UPC Munich Local Division on Damages for Convoyed and Springboard Sales

The decision is Edwards Lifesciences Corp. v. Meril GmbH, UPC_CFI_1160/2026 (Oct. 28, 2026).  I blogged about an earlier order in this matter here.  Prior to that, in an earlier proceeding, Meril was found to have infringed Edwards’ patent (EP 3 699 828 B2) for a prosthetic heart valve.  Edwards thereafter “filed an application for the determination of damages, which includes a request for an order to lay open books” (para. 2).  Specifically, Edwards claims that it is entitled to discovery pertaining to damages not only for the infringing products themselves, but also for (1) “related accessory products” (“convoyed goods”); and (2) damages relating to other noninfringing products which, according to Edwards, Meril would not have sold but for the foothold that the infringing products provided (referred to here as “springboard damages”).  From the decision:

4. Edwards argues that as a result of the infringement of EP 828, Meril has also sold related accessory products, including the Navigator delivery apparatuses, crimping devices, delivery sheaths, and balloon catheters. Such accessory products constitute “convoyed” goods, namely products that would not have been sold but for the underlying infringement. Further, as a result of the infringement of EP 828, Meril has established (a) relationships with clinicians responsible for the implantation of THV devices; (b) a distribution network for THV devices; (c) a clinical evidence base which it uses to market the “Myval Series”, including devices other than the Infringing Products, i.e., the Octacor THV / System, Octapro THV / System, and Octapro+ THV / System (together, the “Other Relevant Devices”; and (d) other relationships and knowledge regarding the THV market within the Territory for Relief. Edwards understands that the CE marks granted in respect of the “Other Relevant Devices” have been granted on the basis that no “significant changes” have been made to their design and intended purpose as compared to the “legacy device”, being the Myval System (per Medical Device Regulation 2017/745, Art. 120.324). As a consequence, these devices have essentially been able to “ride on the back” of the approval given for the Myval System, a device which infringes EP 828. Consequently, but for the infringement of EP 828, Meril would not have been able to obtain approval for these other devices in Europe or at least would not have been able to avoid undergoing a full MDR certification process –i.e., submitting an MDR application, undergoing assessment of the technical documentation demonstrating conformity with MDR requirements and obtaining approval of the MDR evaluation package - which would have delayed approval by several years. Edwards also understands that Meril has “substituted” one THV device for another in the context of national approvals, tenders, etcetera where a particular THV device has ceased to be available due to the grant of an injunction. As a result, Meril has been able to use an infringing device to establish a foothold in the market, and then substitute a different device when that device ceased to be available as a result of activities which have been found by a court to infringe Edwards’ patent rights. . . .

 

26. . . . as any order pursuant to Rule 141RoP must be proportionate, the possibility of ordering access to information is limited, particularly with regard to information relating to non-infringing activities.

 

27. The need to take the principle of proportionality (and fairness/equity) into account follows from Art. 42 UPCA, the Preamble to the RoP (2-6) and Art. 10.3 and Art. 13.1 of the Enforcement Directive. The latter demands that damages awarded to the patent owner are proportionate to the actual prejudice suffered as a result of the infringement. By virtue of Art. 20 UPCA, the Unified Patent Court shall apply Union law in its entirety and respect its primacy.

 

28. One aspect of proportionality is necessity. . . .

 

34. The extent to which the profits realised are attributable to the infringement of the intellectual property right cannot usually be determined precisely but only estimated. The necessary causal link between the infringement of the intellectual property right and the profit realised must not be understood solely in terms of adequate causality. Even in the case of profits derived from the marketing of devices manufactured in accordance with a patent, it must rather be determined, on a discretionary basis, whether and to what extent the profit realised is reasonably attributable to the characteristics of the sold item associated with the infringed intellectual property right or to other factors. Profits that are causally related but too far removed should not be attributed as having no sufficient connection with the infringement.

 

35. On this basis, the claim for the surrender of the infringer’s profits also encompasses ancillary transactions which, whilst not constituting an act of use within the meaning of Art. 25, 26 UPCA, are nevertheless concluded in a causal connection with acts of infringement and have a sufficient link to the infringing subject-matter.

