UPDATE: The Unified Patent Court granted US biotech company 10x Genomics a preliminary injunction against rival NanoString. It was the UPC’s first PI in a case were an oral hearing was held with both parties. NanoString has announced it will appeal the order in the UPC Court of Appeal in Luxembourg.
Earlier, an ex parte PI order was granted by the UPC Local Division Dusseldorf in June 2023 (ORD_ 541204/2023, in the case of myStromer AG v Revolt Zycling AG),
The order in the 10x Genomics case was issued yesterday by Presiding Judge Matthias Zigann at the Munich local division of the UPC. The panel included three other judges: Tobias Pichlmaier, András Kupecz and Eric Enderlin (TQJ). The oral hearings were held on 5 and 6 September, as described among others by FOSS Patents.
As 10x Genomics announced on its website: ‘10x Genomics, Inc. (Nasdaq: TXG), a leader in single cell and spatial biology, announced today that the European Unified Patent Court (“UPC”) issued a preliminary injunction against NanoString Technologies, Inc. (Nasdaq: NSTG) for infringing European Patent 4 108 782 B1 (“the EP 782 patent,” docket No 459746/2023). The preliminary injunction, issued by a panel of four judges with both legal and technical expertise, prevents NanoString from selling or providing services using its CosMx Spatial Molecular Imager (SMI) instruments and CosMx reagents for RNA detection in all 17 countries of the UPC.
(…) The injunction on the EP 782 patent requires that NanoString stop selling or providing services using the CosMx SMI instruments as well as CosMx reagents for RNA detection in Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovenia and Sweden.
(…) In a separate case before the UPC, 10x also requested a preliminary injunction against the CosMx Spatial Molecular Imager (SMI) instruments and CosMx reagents for RNA detection for infringing European Patent 2 794 928 B1 (“the EP 928 patent,” docket No 459996/2023), which is in effect in France and the Netherlands in addition to Germany. The UPC held a hearing on this request today and announced that it expected to issue a decision on October 10, 2023.’
NanoString will go to UPC Court of Appeal in Luxembourg
NanoString is disappointed and has announced it will appeal the order in the UPC Court of Appeal in Luxembourg. In a press release, it stated: ‘We are confident in our belief that we do not infringe the asserted patents, and that the patents will ultimately be found to be invalid. We also respectfully believe the court erred by failing to adequately consider evidence demonstrating that the patents asserted by 10x were funded by a grant of over $19 million from the National Institutes of Health that required open and non-exclusive licensing to promote the public interest.
NanoString remains steadfast in our commitment to defend the scientific community’s access to our products and researchers’ scientific freedom to select the platforms that best advance their research. Importantly, today’s ruling does not impact NanoString’s legal ability to market or sell CosMx SMI products for protein detection in the European Union, nor does it impact the lawful selling of any NanoString CosMx SMI products in the United States, the United Kingdom or the rest of the world outside of the EU member states participating in the UPC system.
We believe that 10x Genomics has resorted to the courts and is misusing non-final court rulings as part of its commercial strategy to eliminate competition in the spatial transcriptomics market to the detriment of the public good.’
Comments
The case of 10x Genomics and NanoString has been discussed on various platforms. DLA Piper made a summary of the hearings, with six take aways, including points such as ‘it seems that the UPC will handle PI cases with the pace that we know from national (e.g. German) proceedings’, ‘Parties can expect the panel to give quite a detailed introduction to the case and respective relevant questions at the beginning of the hearing’, ‘the question of validity will not be ignored by the UPC’ and ‘the panel phrased a preliminary opinion (…). If losing the case is similarly detrimental for both sides respectively, it might follow from the Enforcement directive that the court should lean towards the plaintiff in this case.’
Carpmaels & Ransford described in detail the various steps in the procedure, in which a discussion of novelty of the claims was conducted. ‘This is very interesting as it seems to go beyond the intention of the UPC Agreement (…).’ Some more quotes from the article:
‘The court again referred to the Bundespatentgericht’s preliminary opinion (…), asking in particular the defendants to comment on the BPatG’s opinion and why they thought it was incorrect’
‘References were also made to opinions by experts on the invention and the prior art, but the court stated that it was the quality of the argument, not who made it, which mattered – given that two judges on its panel had a background in biotechnology. This is also a highly relevant aspect as it is the first time that weight has been put on expert evidence in the UPC.’
‘(…) There was further debate about which standard the UPC should be applying when considering validity under Rule 211(2) RoP. The applicants argued for a ‘balance of probabilities’ approach and so a standard that is significantly lower than that applied in German courts which look at validity “beyond reasonable doubt” in provisional measures (…).’
‘The chair also commented in his preliminary remarks on the need to weigh up the parties’ interests. (…) until now only very few cross-border PI requests were brought in Europe, such that balancing the interests of the parties in a 300 million-people market is an exercise that has not been done often by EU courts.’
‘(…) the applicants filed an amended claim set as an auxiliary request. (…) The court did not decide on admissibility but noted that a second hearing would be required if the auxiliary request was held admissible and needed to be discussed in substance.’
Managing IP pointed out the UPC’s PI ‘is the second injunction 10x has obtained from a court in Germany against NanoString so far this year. The Munich Regional Court issued an anti-anti-suit injunction against NanoString in April (…). The order forced NanoString to withdraw an anti-suit injunction it had filed at the US District Court for the District of Delaware.’
