UPC Court of Appeal Invokes Proportionality in Approving Injunction Carve-Out

In the joined appeals in Meril Italy Srl et al. v. Edwards Lifesciences Corp., UPC__CoA__A464/2024 et al. (Nov. 25, 2025), Panel 1 of the UPC Court of Appeals decided several important issues, most notably relating to inventive step, in regard to a claim of infringement of EP 3 646 825, for “a system comprising a prosthetic heart valve and a delivery catheter” (p.6).  For present purposes and for brevity, I will focus exclusively on the (also very important) remedy question presented, namely whether the hardship resulting from a permanent injunction directed against certain infringing products would be disproportionate, and therefore should be subject to a carve-out.  The Court concludes that the answer is yes.

To put the matter in perspective, UPCA article 63(1) states that “Where a decision is taken finding an infringement of a patent, the Court may grant an injunction against the infringer aimed at prohibiting the continuation of the infringement,” and article 64(1) states that the court “may order . . . that appropriate [corrective] measures,” such as recall, removal, and destruction, be taken.  Article 64(4) further states that “[i]n considering a request for corrective measures pursuant to this Article, the Court shall take into account the need for proportionality between the seriousness of the infringement and the remedies to be ordered, the willingness of the infringer to convert the materials into a non-infringing state, as well as the interests of third parties.”  There is no corresponding provision in article 63.  The UPCA should be interpreted in conformity with the Enforcement Directive, however, which states in article 3(2) that “remedies shall . . . be effective, proportionate and dissuasive and shall be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse”—though as most readers probably are aware, it has long been a matter of debate whether this provision requires courts to consider the proportionality of injunctive relief in every case, or only certain special cases, or (as some have argued) perhaps no cases at all, as long as proportionality is guaranteed “from the functioning of the patent system as a whole.”  See, e.g., Lea Tochtermann, Injunctions in European Patent Law, 11 ZGE//IPJ 257, 265 (2019). 

Anyway, in the present matter, the Munich Local Division had concluded that one of Meril’s product lines (the Meril XL devices), though infringing, should be subject to a carve-out from permanent injunctive relief and corrective measures, because for certain patients there are no good substitutes for a product of the same size; but for Meril’s intermediate-size products, the evidence did not demonstrate any “notable enhancement in patient care” (p.46 para. 192), and thus no carve-out would be appropriate.  The Court of Appeal affirms, and in doing so actually makes it a bit easier for Meril to keep the XL devices on the market.

The Court begins its discussion of these matters by stating that “Art. 64 IPCA does not merely confer on the Court the power to grant the measures requested.  The Court has no discretion” (p.45, para. 187), and that “[t]he same applies to permanent injunctions” (p.46, para. 188).  “Accordingly, where the proprietor files an infringement action and the Court finds that an intellectual property right has been infringed or is threatened to be infringed, it shall issue an order prohibiting the continuation of the infringement unless there are special reasons for not doing so” (p.46 para. 189).  However—and this, I think, is significant:

A special reason for denying an injunction may apply if, in the circumstances of the particular case, granting an injunction does not comply with the general obligations of Art. 3 of the Enforcement Directive, in particular the obligation that the remedies shall be proportionate. In addition, the Court must ensure that the application of its power under Art. 63(1) UPCA is not in conflict with fundamental rights protected by the European Union legal order or with other general principles of EU law, such as the principle of proportionality (CJEU, judgement of 29 January 2008, Promusicae, C-275/06, ECLI:EU:C:2008:54, paragraph 68; judgement of 27 March 2014, UPC Telekabel Wien, C-314/12, ECLI:EU:C:2014:192, paragraph 46; judgement of 16 July 2015, Coty Germany, C-580/13, ECLI:EU:2015:485, paragraph 34).

 

When considering the proportionality of injunctive relief and corrective measures, the Court may take into account not only the interests of the parties to the litigation but also the interests of third parties, such as patients. The Munich Local Division correctly held that the interests of the patients justify an exception to the right to injunctive relief and corrective measures if it is established that the infringing embodiment is the sole available treatment method or represents an improvement upon the available treatment methods, resulting in a notable enhancement of patient care (id. paras. 190-91).