 

36. Such a sufficient connection exists, in any event, in the case of profits from transactions involving consumables or reusable devices intended for use with a patent-infringing device. However, this only applies when those transactions are causally linked to the patent infringement. As with the profit derived from placing the infringing article on the market, the profit derived from the sale of consumables in such scenarios will, as a rule, not be based solely on the infringement, but on other factors that were decisive for the customer’s purchasing decision. However, this does not alter the fact that the profit is in any event also based on the patent infringement, because the distribution of consumables or any other related accessory devices, respectively, would not have been possible, or not to the same extent, without the placing on the market of the patent-infringing device. This is particularly evident in situations where the consumable or any other related accessory devices, respectively, is, by its very nature, tailored to the protected device, or where sourcing from a single supplier offers advantages for other reasons. A defining feature of the distribution of consumables or any other related accessory devices, respectively, is precisely the close link to the infringing business, which quite naturally paves the way for further revenue from the supply of consumables or any other related accessory devices, respectively, as these are necessary to put the infringing product into proper operation or to continue using it. This almost inevitable connection necessitates the extension of liability for damages to include such subsequent transactions as well.

 

37. Therefore, when calculating the damage caused by a patent-infringing offer, also profits derived from the performance of a contract causally linked to that offer must not be disregarded merely because the acts carried out in performance of the contract were carried out with non-infringing devices. . . .

 

42. Meril did not object to (information regarding) profits made from the sale of 'related accessory devices' being considered alongside those from infringing devices. This is because devices such as the crimping device are tailored to the properties of the infringing Myval THV device and designed to be used together. . . .

 

43. It cannot be ruled out at this point that profits earned with 'other relevant devices' and related accessory devices' along with them are to be taken into account if Meril participated in a tender offering at least one infringing device. This applies, as explained above, even if the tender offer has been amended subsequently and the infringing device was replaced with a non-infringing 'other relevant device'. This is because the infringing activity is participating in the tender with an infringing device. Participation in a tender constitutes an offer in the sense of Art. 25(a) UPCA and therefore constitutes an infringing activity. Even if the infringing device is replaced with a non-infringing device later on, any profits earned thereafter are causally linked to the infringing offer that secured the tender. Therefore, these profits might be considered as unfair as these profits would not otherwise have been possible. They are also directly linked to the patented invention, since the invention was incorporated into the device used to win the tender. Profits from 'related accessory devices' might also be attributed to the participation in this tender, even if the sales were made after the infringing product was replaced by a non-infringing one.

 

44. Profits made by Meril from sales of 'other relevant devices' and 'related accessory devices' outside of this scenario and/or without any close connection to infringing activities, are clearly not to be considered.

 

45. Edwards is arguing that Meril used the infringing devices to enrol patients in the LANDMARK and COMPARE clinic trials, build a distribution network and establish and deepen relationships with interventional cardiologists. Thus, according to Edwards, Meril used the infringing products as a springboard to launch the “other relevant devices” thereby securing an unlawful start in their development, validation, customer adoption and market positioning. Edwards argues e.g. that the CE marks granted in respect of the “other relevant devices” have been granted on the basis that no signification changes to the infringing Myval THV are present.

 

46. This is not convincing. The sales of the non-infringing 'other relevant devices', as outlined by Edwards, do not have sufficient (causal) connection with the infringing acts and are not sufficiently linked to the infringing subject matter, unlike sales of non-infringing devices following an offer of an infringing device. Edwards has not established that these activities, particularly the use of infringing devices in clinical trials or in the administrative process for acquiring CE marks, constitute a use under Article 25 and 26 of the UPCA or the relevant national law in the protected territories. Even if that were the case, subsequent sales of non-infringing products would no longer be sufficiently linked to the use of the invention. The invention relates to the folding of tabs 112, 116 within a leaflet structure within an implantable prosthetic heart valve . . . . Non-infringing devices use a different leaflet structure. The benefits described by Edwards, such as the distribution network and relationships with cardiologists, must be considered as independent of this limited contribution to the state of the art provided by the invention protected by the patent in suit. None of these benefits have been achieved because of the specific leaflet properties.

