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 - 17 March 2025 - is below:

UK

Patents Court gives guidance on Interpretation of Cross-Licence Agreement.

On 11 March 2025, the Patents Court gave a judgment in Motorola Mobility v Ericsson ([2025] EWHC 539 (Pat)), in which the Court examined preliminary issues concerning the proper construction of a cross-licence agreement entered into between the parties. The first two issues related to clause 2.4A of a 2011 licence agreement between Motorola Mobility and Ericsson (the 2011 Licence) limiting the license to specific product categories and their "commercially reasonable updates or extensions" (CRUE). 

Motorola Mobility presented three main arguments regarding the construction of clause 2.4A. The first argument, known as the "FIELD construction," suggested that the license covered all developments of cellular handsets developed or existing at the date of the 2011 Licence. The second argument, summarised as "a phone is a phone," claimed that any cellular handset should be considered a CRUE of a licensed product. The third argument proposed that a CRUE included all cellular handsets that underwent similar development processes as those existing or in development at the date of the 2011 Licence. 

Meade J rejected all three arguments. He found that Motorola Mobility's interpretations were overly broad and inconsistent with the principle of reading clause 2.4A as a whole. He emphasized that clause 2.4A was concerned with actual products, not conceptual ones.  However, he also did not fully agree with Ericsson’s narrow view that CRUE should be limited to single-step updates of a single origin product. Instead, he concluded that a CRUE could involve updates or extensions of product ranges and did not necessarily have to be “single step” updates. 

In considering the third and final issue, Meade J also rejected Motorola Mobility's argument for an implied term in the 2011 Licence, that Ericsson may not sue for patent infringement of products covered by the 2011 Licence, which Motorola Mobility had combined with a request for a declaration that bringing infringement proceedings in the US (including in the ITC) was a breach of that implied term. The Judge concluded that a “licence of a patent means that within the scope of the licence the licensee’s acts are not an infringement and an infringement claim can be met by a successful defence of licence. There is no necessity for anything more.”. 

FINLAND

Changes Proposed to Patents Act.

The Finnish Ministry of Economic Affairs and Employment has initiated a reform of the Finnish Patents Act to modernise and align the patent system with international standards, with the overall aim of building an environment that encourages companies to innovate and grow internationally. A draft Government Proposal for the Patents Act has been published, and comments have been sought on the draft. 

The key changes are as follows: 

• The draft introduces a provision for partial invalidation of patents, replacing a previous limitation procedure.  This change allows patent proprietors to request the Market Court to declare a patent partially invalid.    
• The reform also proposes a new mechanism, enabling the Market Court to impose a conditional fine as a means of enforcing an injunction. The current Act does not explicitly provide this power to the Court. 
• The language requirements for national patent applications are proposed to be simplified.    
• The reform proposes to introduce the possibility to waive the right to be designated as an inventor. 

UPC

Mannheim Local Division finds infringement and orders damages and delivery up. 
(UPC_CFI_162/2024)

The Mannheim Local Division handed down its decision finding infringement of Hurom’s European Patent No EP 2 028 981 (EP 981) for a juice extractor by NUC Electronics. The judgment concerned the national EP patents designated in Germany, France, Denmark, Italy and The Netherlands. Allegations of infringement regarding a number of non-UPC designations of EP 981 were not considered during the hearing (more on this in the next article).  

In considering infringement, the Court confirmed that the UPC has jurisdiction over acts committed before the UPCA entered into force on 1 June 2023. However, when determining the applicable substantive law, it was noted that this should be distinguished from the Court’s jurisdiction to hear the case. For acts committed after 1 June 2023, the Court interpreted the relevant articles of the UPCA to mean that it was the law of the UPCA, not the law of the national patents, that should be applied when assessing the infringement of either European bundle patents or European patents with unitary effect. Such an interpretation aligns with the aim of the UPC to harmonise European patent law.  

For acts committed before 1 June 2023, the Court held that the relevant national law shall apply. This interpretation was key to ensuring legal certainty and the protection of the legitimate expectations of all parties. However, the Court did hold that it was acceptable to apply the UPCA to situations where an infringing act started before and continued after the UPCA entered into force. When evaluating whether an act is “ongoing” the decisive issue will be whether “the alleged infringer could have stopped its ongoing production in the light of the entry into force of the UPCA but still made the decision to continue”.   

When considering remedies, the Court noted that in the case of traditional European bundle patents, a finding of infringing acts in in one member state does not have the effect of extending the remedies sought to other UPCA member states. In reaching this conclusion, the Court rejected the claimant’s interpretation of Art. 34 UPCA (territorial scope of decisions) commenting that Art. 34 is not substantive law and does not create a unitary right that would extend the scope of remedies for traditional European bundle patents.   

