UPC injunction applies to the UK in ‘historic’ first

The decision of the Mannheim local division (LD) of the UPC has been described as historic and of enormous significance by patent law experts at Pinsent Masons, who said it has strategic implications for businesses across all sectors that are or may become engaged in UPC or national patent litigation – and, in particular, businesses with UK operations.

Arjan Reijns and Sarah Taylor of Pinsent Masons were commenting after the Mannheim LD granted the UPC’s first injunction covering the UK (34-page / 1.41MB PDF) in favour of Fujifilm in its lithographic printing plate dispute with Kodak.

Reijns: “The effect of this decision is enormous. Companies managing their UK operations from the EU need to be aware of this decision and its potential impact.”

The UPC is a relatively nascent court system in Europe. It is designed to help holders of unitary patents or certain European patents to enforce their patent rights on a cross-jurisdiction basis more easily and cheaply. Conversely, patents in-scope of the UPC’s jurisdiction are at risk of being revoked in multiple countries via a single ruling.

Only EU member states can participate in the UPC system, though just 18 of the 27 countries eligible to participate are UPC contracting member states to-date. Despite this restriction on membership, the Mannheim’s LD ruling is the latest in a growing line of judgments concerning the UPC’s so-called ‘long arm jurisdiction’ – its scope to rule on matters concerning ‘foreign’ patents. Among others, this issue has arisen in the context of disputes between Fujifilm and Kodak.

Fujifilm sued Kodak over alleged infringement of European patents it holds broadly relating to lithographic printing. It raised proceedings before both the Düsseldorf and Mannheim LDs of the UPC. Different patents owned by Fujifilm were at issue in each case – one in Düsseldorf and two in Mannheim, but Fujifilm sought to enforce its rights in those patents in both Germany and the UK in all three instances.

In a first ruling of its kind by a UPC division, the Düsseldorf LD earlier this year held that where a defendant is based in a UPC contracting member state, the UPC can determine claims of infringement of European patents in every country in which those patents apply – which can include countries that do not participate in the UPC system, like the UK.

At the time of the Düsseldorf LD’s decision, a significant ruling concerning the jurisdictional scope of the EU’s patent courts was anticipated from the EU’s highest court, the Court of Justice of the EU (CJEU). Despite this, the Düsseldorf LD elected to issue its decision before the CJEU ruling was handed down. In contrast, the Mannheim LD decided to suspend its consideration of the UK part of Fujifilm’s claims in the case before it until after the CJEU ruling.

In February, the CJEU confirmed that courts in EU member states – including the UPC – have scope to rule on the infringement of ‘foreign’ patents, even when the validity of those patents is challenged. Those courts, the CJEU said, can further consider whether ‘foreign’ patents are valid when assessing infringement in certain circumstances. The underlying case that prompted the CJEU’s judgment was a patent dispute between BSH Hausgeräte (BSH) and Electrolux.

Subsequently, there have been numerous examples of patent rights holders amending their claims to take advantage of the UPC’s long arm jurisdiction. Cases in which the UPC’s long-arm jurisdiction has been considered have come before several different LDs of the UPC – including in Paris, Munich, Milan and Helsinki.

While Fujifilm failed with one of its cases brought in Mannheim (26-page / 996KB PDF), it succeeded with the other, obtaining a permanent injunction and other corrective measures including damages, and an order for recall and destruction of the infringing goods. That decision is the first in which a UPC division has gone beyond legal theory on long-arm jurisdiction to issue an injunction that has effect in a foreign country, in this case the UK.

Taylor said the Mannheim LD reached similar conclusions on how the law applies in respect of the UPC’s long-arm jurisdiction. This includes that while the UPC has scope to rule on the infringement of ‘foreign’ patents, it can only rule on the validity of such patents on an ‘inter partes’ basis. This means that the UPC’s determinations on validity of foreign patents are relevant only for the purposes of the dispute at issue before it and have no legal effect and are not binding on the courts in the states where the patent is in force.

However, Taylor said the Mannheim LD’s approach in this case was potentially revealing of how other UPC divisions might handle similar claims in respect of the UK parts of European patents.

For example, she said the court held that a defendant to a UPC infringement action does not have to have filed an action in the UK for revocation of the UK part of a European patent to be able to raise an invalidity defence against claims they have infringed a UK part of a European patent before the UPC.

The court implied, however, that if UK national revocation proceedings have been initiated, the UPC may, depending on the precise factual scenario, have reason to delay the UPC infringement proceedings until after those proceedings have concluded, though it said there is no reason for the UPC to make its decision conditional on the validity of the UK part of the European patent having already being established by a UK court.

The court further said that while the UPC will assess validity as a pre-requisite to determine whether there has been infringement, a finding of invalidity by it will not require the national patent register – in this case, the register operated by the UK Intellectual Property Office (UKIPO) - to be amended. 

Taylor highlighted that the Mannheim LD had applied UK patent law when assessing matters pertaining to infringement of the patent at issue, as well as in relation to relief. However, the court’s procedure in doing so was governed by provisions included in the UPC Agreement and the UPC Rules of Procedure, not the procedural rules that govern proceedings in the UK. One practical effect of this was that there was no obligation for Fujifilm or the court to notify the UKIPO of the decision.

The Mannheim LD’s decision is not binding on other UPC LDs. Ultimately, it will take a ruling of the UPC Court of Appeal to establish binding UPC case law on the court’s long-arm jurisdiction. However, Taylor predicted that the Mannheim LD’s decision will prompt many more rights holders to pursue new or amend existing claims in order to enforce against alleged infringement of foreign patents before the UPC.