UPC: Ireland is outside the court’s jurisdiction

The judgment of the UPC Court of Appeal provides clarity on the jurisdictional scope of the UPC’s powers and will be welcomed by Irish businesses that have not envisaged litigating before the UPC as part of their patent strategies, said Dublin-based experts in patent litigation Maureen Daly and Karen Gallagher of Pinsent Masons.

The UPC Court of Appeal order sets aside part of a recent ruling made by the local division of the UPC in the Hague. In its ruling in June, the Hague local division granted an application from Abbott Diabetes Care Inc (Abbott) for a preliminary injunction in respect of a European patent it owns that applies to continuous glucose monitoring (CGM) devices used in the management of diabetes.

The way that Abbott’s application and the Hague court’s order were worded meant that the preliminary injunction that was granted extended not only to the UPC member states where Abbott’s European patent is in force – Germany, France, and the Netherlands – but to Ireland too, where Abbott’s European patent is also in effect. This was despite Ireland not yet fully participating in the UPC system.

Neither of the companies targeted by the Hague court’s order – SiBio Technology Limited (SiBio), which manufacturers rival devices to Abbott’s, and Umedwings Netherlands B.V. (Umedwings), which imports SiBio’s devices – objected to the terms of the Hague court’s order at the time. However, SiBio subsequently advanced an appeal before the UPC Court of Appeal claiming that the extension of the scope of the order to Ireland specifically was “manifestly erroneous”.

The UPC Court of Appeal agreed with SiBio’s argument. It cited problems with the wording of Abbott’s preliminary injunction application, which appeared to imply that Ireland was a ‘contracting member state’ for the purposes of the UPC Agreement (UPCA).

Participation in the UPC system is open to EU member states only. However, each EU country must sign and ratify the UPCA before they can participate in the system. Ireland has signed the UPCA but has not yet ratified it. Before Ireland can ratify the UPCA, a referendum on participation in the UPC system needs to be held in the country. This is because the Irish constitution requires such a referendum where there is a planned ceding of judicial powers to international bodies – as would be the case with the UPC. That referendum has not yet taken place.

Karen Gallagher of Pinsent Masons said: “The Court of Appeal decision brings some welcome clarity to the scope of the UPC’s jurisdiction in relation to states which have signed but not yet ratified the UPC Agreement.”

“Abbott had sought an injunction ‘for the Contracting Member States in which the patent is in force’. The Court of Appeal has now made clear that because Ireland has not yet formally ratified the UPC Agreement, it could not yet be considered a ‘Contracting Member State’, and therefore, the Hague local division of the UPC could not extend the injunction to Ireland, as this went beyond the order that Abbot had actually sought in the case,” she said.

“The decision appealed from had raised some eyebrows, not least because it was issued on the same day, and by the same panel of judges, as another decision between the parties where the UPC had declined to grant an injunction, and where SiBio had opposed the attempt to extend the scope of the injunction to Ireland. Due to the differing outcomes, the original decision may have been read as imposing a positive obligation on defendants to challenge the proposed scope of a preliminary injunction, or have their silence taken as acquiescence. However, the Court of Appeal has now stated that the fact that SiBio did not object to the injunction extending to Ireland did not alter the fundamental fact that it was ‘erroneous’ for the Hague court to find that Abbott’s request extended to Ireland in the first place. No doubt this confirmation will come as a relief to defendants,” she said.