Thursday, December 14, 2023

Two More Articles on Proportionality and Injunctions in the UPC

In recent days, I've mentioned Léon Dijkman’s new book The Proportionality Test in European Patent Law PatentInjunctions Before EU Courts and the UPC (Hart Publishing 2023) and  Benjamin Raue and Franz Hofmann's paper Injunctions and Damages for the Infringement of Patents under the UPCA - An Analysis in the Light of the Principle of Proportionality (here and here), both of which I highly recommend to readers.  On this same theme are two other papers cited in one or both of these works, which I had not previously come across, and which are noted below. 

First, Ansgar Ohly published a paper titled Injunctions in the UPC and the principle of proportionality, 5 Stockholm Intell. Prop. L.Rev. 58 (2022).  Here is  a link to the paper on ssrn, here is a link to the published version, and here is the abstract:


Whereas in U.S. patent law injunctions are subject to the "four-factor test" established by the U.S. Supreme Court in eBay v. MercExchange, continental European patent courts have granted injunctions in cases of patent infringement as a matter of course. But the EU law principle of proportionality might require a more nuanced solution and has, indeed, caused the German legislator to introduce a disproportionality defence into patent law. The paper explores whether the Unified Patent Court, which started adjudicating patent law disputed in the EU in 2023, can deny the grant of injunctions in cases of disproportionality, discusses the criteria of proportionality and the legal consequences.

As discussed in the article, Ohly argues "that the UPC should steer a middle course" between the U.S.  approach and the traditional German approach under which injunctions were an "automatic consequence of an infringement."  Further, he argues that "the UPC should - and will probably -not conduct a balancing exercise in every single case," but rather will delay or deny injunctive relief only in exceptional circumstances; and that the most common scenarios probably will involve complex products, PAEs, or public health.  Finally, he argues (as he has previously) that compensation in lieu of an injunction should be limited to a reasonable royalty (a point on which I agree), and also that the authority to delay or deny injunctions on proportionality grounds should be available in some SEP cases as well (for example, cases in which a declared SEP is not in fact standard-essential)

Second, Matthias Leistner has posted a paper on ssrn titled Injunctive Relief in the UPC – A Case for Carefully Limited Flexibility, which is forthcoming in a festschrift for Reto Hilty.  Here is a link, and here is the abstract:

This article discusses whether and in what form the UPC has discretion with regard to the granting of injunctive relief. The argument is based on international and EU law, in particular the general proportionality principle, embedded in the Enforcement Directive, as well as on the text and context of the UPC itself. The author proposes an approach of limited discretion including appropriate compensation measures, namely payment in lieu of an injunction. These proposals are in line with the historically hybrid nature of the UPC as well as its internal and external context. Furthermore, the article explains, how this proposal can be implemented during the transitional period in the UPC as well as in national courts.

Leistner too argues that the UPC has the responsibility to delay or deny injunctive relief under extraordinary circumstances, which may include complex products cases in which the there is a substantial risk of holdup and cases involving serious risks to third parties (e.g., public health cases).  He leaves open the issues of PAEs and SEPs, and argues for compensation in lieu that would be in addition to damages.

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