The court also notes that "[f]or periods prior to the coming into force of the Agreement on a Unified Patent Court, the calculation of damages must be based on the national law of the relevant member states in which the infringing activities took place" (para. 39), but concludes that no other result is mandated under German or French law (paras. 60-66).

Overall, this seems like a pretty reasonable approach to me.  The court’s position on convoyed goods appears to be slightly more favorable to the patentee than the corresponding rule in the United States.  As I explained in my August post,  under Rite-Hite Co. v. Kelley Corp., 56 F.3d 1538 (Fed. Cir. 1995) (en banc), although infringers can be liable for lost profits on sales of noninfringing goods that compete with infringing products, they are not liable for lost profits on sales of noninfringing complementary products that the patent owner ordinarily sells along with the patented article, unless those complementary products “function together with the patented component in some manner so as to produce a desired end product or result” and are therefore “analogous to components of a single assembly or be parts of a complete machine, or . . . constitute a functional unit.”  The U.S. rule can be defended on various grounds, but I am inclined to think it is too formalistic and that normal proximate causation principles should apply.  Applying those principles to a case like Meril arguably would result in an outcome similar to that which the LD Munich reached, which may result in recovery for damages on convoyed goods (para. 36) but not for the more remotely-caused benefits or harms based on the development of customer relationships and such.    

Edwards and/or Meril may appeal, and the extent of any damages eventually to be awarded remains to be seen.  

For discussion elsewhere, see the write-ups on ip fray, EPLaw, and Kluwer.   

Blogging break

I will be taking a blogging break for the next week or so, as I travel to conferences in Macau and Hong Kong.  I plan to resume sometime the week of November 9.

Fusco and Sterzi on Patent Injunctions in Europe

Stefania Fusco and Valerio Sterzi have posted a paper on ssrn titled Patent Injunctions: The Case for an eBay Echo, 72 Wayne L. Rev. __ (forthcoming 2027).  Here is a link to the paper, and here is the abstract:

The Unified Patent Court (UPC) opened its doors on June 1, 2023. After three years of operation, data show that nearly fifty percent of the UPC plaintiffs are entities based in the United States. Thus, interest in how this Court operates is growing exponentially on both sides of the Atlantic. This Article examines whether the availability of near-automatic injunctive relief in patent litigation at the UPC is justified in an era of cumulative innovation, patent-thick products, and increasingly complex technological markets. Two decades ago, an identical debate gained great prominence in the United States, resulting in court rulings and legislative actions that significantly shifted the balance of power between patent holders and infringers. This Article discusses what can be learned from the United States’ experience on injunctions in patent law that can shed light on the direction that the newly created UPC should take in this context. Moreover, this Article uses empirical evidence from European patent litigation to better inform this debate vis-à-vis the United States’ experience and, in this way, help answer the many questions that patent holders involved in litigation before the UPC currently have.

 

While patent law traditionally relies on injunctions to protect inventors from under-compensation and deter free riding, modern innovation ecosystems challenge the assumption that these remedies invariably promote technological progress. Indeed, in industries characterized by interoperability, high switching costs, and cumulative innovation, injunctions may confer bargaining power to patent holders that substantially exceeds the economic value of the patented invention.

 

To investigate these concerns, this Article analyzed patent infringement actions initiated between 2010 and 2019 in five major European jurisdictions - France, Germany, Italy, the Netherlands, and the United Kingdom - involving at least one patent granted by the European Patent Office. Using firms’ industry classifications and business descriptions processed through BERT-based textual analysis, the study measures the degree of competition between litigants and identifies the characteristics of disputes involving competitors and non-competitors.

 

The empirical evidence shows that only 32.8% of litigation case–claimant–defendant relationships involve parties operating in the same main industry. Cross-industry enforcement is particularly prevalent in complex technological fields, including telecommunications and other ICT technologies. A complementary measure based on the similarity of firms’ business activities confirms substantial variation in the competitive proximity of litigating parties. The regression analysis further shows that patents with larger families and standard-essential patents tend to be asserted between firms with greater competitive proximity, whereas technologically broader patents are associated with litigation between more economically distant firms. The Article therefore contributes to the ongoing debate regarding enforcement practices at the UPC and argues in favor of an “eBay echo” based on the United States Supreme Court’s decision in eBay Inc. v. MercExchange, L.L.C.. While the Article does not recommend a wholesale transplant of the U.S. four-factor test into the UPC system, it provides compelling evidence for the adoption by the Court of a more individualized inquiry into whether injunctive relief is truly appropriate in every case.