As noted, the Court agrees that the XL devices may remain on the market, but disagrees with the Munich Local Division in one respect:

As far as Meril’s XL devices are concerned, the Munich Local Division acknowledged a legitimate interest in their availability. It established that there may be patients who can only be adequately treated with Meril’s XL devices, in view of inter alia the fact that Edwards’ products are not recommended for native annulus sizes of more than 28 mm. It therefore exempted XL devices that were scheduled for implementation in an individualized patient by 15 November 2024 from the injunction and the corrective measures. This part of the judgment is not challenged on appeal.

 

In respect of XL devices not scheduled for implementation, the Munich Local Division held that the interest in their availability is adequately addressed through Edwards’ Medical Request Portal. Via this online portal, practitioners can upload relevant patient data. A team of doctors at Edwards review the data and determine whether use of Edwards’ product is an option. If the doctors find that using Edwards’ products is not an option, Edwards will grant an exception to the injunction.

 

The Court of Appeal agrees with Meril India and Meril Germany that Edwards’ portal does not adequately address the legitimate interest in the availability of Meril’s XL devices. The availability of these products should not depend on the willingness of Edwards to maintain the portal or on the assessment by Edwards’ team of doctors. A notification of an intention to use Meril’s XL device by a physician confirming that such product is the only available treatment option for a particular patient should be sufficient. The Court of Appeal will therefore amend the injunction and orders for corrective measures accordingly and maintain them on the basis of an auxiliary request which the parties have drafted in common accord during the oral hearing in the appeal proceedings.

 

Under the amended orders, the making, offering, placing on the market and use of Meril’s XL devices, and the importing and storing of the products for those purposes, are not covered by the injunction and corrective measures, provided that a physician has submitted the required notification. Contrary to the concerns put forward by Meril India and Meril Germany, this implies that the injunction does not prohibit them from making doctors aware of the availability of the XL devices where it is the only treatment option for a particular patient (p.47, paras. 194-97).

The Court concludes this section of the judgment by noting that, although the Munich Local Division “regarded Meril India and Meril Germany as unwilling licensees,” its “findings were not decisive for the Court’s decision to grant the injunction and the corrective measures” with respect to the intermediate-sized products.  The Court of Appeal therefore does not need to review the “unwilling licensee” issue.  It also permits Edwards to publish the decision and amends the costs award.

Van Dongen on Sustainable Destruction of Patent-Infringing Goods

Lisa van Dongen has posted a paper on ssrn titled Sustainable Destruction of Patent Infringing Goods: An Oxymoron?  (Hat tip to Jorge Contreras for calling this paper to my attention.)  Here is a link to the paper, and here is the abstract:

This paper explores the feasibility and attractiveness of alternative solutions to destruction based on the Customs Enforcement Regulation (Regulation 608/2013), the IP Enforcement Directive (Directive 2004/48), and the UPC Agreement. It finds that the current European system actually undermines the ability of actors involved to opt for more sustainable alternatives to the destruction of infringing goods, despite the increasing awareness that the destruction of infringing goods is generally not the most sustainable remedy a patentee has at their disposal. Indeed, a lot can be said about the cost to the parties involved, the environment, society and those who could have directly benefited from the infringing products when products are recalled and destroyed. This is true for most-if not all-infringing products in varying degrees, but this is especially contentious when it involves goods such as medicines and medical devices. Unfortunately, alternatives to a destruction order are currently complicated or even curtailed by a number of factors. One obstacle is the Customs Enforcement Regulation, which does not allow much room for an alternative route once the rights holder has asserted their rights. While the IP Enforcement Directive prescribes the application of a proportionality test by courts considering the seriousness of the infringement, the remedies ordered and the interests of third parties, it depends on the corresponding national provisions and case law how much effect is given to this precondition. Last, even if patentees are open to alternatives to requesting an order for destruction, finding an alternative that would accomplish the same without costing more may not be straightforward as a practical matter. The chapter concludes with a few final thoughts on the way forward.

This is a very good paper, both in terms of its analysis and its description of the current state of the law in the EU.  I’m also gratified by the paper’s generous citations to my article with Professor Shen on the destruction remedy, and to foundational work on sustainability by Professor Charlotte Vrendenbarg.

