The Court of Appeal of the Unified Patent Court has overturned the preliminary injunction issued by the Munich local division against NanoString in its conflict with US biotech company 10xGenomics. The court cited substantial concerns about the invalidity of the asserted claim of 10xGenomics’ European Patent 4108782 B1, noting that “on the balance of probability it is more likely than not that the patent at issue will not prove to be valid.” NanoString has resumed of its CosMx™ Spatial Molecular Imager (SMI) products in the EU in 16 EU countries.
The case was the subject of the first public hearing in the existence of the UPC. After the hearing, in September 2023, the Munich local division granted 10x Genomics a preliminary injunction against NanoString, saying it was convinced of the validity of the patent at issue.
However, the Court of Appeal, ruling after another public hearing on 16 December 2023, disagrees: ‘5. The objection in the Appeal that, contrary to the judgement of the Court of First Instance, the validity of the patent at issue is not established with a sufficient degree of certainty for the injunction requested to be issued is rightly raised.
a) Since the order for provisional measures is issued by way of summary proceedings pursuant to R. 205 et seq. RoP, in which the opportunities for the parties to present facts and evidence are limited, the Court of Appeal agrees with the Court of First Instance that the standard of proof must not be set too high, in particular if delays associated with a reference to proceedings on the merits would cause irreparable harm to the proprietor of the patent (…). On the other hand, it must not be set too low in order to prevent the defendant from being harmed by an order for a provisional measure that is revoked at a later date (…).
211.2 RoP, in conjunction with Art. 62(4) UPCA (see also Art. 9(3) Directive 2004/48/EC), provides that the court may invite the applicant for provisional measures to provide reasonable evidence to satisfy the court to a sufficient degree of certainty that the applicant is entitled to institute proceedings under Art. 47 UPCA, that the patent is valid and that his right is being infringed, or that such infringement is imminent.
Such a sufficient degree of certainty requires that the court considers it at least more likely than not that the Applicant is entitled to initiate proceedings and that the patent is infringed. A sufficient degree of certainty is lacking if the court considers it on the balance of probabilities to be more likely than not that the patent is not valid.
‘It is, on the balance of probability, more likely than not that the subject-matter of claim 1 in the version asserted in the main request will prove to be not patentable’
The burden of presentation and proof for facts allegedly establishing the entitlement to initiate proceedings and the infringement or imminent infringement of the patent, as well as for all 28 other circumstances allegedly supporting the Applicant’s request, lies with the Applicant, whereas, unless the subject-mater of the decision is the ordering of measures without hearing the defendant pursuant to Art. 60(5) in conjunction with Art. 62(5) UPCA, the burden of presentation and proof for facts concerning the lack of validity of the patent and other circumstances allegedly supporting the Defendant’s position lies with the Defendant.
The aforementioned allocation of the burden of presentation and proof in summary proceedings is in line with the allocation of the burden of presentation and proof in proceedings on the merits, in which facts giving rise to the entitlement to initiate proceedings and the infringement or imminent infringement of the patent, as well as other circumstances favourable to the infringement action, are to be presented and proven by the rightholder (…), whereas the burden of presentation and proof with regard to the facts from which the lack of validity of the patent is derived and other circumstances favourable to the invalidity or revocation lies with the opponent (…).
b) Contrary to the opinion of the Court of First Instance, in the judgement of The Court of Appeal it is, on the balance of probability, more likely than not that the subject-matter of claim 1 in the version asserted in the main request will prove to be not patentable under Art. 65(2) UPCA, Art. 52(1), 138(1)(a) EPC.’
Reaction NanoString
In a press release Brad Gray, President and CEO of NanoString, reacted: ‘We have maintained from the outset of this case that the patents being asserted by 10x and Harvard against us are invalid. The court’s ruling is significant validation of our position. We are grateful to the UPC Court of Appeal for its in-depth analysis of the validity of the patent at issue and feel vindicated by its finding that it is ‘overwhelmingly likely’ that the patent is invalid on the basis of prior art.