The authors’ descriptive statistics and empirical analysis (Part III) are illuminating, and their policy recommendation (Part IV) that the UPC take various factors into consideration before granting injunctive relief (among them, “the competitive relationship between the parties, the importance of the patented technology to the infringing product, the availability and adequacy of monetary compensation, the consequences of exclusion for the defendant and third parties, and whether the bargaining leverage generated by an injunction would be disproportionate to the patented invention’s economic contribution”) seems sensible to me.  An important contribution to the growing literature on whether European courts should deny (or stay) permanent injunctions in a greater number of cases.

Hernández on Judicial Extraterritoriality

As I have mentioned a few times now on this blog, Professor Tim Holbrook and I are coediting the Oxford Research Handbook on Extraterritoriality and Intellectual Property Rights, an edited volume that will bring together contributions from 40+ scholars from around the world to address both the many prescriptive and adjudicative jurisdiction issues pertaining to the assertion of IP rights—including patents, of course, but also copyright, trademarks, and trade secrets.  In addition, the week after next I will be presenting “On the Law and Economics of Extraterritoriality and IP Rights,” based largely on my own draft chapter for the edited volume, at this year’s IEEM Intellectual Property Seminar, “Patents and (Extra) Territoriality:  Longarm Jurisdiction, Comity, and (Contributory) Infringement,” held in Macau S.A.R. on November 4.  I also am preparing a separate paper from the one I am writing for the Oxford edited volume, for inclusion in an edited volume that I understand Professors Christopher Heath and Anselm Kampelman Sanders will be preparing following the Macau conference.  (While in Asia, I also will be speaking on the U.S. Supreme Court’s recent case law on indirect infringement and the current state of U.S. law on unjust enrichment awards in trade secret litigation, at the Professional Intellectual Property Update 2026 in Hong Kong on November 5.)

Anyway, in view of my current interest in territoriality and IP rights, I was pleased to come across a recent paper by Francisco Hernández Fernández, titled “Judicial Extraterritoriality, TRIPS Article 1.1 and the Competitive Governance of Global SEP Licensing,” which he presented recently at the Max Planck Institute in Munich.  Here is a link to the paper on ssrn, and here is the abstract:

Standard-essential patent (SEP) licensing exposes a structural tension between territorial patent rights and global technology markets. This paper examines how WTO dispute settlement is emerging as a forum for addressing the cross-border effects of judicial measures governing SEP licensing. It argues that the interpretation of Article 1.1 of the TRIPS Agreement in China – Enforcement of Intellectual Property Rights (DS611) supports a limited anti-frustration principle: WTO Members must not adopt measures that materially frustrate another Member’s TRIPS-compliant protection and enforcement system. The paper distinguishes this principle from a general prohibition on adjudicating disputes involving foreign patents and tests its possible extension to non-consensual worldwide FRAND determinations in the pending China – Worldwide Licensing Terms for Standard Essential Patents (DS632) dispute. Comparing this approach with EU and German competition law, it identifies a jurisdictional asymmetry: effective enforcement can support licensing negotiations, while judicial measures in one jurisdiction may disable enforcement options elsewhere. Changes in bargaining leverage, however, do not by themselves establish competitive harm. The paper proposes complementary safeguards through transparency under Article 63, consultations under Article 40.3, domestic controls against abusive enforcement, and consensual dispute resolution. It concludes that coordination among existing institutions offers a more credible response than centralized global rate-setting, while recognizing the institutional fragility of appellate review through the Multi-Party Interim Appeal Arbitration Arrangement.

I am inclined to agree with the paper’s measured interpretation of the arbitration award in DS611, as well as its call for the development of "best practices on FRAND calculation aspects" and “comprehensive guidelines to ensure that national courts adhere to similar approaches or methodology,” which is consistent with a recent piece by Lord Justice Richard Arnold that I noted here.  The paper also highlights the inherent tension between the German approach to SEP matters, which emphasizes the availability of injunctive relief as a means for inducing private parties to reach global settlements, and the anti-frustration principle articulated in DS611.  It also briefly mentions the UPC's Fujifilm v. Kodak decision (see discussion on this blog here and here), though not the CJEU's BSH decision, both of which would be in some tension with an expansive reading of DS611 (see p.13).