UPC Choice of Law Principles for Damages

Last week the Mannheim Division of the UPC published its decision in Hurom Co. v. NUC Electronics Europe GmbH, establishing some choice of law principles for patent infringement actions filed in the UPC.  There has already been some discussion of the case on JUVE Patent and on ip fray.  The principal question of interest is whether UPC law or national law applies with respect to damages, especially where the infringement is ongoing in the sense that it began prior to the UPC startup date of June 1, 2023 and continued thereafter.  The court’s summary of the decision states, in relevant part, the following:

3. . . . with regard to the determination whether substantive law as laid down in the UPCA or substantive national laws of the UPCA member states applies to acts allegedly infringing traditional European bundle patents, the following applies:

 

a) to acts committed after the entry into force of the UPCA, the substantive law as laid down in the UPCA applies;

 

b) to acts committed before the entry into force of the UPCA, the substantive national laws apply;

 

c) to ongoing acts started before the entry into force of the UPCA and continued after the entry into force on 1 June 2023, the substantive law as laid down in the UPCA applies.

 

4. When assessing whether infringing acts are in that sense “ongoing” and justify the application of the UPCA as a general rule, an overly formalistic approach which runs counter to the aims of the Agreement must not be applied. What is decisive is to categorize such acts not in a formalistic manner which only takes into account, if, when viewed from a pure natural perspective, such acts can be referred to as separable acts, but which looks at the scenario from a normative and therefore evaluative perspective. Before this backdrop it is justified to apply the UPCA as a harmonized set of national law of the contracting member states of the UPCA to ongoing acts, if the infringer continues its infringing behaviour although he could have stopped the infringement in the light of the entry into force of the new regime on 1 June 2023. In that case, however, each party reserves the right to rely on provisions of the national laws for acts before 1 June 2023 being favourable to its position compared to the provisions of the UPCA and the RoP. The party which advances the argument based on national law has to elaborate on such rules of national law and set out with a sufficient degree of substantiation why that rule of national law supports its argument.

 

5. With regard to a right to information, the question of intertemporal applicability and the question of the scope of the period, for which information has to be provided, have to be distinguished. The rights to information provided by the UPCA as laid down in particular in Art. 67 UPCA and Art. 68 (3) (a) (b) UPCA in conjunction with R. 191 sentence 1 alternative 2 RoP are to interpreted to encompass time periods which resided before the entry into force of the UPCA.

Here are a few things that I found interesting.

First, the court concludes that a permanent injunction is appropriate only in the UPC member states in which the patent in suit has been infringed, not the entire UPC (paras. 107-08).

Second, if I am reading this correctly the court implicitly characterizes the law of damages as “substantive” rather than “procedural.”  Under general principles of private international law, as I understand them, even when court concludes that it should apply another state’s substantive law to a particular issue, it usually applies its own procedural law.  But damages law sort of straddles the border between procedure and substance, and there are differing views of whether it should be classified as one or the other.  (See, e.g., the sources I cite in my article Extraterritorial Damages in Copyright Law, 74 Fla. L. Rev. 123, 163 n.204 (2022).)  My own view is that it makes more sense to classify them as substantive, so that if the court is adjudicating foreign patent rights—as courts within the E.U. may have to do now following the Court of Justice’s decision last month in BSH Hausgeräte GmbH v. Electrolux AB, Case C‑339/22—it would apply the foreign state’s damages law.  (That issue will be addressed in this case at a later proceeding, as it relates to damages for the infringement of non-UPC member state patents.  See decision para. 45.)  So I think the UPC is right to conclude that UPC damages law applies to infringement occurring after June 1, 2023, and national damages law to infringements occurring before.  For infringements that span that date, I’m inclined to think that it makes sense to apply UPC law as a default, though as the court indicates, subject to permitting the patent owner and the defendant to argue for more favorable treatment under domestic law.  On the other hand, the right of information is more clearly procedural, and therefore applies to UPC actions involving infringements occurring both before and after the UPC’s entry into force.  Interestingly, the court explicitly characterizes the right to recall and removal of infringing goods from the channels of commerce as substantive (para. 129).

