Judge Albright Enjoins Onesta from Proceeding in Munich with Claims for the Infringement of U.S. Patents

In December, I noted that, at BMW’s request, Judge Albright (W.D. Tex.) had entered a TRO prohibiting Onesta from litigating claims for the infringement of two U.S. patents in the Munich I Regional Court.  ip fray is now reporting that the judge yesterday converted the TRO into a preliminary injunction, that is, an antisuit injunction forbidding Onesta from proceeding with litigation over the U.S. patents in Munich.  I’ve checked both Pacer and Lex Machina, which show that Onesta has already filed a notice of appeal to the Federal Circuit; but there is no written opinion (yet) from the judge, though I would expect some sort of written opinion might follow.

As I noted in December, the order comes after Onesta asserted claims against BMW for the infringement of both German and U.S. patents in Munich—something that the CJEU’s February 2025 decision in BSH v. Electrolux appears, on my reading, to permit it to do in a case like this, in which the defendant is domiciled in an EU member state, subject to the caveat that any decision concerning patent validity would apply only inter partes (in other words, the validity ruling would not be binding in other litigation between Onesta and another party).  BMW contested this reading in its initial motion papers, which were available from Law 360 (and on Pacer and Lex Machina).  Dennis Crouch has an excellent writeup on the issue of whether courts may adjudicate claims for the infringement of foreign patents, which notes among other things the Federal Circuit’s 2007 opinion in Voda v. Cordis (denying supplemental jurisdiction to adjudicate such claims, over a dissent from Judge Newman).  The ip fray post mentions expert declarations in the BMW case have been filed by three people I know, admire, and have worked with, namely Professors Peter Picht (in support of Onesta), Margo Bagley (in support of BMW), and Matthias Leistner (also in support of BMW).  Their declarations, attached to the motion papers, are available here, here, and here.  (I have not yet read through all of them carefully myself.)

For my February 2025 writeup on BSH, see here.  Also note that, in my December post, I flagged as a possible issue (to which I do not claim to know the answer) whether the German court, if it were to adjudicate claims for the infringement of U.S. patents, would apply German or U.S. law to the question of remedies, especially permanent injunctive relief.  That would be a huge issue here, where under U.S. law an injunction in a  case like this would be difficult to obtain.

OxFirst Webinars Tuesday and Wednesday

In connection with its 12^th IP and Competition Forum in Oxford, U.K., OxFirst will be presenting live webinars tomorrow (Jan. 13) and Wednesday (Jan. 14) featuring eight patent judges—Richard Arnold, Kemal Bengi-Akyürek, Fabian Hoffmann, Richard Meade, Oliver Schoen, Katalin Tözsér, Stefan Wilhelm, and Jiyoung Yi—including FRAND, antisuit injunctions, and interim licenses.  (Readers who follow global FRAND disputes will surely recognize some of these names!) Registration is free, and more information is available here.  

UPC Court of Appeal Reverses Moral Prejudice Damages Award

The case is Bhagat Textile Engineers v. Oerlikon Textile GmbH & Co. KG, decided by Panel 1b of the UPC Court of Appeal on December 9, 2025.  In one respect at least it resembles the Federal Circuit decision I blogged about earlier this week, in requiring non-speculative evidence of alleged reputational harm.

Plaintiff Oerlikon owns EP 2145848 for a “false twist texturing machine.”  In July 2023, Oerlikon initiated an action for infringement in the Milan Local Division of the UPC.  That court found Bhagat liable based upon its “promotion and offer to the public of a structuring/textiling machine exhibited at the ITMA trade fair in June 2023 in Milan” (para. 6).  It also entered an injunction and awarded “provisional damages in the amount of €15,000 as a result of reputational  damage to Oerlikon’s image” and “ordered Bhagat to bear 80% of the proceedings costs” (id.) 

On appeal, the court notes that, consistent with IPRED article 13, UPCA article 68 “distinguishes between situations in which the infringer knew or had reasonable grounds to know that he or she was engaging in a patent infringing activity (Art. 68(1) to (3) UPCA) and situations where the infringer did not knowingly, or with reasonable grounds to know, engage in the infringing activity (Art. 68(4) UPCA)” (para. 18).  For the first situation, the court shall award “damages appropriate to the harm actually suffered,” taking into account “all appropriate aspects,such as the negative economic consequences, including lost profits, which the injured party has suffered, any unfair profits made by the infringer and, in appropriate cases, elements other than economic factors, such as the moral prejudice caused to the injured party by the infringement (Art. 68(3)(a) UPCA) or, alternatively, may decide to set the damages as a lump sum under certain conditions (Art. 68(3)(b) UPCA)” (paras. 19-20).  On the other hand, “[w]here the infringer did not knowingly, or with reasonable grounds to know, engage in the infringing activity, the Court may order the recovery of profits or the payment of compensation (Art. 68(4) UPCA)” (para. 21).  Here, there was no “evidence of negative economic consequences such as lost profits . . . or unfair profits made by Bhagat,” but the parties disagree regarding damages for moral prejudice (para. 22).  First, Bhagat argues that it did not know or have reasonable grounds to know that the product it exhibited at the trade fair was infringing, but the court disagrees:

Bhagat . . . presents itself as an international leading manufacturer of texturing and winding machines (see a press release in the magazine Textile Insights dated 13 July 2023, cited in Oerlikon Exhibit # 20) and is a direct competitor of Oerlikon in the field of textile and winding machines. It actively participated in the ITMA trade fair, which Bhagat does not deny is the most important textile machines trade fair globally, and exhibited a sizable textile machine (the attacked embodiment).

 

It follows that, being an active stakeholder in the industry, Bhagat was at least reasonably expected to monitor the patent landscape before exhibiting its product on the market and should have had reasonable grounds to know about the existence of the Patent and the infringing nature of the attacked embodiment. Failure to do so was at least negligent . . . (paras. 24-25).

Nevertheless, there was no evidence of reputational harm resulting in moral prejudice.  Oerlikon’s evidence consisted merely of “general statements” made by Bhagat about its success at promoting its products at the trade fair; and that further evidence submitted by Oerlikon for the first time on appeal concerning the accused product exhibited at the fair, even if admissible, did not change this result.

On costs, the court affirmed that Bhagat was liable for 80% of Oerlikon's recoverable costs, and Oerlikon 20% of Bhagat's, in accordance with UPCA article 69.  Oerlikon did not cause Bhagat to suffer any unnecessary costs by not first sending a warning letter, given the urgency and the short time frame of the fair.  The specific amount of costs to be recovered, however, will be determined in view of the value of the proceedings, which the court lowered from €750,000 to €250,000 (meaning that recoverable costs cannot exceed €38,000).  

Federal Circuit Reverses Injunction, Reverses and Remands on Willfulness

I resume blogging this week with a post about the Federal Circuit’s December 17 precedential decision in Wonderland Switzerland AG v. Evenflo Co., majority opinion by Chief Judge Moore joined by Judge Prost, with a separate opinion by Judge Reyna concurring in part and dissenting in part.  (Still to come are my promised posts on Acer, Inc. et al. v. Nokia Technologies Oy, [2025] WHC 3331 (Pat.) (Eng.) and related developments in the UPC, as well as the UPC COA’s damages decision in Bhagat Textile Engineers v. Oerlikon Textile GmbH & Co KG.  Meanwhile, I am heading to the Association of American Law School’s Annual Meeting in New Orleans tomorrow, and will be speaking there on Thursday on the remedy of destruction, which was the subject of a paper I coauthored with Professor Chung-Lun Shen in 2024; and I eagerly await publication of my book Remedies in IP Law, which should be out within the next week.)  

In Wonderland, the plaintiff filed suit for the infringement of two patents (ʼ043 and ʼ951) relating to child car seats.  The jury found that the accused products (referred to as the 3-in-1 and 4-in-1 seats) infringed; the Federal Circuit, in portions of the opinion I will omit here, reverses the finding that the 4-in-1 seats infringed ʼ043, but otherwise affirms on liability.  The court nevertheless concludes that the district court abused its discretion in granting a permanent injunction as to both patents.  As for ʼ951, the court concludes that the district court abused its discretion “because Wonderland expressly declined to request [injunctive] relief” (p.13).  Moreover, this was not harmless error, because “the injunction could affect Evenflo’s release of other products, which may not necessarily infringe the ʼ043 patent”—and because it was an abuse of discretion to enjoin the infringement of ʼ951 (p.13).  With regard to ʼ951, the district court erred in relying “solely on speculative and conclusory evidence that Wonderland suffered, and would continue to suffer, irreparable harm or injury that could not be compensated with monetary damages” (p.14).  More specifically:

. . .  the district court did not point to any non-speculative or non-conclusory evidence establishing Wonderland’s business partner, Graco Children’s Products Inc. (Graco), lost sales or market share of car seat products to Evenflo as opposed to the large number of other competitors in the market. . . . for non-car seat products, the district court improperly relied on speculative and conclusory testimony from Wonderland’s managing director, Renee Wang, that a lost car seat sale “naturally leads” to the loss of market share across other products. . . . This testimony was concededly based on “no[thing] more than [the notion that] the parents will buy other products under the same brand name.” . . . Without providing any evidence of such consumer behavior, Ms. Wang merely speculated that after buying a car seat, a parent “may” also choose to buy other products under the same brand. . . . Such speculative testimony is not sufficient to establish irreparable harm. . . .