AIPPI Q293: Compulsory Licensing

Compulsory licensing is a topic I briefly discuss in my book Remedies in Intellectual Property Law at pages 235-49, so I was interested when I recently came across a piece in a recent issue of GRUR Int. by Fabian Hoffmann, Wolrad Prinz zu Waldeck und Pyrmont, Niclas Gajeck, Jérôme Kommer, Hendrik Meier, and Carsten Paga, titled AIPPI-SQ 293 – Compulsory Licensing for Patents – the State of Play from a German Perspective, 75 GRUR Int. 409 (2026).  Here is the abstract:

Compulsory licence law – though not often applied in practice – has played a decisive role in the historical development of patent law. Compulsory licences function as an ultima ratio instrument utilized only when patents are not used, when they obstruct crucial innovation, or when the public interest requires the use of the patented technology, especially in the field of public health. Despite this fundamental role, the law governing compulsory licences lacks harmonization on both the European and international level. Such harmonization is desirable to provide for a globally aligned, fast and efficient system. AIPPI Study Question 293 on compulsory licences aims to foster future harmonization in this area. AIPPI collected the responses of 38 national groups, published a summary report, and ultimately adopted a resolution on compulsory licences on 16 September 2025 in Yokohama. This article presents the key responses of the German national group of AIPPI to the study. It outlines the history, legal basis and fundamental case law of compulsory licensing in Germany. Further, it analyses the grounds and scope of compulsory licensing under German law and then discusses current issues relating to the compulsory licensing system, such as sublicensing and compulsory licences for patent applications or for products that are intended for export. The article concludes with insights on the determination of reasonable remuneration and an economic analysis of the impact of compulsory licensing.

As the article states, it is based to some extent on the German national group’s response to AIPPI Study Question 293.  The article is very readable and thorough in its discussion of the relevant history, German statutory provisions, and case law on the topic.  As the authors note, there is only one case since 1949 in which the German Federal Supreme Court has approved a compulsory license granted under article 24 of the German Patent Act (previously noted on this blog here).  The German Patent Court's subsequent determination of the applicable royalty in that case (see brief mention on this blog here) is helpful in setting forth the factors to consider in setting the amount of the compulsory licensing royalty—essentially, as the authors put it, terms reflecting what “reasonable parties would have agreed on in a licence agreement,” probably on the basis of the “abstract licence analogy” (i.e., largely the same sort of factors that would be relevant in an infringement case).  The authors argue that if the patent owner is a practicing entity that has been exploiting its invention as a monopolist, this would weigh in favor of an increase over the typical rate.

Regarding the AIPPI Study Question, all 38 responses, plus AIPPI’s resolution and its summary of responses, can be found on AIPPI’s website.  (From www.aippi.org, go to “Library,” then type “Q293” into “Search Our Library”.)  I haven’t read all of these yet myself, but my initial take is that the U.S. response takes an unduly dismissive attitude toward compulsory licensing, even as a response to public health emergencies.  Toward the beginning it states that the U.S. does not have compulsory licensing of patented inventions as such, but that “in very narrow specific situations, compulsory licensing-like rights may be available,” citing the possibility of march-in rights under the Bayh-Dole Act (to date, never used); a provision of the Clean Air Act (ditto); ongoing royalties in lieu of injunctive relief under eBay; and 28 U.S.C. § 1498.  This last is a statute that authorizes the federal government to take a nonexclusive license to any patented invention in exchange for fair market value, and actually is used with some frequency.  (For discussion, see this KEI Briefing Note by Jamie Love and Lokesh Vyas).  The U.S. report also does not mention court-ordered compulsory licensing as a remedy for certain antitrust violations, but it has been employed in some antitrust cases, as discussed in this 2004 article by (of all people) Makan Delrahim (who also notes a couple of other federal statutes that authorize compulsory licensing of patented inventions under limited circumstances).