UPC Issues Injunction in Bold First Decision on the Merits
“The UPC keeps its promise, already in the early days of this entirely new court and procedure, to render a full-blown decision on the merits, including on both validity and infringement of the patent at issue, in just over a year.”
Thirteen months after it opened for business, Europe’s Unified Patent Court (UPC) has issued its first decision on the merits. On July 3, 2024, the Düsseldorf Local Division released its decision in Franz Kaldewei v Bette UPC_CFI_7/2023, issuing cross-border injunctive relief and a provisional award of damages enjoining the defendant from continuing infringement.
On June 1 2023, plaintiff Franz Kaldewei had sued Bette for direct and indirect infringement of claims 1 and 3 of EP3375337, ‘Sanitation Bath Tub Device,’ in Austria, Belgium, Denmark, France, Italy, Luxembourg and the Netherlands. Kaldewei sought disclosure of accounts books for the calculation of damages to be paid, an award of provisional damages, an injunction, a recall of the product from the market and permanent removal.
Bette did not present any material non-infringement arguments (apart from a claim of personal prior use) but counterclaimed for revocation of the patent in the same countries for the same claims. In response, Kaldewei defended the validity of the patent as granted but also sought to conditionally amend the claims in the event that the granted claims could not be maintained.
Key Comments on the Decision
- The scope for venue shopping in the UPC system is evident from the background of this case: Kaldewei could have chosen to sue in any of the local divisions of the UPC in Austria, Belgium, Denmark, France, Italy or the Hague – all on the basis of infringing acts in those countries – or Düsseldorf, Hamburg, Mannheim or Münich (Germany) – all on the basis of residence. The plaintiff chose to file suit in Düsseldorf although no infringement claim was made for Germany.
- The UPC keeps its promise, already in the early days of this entirely new court and procedure, to render a full-blown decision on the merits, including on both validity and infringement of the patent at issue, in just over a year.
- The decision illustrates the Division’s willingness to grant effective final relief, including injunctions and recall orders for multiple countries, and even a provisional damages award. That the injunction covers seven countries underscores the UPC’s potential: with one action a patentee can obtain a uniform, cross-border decision on the merits in a short period of time. This would not have been possible using the seven national courts.
- Injunctive relief is backed up by recurrent penalty payments in case of non-compliance. Following the traditional approach of (for example) German courts, the amount of the penalty far exceeds the value of the product in suit, as a deterrent against continued infringement.
- This particular decision by the Division is concise: under 38 pages. The Division seeks to make clear the basis for its decision but does not elaborate greatly on the principles underlying it. This rather practical approach aids rapid issuance of decisions but does not shed as much light as it could on the jurisprudential basis. It is to be expected that future decisions in proceedings on the merits may be more substantive (considering the level of detail in prior, even preliminary, decisions before the UPC).
- The Division approached claim interpretation the same way for both validity and infringement, referring to earlier case law by the Court of Appeal of the UPC. Meanwhile, at the EPO on July 1, 2024, questions were referred to the Enlarged Board of Appeal of the EPO on this topic in light of divergent case law at the EPO.
- Some insight is given as to how the Court – or at least the Division – will treat novelty and inventive step. No reference is made to the case law of the European Patent Office (EPO). The Division takes a strict approach to novelty, dismissing a prior art disclosure for allowing alternative interpretations. Also, the Division did not (at least not explicitly) apply the problem-solution approach, developed by the EPO (and applied by many national courts in Europe), for inventive step analysis in finding the patent obvious.
- The patentee was, however, able to uphold the patent in amended form by filing an application to amend (termed an ‘auxiliary request’ like at the EPO) combining the features of claims 1, 2 and 3 of the patent as granted.
- The decision provides some interesting considerations of the Division on what constitutes “offering for sale” in particular also regarding a searchable website, although it goes in no detail on that point since infringement was not otherwise disputed.
- Indirect infringement was also specifically addressed : the Division considered that offering for sale a component that is explicitly mentioned in the claim and regards the core of the invention, fulfills the requirement of being an “essential means” for the purposes of finding indirect infringement. The Division did not need to decide how to correctly resolve the matter of ‘double territoriality’ in the UPC (see further below).
- The Division confirms the narrow interpretation of prior user rights: a right in one country does not provide a shield for the whole UPC region.
Further Analysis
Bette does not appear to have challenged that its product fell within the scope of the claims. Instead – and presumably for this reason – it claimed that it had the right to continue prior use of the invention, having been in possession of the invention and taken steps to put it into use before the priority date in Germany. This relatively unusual defense is recognized in Art. 28 UPC Agreement (‘UPCA’ – the treaty that established the UPC). Taken at face value, Art. 28 implies that: (1) the right is dependent on the national law of the state in which the prior use was made and (2) the right extends only to the state(s) in which the right is established, not the whole UPC region. Nevertheless, the defendant argued that this interpretation would “miss the reality and the necessities of a uniform patent jurisdiction”. The Division dismissed this, noting that “the narrow wording of [article 28] is clear in this respect. … the existence of a right of prior use must be claimed for each protected state under their own conditions. The standard does not provide for a European right of prior use…” .