 

With respect to reputational loss, the district court cited no record evidence to support its findings that “[t]he similarity between Graco’s products and Evenflo’s Accused Products has caused Graco’s products to lose some of their ‘distinctiveness and market allure’ and has also harmed Graco’s reputation as an innovator in the marketplace.” . . . Nor did the district court cite any evidence to support its finding that such reputational factors “cause Wonderland irreparable harm because of Graco and Wonderland’s close working relationship and exclusive supplier arrangement.” . . . Similarly, the district court failed to identify any evidence from the trial record supporting its assertions that “an average customer . . . [would] assume that Graco’s products do not contain unique or innovative technologies,” that such reputational harm would flow to Wonderland, or that Wonderland would suffer reputational harm because it “may be seen as failing to enforce its intellectual property rights.” . . (pp. 14-15).

The preceding analysis would seem to demonstrate the importance of eBay’s allocation to the plaintiff of the burden of proof on the eBay factors, in contrast with practice in other common-law countries where it would be the defendant’s burden to come forward with evidence showing why the court should deny permanent injunctive relief.

On the issue of willfulness, the district court invoked Federal Rule of Evidence 403 to exclude an email chain, in which “Evenflo’s affiliated corporation, Goodbbay Child Products Co., Ltd. . . . notified Evenlo employee that one of the accused products might fall with the scope of claim 1 of the ʼ043 patent and asked how to ‘avoided the claims of the patent’” (p.16), on the ground that the probative value of this evidence was substantially outweighed by the danger of unfair prejudice and confusion.  The majority concludes that this too was an abuse of discretion because portions of the email chain were highly probative of willfulness, and “not merely cumulative in view of Evenflo’s stipulation to awareness of the ʼ043 patent” (p.19).  Moreover, the majority concludes that the district court could have managed the risks of unfair prejudice and confusion by limiting instructions or redaction; the text of the email did not raise any privilege or hearsay concerns; and the error was not harmless.  So this issue is remanded for a new trial.  Judge Reyna dissents on this issue only, in view of the substantial deference normally accorded to Rule 403 rulings; in his view, the trial judge’s decision was neither irrational nor arbitrary.

EWHC: Acer, ASUS, and Hisense Are Entitled to Declarations of Interim Licenses

Mr. Justice Mellor's decision in Acer, Inc. et al. v. Nokia Technologies Oy is here.

 

I have grading to complete, after which I will be taking a few days off around Christmas.  Consequently, I hope to have something to say about this complex SEP decision--and about the UPC Court of Appeal's recent decision on damages in Bhagat Textile Engineers v. Oerlikon Textile GmbH & Co KG, and the Federal Circuit's decision yesterday on injunctive relief and willfulness in Wonderland Switzerland  AG v. Evenflo Co.--sometime after January 1.  This has proven to be a busy month!  Anyway, happy holidays to my readers--see you in 2026.

Judge Albright Issues Antisuit TRO Relating to Assertion in Munich of Claims for the Infringement of U.S. Patents

This dispute is reported this morning on Law360 and on ip fray.  When BSH v Electrolux came out earlier this year (see my blog post here, a more recent one noting an article about the case here, and a third I hadn't previously noted here), I predicted that before long it would cause a stir in the U.S.  Well, here we are.  It was reported recently that Onesta, an NPE, had asserted claims in the Munich I Regional Court against BMW for, inter alia, the infringement of two U.S. patents.  U.S. District Judge Albright has now issued a TRO ordering Onesta to refrain from making “any request, claim, application, or motion further pursuing or enforcing an injunction from a foreign court—including but not limited to the Munich Regional Court I—which would prohibit, deter, impose monetary fines on, or otherwise limit in any way BMW’s, and all of its corporate parents, subsidiaries, and affiliates, ability to fully and completely prosecute this action, request and enforce relief, or which would impair this Court’s ability to adjudicate any and all matters in this lawsuit”; and from making “any request, claim, application, or motion further pursuing or enforcing an injunction from a foreign court—including but not limited to the Munich Regional Court I—which would prohibit or otherwise limit in any way BMW’s, and all of its corporate parents, subsidiaries, and affiliates, ability to make, use, offer to sell, or sell within the United States or import into the United States any vehicle, product, or other item on the basis of Onesta’s United States patent.”  The TRO was granted ex parte, so there will be a further hearing.  The Law 360 article includes BMW’s complaint and motion(see pp. 13-14).

