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Preliminary injunction overturned in UPC appeal

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The Unified Patent Court (UPC) Court of Appeal in Luxembourg has overturned an earlier decision that had awarded a preliminary injunction to patent holder 10x Genomics in its dispute with rival US biotech company NanoString Technologies.

The preliminary injunction was issued by the Munich Local Division of the UPC in September last year in respect of a unitary patent (EP 4 108 782 B1 (EP ‘782)) relating to NanoString’s CosMx Spatial Molecular Imager (SMI) products for RNA detection – technology that essentially helps medical researchers identify ribonucleic acid (RNA) in living cells. NanoString raised an appeal against that decision which was heard by the UPC Court of Appeal in December 2023. The preliminary injunction was in force pending the appeal court’s decision. Now that the injunction has been lifted (37-page / 695KB PDF), NanoString is no longer subject to a sales ban in respect of its product across the participating UPC countries in Europe, meaning that it can immediately resume sales.

Patent holders that believe their patents have been infringed often apply to the courts to have a finding of infringement recognised and to obtain a remedy in respect of that infringement – typically, the award of an injunction preventing the infringer from selling goods that use their patents without a licence to do so, or an award of damages to compensate them for the financial loss they have incurred from the infringing activity.

Julia Traumann

Dr. Julia Traumann

Legal Director

The UPC is really developing its own case law that is relevant in the scope of application of the UPC Agreement and the Rules of Procedure

Proceedings on the merits before court requires the court to determine whether there has been infringement. These can take months for parties to prepare for and for the courts to resolve. Patent rights holders also have the option to seek interim relief, including preliminary injunctions, via preliminary proceedings.

It is common in such preliminary proceedings for alleged infringers to object to applications made for interim relief, which before the UPC may be in, for example, a protective letter or in their statement of defence. Often, the alleged infringers will claim that the patent in suit is not valid. The courts, in such cases, will then consider how likely it is that the patent is valid as part of the process for determining whether to award a preliminary injunction.

Experts at Pinsent Masons said that one of the overarching aims of the UPC is expediency and efficiency, with decisions expected to be issued quicker than some national courts.  However, the expected timeframe for first instance decisions is still 12-14 months from proceedings being issued.  This, along with offering relief over a large European market, means that pursuing, or defending, a preliminary injunction is important.

In its first ruling on the substance of a preliminary injunction application, the UPC Court of Appeal overturned the first instance decision to award the preliminary injunction to 10x Genomics. Unlike the Munich Local Division, it determined that 10x Genomics' unitary patent was likely to be held as invalid due to a lack of inventive step. The court therefore considered that the test for awarding a preliminary injunction in UPC proceedings had not been met.

In its decision, the UPC Court of Appeal provided guidance on the assessment of the merits for awarding provisional measures, such as a preliminary injunction, in accordance with the UPC Rules of Procedure.  In order for such measures to be granted, the court must be satisfied with a “sufficient degree of certainty” that the patent in issue is valid and infringed.  The Court of Appeal said this means that it must be at least predominantly probable the applicant is entitled to initiate proceedings and the patent will be infringed. It went on to confirm that a “sufficiently certain” conviction is lacking if the court considers it predominantly probable that the patent is not valid.

In substance, the Court of Appeal agreed with the Munich Local Division in many respects. It also held that claim 1 of EP ’782 was not anticipated by the prior art but considered that a “sufficient degree of certainty” existed that an obviousness – lack of inventive step – argument could be successfully made in main proceedings against the validity of the claim.

The Court of Appeal based this prognosis on a wider interpretation of claim 1 of EP ’782 than that adopted by the Munich Local Division. Therefore, the Court of Appeal found there was no sufficient basis for the issuance of a preliminary injunction.

Sarah Taylor

Senior Practice Development Lawyer

The outcome of the dispute between the parties is still far from certain

Munich-based patent law expert Dr. Julia Traumann of Pinsent Masons, who previously attended the Munich Local Division’s preliminary injunction hearing in September, said: "It appears that the Court of Appeal shares the Munich Local Division's view on the threshold, even though when reading the decisions carefully, there is a small difference.”

“The Court of Appeal states that a sufficiently certain conviction is lacking, if the court considers it predominantly probable that the patent is invalid, whereby the Munich Local Division had stated that such conviction requires that the validity of the patent in suit is more likely than the invalidity. In any case, the Court of Appeal implicitly confirms the Munich Local Division's rejection of the defendants' argument that, according to German national case law, the revocation of the patent does not have to be predominantly probable, but only possible. With this, the UPC is really developing its own case law that is relevant in the scope of application of the UPC Agreement and the Rules of Procedure," she said.

Sarah Taylor, patent law expert at Pinsent Masons, added: "This decision will provide at least some temporary relief to NanoString, despite the UPC declining to stay the proceedings even though NanoString recently filed for Chapter 11 bankruptcy in the US. There is also an injunction still in place in Germany in favour of 10x Genomics and the oral hearings in the main UPC proceedings for both EP ‘782 and another of 10x Genomics’ patents, EP ‘928, are expected to take place later this year, so the outcome of the dispute between the parties is still far from certain.”

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