Ruling suggests growing UPC consensus over doctrine of equivalents

Christian Koeker and Sarah Taylor of Pinsent Masons, who specialise in patent litigation, were commenting after the Düsseldorf local division (LD) of the UPC rejected claims that an Austrian manufacturer of coffee and espresso machines, ALPINA Coffee Systems GmbH (ALPINA), had infringed European patent rights belonging to rival business CUP&CINO Kaffeesystem-Vertrieb GmbH & Co. KG (C&C).

C&C’s patent covers a device for the preparation of a liquid, in particular milk, with an integrated rinsing system and rinsing process. The company took issue with a type of milk frother ALPINA produced. It asked the Düsseldorf LD to declare its patent as having been infringed, to ban ALPINA from making and selling the milk frother in Austria, Germany, Denmark, France, Italy and the Netherlands. ALPINA challenged the action and counterclaimed that C&C’s patent was invalid.

The infringement dispute centred on whether spring-loaded valves in ALPINA’s milk frother fell within C&C’s patent claims, either literally or as equivalents of the direct-closing valves cited in the patent.

Literal infringement is where the rights holder successfully demonstrates that the allegedly infringing product or process infringes the protection conferred from a literal reading of the words used in the relevant patent claims. In this case, the court construed the wording in the patent claims of “direct-closing check valves” as excluding spring-loaded valves. Because both relevant components in ALPINA’s milk frother operated with springs, neither was a “direct-closing check valve” within the court’s construction. Therefore, it found there was no literal infringement.

If literal infringement claims fail, rights holders may still be able to rely on the ‘doctrine of equivalents’. The doctrine essentially provides that if a product or process is not substantially different from the elements of a patented invention, it can still be considered infringing. The purpose of the doctrine is to ensure patent protection cannot be simply circumvented by making small changes to the patented invention whilst reproducing its core and inventive elements.

The doctrine has its origins in the European Patent Convention (EPC) and an interpretative protocol, but it has been applied differently by national courts across the various countries that are signatories to the EPC.

As yet, there has been no case law developed by the UPC Court of Appeal that has established a definitive test for infringement by equivalence, which would serve to standardise how the different UPC divisions apply the doctrine during UPC proceedings. However, in this case, the Düsseldorf LD backed the four-question legal test that was applied by the Hague LD in an earlier case, Plant-e v Bioo. The test adopted by the Hague LD in that case aligns with Dutch national case law. It is the second time in recent months that the Düsseldorf LD has adopted the test, with a different panel of judges for the court also having applied the Hague LD’s test in the case of Wonderland v Cybex back in May.

Under the Hague LD’s test, an accused variation is equivalent to a claimed feature only if four questions can be answered affirmatively.

First, the variation in the allegedly infringing product must be shown to solve essentially the same problem that the patented invention solves and perform essentially the same function in that context.

The second question involves considering whether extending the protection of the claim to the equivalent is proportionate to deliver a fair protection for the rights holder, by reference to the rights holder’s contribution to the art and whether it would be obvious to the skilled person from the patent’s publication how to apply the equivalent element at the time of the alleged infringement.

The third question centres on delivering reasonable legal certainty for third parties: it must be able to be shown that the skilled person understood from the patent that the scope of the invention was broader than what was claimed literally.

The fourth question involves considering whether the allegedly infringing product is novel and inventive over the prior art, and that there is no successful ‘Gillette’ or ‘Formstein’ defence.

The Gillette defence was established in 1913 by the English courts and provides that if the product or process used by an alleged infringer falls within the scope of a patent claim, but that product or process would have been known or obvious at the priority date of the patent, that claim must be invalid for lack of novelty or inventive step. The Formstein defence is derived from a German case of the same name: if a patent is not infringed under a normal interpretation but would be under the doctrine of equivalents, the scope of that patent could be confined to a normal interpretation, where and insofar as the consequence of the broader interpretation under the doctrine of equivalents is that the patent would be invalid. 

In this case, the Düsseldorf LD said that C&C failed to satisfy both the first and third questions in the legal test.

