The Unified Patent Court, or UPC, opened its doors for business on June 1. Since then, cases have been filed continuously, and the court has already issued its first decision.
For example, one of the first ex parte preliminary injunctions was granted by a German local division on June 22 in the case myStromer AG v. Revolt Zycling AG.
The judges saw a risk of irreparable harm in case of continued presentation of the attacked e-bikes at the “Eurobike 2023” trade show.
As a result, they issued the preliminary injunction without hearing the affected distributor, who had filed a protective brief and inter alia asked for a hearing prior to such decision.
This article provides a short overview of the factual background, the court’s decision and the subsequent development of the case, followed by the key takeaways to provide litigants with practical guidance and an overall conclusion as regards to the main implications of the case for practitioners.
Factual Background of the Patent Dispute
The case relates to a patent dispute between the Swiss bicycle companies myStromer and Revolt Zycling.
Revolt Zycling announced on its website the prospective delivery of certain e-bikes with a specified bicycle frame and motor hub structure. Upon request of myStromer, an inspection of those bikes took place on June 19 at the Swiss headquarters of Revolt Zycling, which filed as precaution a protective brief on the same day with the UPC.
Two days later, Revolt Zycling presented its e-bikes at the “Eurobike 2023” trade show in Frankfurt, Germany.
In parallel, Revolt Zycling also provided an order form in German and English on its website to enable orders of the bikes via its distributors.
MyStromer sent a warning letter to Revolt Zycling on June 22 and applied on the same day for a preliminary injunction at the UPC’s local division in Düsseldorf, Germany.
The request was based on the alleged infringement of its European patent EP 2 546 134 B1, which protects a combination structure of a frame and motor hub adapted for an electric bicycle. The patent was filed on Oct. 11, 2011, and was granted on March 25, 2015.
The patent is in force, inter alia, in Austria, Germany, France, Switzerland, Italy, Lichtenstein and the Netherlands. Neither an opposition nor national nullity proceedings had been filed against it.
Preliminary Injunction Granted Ex Parte Despite Protective Brief
The German local division issued the preliminary injunction on June 22, the same day that the request was filed, without hearing Revolt Zycling, which is an ex parte injunction, even though Revolt Zycling had not only asked that the request for an interim injunction be dismissed but also asked the court not to decide the case without a prior hearing.
Revolt Zycling had therefore submitted certain defense arguments including an alleged lack of infringement and an exhaustion of rights.
In its concise reasoning, the court briefly stated that it considered the noninfringement arguments were not convincing. It did not see an exhaustion of rights and held the matter urgent since the trade show had already started.
Considering these aspects when exercising its discretion, the court found the issuance of a preliminary injunction appropriate and justified.
The court also noted that the validity of the patent was sufficiently secured for the issuance of such preliminary injunction, as its grant had already been published in 2015, and it had not been attacked in opposition or national nullity proceedings. Furthermore, Revolt Zycling had not presented relevant prior art.
The court particularly found it reasonable to grant the injunction without hearing Revolt Zycling.
MyStromer had shown to the satisfaction of the court that a delay of such grant would cause it irreparable harm since the “Eurobike 2023” trade show was of considerable relevance for the entire industry.
The court considered it obvious that the exhibition of the infringing bikes at this trade show could lead to a loss of sales or market shares of myStromer, which could hardly be reversed since the products of both parties were directly competing.
Accordingly, Revolt Zycling was ordered to refrain from offering, placing on the market, using, importing or possessing for such purposes combination structures of bicycle frames and motor hubs that fall under the scope of protection of claim one of the patent in the suit during its remaining term in Germany, the Netherlands, France and Italy.
In addition, Revolt Zycling was ordered to surrender the infringing products in its direct or indirect possession or ownership at the “Eurobike 2023” trade show to a bailiff to prevent their marketing and circulation in the distribution channels during the trade show.
On the other hand, myStromer was ordered to provide security in the amount of €500,000 ($547,038). Revolt Zycling had the opportunity to request a review of the order within 30 days after its execution.
Subsequent Request for Correction of the Order
What is noteworthy is that the case did not find its end after the grant of the preliminary injunction.
In its first motion, myStromer sought interim relief for all UPC member states where the patent is in force.
In its auxiliary motion, myStromer clarified that this should particularly apply to the UPC states Germany, the Netherlands, France and Italy. Accordingly, the court granted the preliminary injunction only for those four UPC states.
MyStromer subsequently applied for a correction of the decision and asked the UPC to also include Austria in the injunction order.
The court refused this however, since myStromer’s substantiation of the infringing acts only dealt with Germany, the Netherlands, France and Italy. This would not allow any other conclusion than that the missing mention of Austria in the auxiliary motion was not a misspelling, but rather expressed that the auxiliary request exclusively referred to Germany, the Netherlands, France and Italy, despite the general wording of the main request.
In addition, infringement proceedings on the merits are also pending at the UPC between the parties based on the same patent in suit.
Key Takeaways for Litigants
The five key takeaways for litigants at this new venue are as follows.
The territorial scope of the decisions of the UPC can be extremely far-reaching given that 17 European member states are currently participating in this new system. This can be very attractive for potential claimants, since one single application may suffice to obtain an injunction for several countries at once.
Applicants aiming to obtain an injunction for several UPC member states must substantiate the alleged infringement for all countries for which the decision shall take effect.
It seems advisable to phrase motions carefully and to submit sufficient evidence. In particular, all territories where the decision shall take effect should explicitly be mentioned in the motions and in the reasoning to avoid any pitfalls.
The UPC is fully prepared to deal with applications for preliminary injunctions in an extremely speedy manner. Injunctions may even be granted within one day if the case is urgent.
Applicants should thus be prepared with a strong argumentation line to build a strong and convincing urgency case.
The judges have discretion when deciding on the grant of a preliminary injunction, in particular, whether they want to hear the opposing party or not. If applicants can convince the court that a delay would cause them irreparable harm, the chances of getting an ex parte injunction should be good if all other prerequisites are met.
In the present case, the protective brief did not prevent the grant of an injunction. It may even have triggered the issuance of an ex parte injunction as the court was able to deal with the respondent’s defense arguments.
Potential infringers who fear the grant of a preliminary injunction should thus be careful with such briefs and diligently weigh their pros and cons for each specific case.
In conclusion, the UPC is an attractive venue for patent disputes given the fact that in less than three months, the number of cases registered for public in the UPC’s case management system has reached more than 40.
What may have attracted the first filers could be the broad territorial jurisdiction of the court and the promise of speedy proceedings.
This first substantive decision of the UPC may confirm litigants’ hopes, as the court could demonstrate its ability to decide cases extremely quickly.
The UPC judges are aware of the economic impact a potential patent infringement may cause on the side of the patentee. If they see a risk of irreparable harm preliminary injunction orders may even be granted on the same day as requested and without hearing the opposing party.
In view of that, combined with the far territorial reach, it may therefore be expected that this new venue will attract more and more litigants over the course of time.
Parties conducting patent litigation in Europe should therefore be aware of this new venue and consider it in their European and global patent litigation strategy.
However, when deciding to take advantage of this new system, litigants must also be well-prepared to make the best tactical use of its possibilities.
The present case shows how important it is for both parties on the active and defensive side not only to carefully phrase their motions but also to sufficiently substantiate and prove them. Otherwise, this could easily weaken the desired result.
It is therefore important to take an in-depth look at the new system and its specific requirements, and to examine each individual case thoroughly not to lose sight of any essential aspects. Those who take this into account should be well prepared to litigate at this new venue.
Originally printed in Law360 on September 1, 2023.