Striking early: preliminary injunctions in the UPC

One of the most important powers in the Unified Patent Court’s (UPC) possession is the discretion to order preliminary injunctions againstan alleged infringer. A preliminary injunction may be obtained in the UPC to prevent ongoing alleged infringements and infringements that can be demonstrated to the court to be imminent.

In appropriate cases the court can also order the associated preliminary relief of seizure and delivery of the allegedly infringing products to prevent them from entering the market or further circulating within it.

In rarer circumstances, where the recovery of damages from an alleged infringer can be shown to be endangered, the court may orderthe precautionary seizure of the alleged infringer’s assets,including the freezing of bank accounts.

While it is clear that preliminary injunctions may be obtained against an alleged infringer, the power also extends to“an intermediary whose services are used by the alleged infringer”. It is likely that this language is intended to cover alleged indirect infringers, who either supply or offer to supply means relating to an essential element of the patented invention, for putting it into effect; or supply staple commercial products with an inducement to the person supplied to infringe.

Geographical scope

The geographical scope of a preliminary injunction ordered by the UPC depends on a number of factors. In cases of infringement of a unitary patent, the countries in which the injunction has effect will be all the participating member states (currently 26), provided they have ratified the UPC Agreement. Preliminary injunctions based on European patents will also be limited to the member states that have ratified the UPC Agreement, as well as to the countries in which the patent is designated. This is an important limitation to consider, particularly in the early months of the UPC's existence, because the court can come into force on the basis of just 13 ratifications, and preliminary relief will be limited accordingly.

The Court of First Instance of the UPC will have a large number of divisions: local, regional and central. In which of these does a claimant apply for an injunction? If the defendant is domiciled in a contracting member state and the alleged infringement occurs in a contracting state in which there is a local or regional division, then the claimant has a choice: it can lodge its claim in one of the local or regional divisions where the alleged infringement takes place, or in the local or regional division of the defendant’s domicile. If the domicile of the defendant is outside the contracting member states then the choice for the claimant is between the place/s of infringement and the central division.

An application for a preliminary injunction may be ordered with (inter partes) or without (ex parte) the defendant being notified and heard. An application to be heard ex parte must be supported with reasons and provide any prior correspondence with the alleged infringer. It must also disclose any material facts that might influence the court in deciding the injunction, including any pending proceedings and/or any previously unsuccessful attempt to obtain provisional measures based on the patent.

The court will then exercise its discretion on whether to hear the application ex parte. In making this decision, the court must consider whether the claimant’s reasons for wanting the injunction ex parte are well-founded. The urgency of the matter must also be taken into account, in particular whether delay is likely to cause irreparable harm and whether there is a demonstrable risk of relevant evidence being destroyed. In addition, any opposition procedure in which the patent has been upheld or any other proceedings in which it has been at issue are relevant.

In particular, the court must consider summoning both parties to an oral hearing if a protective letter has been lodged. Protective letters, which are familiar to German practice and a number of other national courts, are lodged by a party that expects to be a defendant to a preliminary injunction application. They can contain a challenge to the individual prerequisites for obtaining an (ex parte) preliminary injunction, such as (i) non-infringement, (ii) lack of validity, (iii) not starting preliminary injunctions proceedings right away, and (iv) balance of convenience arguments in favour of the defendant.

As a rule of thumb, a protective letter should only be filed if good arguments on any of the above points are available; if this is not the case, filing a protective letter may even increase the risk of an ex parte preliminary injunction if the court sees the defence as weak enough for it to be compelled to decide the case without requiring an oral hearing.

“Protective letters, which are familiar to German practice and a number of other national courts, are lodged by a party that expects to be a defendant to a preliminary injunction application.”

A potential defendant to a preliminary injunction cannot predict the division in which that injunction may later be sought and therefore protective letters are submitted at the registry in Luxembourg in the language of the patent concerned. They are kept in the registry for six months, which may be prolonged. Protective letters are not publicly available until the application for a preliminary injunction is lodged.

In cases of extreme urgency the standing judge may decide the application for the ex parte preliminary injunction immediately. In other cases, the court will summon the claimant to be heard. Alternatively, if the court decides the matter should be heard inter partes, the claimant can at that stage withdraw its application and request that it is kept confidential. Otherwise, the court will summon both parties to an oral hearing; the date for the hearing will be set as soon as possible after the date of receiving the application. The defendant may also be invited to lodge an objection to the application, which includes reasons why the application should fail and the facts and evidence relied on.

Discretion required

Before the court makes a decision, it may require the applicant to produce evidence in order to be satisfied that there is a sufficient degree of likelihood of infringement or imminent infringement, and that the patent in question is valid. The merits of the case are therefore a discretionary factor and there is no indication that mini-trials on the merits will be a feature of UPC practice when considering preliminary injunctions.

However, the court must consider any unreasonable delay in seeking provisional measures. It mustalso exercise its discretion to weigh up the interests of the parties. This means taking particular account of the potential harm for either of the parties that would result from the granting or refusal of the injunction. There is no explicit requirement for the court to consider whether damages would be an adequate remedy, or whether without the injunction irreparable harm would be caused to the claimant. However, these will be factors relevant to the potential harm to the parties that must be weighed in the court's discretion.

If the injunction is awarded inter partes, the court may order the applicant to provide adequate security, compensating for any loss caused to the defendant in the event that the court later revokes the order for provisional measures. If the injunction is awarded ex parte, it must do this. The defendant must also be given notice of an ex parte injunction without delay.

There is currently no indication of how quickly preliminary injunction decisions will be obtained. The 18th draft Rules of Procedure merely state that the claimant will get a decision as soon as possible after the oral hearing or, where the court deems it appropriate, there may be a decision at the end of the hearing followed by a written decision.

If a preliminary injunction is ordered, proceedings on the merits must be started within a time period of no more that 31 calendar days or 20 working days, whichever is the longer, from the date specified in the court’s order. If the applicant does not start proceedings on the merits of the case in time, the court must ensure that the injunction is revoked at the request of the defendant and the defendant may be compensated for any harm caused. In cases where an injunction has been ordered ex parte, the defendant may request that it be reviewed.

However, in all cases, a preliminary injunction may be appealed by an affected party within 15 calendar days of the notification of the order to the applicant. If proceedings on the merits have been started, these will continue, but a decision in the main proceedings must not be given before the decision of the Court of Appeal on the preliminary injunction.

Paul England is a senior associate at  Taylor Wessing. He can be contacted at: p.england@taylorwessing.com

Christof Höhne is a member  at Taylor Wessing. He can be contacted at: c.hoehne@taylorwessing.com