One very important issue lurking in the background, in cases like this and in the event that other litigants invoke BSH v. Electrolux in an effort to litigate claims for the infringement of U.S. patents in European courts, is whether those courts will apply U.S. or their own domestic law with regard to remedies, especially injunctive relief (which is much more limited in the U.S.--here's a decision rendered today, for example, by the Federal Circuit, which I will have to blog about at some point after I finish exam grading).  Another is whether an EU court might, at least in some cases, voluntarily stay litigation involving foreign patents so that claims involving those patents could be litigated on their home turf.  To my knowledge, civil law jurisdictions do not recognize, as a general matter, recognize the doctrine of forum non conveniens; but the BSH decision itself suggests the possibilities of at least stays pending invalidity determinations, and perhaps domestic law would allow stays more generally where there is parallel litigation in another country.  (I'd appreciate any information others may have on this issue.)  A third is whether paragraph 61 of BSH (which states that "It follows that, under the general rule laid down in Article 4(1) of the Brussels I bis Regulation, the courts of the Member State in which the defendant is domiciled have, in principle, jurisdiction in an infringement action brought against that defendant by the holder of a patent granted or validated in a third State which is domiciled in another Member State") authorizes a plaintiff such as Onesta, which if I understand correctly is domiciled in the U.S. (or is the German action being filed by a German subsidiary?  I don't think so, but if any readers know better, please correct me), to assert a claim in an EU member state against a defendant domiciled in a member state, for the infringement of a U.S. patent.  In other words, does the Brussels Regulation (Recast) apply in such a case, regardless of where the plaintiff is domiciled?  My understanding is that it does, but I would appreciate any insights from someone who is more knowledgeable than I about that very specific issue. 

Criminal Contempt in Munich

Florian Mueller has published a post on ip fray concerning a December 10 decision of the Munich I Regional Court, ordering the general manager of a patent infringement defendant to be imprisoned for one month, following the defendant’s alleged failure to comply with an Auskunft (essentially, an order for the provision of information that will be relevant to assessing damages) and a previously-imposed contempt fine of €15,000.  According to ip fray, the order likely will be stayed pending appeal (and, to be sure, may induce compliance with the Auskunft in the interim). 

To my knowledge, resort to contempt proceedings is not all that common either in Germany or the U.S.—and this use of criminal contempt is, according to ip fray, unprecedented in Germany (and would be unavailable in the UPC).  (For a good discussion of contempt proceedings in U.S. patent cases, see my former student Nina Elder’s article The Contours of Contempt in Patent Law After TiVo, Inc. v. EchoStar Corp.: An Empirical Study, 25 Minnesota Journal of Law, Science & Technology 145 (2023), previously noted on this blog here.  She describes criminal contempt in U.S. patent cases as "nearly non-existent," id. at 147 n.18 (citing John M. Golden, Injunctions as More (or Less) than “Off Switches”: Patent-Infringement Injunctions’ Scope, 90 Tex. L. Rev. 1399, 1409–10 (2012).)  On a related note, which I discuss in chapter 6 of my forthcoming book Remedies in Intellectual Property Law, the U.S. does not impose criminal sanctions for patent infringement itself—although many other countries do, at least in principle.  (Germany is one, though in practice German prosecutors rarely if ever file charges for patent infringement.)  The criminal prosecution of IP infringement may be most common in certain Asian jurisdictions, as discussed by a group of authors (Masabumi Suzuki, Su-Hua Lee, Byungil Kim, Xiuqin Lin, Prashant Reddy, Heng Gee Lim, Jyh-An Lee, and Kung-Chung Liu) in a chapter titled Civil Follow Criminal or Criminal Follow Civil Procedure as Models to Deal with IP Infringement: Asian vis-à-vis Western Approaches, in Kreation Innovation Märkte - Creation Innovation Markets:  Festschrift Reto M. Hilty 663 (Florent Thouvenin, Alexander Peukert, Thomas Jaeger & Christophe Geiger eds., Springer 2024), previously noted on this blog here—but the only jurisdiction discussed in that chapter that appears to make extensive use of criminal prosecution for patent infringement appears to be Japan.  (The TRIPS Agreement, for its part, only requires criminal sanctions for “wilful trademark counterfeiting or copyright piracy on a commercial scale,” and in most places I am aware of criminal sanctions are generally reserved for copyright and trademark infringement, and for trade secret misappropriation.)  Among the reasons for some Asian jurisdictions’ more extensive use of criminal law are, according to Suzuki et al., the perceived need for additional deterrence, in view of the practical difficulty of obtaining preliminary injunctions, enforcing permanent injunctions, and/or obtaining fully compensatory damages awards; and, relatedly, the ability of civil litigants to file criminal complaints as a means for obtaining discovery.  (For other useful sources of information on criminal IP law, see, e.g., Eldar Haber,  Criminal Copyright (Cambridge Univ. Press 2018), and other sources cited in chapter 6 of my book.)

Anyway, the German court’s resort to criminal contempt certainly is notable—and, somewhat paradoxically perhaps, contrasts with Japan, where--despite the country's heavier reliance on criminal law generally--Professor Suzuki writes that courts do not order criminal contempt for failure to comply with injunctions.  As for Germany, however, I wonder if we will see more of this, as a deterrent to perceived non-compliance with court orders?