UPC: Philips succeeds against Belkin in first full SEP decision

The court found Philips’ patent for wireless charging of portable electronic devices to be valid as granted and infringed by Belkin. Notably, a FRAND defence was not available to Belkin.

The injunction granted covers several European countries including Germany, but carves out Belkin GmbH and Belkin Limited in Germany, as there is a contradicting legally binding national judgement already in place that involves both businesses.

“The Munich Local Division’s findings in this case, including the willingness to diverge from national decisions in relation to the same patent, may increase the pressure on implementers operating in the Qi wireless charging technology space to enter into a licence agreement, and it would not be surprising if that is how this dispute is ultimately resolved” said Sarah Taylor, a patent law expert at Pinsent Masons.

“The Munich Local Division extended the injunction to three Belkin directors, which certainly raised some eyebrows. However, the UPC Court of Appeal subsequently suspended the injunction regarding the enforcement against the directors.”

The dispute centers around an SEP owned by Philips - EP 2 867 997 B1 (EP997) - which covers wireless inductive power transmission for charging of portable electronic devices. The invention introduces a negotiation phase between the power transmitter and receiver to agree on operating parameters, enabling higher power transmission levels. EP997 had been declared essential to the Qi wireless charging standard (5-page / 640KB PDF).

In Germany, Philips has already been unsuccessful in its infringement action against Belkin. In March 2023, the Düsseldorf Regional Court dismissed the action and found that Belkin’s products did not infringe EP997. In April 2024, the Düsseldorf Higher Regional Court rejected Philips’ appeal for inadmissibility. In parallel with the infringement proceedings, Belkin made an attempt to invalidate EP997 by bringing German national nullity proceedings, but the validity of the patent was upheld by the German Federal Patent Court.

Philips then turned to the UPC and has – subject to appeal - successfully enforced the patent. The decision handed down by the Munich Local Division addresses several relevant topics, including claim construction, liability of officers and directors as well as effectiveness of a prior final German national court’s decision.

The Munich Local Division rejected Belkin’s application for a stay of the proceedings in the light of the pending German nullity proceedings and the infringement proceedings.  In the nullity action, a first instance decision had already been issued and any appeal decision would not be expected in the short term. The UPC found that a stay to avoid the risk of contradictory decisions pursuant to article 30(1) of the Brussels I Regulation was therefore not appropriate. The UPC also considered that, as the German infringement appeal had been rejected as inadmissible, there are no longer any pending German infringement proceedings.

However, there is one issue that this decision did not address. Rights holders of SEPs for technologies that are essential to implementing a technical standard are often required to make SEPs available for others to use by way of a licence on fair, reasonable and non-discriminatory (FRAND) terms. Disputes on what are FRAND terms often arise in the context of SEP licensing negotiations.

While this decision related to a SEP, FRAND issues did not arise in this case as a FRAND defence can only succeed if the patent in issue confers market power, which wasn’t the case here, as Qi is only one of various ways of charging a device. As such, Belkin did not run a FRAND defence. “How the UPC will approach FRAND issues remains a hot topic, but will need to be dealt with in future UPC disputes,” said Taylor.

The judgment revolves around the interpretation of claim 20 of EP997 relating to a power transmitter with means for generating a power signal, initiating a mandatory configuration phase, receiving a request to enter a negotiation phase, confirming or rejecting the request, entering the negotiation phase and determining operating parameters through message exchange in negotiation cycles. The Munich Local Division reached a different conclusion to both German national courts on claim interpretation, and as a result found that Belkin’s devices meet all the features of claim 20 of EP997, leading to a finding of infringement.

In reaching its decision, the Munich Local Division outlined that the description and drawings must be taken into account as explanatory aids for the purposes of claim construction rather than solely relying on the exact wording of the claim. It then clarified that this approach should not be abused and that an approach similar to that set out in the Protocol to article 69 European Patent Convention (EPC) should be followed, meaning a balance must be struck between appropriate legal certainty for third parties and adequate protection for the patent proprietor. The Munich Local Division found that the skilled person would understand the technical meaning of the wording of the patent and take into account the entire disclosure of the patent.

The court referred to the prosecution history to understand amendments to the claims that had been made during the course of the prosecution of the patent. “The use of prosecution history in aiding claim interpretation has been considered in UPC preliminary injunction applications, where the Munich and Dusseldorf Local Divisions have taken a different approach, and the Court of Appeal has so far declined to decide the issue,” said Taylor. “While it was only of minor importance in this decision, it is nevertheless worth acknowledging and may ultimately prove to be insightful in shaping the UPC’s approach to this issue.” 

Belkin counterclaimed for invalidity of the patent on a number of grounds, including added matter, novelty and lack of inventive step. The judges confirmed the validity of the patent and dismissed Belkin’s counterclaim.

The Munich LD also dealt with the independent liability of three of Belkin’s directors. It said that independent liability of those directors arose from their roles and that, despite knowledge of the infringing acts, they did not take action to prevent the infringement of the patent. The court considered each of the directors to be an intermediary within the meaning of Article 63(1) of the UPC Agreement (UPCA) against whom an injunction could be sought.

However, Belkin appealed to the UPC Court of Appeal which suspended the injunction regarding the enforcement against the directors. The court held that it was a manifest error of law that managing directors of a company can be seen as "intermediaries" and face personal liability solely on the basis of their function as managing directors.

“The Court of Appeal’s decision will provide some comfort to company directors that their mere function as directors will not automatically mean they will be held personally liable for the actions of the company of which they are a director in respect of patent infringement,” Taylor said.  

Taylor highlighted that the speed of the UPC’s decision – around 11 months after Philips filed the action – is extremely quick, and follows the trend of the early substantive UPC decisions being handed down in the court’s desired timeframe of 12-14 months.  “However, the court did not have to consider FRAND issues, so this is perhaps unlikely to be a typical example of how SEP and FRAND disputes may unfold before the UPC” she said.