Going back to 2021, 10x has chosen to deploy a highly questionable litigation campaign against NanoString and several other innovative companies in the marketplace in what we believe is an effort to eliminate competition in the research tools space to the detriment of science and the public good. (…) NanoString is committed to continuing our fight for choice and intends to seek damages that will compensate for the hardship caused by the plaintiffs’ unjustified preliminary injunction.’
Chapter 11
In a separate ruling, the UPC’s Court of Appeal, rejected 10X Genomics’ request to stay the proceedings due to NanoString’s Chapter 11 insolvency filing in the US of 4 February 2024: ‘The fact that in particular the principles of procedural economy and cost efficiency as well as a fair balance between the legitimate interests of the parties speak in favour of not staying the proceedings if a party is declared insolvent after the oral hearing has concluded and the legal dispute is ready for a decision is confirmed by comparable provisions in the national civil procedural law of several contracting Member States to the Agreement.’
Due to the rulings, NanoString can resume selling its products in the UPC member states. However, in a letter to clients CEO Brad Gray explains why NanoString will not yet sell any products in Germany: ‘The court’s decision lifts the preliminary injunction in all 17 UPC member countries in the EU, though, for now, the injunction in Germany remains in place. In a separate decision in December concerning a related patent at issue in the litigation, the German Higher Regional Court of Munich ordered the lifting of the injunction on the sale of CosMx products in Germany, subject to a security bond payment. NanoString is evaluating its next steps in Germany in light of the decision from the UPC and will provide updates to German customers as more information becomes available.’
In October 2023, the Unified Patent Court refused to grant 10x Genomics a second preliminary injunction against NanoString, in a case concerning European Patent 2 794 928 B1, as it was not convinced of the infringement of 10x’s patent.
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I am confused as to what interpretation the Court of Appeal has arrived at with respect to Article 69 EPC.
Under the heading “Leitsätze” (Guiding Principles), the 3rd paragraph of point 2 states:
“Der Patentanspruch dient nicht lediglich als Richtlinie, sondern sein Gegenstand erstreckt sich auch auf das, was sich nach Prüfung der Beschreibung und der Zeichnungen als Schutzbegeh-ren des Patentinhabers darstellt”.
My understanding is that this translates as:
“The patent claim does not merely serve as a guideline, but its subject matter also extends to what appears to be the patentee’s request for protection after examination of the description and drawings”.
However, the 1st full paragraph on page 27 of the decision states:
“Das bedeutet aber nicht, dass der Patentanspruch lediglich als Richtlinie dient und sich sein Gegenstand auch auf das erstreckt, was sich nach Prüfung der Beschreibung und der Zeich-nungen als Schutzbegehren des Patentinhabers darstellt”.
If I am not mistaken, that statement reaches a VERY different conclusion to that outlined in the “Leitsätze”, as its machine translation reads as follows:
“However, this does NOT mean that the patent claim only serves as a guideline and that its subject matter also extends to what appears to be the patent holder’s request for protection after examining the description and drawings”.
Thus, the above two statements from the same decision appear to be at odds with each other. Moreover, the statement in the “Leitsätze” appears to be at odds with the Protocol on the Interpretation of Article 69 EPC, which specifically indicates that Article 69 EPC should NOT be taken to mean that “the claims serve only as a guideline and that the actual protection conferred may extend to what, from a consideration of the description and drawings by a person skilled in the art, the patent proprietor has contemplated”.
What is going on here? It is not possible for both statements to be true, so which does the Court of Appeal actually believe?
On a more positive note, it is pleasing to see the Court of Appeal issuing a decision in a composition that complies with Article 9(1) of the UPC Agreement (“Any panel of the Court of Appeal shall sit in a multinational composition of FIVE judges”). I am not sure that the same can be said for some of the Court’s earlier decisions.