Third, there are a variety of other remedial issues the court briefly addresses, among them (1) the court accepts that injunctive relief is not mandatory but rather may be limited by the principal of proportionality, but here there is no evidence of disproportionality (para. 113); (2) the possibility of damages for moral prejudice is not excluded by virtue of the plaintiff calculated the amount of interim damages it wanted as a reasonable royalty, but there is no evidence here of any such damages having been suffered (para. 119); (3) there is no basis here to award interim damages, to order publication of the decision, to exclude an interim award of costs because the plaintiff didn’t first send a warning letter, or to order security for enforcement pending appeal (paras. 120, 130-35); (4) the fact that the destruction of the infringing goods will have environmental effects is not, by itself, sufficient to reject an order for destruction (para. 126); and (5) damages for pre-grant use of the patent in suit may be available under German domestic law, para. 118 and operational portion B.1).     

Cotter and Shen on Destruction and Proportionality

My article with Professor Chung-Lun Shen, Destruction, Proportionality, and Sustainability: A Law-and-Economics Analysis, 32 Texas Intellectual Property Law Journal 111 (2024), has now been published.  It is available on Westlaw and SSRN, and should be available soon on TIPLJ’s website.  Here is the abstract:

This Paper undertakes a law-and-economics analysis of the remedy of destruction (and, subsidiarily, the related remedies of recall and removal) of products that infringe intellectual property (IP) rights. We begin with a brief survey of international, regional, and domestic law and practice, observing that (1) courts generally are believed to be more likely to order the destruction of copyright- and trademark-infringing goods than of patent-infringing goods, and (2) the frequency with which courts order the destruction of patent-infringing goods varies from one country to another. Our observations lead us to present two principal theses.

 

The first is that a comparative reluctance to order the destruction of patent-infringing goods, as opposed to copyright- or trademark-infringing goods, would be consistent with economic considerations. From an economic standpoint, destruction can be viewed both as a complement to injunctive relief and as a substitute (albeit an imperfect one) for ongoing monitoring of an infringer’s compliance with the terms of an injunction. The social benefits arising from substituting destruction for monitoring, however, are likely to be lower—on average, and perhaps subject to regional variation—for patent-infringing goods than for products that infringe other IP rights. In addition, although observers have long noted that the private and social costs of destruction provide a rationale for withholding that remedy when it would cause disproportionate harm to the defendant or third parties, these costs may be unusually high in patent cases—particularly that subset of cases in which the risk of patent holdup is substantial. In view of these factors, the social costs of ordering the destruction of patent-infringing goods are likely to outweigh the social benefits in a comparatively broader swath of cases.

In addition, I may as well note a paper I just came across in the preceding volume of TIPLJ, Deepa Sundararaman & Cleve B. Tyler, A Detailed Study of Court Decisions on Admissibility of Intellectual Property Damages Experts, 32 Tex. Intell. Prop. L.J. 45 (2023).  Here is a link to the paper, and here is the abstract:

Damages experts’ opinions in intellectual property litigation are routinely challenged for failing to reach standards set forth in the Supreme Court’s 1993 Daubert decision. Our study is the first of its kind, in performing a systematic and in-depth review of court decisions, including an analysis of the substantive reasons for challenge. We studied more than 400 Daubert orders covering nearly 1,300 decisions over a six-year period from 2015 through 2020.

 

Patent cases make up a significant majority of our dataset. Overall, we find an exclusion rate of 24%. While plaintiff experts are challenged more frequently than defendant experts, their exclusion rates are not significantly different. However, the type of analysis challenged appears to matter—in particular, lost profits analyses are excluded at lower rates than other types of analyses, and experts described as offering legal opinions are excluded at higher rates. Exclusion rates vary by district, with the Northern District of California (NDCA) having higher exclusion rates and the Eastern District of Texas (EDTX) having lower exclusion rates than the rest of the country. We study the impact of the Supreme Court’s Heartland decision on exclusion rates, which has reduced a plaintiff’s ability to engage in “venue shopping.” Overall, rates of exclusion in EDTX and Delaware declined following the decision, with a moderate increase in exclusion rates in NDCA.

 

Finally, we find substantial disparities in exclusion rates among judges. Among the top ten judges ranked by number of decisions, five have relatively “low” exclusion rates of less than 15% and four have relatively “high” exclusion rates greater than 30%. Variations such as these, along with differences by jurisdiction, raise questions about courts’ consistency in application of the Daubert standard—questions that are left for future researchers and policymakers to address.