Reports are coming in that the European Parliament has overwhelmingly approved the draft SEP Regulation that was proposed last spring. Stay tuned as more news arrives.
I understand this was a first reading, and that the matter next goes to the European Council. Story by Maura O'Malley on the Global Legal Post here.
I just read this report on JUVE Patent about the UPC Court of Appeals' reversal of the Munich Local Division's much-discussed September 19, 2023 grant of a preliminary injunction in favor of 10x against Nanostring. (For previous discussion on this blog, see here.) Here is a link to the relevant UPC webpage, with links to the decision in German and in English. The ground is likely invalidity of the patent in suit:
Contrary to the opinion of the Court of First Instance, in the judgement of The Court of Appeal it is, on the balance of probability, more likely than not that the subject-mater of claim 1 in the version asserted in the main request will prove to be not patentable under Art. 65(2) UPCA, Art. 52(1), 138(1)(a) EPC (p.28, English language version).
Further:
The application for a preliminary injunction is in any case unfounded because on the balance of probability it is more likely than not that the patent at issue will not prove to be valid even in the version of the auxiliary request (p.34).
I'll be spending some time today and into the week reviewing the decision more carefully, and may have to more to say in due time.
Update (2-29-2024): Sarah Taylor and Julia Traumann have published an excellent summary and analysis of the Court of Appeals' decision on EPLaw. Recommended!
A post I published a few months ago titled Recent Patent Damages Decision of the Madrid Court of Appeal began as follows:
A few weeks back Adrián Crespo published a short post on the Kluwer Patent Blog titled Patent case: Judgment no. 18/2023 of Madrid Court of Appeals (Section32) of 23 June 2023, Spain. The author writes that, as a result of the decision, “generic companies wishing to launch at risk” should be aware that “the first mover(s) will be held liable for triggering regulatory price reduction and thus for the damages arising from the price gap between the innovator and the generic, even if other third parties have launched at a later point in time.” The post references a longer summary of the decision on Kluwer IP Law, to which I do not have access, but I was able to obtain a copy of the decision itself and will note a few things about it below. (Here is a link to the decision in the original Spanish, and here is a link to a machine translation.)
More recently, Mr. Crespo and Josep Montefusco have published an article titled Madrid Court of Appeal Rules in Landmark Damages Case, 46 EIPR 65 (2024). The abstract reads:
In a recent judgment, the Madrid Court of Appeal (Section 32) has ruled in the landmark raloxifene patent infringement case. The decision dealt inter alia with the allocation of liability among patent infringers for triggering regulatory price reduction. This comment considers the main implications of this precedent, which are likely to shape future damages claims in Spain (an important market for pharmaceutical products which, moreover, is not part of the Agreement on a Unified Patent Court).
The article provides a detailed analysis of the facts and the principal holdings. It concludes, first, that one of the decision’s important holdings is that “patentees and/or their licensees may claim damages for losses suffered by their subsidiaries” (p.69). (By way of comparison, I would note that U.S. law on this point is not altogether clear; for brief discussion and citations, see my post dated Oct. 26, 2016, noting Mark Lemley’s critique of Federal Circuit case law that generally precludes a patentee from recovering losses suffered by its exclusive licensee, and district court cases considering the “inexorable flow” doctrine, under which a parent may under some circumstances recover for losses suffered by a subsidiary. In a somewhat related vein, see also my post dated Nov. 20, 2023, discussing some recent French and Canadian cases addressing standing to sue of licensees and related companies. ) Second, the article notes the significance of the court’s holding that the first generic in the market can be liable for a subsequent price reduction even if other entrants follow, and considers its implications and possible nuances.
Peter Picht has two papers out on the European Commission’s draft SEP regulation. The first, available on ssrn, is The Draft EU SEP Regulation: Issue Spotting. Here is a link to the paper, and here is the abstract:
The draft EU SEP Regulation has already triggered vivid debate. The purpose of this issue spotting paper is not to reflect on fundamental questions, such as whether there should be a Regulation at all and whether it should apply the main concepts of the current draft. The author will address such concerns elsewhere. Instead, the issue spotting accepts – as it were – the legislative concept as a given, looks at where the draft provisions seem not to implement this concept in a coherent and reasonable manner, and makes suggestions for improvement.
As the abstract indicates, this paper goes through the regulation, recital-by-recital and provision-by-provision, making numerous observations and suggestions. The other paper is The Draft SEP Regulation: Status and Issues, 2024 GRUR 83-95. Here is the abstract:
The draft SEP regulation is a momentous, but also complex and ambitious undertaking. One can question whether regulation along the draft’s lines should be undertaken at all. In any case, key parts of the current concept need revision and improvement.
* * *
I will take a blogging break for the coming week, as I have a backlog of administrative work, among other matters, to catch up on. I shall resume the week of February 26.
1. In September and October 2023, the Munich Local Division of the UPC decided two applications for preliminary injunctions, both filed by 10x Genomics, Inc. and the President and Fellows of Harvard College against NanoString Technologies Inc., NanoString Technologies Germany GmbH, and NanoString Technologies Netherlands B.V. The decision in the first case, UPC CFI 2/2023, is available on the UPC’s website in the original German and in English. I have previously noted other commentary on the first decision, which resulted in the granting of a preliminary injunction, here; the second decision, which denied the request for preliminary relief, has been noted here.
