Out-Law News 4 min. read
20 Sep 2023, 3:45 pm
A US biotech company has been granted a preliminary injunction that prevents a competitor from selling products in 17 EU countries in a landmark ruling by the local division of the Unified Patent Court (UPC) in Munich.
Dr Julia Traumann and Emmanuel Gougé of Pinsent Masons said the ruling, where 10x Genomics successfully asserted patent rights against NanoString Technologies, is significant for a number of reasons: including because it is the first decision of the UPC in a case concerning a European patent with unitary effect – a so-called unitary patent – from the life sciences sector, and because the case was the first in which a division of the UPC had considered a preliminary injunction application in a substantive hearing involving both parties.
Traumann, who attended the hearing in the case, said: “As the first judgment in a life sciences litigation case to be handed down by the UPC, this case serves as the first, and impressive, example for the operating and decision making of the UPC in life sciences litigation cases. The judgement sets the standard for and future expectations of what is a new and untested court system. Put simply, it could pave the way for a coherent, efficient, and progressive approach to handling patent cases. Now we are off the starting blocks, it is more likely that the UPC could become a global leader in patent litigation.”
The UPC is a new court system that began operating across participating states on 1 June 2023 in what marked a major change to Europe’s patent litigation landscape. The UPC has exclusive jurisdiction for resolving disputes relating to infringement and validity of new unitary patents as well as any classic European patents, applicable in participating UPC member states, which have not been "opted out" of the new system.
Dr. Julia Traumann
With Munich likely to be a popular seat for raising litigation before the UPC, it means German judges and practice could heavily shape the early case law of the UPC across all participating states
Advocates of the new unitary patent and UPC regime believe it will help promote consistency in the application of patent rights across countries participating in the system – 17 countries currently – and help businesses obtain and assert those rights more cost effectively. Classic European patents granted centrally still have to be validated in each of the countries that a patent holder wishes those patents to apply in, often at great expense; unitary patents that are granted centrally apply by default across participating countries. In addition, holders of classic European patents that are opted out of the UPC system that wish to assert those rights against infringers must do so on a country-by-country basis. In contrast, a single ruling by a division of the UPC applies across all participating countries.
However, there are risks to patent holders in subjecting their patents to the jurisdiction of the UPC – not least that it exposes those patents to the risk of being invalidated unilaterally across each of the participating states on the basis of a single ruling by the UPC. As such, experts in patent law and litigation at Pinsent Masons have been encouraging businesses to develop bespoke strategies for each of the patents in their portfolios and take other relevant action to account for the opportunities and risks presented by the new UPC system.
The preliminary injunction issued by the Munich local division of the UPC relates 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’s share price fell in the aftermath of the ruling, which the company said it would appeal.
In a statement, Brad Gray, president and chief executive of NanoString Technologies, said the company is “confident in our belief that we do not infringe the asserted patents, and that the patents will ultimately be found to be invalid”. NanoString Technologies also believe the Munich court “erred by failing to adequately consider evidence demonstrating that the patents asserted by 10x were funded by a grant of over $19 million from the National Institutes of Health that required open and non-exclusive licensing to promote the public interest”, he added.
For 10x Genomics, chief legal officer Eric Whitaker said the company “will be steadfast in protecting the inventions that scientists have worked so hard to create”. He said innovation “fuels and funds the development of future 10x technologies that benefit researchers – and ultimately patients” and that “the entire purpose of patent systems around the world is to protect such innovations and encourage such investments”.
“Although we welcome legitimate competition on the merits, competition based on our own innovations must stop,” Whittaker said, adding that patent holders “must meet a very high standard to win a preliminary injunction".
Any appeal brought by NanoString Technologies would be before the UPC Court of Appeal in Luxembourg.
“This was a complex case, reflected by the fact the four judges took two weeks to consider their decision following the hearing – this compares to a recent preliminary injunction hearing before the Vienna local division, where the court handed down its decision on the same day,” said Gougé. “It is disappointing that the ruling is not immediately public. Coupled with issues with the UPC’s case management system, this may have a negative impact on transparency in relation to the new UPC system as well as delayed understanding of the detailed reasoning behind judgments. However, it is clear from the hearing that factors including the validity of the patents at issue, the context in which they apply, and the respective interests of the parties, were considered by the judges in this case.”
Traumann added: “With the UPC in its infancy, businesses will be keen to understand how proceedings before the court will operate and how the development of case law will be influenced. It was apparent from sitting in the so-called overflow room at the local division in Munich for the first part of the hearing in this case that court procedure and legal interpretations will at least at this early stage be influenced by what local judges sitting in these cases are familiar with and what their legal background is. With Munich likely to be a popular seat for raising litigation before the UPC, it means German judges and practice could heavily shape the early case law of the UPC across all participating states.”
A separate ruling by the Munich local division of the UPC on another preliminary injunction sought by 10x Genomics against NanoString Technologies in respect of a separate European patent it owns, is expected on 10 October.
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