With regard to the headnote, it may be that there is an error in the German version and it was intended that the meaning of the English version should be conveyed, “[t]his does not mean that the patent claim merely serves as a guideline but that its subject-mater also extends to what, after examination of the description and drawings, appears to be the subject-mater for which the patent proprietor seeks protection.”
My initial thought was that there was an error with the wording of the headnote. However, the official English translation of the two passages in question just deepens the mystery.
Headnote:
“This does not mean that the patent claim merely serves as a guideline BUT that its subject-matter also extends to what, after examination of the description and drawings, appears to be the subject-matter for which the patent proprietor seeks protection”.
Page 27 (of German original):
“However, this does not mean that the patent claim merely serves as a guideline AND that its subject-matter also extends to what, after examination of the description and drawings, appears to be the subject-matter for which the patent proprietor seeks protection”.
The official translation of the headnote appears to give a somewhat unusual meaning to “dient nicht lediglich”. That is, instead of what would appear to be the plain meaning (“does not merely”), it is translated as “does not mean that … merely”. This does seem to move the meaning of the statement in the headnote somewhat closer to that of the paragraph on page 27.
Nevertheless, a crucial difference remains, namely the different meanings imparted by the words “and” (in the headnote) and “but” (in the paragraph from page 27 of the German original). That is, the wording of the headnote implies that ONLY what precedes “but” is not true, whereas “and” on page 27 implies that what follows is ALSO not true.
Perhaps the Court of Appeal could issue a corrected (German-language) original in order to clear up the confusion?
Mike, I tend to agree. The original wording of this sentence of the headnote is a bit awkward and does not reflect the court’s message on page 27. It is also inconsistent with clause 1 of headnote 2 (which btw corresponds to the standard German formula of what Art. 69 EPC is supposed to mean). I suppose clause 3 should have read: “Der Patentanspruch dient aber nicht lediglich als Richtlinie in dem Sinne, dass sich sein Gegenstand sich auch auf das erstreckt, was sich erst nach Prüfung der Beschreibung und der Zeichnungen als Schutzbegehren des Patentinhabers darstellt”. (“The patent claim does, however, not merely serve as a guideline in the sense that its subject-matter also extends to that which, only after examination of the description and drawings, appears to be claimed by the patent proprietor”). This would at least convey a consistent message of the overall decision, whereas in the current version of the headnotes, clause 3 of headnote 2 sounds a bit confusing.
Indeed, the headnote and the reasons are inconsistent in both the English and German text, it seems.
” it is pleasing to see the Court of Appeal issuing a decision in a composition that complies with Article 9(1) of the UPC Agreement (“Any panel of the Court of Appeal shall sit in a multinational composition of FIVE judges”). I am not sure that the same can be said for some of the Court’s earlier decisions.”
I also noticed that previous decisions of the Court of Appeal seem to violate Art. 9(1) UPCA (if so, what a shame). I guess that they would be considered fundamental procedural defects under Art. 81(1)(b) UPCA (Rehearing).
P.S.: in case of a fundamental procedural defect done by the Court of Appeal, who would decide on the rehearing under Art. 81 UPCA? The Court of Appeal itself??
An application for rehearing under Art 81UPCA + R 245 UPCA is similar to a Petition for review under Art 112a EPC, whereby the Court of Appeal may
– waive the payment of the fee, rather than reimburse it
– give the application for rehearing a suspensive effect
The fundamental procedural effects allowing the filing of an application for rehearing are defined in R 247 UPCA.
There is as well an obligation to raise objections, cf. R 248UPCA, similar to R 106EPC.
Art 81 stipulates that “a request for rehearing after a final decision of the Court may exceptionally be granted by the Court of Appeal”.
According to Art 6(1) UPCA, the Court shall comprise a Court of First Instance, a Court of Appeal and a Registry.
If there is no appeal, a decision of the court of first instance becomes final and might thus be subject to a rehearing. In case of appeal, the decision of the court of appeal is a final decision.