On the facts of the case, the remedies were extended because the claimant had a good reason to allege that infringement may take place in Denmark, Italy and The Netherlands and the defendant had failed to provide an effective denial, merely criticising the claimant for lack of substantiation and evidence.

The Court granted the claimant a permanent injunction with regard to the “acts of offering, placing on the market and using and the acts of storing and importing for those purposes”. However, the Court refused to grant an injunction for importation without purpose. The Court ordered that the amount of damages and time periods to be taken into account  be determined in subsequent proceedings but rejected the claimant’s application for damages in compensation for moral prejudice under Art. 68(3)(a).  The claimant had failed to highlight any special circumstances which would warrant this additional award. Further, the Court granted an order for “definite removal” of infringing products but did not specify the mode of such removal. The Court rejected the defendant’s arguments that destruction of unfaulty infringing products was environmentally unsustainable and did not allow for the modification of the infringing products as the defendant had not specified how this could be done. The Court refused the defendant’s request for enforcement security as the defendant failed to justify such an order and, in the Court’s view, damage recovery would be facilitated by the fact that both parties were domiciled in the same country.

UPC

Mannheim Local Division considers Electrolux.
(UPC_CFI_162/2024)

In addition to its main findings, the Mannheim Local Division issued an order stating that the proceedings relating to the designations of the patent concerning Poland, Spain, Turkey and the UK should be separated from the main proceedings despite being included in the “traditional European bundle” of patents. This was because the main infringement hearing took place before the CJEU had handed down its decision in BSH v Electrolux (C-339/22) in which it clarified that the Brussels I Regulation did allow for EU courts to retain jurisdiction over infringement claims concerning foreign patents, even in cases where validity had been raised as a defence. As a result of this pending decision, it was not clear at the time of the hearing whether the UPC would have the jurisdiction to consider infringement of the national patents in non-UPC countries.  

The Judge explained that separation of the proceedings was necessary as it was important not to delay the decision in infringement proceedings for the other designations of the relevant European patent as this may hamper the patentee’s ability to enforce its patent rights in those countries.   

The Court indicated to the parties that it would therefore deal with the parties’ requests in relation to the non-UPC patents and any questions concerning the CJEU decision in BSH v Electrolux at a later hearing. Such an order is another example of the wide-ranging impact that the CJEU’s decision is expected to have. More detailed discussion on BSH v Electrolux can be found on our website here.

USA

Federal Circuit clarifies meaning of “domestic industry” requirement for unfair import investigations. 

On 5 March 2025, the Court of Appeals for the US Federal Circuit handed down its opinion in Lashify v ITC. Lashify is an American company which distributes, markets and sells eyelash extensions (and related products) in the United States – however, it arranges to have these products manufactured outside the USA.  

Lashify had filed a complaint at the US ITC against several other producers of eyelash extensions, alleging that they were infringing Lashify’s patents by importing and selling similar products in the USA. Lashify’s complaint was made under section 337 of the Tarff Act of 1930, which prohibits importation, sale or distribution of products which infringe valid US patents, but only if a “domestic industry” related to the patented products exists. The ITC has previously interpreted the “domestic industry” requirement to comprise: 

i. An “economic prong”, requiring that there is an industry in the US that involves significant investment in plant and equipment, significant employment of labour or capital, or significant investment in the exploitation of the patented products (including engineering, R&D, and licensing); and  

ii. A “technical prong”, requiring that the industry relates to the articles actually protected by the asserted patent. 

At first instance, the ITC denied the claim, finding that Lashify’s warehousing and distribution activities in the USA were those of a “mere importer” and did not suffice to satisfy the economic prong of the s. 337 test. Lashify appealed against this finding. 

On appeal, the Federal Circuit rejected the ITC’s approach to disqualifying certain activities, such as warehousing and distribution from qualifying under the “economic prong” of the s. 337 test unless accompanied by significant other expenditures such as domestic R&D and engineering. The Federal Circuit noted that the statutory text imposed no lower limit on the level of “employment of labour and capital” needed to qualify. The Federal Circuit therefore allowed Lashify’s appeal in relation to the “economic prong”, vacating the first-instance decision and remanding the case back to the ITC. 

Under the Federal Circuit’s preferred approach, the “domestic industry” could now include ancillary activities, such as sales and marketing, previously excluded from scope by the ITC. Although limited initially to the “significant employment of labour or capital” subsection of s. 337, the Federal Circuit did suggest that similar arguments could apply to the other subsections relating to the “economic prong”.