UPC decision suggests burdens will attach to preliminary patent injunction applications

Munich-based Dr. Julia Traumann of Pinsent Masons said that the need for patent holders seeking preliminary injunctions to prepare significant evidence in support of the validity of their patents at an early stage of UPC proceedings can be implied from a recent decision by the local division of the UPC in Munich. Other local divisions of the UPC may adopt different approaches to considering applications for preliminary injunctions, she added.

Traumann’s comments follow publication of the Munich local division’s ‘reasoned decision’ in a case involving biotech companies 10x Genomics and NanoString Technologies. It is the first reasoned decision published by any of the divisions of the UPC in an infringement case.

Last month, 10x Genomics was granted a preliminary injunction that prevents NanoString from selling products in 17 EU countries. The preliminary injunction issued relates to NanoString’s CosMx Spatial Molecular Imager (SMI) products for RNA detection – technology that essentially helps medical researchers identify ribonucleic acid (RNA) in living cells. NanoString has said it will appeal the ruling.

Patent holders that believe their patents have been infringed often apply to the courts to have a finding of infringement recognised and to obtain a remedy in respect of that infringement – typically, the award of an injunction preventing the infringer from selling goods that use their patents without a licence to do so and/or an award of damages to compensate them for the financial loss they have incurred from the infringing activity.

A full trial before court is often required to determine whether there has been infringement. These can be long and complex cases that take months for parties to prepare for and for the courts to resolve. In those cases, patent rights holders will sometimes seek interim relief, including preliminary injunctions, via preliminary proceedings.

It is common in such preliminary proceedings for alleged infringers to object to applications made for interim relief, including preliminary injunctions. Often, the alleged infringers will claim that the patent in question is not valid. The courts, in such cases, will then consider how likely the patent is valid as part of the process for determining whether to award a preliminary injunction.

In its recent ruling in the 10x Genomics and NanoString case, the Munich local division of the UPC undertook what could be considered to be a mini-trial in respect of validity in the preliminary injunction proceeding, Traumann said – an approach she said is common in the context of German law. She said the court gave important guidance on the interpretation of provisions in the UPC Agreement and the UPC’s Rules of Procedure that govern when preliminary injunctions can be awarded. That guidance relates, in particular, to the degree of certainty that must be reached over the patent’s validity.

The Munich court suggested that, for a preliminary injunction application before it to succeed, it would be necessary for it to be shown that that it is “more probable for a sufficiently certain conviction of the court that the patent is valid than that it is not valid” and that it would not be enough for it to be “merely possible” that the patent is valid. Traumann said this approach appears to suggest that applicants for preliminary injunctions in future cases before the Munich local division of the UPC will have to demonstrate a probability of ‘50% plus x’ in respect of the likelihood of validity of their patents.

The court further considered where the burden of proof lies in relation to the adducing of evidence on the question of a patent’s validity in preliminary injunction proceedings.

Traumann said: “The Munich local division of the UPC said that generally, pursuant to the UPC Agreement in conjunction with the Rules of Procedure, the claimants do not bear the initial burden of proof for the validity of the patent in suit. Nevertheless, the claimants are obliged, under Rule 206.2(d) in conjunction with Rule 211.1 of the Rules of Procedure, to provide evidence on the validity of the patent in suit. Such obligation is not limited to the patent in suit but also includes relevant patents from the patent family of the patent in suit, as far as they are object of a validity attack. This also applies if such attack has not yet been successful.”

“Stating that the claimants do not bear the initial burden of proof for the validity of the patent in suit, but then asking claimants to provide evidence on the validity of the patent in suit, appears to be inconsistent at first, even when understanding the legal nuance. In any case, it has significant implications for claimants. It means that they must prepare and submit evidence on the validity of the patent in suit, and even other patents belonging to the same patent family if they are under a validity attack, at a very early stage of litigation – specifically, when applying for a preliminary injunction. This can require a lot of preparation before filing a request for a preliminary injunction,” she said.

In granting the preliminary injunction against NanoString in this case, the Munich local division also considered that it is "convinced, with sufficient certainty, namely with at least a high degree of probability" that 10x Genomics’ patent is infringed.

The court also confirmed that patent holders will need to be able to demonstrate that the order of interim relief is necessary, and that the need is sufficiently urgent, for a preliminary injunction to be awarded. It said the mere likelihood that a patent has been infringed is insufficient in this regard.

In this case, 10x Genomics filed for a preliminary injunction for its unitary patent on the first day that the UPC became operational. The local division rejected claims raised by NanoString that if the preliminary injunction was so necessary and urgent, that 10x Genomics should have properly enforced its parent European patent before then. NanoString’s claims that 10x Genomics was negligent in this regard “does not hold water”, the Munich local division said. It considered that the option of enforcing of a European patent on a country-by-country basis cannot be considered equivalent to enforcing a unitary patent before the UPC, where enforcement can be achieved across all participating UPC states on the basis of a single decision of the UPC.

In considering the preliminary injunction application, the Munich local division also gave consideration to the potential damage that could arise to NanoString from imposing the order on the company. It said it “does not consider the possibility of long-term damage caused by the order for interim measures or their rejection to be unilaterally detrimental” to NanoString and that it would be harder for 10x Genomics to reverse any damage that may arise from not granting the injunction.