The Division also had to consider indirect infringement in this case because Bette supplied not only the complete sanitary tub product but also a component part said to “constitute the core of the invention according to the patent in suit”. Assessment required interpretation of art. 26 UPCA , in particular in relation to the so-called ‘double territorial’ requirement: that the offer of the invention for use and the use must occur in the same territory. Art. 26 requires interpretation as to whether the ‘double territorial’ requirements must be satisfied only for the whole territory of the relevant European states where infringement is alleged or must be satisfied in each country separately. The Division did not reach a conclusion on this point, instead finding on the facts that “defendant also fulfils the … [elements] … according to narrower view”. This important point must therefore wait for a subsequent decision. If the narrow interpretation is correct, this may be factor favouring unitary patent protection: a single patent covering 17 (soon 18) member states, rather than a bundle of national patents. For unitary patents (according to the Division’s apparent assumption) the double territorial requirement would be assessed taking the whole UP territory as a whole.
Ultimately therefore, the Division’s assessment of infringement and validity turned on assessment of the disclosure of prior art and interpretation of the patent’s claims. The Division found the patent in granted form novel, noting that for a successful novelty attack, the disclosure of the prior art must make “directly apparent to the skilled person” all the features of the claim. The Division later noted that “the mere fact that the skilled person has two options for understanding the information [in the prior art] speaks against the existence of a direct and unambiguous disclosure”. The Division therefore appears to adopt the “direct and unambiguous disclosure” standard of the EPO and strictly so: ambiguity was found where two interpretations were possible.
The Division’s finding on validity and infringement was dependent on claim interpretation. The decision refers to decisions of the UPC Court of Appeal regarding the main principles for claim interpretation. These decisions were the decisions of February 26, 2024, and May 13, 2024, by the Court of Appeal in which the principles of article 69 EPC were said to apply to proceedings before the UPC for both validity and infringement. The Division in this decision does not provide any additional commentary.
Finding that the patent’s claims as granted nevertheless lacked inventive step, the Division noted that “[a]n invention is deemed to exist if it does not result from the usual approach of the skilled person [to the prior art], but requires an additional creative effort on their part”. The necessary step over DE 945 was “a routine consideration” for the skilled person here. The Division does not explicitly assess this using the problem-solution approach used at the EPO. However, as mentioned, in amended form, the patent was deemed to be valid based on plaintiff’s auxiliary requests.
Finding the patent infringed and valid in amended form, the Division therefore considered what relief should be granted. Taking the request for a final injunction first, the Division noted that the “prohibition of continuation in Art. 63 UPCA implies that there must still be a possibility of continuing the infringement. The defendant has the burden of … proof with regard to the fact that it has ceased all acts of use” and that where, as here, an act was shown in one state there was “thus a rebuttable presumption that the defendant is also continuing its activities in the other states…”. This analysis is pragmatic: plaintiffs who have already demonstrated infringement should not be burdened by showing continuing infringement in all states to get an injunction covering all states where infringement was carried out previously when the information about sales activity will lie with defendants.
Regarding the discretionary power of the court to deny injunctive relief as per article 63 UPCA, there do not appear to have been any special circumstances pleaded by Bette for resisting an injunction. An interesting consideration can be found on the point of the essential means of the bathtub found to indirectly infringe the patent. The Division did grant an injunction also against these means, but not before establishing that there was no other relevant use of these means: “In particular, it is not apparent for what other purpose the contested embodiment II would otherwise be used”. This may make for an interesting debate in situations where indirectly infringing means would have alternative use cases in the market.
The Division proceeded to grant an order not only prohibiting continuation of the infringement but requiring recall of the product (by informing third parties) and cessation of any distribution of the product, such as by cancelling all orders.
Penalty payments were ordered in the sums of €1,000 per product for any continued infringement and €250 for each day late in effecting recall or providing information about its sales for the purposes of damages assessment. No maximum penalty ceiling was set. Also, the UPC held that the decision was enforceable once Kaldewei had informed the court it wanted to enforce the decision and taken the appropriate steps as well as service of the decision on the defendant.
Other Matters
Two minor aspects of the decision merit some comment.
First, the decision reiterated the tough stance by the UPC on deadlines; here, a retroactive request by Bette for an extension of time to file certain drawings was denied, the Division holding that “such an application must be made at the latest at the same time as the … submission for which the party is requesting retroactive extension…” and that “the missed deadline served to ensure the proper preparation of the oral hearing by the international panel… [which involved travel such that] … (preliminary) consultations … must be ensured from the time of the conclusion of the interim proceedings…”. The latter point seems reasonable given the documents were filed only the day prior to the oral hearing.
Second, the decision recognized that Kaldewei’s attempt to use the ‘lay open books’ procedure for information about defendant’s product for the purpose of establishing infringement was not the correct approach, noting it “is an application that is or can be part of the proceedings to determine the amount of the damages ordered and can precede the quantified claim for damages”. Any such attempts to obtain information or discovery from defendants for the purpose of establishing liability for infringement must be done using the other procedures available. The Division discussed and approved the typical approach in Europe of not requiring production or analysis of damages-related information until liability is established, saving substantial costs either in cases where liability is not found or because the parties will settle once liability is found.
[All quotations from the judgment are based on informal translation from the original German: no official copy in English is available]
