UPC cases provide guidance on preliminary injunction applications

The case law that has been developed – on 22 preliminary injunction applications determined, at the time of writing – provide comfort and certainty to businesses seeking to litigate before the UPC. They illustrate the need for patent rights holders to ensure that they present their cases in the most robust and timely manner to provide the best chance of their application succeeding, whilst providing insights into how businesses on the receiving end of a preliminary injunction application may formulate a defence.

For the first time, the Court of Appeal recently affirmed the granting of a preliminary injunction by the Dusseldorf Local Division (LD) in Ortovox v Mammut, restricting offers for sale and sales of the Mammut’s Barryvox S2 avalanche search device in Germany and Austria. This decision provides an opportunity to review the current case law into how the UPC will approach preliminary injunction applications.  

UPC requirements for preliminary injunctions

Preliminary injunctions are a form of interim relief that patent holders can apply to court for, to prevent rivals continuing activities – like selling goods – that they believe infringes their patent rights, pending the court considering all the evidence pertaining to the merits of those infringement claims at trial.

For patent holders, obtaining a preliminary injunction can be extremely valuable to them, as it can help them preserve what they see as their legitimate monopoly in a market in which they have heavily invested. In contrast, the award of a preliminary injunction against them can be very damaging to the commercial interests and strategies of competitor companies. There is a lot at stake and a significant potential for harm to arise from granting, or refusing to grant, a preliminary injunction application.

The UPC’s scope to grant preliminary injunctions is provided for under Article 62 of the UPC Agreement, which is substantiated by Rule 211(2) of the UPC’s Rules of Procedure. The rules provide criteria that the UPC can consider when assessing applications for preliminary injunctions.

The UPC can “require the applicant to provide reasonable evidence to satisfy the Court with a sufficient degree of certainty that the applicant is entitled to commence proceedings pursuant to Article 47, that the patent in question is valid and that his right is being infringed, or that such infringement is imminent”.

In making its decision, the court must weigh up the interests of the parties and take into account the potential for harm for either of the parties arising out of the grant or refusal of the preliminary injunction. It must also have regard to any unreasonable delay by the applicant in seeking the preliminary injunction.

Refining the UPC’s approach: Lessons learnt from the cases to-date

A number of decisions have refined the UPC’s approach to the application and scope of these provisions.

Urgency

A preliminary injunction applicant must ensure that they have sufficient evidence to bring a case, but they also have to ensure that they act promptly once they become aware of the allegedly infringing activity to avoid an unreasonable delay in bringing the application.

The burden of proof for urgency rests with the applicant. In Ericsson v Asustek, the Lisbon LD dismissed Ericsson’s application for a preliminary injunction due to lack of urgency, finding that it was silent as to the exact date it became aware of the alleged infringement (which, on the facts, could have been as early as 2019).  Practically speaking, once becoming aware of the infringement or imminent infringement, the applicant should document the steps they have taken from that point through to filing the application.

This begs the question of what an acceptable timeframe would be between the patent holder becoming aware of the alleged infringement and filing an application for a preliminary injunction.  A ‘safe harbour’ of two months has been accepted by the Munich LD in a number of decisions, including Dyson v SharkNinja and Syngenta v Sumi. However, this two-month safe harbour is not, as yet, universally followed. For example, in 10x Genomics v Curio the Dusseldorf LD found that the safe harbour should be no more than one month.

Further, it is clear that – like any rule – there will be exceptions, and the facts of the cases may lead to the court taking a more flexible approach to unreasonable delay. For example, in Amycel v Szymon Spyro, The Hague LD accepted Amycel’s arguments that a 12-month delay in bringing its preliminary injunction application was justifiable. Although Amycel first became aware of the imminent infringement of its patent for a certain strain of mushrooms for commercial production by Szymon Spyro in July 2023, it only filed the preliminary injunction application 12 months later because it had to obtain evidence about the specific strains to anticipate the arguments that Szymon Spyro would be likely to make, and the nature of the samples meant that cultivation was a time-consuming process.

The issue of unreasonable delay has now come before the UPC Court of Appeal in Ortovox v Mammut.  While the court declined to specify a timeframe, it said that the period for evaluating claims of unreasonable delay begins from when a patent holder becomes aware of a violation or should reasonably have known about it.

For the time being, it is likely that two months may be an acceptable rule of thumb for applicants, but each case will be considered on its specific facts.

Irreparable harm

The Court of Appeal also considered the potential for harm to the parties in Ortovox v Mammut, noting that the presumption of potential financial loss due to patent infringement does not strictly require evidence of irreparable damage, and reiterating that a mere credible threat of such damage is sufficient to justify protective legal measures.

“Sufficient degree of certainty” that the patent is valid and infringed

In considering preliminary injunctions, the most attention by far has been given to the meaning of a “sufficient degree of certainty” that the patent in issue is valid and infringed.  The test established by the Court of Appeal in 10x Genomics v NanoString set high standards for issuing UPC preliminary injunctions, and provides that a sufficiently certain conviction is lacking, if the court considers, on the balance of probabilities, it to be more likely than not, that the patent is invalid.  While the burden of proof for establishing the right to bring proceedings and the infringement of the patent lies with the applicant, in this case the Court of Appeal confirmed that the burden of proof for establishing invalidity lies with the defendant.