This report was updated on 20 September 2023 to include NanoString’s announcement it will challenge the UPC’s decision.
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battles between similar size giants, some hundreds million of revenue and around 1000 employees, both have resources enough to appeal and appeal … funny they claim that some funds came from National institutes, as if they would have not (rightly) do the same …
At least the panel in Munich took its time to decide and did not act like the Dusseldorf panel, when it decide a PI in a few hours in case “myStromer AG v Revolt Zycling AG”. The counter part of the PI in Dusseldorf was a deposit of € 500 000 so that the PI could be carried out. One question arises: by fixing the deposit to such a level, is this not a way for a panel to increase the court fees?
In Dusseldorf the panel was exclusively composed of 3 LQJ, whereas one of the judges also sat in Munich in the present case. in view of the very specific case, it was surprising that no TQJ was called.
EP 4 108 782 is a divisional of EP 2 794 928. An opposition has been filed by NanoString against EP 4 108 782 on 18.07.2023 and is still pending before the EPO.
No opposition has been filed against EP 2 794 928. There is a further divisional in the pipeline EP 3 425 063 which has been granted on 11.05.2023, and the opposition period is still running.
It is thus somehow surprising that a PI has been granted against the divisional, but that the decision about a PI against the parent is only due in October.
The local panel in Munich seems to have acted like the panel in a mock hearing organised by EPLA a few years ago. As the Munich panel (like any UPC panel in Germany) will always comprise two German judges and the chairman, it is to be expected that German traditions in matters of PI in particular, and German procedure and handling/case law will make their inroads in the UPC procedure when German panels are on the go.
This was clearly to be felt in said mock UPC hearing. The hearing was chaired by Mr Zigann. He made clear during the mock that since “we did it like this in Germany, there was no reason not to continue”. The mock panel was composed of two German, one Dutch LQJ and one French TQJ.
I would be Nanostring, I would escalate the dispute to any National Court challenging the legality of the whole UPC construction, and ask the CJEU to verify the validity of the ‘common court’ in the Brussels1 regulation, as EU law (notably the IPRED directive) cannot be outsourced to courts outside of National ones, provided by TEU19.1, which was clarified in Opinion 1/09.
For the case of intra-EU investment courts in Achmea, Slovakia was not happy with the result and challenged the legality of those courts in front of National Courts (in Germany), which asked the CJEU via a preliminary question.
In Achmea, infringement of art267 (exclusive right of National Courts to ask the CJEU on EU law) was found.
I doubt that NanoString will challenge the legality of the UPC. It will be another defendant, most probably European.
The two litigating parties are US companies and I cannot see any of the two giving up a fundamental aspect and enormous advantage of the UPC: the opening of a single door for litigating in Europe! What has been done with the European trademark has been repeated with the UPC, with however a big difference: the CJEU is not the last instance dealing with unitary patents or patents validated in a UPC/EU contracting state.
Reasonable doubts are permitted wether the UPC is a legal court according to Art 6(1) ECHR.
All the arrangements with the provisional and final allocation of duties of the former
London Section are far from a sound legal basis. This is the more so since various provisions of the VCLT have been carefully ignored.
In the absence of an exit clause of the UPC, the exit of the UK can be challenged.
It is to be hoped that a court in a contracting state will have the last word.
It might not be as positive as all the staunch supporters of UPC might think.
After all, decisions of the UPC will, at a moment or another, have to be enforced.
Only decisions of a court set up on a correct legal basis can be enforced.
It will be a long time until the UPC will refer a prejudicial question to the CJEU. The risk is too high that the latter will challenge the legality of the UPC.
There is a difference between the procedure in Dusseldorf and in Munich. In Dusseldorf the PI was granted ex parte. This might explain the very high deposit required for the PI to be executed, i.e. € 500 000. In Munich it was granted after hearing both parties.
EP 4 108 782 is a divisional of EP 3 425 063 which is itself a divisional of EP 2 794 928. An opposition has been filed by NanoString against EP 4 108 782 on 18.07.2023 and is still pending before the EPO. Actually, the proprietor has not yet replied to the opposition.
The divisional EP 3 425 063 has been granted on 11.05.2023, and the opposition period is still running.
It is thus somehow surprising that a PI has been granted against a divisional, but that the decision about a PI against the parent is only due in October.
As local panels in Germany will always be composed with at least two LQJ, one of which being the chair of the panel, it can be expected that the tradition in matters of PI established in Germany will be pursued at the UPC. It will be an arduous task for the Court of Appeal of the UPC to harmonise all different approaches stemming from national traditions.
It will be interesting to see how two parallel procedures, between the EPO and the UPC, will go along next to each other. It will be interesting to see whether the alleged infringer will file a counter-claim for nullity at the UPC, whilst he has an opposition running at the EPO. In view of the litigation, one can at least expect a request for acceleration of the procedure before the EPO.
Independently of its admissibility, the mere fact that the proprietor has already filed an amended claim set as an auxiliary request at the UPC, could lead to the conclusion that the proprietor is not absolutely sure about the validity of its patent. It will also be interesting to see whether the AR filed at the UPC will be filed at the EPO.
Interesting times are ahead of us. It will also be interesting to see when a European SME will file an application for PI, infringement or of nullity at the UPC. It might take some time in view of the financial burden such actions require. But the UPC was meant to help European SMEs….