On the first question of technical equivalence, the issue centred on the contribution made by C&C’s direct-closing valves and whether the spring-loaded valves in ALPINA’s product performed essentially the same function in solving essentially the same problem. C&C’s direct-closing valves, among other things, prevented interference with precise air dosing and milk or milk foam from entering the air-supply system. The burden is on the rights holder to demonstrate technical equivalence, and here, the court held that it was neither pleaded with sufficient specificity by C&C, nor otherwise apparent, that ALPINA’s spring-loaded values performed essentially the same function.

On the third question, the Düsseldorf LD considered that the scope of C&C’s patent was not broader than what was claimed literally. In this respect, the court considered that the patent itself explained the potential problems caused by spring-loaded valves, which included vacuum fluctuations and vibration, and presented direct-closing valves as the solution. It said that the skilled person would not understand the patent to encompass a broader class of valves encompassing spring-loaded arrangements, highlighting that direct-closing valves and spring-loaded valves had been distinguished from one another in the patent specification. As a result, the court held that extending protection to spring-loaded valves would undermine reasonable legal certainty for third parties.

As well as dismissing C&C’s claims of infringement, the Düsseldorf LD rejected ALPINA’s counterclaim that C&C’s patent was not valid.

Taylor said: “This case is interesting because both Düsseldorf LD panels have now adopted The Hague LD's four stage test for infringement by equivalence, which was derived from Dutch national case law, rather than the strict test applied by German national courts which might have been expected.”

Koeker added: “Upon closer examination, however, the approaches are not so dissimilar. The Dutch test incorporates into its four questions certain principles that are found in German procedural law and which are applied by the German national courts when assessing infringement by equivalence.”

The German national courts use the test determined by the Federal Court of Justice in the Schneidmesser case. It consists of three questions, rather than four. First, the German courts ask whether the allegedly infringing product has an equivalent effect. Second, the court would examine whether the skilled person, based on their technical knowledge, would consider the equivalent embodiment as having an equivalent effect. Third, the German courts would ask whether the considerations of the skilled person are guided by the meaning of the patent claim.

Koeker said: “In the Netherlands, technical equivalence is a threshold test, meaning that only once equivalence has been established will the court consider the subsequent steps, which expressly includes consideration of the balance between fair protection for the patentee and legal certainty for third parties. This balance is not explicit in the structured technical analysis adopted by the German courts, but that does not mean it does not feature.”

“The German courts apply the principle of proportionality, formally codified by an amendment to section 139 of the German Patent Act (PatG) in 2021, when assessing remedies for patent infringement, whether literally or by equivalence. Although this is not formally part of the infringement-by-equivalence analysis in Germany, it does demonstrate the desire to balance the patentee's entitlement to fair protection against the need for legal certainty for third parties, and therefore shows an analogy with the Dutch and the UPC’s approach to date,” he said.

Further, the Formstein defence potentially plays a similar role in both tests. It is only considered by the German courts when specifically raised by the defendant, and is only considered as the fourth and final step in the Dutch approach, after the first questions have been answered in the affirmative. 

“The adoption of the Dutch test by both Düsseldorf LD panels may not be a rejection of the German approach to infringement by equivalence as such,” said Taylor, “but rather a practical solution which incorporates principles that can be found in German procedural law with the overall aim of maintaining a balance between the interests of patentees and third parties.”

“Whether this test is ultimately adopted more widely by the UPC will ultimately be decided by the UPC Court of Appeal. The issue is yet to come before that court, with the Plant-e case settling before it reached that stage, but harmonisation is desirable sooner rather than later,” she said.

Taylor added: “The dispute between C&C and ALPINA is a long-running one, with a parallel action before the Vienna LD being one of the very first UPC preliminary injunction (PI) decisions. The Vienna court rejected the PI application as there was no infringement and further determined that opting European patents out from the UPC system will be considered ineffective if those opt-outs are filed after a UPC action has been initiated. Given the case history, I would therefore expect this latest ruling to be appealed. This could therefore result in the first UPC Court of Appeal decision on the doctrine of equivalents, and clarity on the applicable test would be welcomed by UPC litigants across all sectors.”