Tuesday, September 5, 2023

UPC Grants Ex Parte Preliminary Injunction; Protective Letter Insufficient

From time to time on this blog, I have mentioned the use of “protective letters”--Schutzschriften in German, escritos preventivos in Spanish--in certain countries including Germany, Switzerland, and Spain.  The basic idea is that an entity that believes it may be the subject of an ex parte application for a preliminary injunction can deposit, ex ante, a protective letter with the relevant court or courts.  (See the discussion in my book at p.244 n.104, and also previous posts here, here, here, and here.)  My understanding is that protective letters may be particularly useful in connection with trade shows.  A patent owner may feel the need to take quick action against the display and possible sale of what it believes to be infringing products, while the seller displaying the products wants some opportunity to get its views on the record in advance, if need be.  The seller therefore deposits the protective letter, which however will be kept secret unless and until the patentee files the application for the preliminary injunction.

That said, protective letters are not a magic bullet, as indicated by what must be one of the first cases in which the UPC has issued a preliminary injunction.  See Order of the Court of First Instance of the UPC Local Chamber Düsseldorf, June 22, 2023,IPC_CFI_177/203.  I read about this decision the other day in a very interesting post on the Kluwer Patent Blog, First developments at the Unified Patent Court, which also discusses hearings scheduled for this week and later this month on an applications for preliminary injunctions brought by 10x Genomics against Nanostring Technologies. (See also this article on JUVE Patent.)  Later in the post the author mentions this case and links to a write-up by Inteo on LinkedIn, titled MyStromer v Revolt Zycling:  protective letters, ex parte injunctions and (accidental?) carve-outs before the United Patent Court.  To summarize, the patent owner owns EP 2546134B1 ("Combination structure of bicycle frame and motor hub"), which it believed was infringed by a product another firm was displaying a trade fair in Frankfurt.  The latter firm filed a protective letter with the court on the same day the patent owner filed its motion for a preliminary injunction.  The court rejects the arguments made in the protective letter for denying the preliminary injunction (lack of infringement and exhaustion), concluding that the letter does not show a lack of literal infringement, and noting that a Swiss court has already rejected the argument that an existing license agreement covers the combination at issue here.  Moreover, the court further cautions that the validity of the patent is adequately assured, insofar as the patent issued in 2015 and has not been the subject of an opposition, and the protective letter makes no mention of any relevant prior art (see decision, part V).

The mention in the LinkedIn post above about a carve-out relates to the fact that the patent has been validated in Austria, but the patentee omitted to ask for injunction to have effect in Austria; and its subsequent request for the court to rectify this error was rejected.    

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