Matthias Leistner has now published an article titled Einstweilige Unterlassungsverfügung des EPG wegen patentverletzung: Die Lokalkammer München bohrt dicke Bretter (“Preliminary Injunctions in the UPC against Patent Infringement: The Munich Local Division Tackles Some Hard Problems”), GRUR 22/2023, 1578-86. (The idiom “bohrt dicke Bretter” literally means “drills thick boards.”) Here is the abstract, in my translation from the German:
The first decision on the merits of
the Munich Local Division of the UPC touches on numerous essential procedural
and substantive questions: the wording of
the request and its relationship with the patent claims and the inquiry into
validity; orders concerning validity in expedited proceedings and relatedly the
burdens of pleading and proof; the need for legal protection and urgency;
objections and proportionality—just to state the most important. The Local Division is off to a good
start. In the following, the decision is
analyzed for purposes of practice and discussed.
Dr.
Leistner compares the decision to Hermione’s handbag in Harry Potter, in terms
of the number of things that the court fit into one package. More seriously, Dr. Leistner approves of the court's adoption of the "preponderant likelihood" (überwiegende Wahrscheinlichkeit) test for evaluating validity, as opposed to something more stringent, in view of the fact (also noted by the commentator below) that the UPC can call upon the expertise of technically qualified judges--though he also notes that in addition the UPC (correctly) considers the probability of infringement and validity as having some relevance to the overall balancing of the interests of the parties. He also expresses concern that, if the defendant is excluded from the market on the basis of a patent that is subsequently invalidated and, under the CJEU's decision in Bayer v. Richter, is denied compensation ex post, the defendant's harm may turn out to be (unnecessarily) irreparable. (It is to be hoped that the CJEU's somewhat surprising partial about-face in Mylan v. Gilead (see here) may help to alleviate this concern.) Finally, the author argues that, although the court rejected the defendant's arguments that granting the preliminary injunction would be disproportionate, the fact that it gave careful consideration to those arguments may mean that in other (albeit uncommon) cases, on other specific facts, the facts that the accused product is a "complex" product or that the plaintiff is an NPE, could be relevant.
2. Tilmann Müller-Stoy has published an article titled Prüfungsmaßstab für den Rechtsbestand bei einstweiligen Anordnungen vor dem Einheitlichen Patentgericht, (“Standards for Evaluating Validity in regard to Provisional Orders before the UPC”), Mitteilungen der deutschen Patentanwälte 11/2023, 486-89. Here is the abstract, again in my translation:
The UPC finally commenced operations on June 1, 2023. Among the first proceedings lodged were related motions requesting provisional measures. This raises the practically significant question of what legal standard the UPC should adopt for evaluating validity in connection with motions for preliminary relief. Above all, a new system for resolving patent disputes needs standards that are as clear and understandable as possible. An overly flexible, necessarily vague standard undermines predictability and does not adequately conform to these requirements. In consideration of the text of the provisions the UPC is to apply and especially in view of the fact, that aside from legally qualified judges technically qualified judges have been appointed, it should be decisive whether, after rigorous examination, validity is more probable than invalidity. Remaining doubts can be taken into account relative to their weight and in combination with whatever other factors inform judicial discretion of how to balance the relevant interests. Thus are justice and reasonableness served in the individual case.
1. Maciej Padamczyk and Duncan Matthews posted a paper on ssrn titled Proportionality and Patent Injunctions, which also appears as a chapter in European Patent Law: The Unified Patent Court and the European Patent Convention (D. Matthews & P. Torremans, eds., De Gruyter 2023). Here is a link to the paper, and here is the abstract:
This chapter assesses how the concept of proportionality might be applied in the context of rising concerns about the perceived undesirable outcomes of final injunctions in patent cases, especially before the newly established Unified Patent Court (UPC), authorized to issue injunctions covering the territories of all Contracting Member States. First, the chapter discusses the policy considerations underlying the issuance of injunctions in patent cases, including the problem of anticommons, royalty stacking, non-practicing entities and patent trolls. Then, it proceeds to explain the theoretical interpretations of the concept of proportionality and its application on the international, i.e., WTO and EU, and national level, with examples from the Unites States, United Kingdom and Germany. Subsequently, an attempts is made to predict how the concept of proportionality might impact the jurisprudence of the UPC. Finally, the chapter then discusses preliminary injunctions, underlining their specific character as compared to final injunctions. It concludes that the likely future use of proportionality in patent injunctions cases will depend on the general understanding of the role of the patent system and the society’s convictions as regards its utility.
2. Léon Dijkman published Verhältnismäßigkeit im Patentrecht: Der dritte Weg ("Proportionality in Patent Law: The Third Way"), 24/2023 GRUR 1737. Here is the abstract, in my translation from the German:
The narrow perspective on proportionality in patent law, under which proportionality contributes nothing to the existing protections for infringers, is no longer sustainable, in view of economic, technological and legal developments, especially the European rights framework for the enforcement of patents. Nevertheless, critics are right to assert that incorporating a balancing of interests into claims for injunctive relief, as the broad perspective advocates, would lead to legal uncertainty and arbitrary outcomes. A proportionality test therefore must be developed, which I sketch out in this article.
The article summarizes some of the content set forth in greater detail in Dr. Dijkman’s new book The Proportionality Test in European Patent Law Patent Injunctions Before EU Courts and the UPC (Hart Publishing 2023) The Proportionality Test in European Patent Law, previously noted here.
I just heard the news that Professor Dan Burk has died. Dan was one of the all-time greats in IP law, and my former colleague for a period of time when he taught at the University of Minnesota. He will be missed.
A previously-planned Celebration of Professor Dan Burk's Scholarly Contributions will be held at UC-Irvine this coming Friday.