In that case, the Court of Appeal overturned the earlier decision of the Munich LD which had allowed the preliminary injunction. By setting out a now accepted approach to claim interpretation, the appeal court adopted a wider interpretation and concluded that a successful obviousness argument could be made and therefore that the validity of the patent had not been established with the required “sufficient degree of certainty”. Where parallel EPO opposition proceedings are ongoing, in Amgen v Alexion, the Hamburg LD considered that a UPC court should consider both the likelihood of invalidity based on its own independent assessment, as well as the likelihood of an invalidity decision by the EPO.

The test set by the UPC Court of Appeal in the 10x Genomics case has subsequently been applied by the lower courts, and the resulting practical guidance from these decisions will assist parties in developing their preliminary injunction strategies.

Perhaps the key practical takeaway from the preliminary injunctions decisions to date is that the UPC will carry out detailed assessments of the substantive matters of infringement and validity at an early stage. This is very different to national courts where such detailed assessments are left for the substantive trial. Indeed, the UPC’s preliminary injunction test is markedly different to that in common law jurisdictions, with which many patent litigants may be more familiar. For example, in the UK, the test was set in the 1975 case of American Cyanamid v Ethicon and requires UK courts to determine: if there is a serious issue to be tried; whether damages would be an adequate remedy if an injunction were granted; and, if they wouldn’t, where the balance of convenience lies. A similar test in Ireland was recalibrated by the Supreme Court in the 2019 pharmaceutical patent case, MSD v Clonmel.

Infringement and imminent infringement

On infringement, the court must be satisfied that the patent is infringed or that infringement is imminent.  What is meant by ‘imminent infringement’ is of particular interest to the pharmaceutical sector where generic and biosimilar manufacturers routinely undertake pre-launch steps prior to the expiry of existing patent rights. In the omalizumab biosimilars dispute, Novartis & Genentech v Celltrion, where Celltrion had obtained a marketing authorisation and made various statements about an intention to launch, the Dusseldorf LD declined to grant Novartis a preliminary injunction, finding that all acts aimed at preparing a rival, allegedly infringing, product for launch must be completed in order for an infringement to be considered imminent.

A balanced approach so far?

Despite some early expectations that the UPC would most likely be a pro-patentee forum, its approach to-date towards preliminary injunctions has been far more nuanced, with it undertaking a comprehensive review of the arguments and evidence on a case-by-case basis. No clear trend has emerged yet – of the 22 applications it has determined, the UPC has granted 12 preliminary injunctions and refused to grant such relief in 10 other cases.

There is also no trend as to whether any particular divisions of the UPC are more likely to grant a preliminary injunction application than others – the Dusseldorf local division (LD) has granted five applications; the Munich LD three; and the Hague LD two. The Hamburg LD has granted one application but refused three. The Vienna and Lisbon LDs have each refused to grant one application. The Helsinki LD refused to grant a preliminary injunction on the basis that the applicant’s attempt at withdrawing the opt-out of the patent in issue was invalid – a decision which was later found to be incorrect by the Court of Appeal, which has now ordered that the proceedings on the merits be resumed.

Similarly, there are not, at the time of writing, any clear sector-related trends in terms of the number of preliminary injunction applications, or the numbers granted or refused, including in the fast-moving consumer goods (FMCG) and wider technology spaces in which many of the preliminary injunction applications have been made.

The risks associated with a UPC-wide preliminary injunction have always been of particular concern in the life sciences sector, particularly for pharmaceutical businesses. To date, there have only been two preliminary injunctions granted by the UPC in human life sciences – neither concern pharmaceutical patents, but rather relate to medical devices and diagnostics.

In Abbott v SiBio, The Hague LD granted a preliminary injunction in relation to Abbott’s continuous glucose monitoring patents, and extended the relief to cover Ireland, but as Ireland is not yet a participant in the UPC system, this was overturned by the UPC Court of Appeal. In 10x Genomics v Curio, the Dusseldorf LD awarded 10x Genomics a partial preliminary injunction against competitor Curio Bioscience’s Seeker Spatial Mapping Kits, which enable spatial mapping of the entire transcriptome of tissue, which the court found infringe one of the patent’s claims but not another.

In relation to biosimilars, in the disputes concerning eculizumab, Alexion’s preliminary injunction applications against Amgen and Samsung Bioepis were refused due to doubts over the validity of the patent. The Dusseldorf LD also refused the preliminary injunction application in the biosimilars dispute between Novartis and Celltrion concerning omalizumab.

Implications

It is clear from the decisions to date that parties should be prepared to address validity and infringement in detail to argue for or against a preliminary injunction. This is a high burden: patent holders must actively monitor markets and keep records of such, carefully and comprehensively formulate infringement arguments and defences to validity challenges in advance, and act swiftly once becoming aware of infringing activities. Challengers must be equally diligent in keeping competitor activities under observation and develop robust validity challenges when defending a preliminary injunction application. However, the reward of relief, or denial of relief, over potentially the entire UPC territory may make overcoming the high hurdle worthwhile.

It is interesting to note that, to date, only seven of the UPC LDs have heard preliminary injunction applications. The court’s approach will continue to evolve when such matters come before other LDs in the future.