The Unified Patent Court (UPC) offers patent holders provisional measures that may be used against alleged infringers. One such measure is the preliminary injunction (PI) which, if granted, may be highly disruptive to the target. In some cases, PIs can even be granted ex parte, without the target of the PI being heard before the PI is ordered. The severe impact on the business operations of the target means that the UPC sets a high standard that patent holders must demonstrate before such measures are granted. One core factor is the timing of the request. Specifically, if the patent holder does not show that urgent measures are necessary, those measures are unlikely to be granted.

Ericsson vs. ASUSTek, Arvato, and Digital River

In June 2024, Ericsson applied for provisional measures at the Lisbon Local Division (LD) requesting a PI against ASUSTek and two co-defendants, Arvato and Digital River, for alleged infringement of EP2819131. EP2819131 relates to an inductor layout for reduced voltage-controlled oscillator (VCO) coupling that exists in certain WiFi Modules. Ericsson alleged that ASUSTek and Digital River infringed the patent in respect of offering and selling laptops and notebooks that include either the Intel Wi-Fi 6E AX211 Module or the Intel Wi-Fi 6 AX201 Module. Arvato was implicated by its storing, shipping and repair services in relation to ASUS branded products that include such modules. The defendants responded to Ericsson’s application in July 2024, arguing that it should be dismissed. An oral hearing was held in September 2024, with the decision issued last week. (UPC_CFI_317/2024)

Demonstrable urgency

In making its decision on provisional measures, the Lisbon LD focused on “urgency”. It outlined that provisional measures are an exceptional form of accelerated proceedings in which prima facie assessments of the parties’ rights must take place. In such circumstances, the Court must be convinced of a need to prevent irreparable harm to the patent holder by ordering the immediate cessation of an infringement or the prevention of imminent infringement, whilst at the same time balancing the interests of the alleged infringer. The Court acknowledged that although “urgency” is not expressly stated in the UPCA or its rules, the condition of urgency reflects a need for early and prompt protection of the applicant’s rights to thereby avoid damage resulting from delays in resolving the case on its merits. Correspondingly, the Court held that an unreasonable delay in initiating the proceedings would arise if an applicant had either acted negligently or had hesitated in requesting provisional measures after gathering all the necessary elements for a promising legal action.

In the present case, the defendants argued that Ericsson had failed to demonstrate the necessary diligence, suggesting that Ericsson must have been aware of the accused WiFi Modules at a much earlier date than when proceedings were initiated. The alleged infringements were acknowledged to have begun in 2019 and 2021, when the respective modules were incorporated into ASUS products sold on European markets, and such use was publicized on several internet sites (including at www.asus.com). In parallel, the defendants referred to ITC proceedings in the USA in October 2023 between Ericsson and Lenovo that concerned the same modules, and argued that this indicated that Ericsson had been actively observing the markets. By implication, Ericsson must have been aware of the infringement in Europe a long time before June 2024.

The Court upheld the defendants’ view that Ericsson had failed to demonstrate that it had not delayed proceedings unnecessarily. In particular, in the various exchanges, Ericsson did not indicate the date on which it became aware of the alleged infringements (such that the delay to initiation of proceedings could be determined) and remained silent on the issue.

Moreover, as the Court pointed out, Rule 211 RoP states that the onus is on an applicant for provisional measures to “provide reasonable evidence … that his right is being infringed, or that such infringement is imminent”. As part of that assessment, the burden of proving urgency and due diligence in initiating proceedings fell on Ericsson. Since the Court was not provided with the exact date that Ericsson became aware of the infringement, that burden could not be satisfied. Rather, the Court was left to conclude that even if the infringements came to light only in October 2023 (the latest of the dates offered by the defendants), initiating proceedings eight months later in June 2024 was too late. Correspondingly, the request for a PI was denied.

The Court’s decision is appealable but the need for rapid action by the applicant in the face of an alleged infringement is consistent with the one-to-two-month timeline adopted by other local divisions (e.g. Munich LD in Scandit AG vs Hand Held Products, Inc, UPC_CFI_74/2024 27th August 2024). Given the apparent delay, it may be an uphill battle for Ericsson to argue this point.

It is also notable that whilst the Lisbon LD could have dismissed the PI application for lack of urgency alone, the Lisbon LD, in its first decision, also chose to review the merits to address infringement as well as validity, providing Ericsson with positive prima facie views on both. Although the requirements for provisional measures were not met, Ericsson seems to have a strong case on the merits and might be optimistic of a positive final verdict, which could influence future settlement discussions.

Takeaways

PIs serve as a formidable tool for patent holders to eliminate third-party products and services from the market. However, due to their stringent nature, patent holders face a high burden of proof to justify the granting of such measures. So far, the UPC has consistently found that patent holders must demonstrate that they have taken all necessary steps to avoid unnecessarily delaying proceedings in order to make a successful request for a PI. Even so, what constitutes a delay is not yet uniform and there may be differences in how the different LDs apply the urgency criterion, inviting claimants to select their forum accordingly.

Conversely, for third parties filing protective letters to mitigate the risk of provisional measures being granted ex parte, comments related to a lack of urgency may be quite persuasive, particularly if the patent holder’s awareness of an allegedly infringing article can be demonstrated (for example, from the presence of the patent holder at a trade fair, or public access to an online marketplace).

Carpmaels & Ransford’s specialist teams of IP lawyers have a wealth of experience in this field, working with innovators to create effective and comprehensive IP strategies that will protect innovations in the long term. If you have any questions, please do get in touch with the team.