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Background
28 February 2024

UPC Court of Appeal overturns preliminary injunction

The Court of Appeal of the Unified Patent Court (UPC) has given its most substantive decision to date (ORD_595990/2023), overturning a preliminary injunction put in place by the Munich Local Division (ACT_459746/2023) against NanoString Technologies in its dispute with 10x Genomics and Harvard College (UPC CFI_2/2023).

This is a highly anticipated case with the potential to have far reaching consequences for the development of the nascent court. Core issues under consideration included the approach to claim interpretation and standard of certainty required for the grant of preliminary injunctions.

The Court of Appeal decision follows a number of decisions on preliminary injunctions at first instance. Preliminary injunctions have been granted in a number of publicised cases including MyStromer (UPC_CFI 177/2023), Orthovox (UPC_CFI_452/2023), and of course, the case at issue in this Court of Appeal decision, which we discussed here. While the UPC has not always granted requests for preliminary injunctions (for example, see SES-imagotag (UPC_CFI_292/2023)), the ability to seek such measures at the UPC has already shown itself to be a powerful tool.

Burden of proof and balance of probabilities

Importantly, while reversing the decision of the Munich Local Division to grant a preliminary injunction in this case, the Court of Appeal approves a number of core principles applied in that decision.

In particular, while any applicant for provisional measures has the burden of proof to demonstrate infringement, on questions of validity the burden shifts to the defendant (notwithstanding the literal language of the Rules of Procedure which imply it is the applicant’s task to demonstrate the case with a “sufficient degree of certainty”).

Moreover, the standard of proof, for both parties, to establish a “sufficient degree of certainty” is confirmed by the Court as simply “more likely than not”. Thus, the applicant must show that the patent is “more likely than not” infringed, while a defendant looking to rely on a defence of invalidity must show that the patent is “more likely than not” invalid. This contrasts with other jurisdictions, which set a lower bar for defences of infringement in the context of preliminary measures (for example, merely requiring a showing that there is a “substantial question” over validity).

Adopting a “more likely than not” approach during interim measures suggests the Court does not, in principle, consider it prudent to set a bias towards inaction. Indeed, this is reflected in the Court’s reference to the potential for “irreparable harm” to the applicant if an appropriate preliminary measure is refused.

Construction of the claim and inventive step

The Court of Appeal therefore agrees with the Munich Local Division on matters of principle; but in this case has disagreed on matters of substance. In particular, the Court of Appeal has taken its own view on the interpretation of the claims; this has had a consequent effect on the assessment of inventive step.

At the first instance, the Munich Local Division considered the claim at issue, which relates to a method of detecting analytes in a cell or tissue sample using detection reagents, to require that the analyte and detection reagent remain bound throughout the claimed process. This was a point of distinction with a crucial piece of prior art, and thus supported the conclusion that the patent was likely to be valid (indeed the Munich Local Division thought that this was “clearly” the case). The Court of Appeal disagrees with the interpretation, and further provides their own analysis of the technical relevance of the prior art, reversing this conclusion and viewing it as “more likely than not that the patent at issue will prove to be invalid in proceedings on the merits due to a lack of inventive step”.

The Court of Appeal’s words on claim construction will be analysed closely. In this regard, it is notable that the Court of Appeal has emphasised that the guiding principles for claim construction are those set out in Article 69 EPC and the Protocol on its interpretation. This is a welcome confirmation that the UPC should follow the same basic principles of interpreting claims as are applied by the European Patent Office (EPO).

Conclusions

The Court of Appeal provides encouragement for patentees, together with notes of caution. Patentees looking to obtain preliminary injunctions (and other interim measures) may be encouraged that the Court of Appeal has demurred from setting too high a bar on the standards of proof surrounding such applications. It seems that the UPC is happy to be seen as an accessible forum for obtaining such measures. Given the territorial reach of the UPC, this is a significant commercial tool. By agreeing with the Munich Local Division on these key principles, an early direction has been set.

However, in the end this is a story about a preliminary injunction being overturned. The salutary lesson here for all parties is that the Court of Appeal is willing to engage on points of substance and not just points of law. Indeed, the panel at the Court of Appeal is constituted with two technical judges (together with three legally-qualified judges), and it is notable that the decision references this knowledge specifically in dismissing arguments from the patentee on inventive step. The Court of Appeal’s confidence in forming its own opinion on such matters means that parties should understand it is willing to exercise its powers without excessive deference to the first instance judgment. In any enforcement strategy, this will have implications for timing and cost exposure that must be taken into account before launching an application for interim measures.

Finally, perhaps as important as what the decision states is what it does not: the Court of Appeal does not introduce any explicit element of discretion in deciding whether a preliminary injunction is appropriate. It would appear on the face of it that preliminary injunctions are available as of right where the appropriate standards of proof on the substance are met. Given that other jurisdictions often take a more cautious approach, this has the potential to set the UPC up as the forum of choice for such relief.

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