UPC damages awards can account for pre-UPC infringement period

Experts in patent litigation at Pinsent Masons said the judgment is the latest UPC ruling that will be welcomed by patent rights holders – not just in life sciences where the dispute in this case was rooted, but across other industries too.

The damages issue was addressed by the Munich local division as it upheld a claim by US medtech company Edwards Lifesciences Corporation (Edwards) that rival Meril’s transcatheter heart valve infringed one of its European patents, which protects a “system comprising a prosthetic valve and a delivery catheter”.

The Munich local division issued an injunction in Edwards’ favour, which applies to Meril in 16 of the 18 participating UPC states. Meril was ordered to cease and desist from further infringements, recall and destroy infringing goods, and pay a preliminary damages payment of €660,000 to Edwards. An exception to the injunction was provided for after public interest arguments were raised by Meril, which enabled certain Meril devices already scheduled for implantation in patients on the date of the ruling – 15 November – to continue to be supplied.

Alasdhair McDonald of Pinsent Masons said: “The Munich local division’s finding that relief can be claimed in respect of acts undertaken before the UPC became operational means that patent rights holders may now be able to claim for infringements which have going on for a number of years, but where it was not deemed cost effective to bring a national action, in one single UPC action. This may open up the UPC to further actions.”

Sarah Taylor, also of Pinsent Masons, added: “The fact that the court was willing to carve out certain devices from the scope of the injunction demonstrates the court’s willingness to find flexible and pragmatic solutions, protecting the rights of patent holders whilst ensuring that patient safety is paramount.”

The Munich local division said the position was further supported by the practical challenges that would arise if Meril’s argument was accepted, considering the five-year limitation period arising under the UPCA and what will happen when the formal transitional period for the UPC – which the Munich court called “the interim phase” – expires. The transitional period is currently due to run until 31 May 2030 – it can be extended by a further seven years.

The Munich local division said: “The concurrent competence of the UPC and the courts of the member states on European patents will cease after the interim phase. Subsequently, the UPC will have exclusive jurisdiction over all European patents. The courts of the member states will no longer have competence in this matter. If Meril's argument were to be accepted, it would mean that no court, whether the UPC or those of the member states, would have the authority to adjudicate claims for damages for infringements committed prior to 1 June 2023. This is not a viable proposition, even if the statute of limitations is taken into account. This is because the statute of limitations only applies if the defendant raises it in a timely manner.”

In this case, Edwards originally applied for an injunction to cover 16 UPC states – that being 16 of the 17 UPC states that were participants in the UPC system prior to Romania’s accession. It specifically excluded Malta from the scope of its injunction as the patent is not in force in that country. However, Edwards subsequently asked if it could amend its claim to bring Romania within the scope of the injunction. The Munich local division rejected that application.

The Munich local division said that Edwards should have made the amended request before the oral hearing in the case, on 24 September, and had failed to prove that it had paid the patent renewal fee in Romania and that the patent was in force there.

McDonald said: “For future parties looking to add jurisdictions to their requests in infringement or revocation proceedings before the UPC, they should ensure that this is done as soon as possible – for example, if Ireland later ratifies the UPC, requesting Ireland to be added very shortly following ratification – with patentees also ensuring that the patent is shown as being valid on the relevant national online register as part of infringement proceedings.”

The Munich local division rejected Meril’s argument that, on the basis that one of the catheter embodiments was not for sale in Germany, Germany should also be excluded from the scope of the injunction. The court held, however, that injunctive relief is available in all contracting member states as long as an actual or imminent infringement has been proven for at least one participating UPC state.

Meril was also largely unsuccessful in arguing that the relief that Edwards requested was disproportionate – it had claimed the risk to patients with severe heart diseases meant the public interest was against an injunction being awarded at all. The court rejected this argument, though it confirmed that third party interests like the public interest can be factored into decisions relating to the award of injunctive relief under the terms of the UPCA. 

According to the Munich court, in considering those interests, the UPC will consider the possibility of the alleged infringer seeking a licence from the patent holder, or initiating proceedings for a compulsory licence, and if it has commenced such proceedings the court will take into account any decision in that regard. 

With that in mind, the court considered that Meril had already sought a compulsory license from the Federal Patent Court of Germany. Meril was not awarded one because it was considered an “unwilling licensee” as it had not made sufficient efforts to obtain a license, such as not complying with Edwards' reasonable request for access to samples and documentation. In addition, during licensing negotiations, Meril had offered a payment of €100,000. The court considered this sum to be inadequate and unreasonable given that the infringement action’s value is estimated to be €8 million and the market value of one device is “five digits”.

On that basis, the Munich local division considered that a public interest was only to be recognised for “valve prostheses for annuli exceeding 30 mm in diameter”. The court went on to recognise that only Meril offers such products and that there is “clear and pressing public need for Meril's XL-sized valve prosthesis” on patient health grounds, determining that even though a party may be regarded as an unwilling licensee, patients are unable to influence that party’s behaviour and so the public interest must still be considered in these cases to ensure that patients don’t face serious consequences due to lack of access to a product. 

The case forms part of a long running dispute between Edwards and Meril over rights pertaining to replacement heart valves. National courts including in Germany, the Netherlands, and the UK are among those to have been engaged in this regard. Earlier this year, Meril was unsuccessful in its bid to revoke the Edwards patent at issue in this case before the UPC – the Paris central division of the UPC upheld the patent in amended form in July.