June 2023. Conversely, Nokia contended that the provision only applies to proceedings actually initiated during the transitional period. At first instance, the Paris Central Division had agreed with Nokia. In contrast, the Court of Appeal noted that the aim of Art. 29 to 32 is to minimise the possibility of parallel proceedings and avoiding conflicting decisions and therefore govern cases of lis pendens (confirmed by the wording of the heading of s. 9 of the Regulation). Therefore, the terms “during” and “are brought” used in Art. 71c(2) must be interpreted as covering a case in which proceedings have been brought before a national court and are still pending during the transitional period, even if the proceedings were initiated prior to the transitional period. Art. 29 to 32 were therefore applicable in this case.

Art. 29 of the Brussels I recast Regulation applies where proceedings involving the same cause of action and between the same parties are brought before different courts, in order to prevent parallel proceedings and conflicting decisions. In this case, the requirements of Art. 29 were not met, as the parties in the parallel proceedings were not identical (i.e. Nokia Solutions is not the same legal entity as Nokia Technology and their interests are not indissociable). Similarly, Art. 31 did not apply in this case, and the UPC did not need to decline jurisdiction. In regard to Mala’s request for a stay of the proceedings pursuant to Art. 30, the Court of Appeal first confirmed that such request for a stay is to be regarded as a preliminary objection within the meaning of r. 19 RoP. Under Art. 30, the UPC may stay proceedings where a related action is pending in a national court. In this regard, the Court of Appeal considered that (i) the cause of action in the sets of proceedings was almost identical, (ii) the parties two both sets of proceedings were closely related (with Nokia Technology and Nokia Solutions being part of the same group, and (iii) the German revocation action is at a more advanced stage than the UPC proceedings. In relation to Nokia Technology’s submission that the patent had been in force in a number of UPC jurisdictions previously did not change the assessment, although the Court of Appeal did not comment on whether the UPC has competence in respect of those lapsed parts of the patent at issue in light of Art. 3(c) UPCA. In this case, Nokia had not presented any interest in a rapid decision on validity in regard to these parts of the patent, and so this did not outweigh the interests of procedural efficiency and coordination within the EU. Finally, the Court of Appeal noted that there was no need to refer either the question on the interpretation of the regulations discussed to the CJEU in this case.

The Court of Appeal therefore partially overturned the first instance judgment. The Paris Central Division was correct to declare itself competent and reject Mala’s request to decline jurisdiction, however; Mala’s request to stay the UPC proceedings pending the German revocation action must be granted.