I would thus be inclined to say that the Court of Appeal might rehear one of its own decisions.
According to R 254(2) UPCA, 2. the action [of rehearing] shall be assigned to a panel consisting of three legally qualified judges. The President of the Court of Appeal may order that judges of the Court who participated in taking the decision to be reviewed shall not sit on the panel.
It is thus in principle possible that judges of the rehearing panel were involved in the decision they are meant to rehear/revise. Reasonable doubts are permitted whether such a composition guarantees a fair review/rehearing or that it is in accordance with the treaties relating to the EU and/or Art 6(1) ECHR.
There is double procedure at the EPO: first a panel of three members (2LM 1TM) decides on the admissibility of the petition. If a petition is admitted, a panel of five members (3LM 2TM) will decide on the allowability. At the EPO, ordinary members of the BA can sit in the panel deciding on a petition for review provided they have not participated in the decision subject to review.
At the UPC, there is one procedure for rehearing, with only three legally qualified judges. It is not even said that the member of the panel for rehearing have to be from the Court of Appeal.
The existing problems with the BA/EBA in the EPO are thus compounded at the UPC.
Be it at the EPO or at the UPC, the revision instance should be truly independent of the BA or of the UPC. Revision should not only possible in procedural matters, but also in substantial matters.
Could the answer lie in RoP 345(8)? Are we looking at a situation akin to G 3/19, i.e. where a provision of the rules effectively amends a provision of an international agreement? That is, does RoP 345(8), by way of its reference to RoP 345(2), permit the Court of Appeal to sit in a composition that complies with Article 8 (but NOT Article 9)?
Whilst such an interpretation would be troubling, it would be helpful if the Court of Appeal could explain if this is how it interprets the provisions of the UPCA that govern the composition of panels of the Court of Appeal. If that is the explanation, then knowing this could make a significant difference to any party contemplating filing a request for a rehearing under Article 81(1)(b).
Rop 345:
1. The President of the Court of First Instance or a judge to whom he has delegated this task in a division, the seat of the central division or one of its sections shall allocate the judges to the panels of the local and regional divisions, the seat of the central division and its sections.
2. The allocation shall be in conformity with Article 8 of the Agreement.
…
8. Paragraphs 1 to 6 shall apply mutatis mutandis to the Court of Appeal.
Article 8 UPCA
(1) Any panel of the Court of First Instance shall have a multinational composition. Without prejudice to paragraph 5 of this Article and to Article 33(3)(a), it shall sit in a composition of THREE judges.
we have tried to tackle down this issue, based on some (3) decisions issued by the CoA where a reasoning (based on efficiency) is given.
https://www.august-debouzy.com/en/blog/2054-la-jub-enfreint-deja-larticle-6-de-la-cedh
our believe is that irrespective of the reasons given by some CoA, there is indeed an Art.6 ECHR issue
The Court of Appeal repeatedly violated the UPCA and the ECHR! What a faux pas!
I read all this with dismay. It seems that the issue is not one for abstruse debate between grammarians as to the presence of a conjunctive or disjunctive “and” or “but”. It seems that the issue is not the challenge of preserving precise meaning when hopping from one language to another. Instead, one wonders i) whether the Court of Appeal is able to express itself clearly and ii) whether it understands Art 69, EPC.
I refuse to believe that the Court doesn’t understand Art 69. That leaves the remaining problem, that the Court is not able to express itself unambiguously and clearly, even in the first language of its opinion writer. I wonder, is the Court now going to be reduced to defending its written Decisions with the excuse that a “mind willing to understand” will have no difficulty deriving the court’s opinion from the court’s text. I hope not.
Max, I agree with your diagnosis of the likely root cause of the problem here. Combined with the apparent contravention of Art. 9(1) UPCA for other decisions, it seems to me that the Court of Appeal has not got off to the most promising of starts. I can only hope that such worrying wrinkles are soon ironed out.
There is another Art 6 ECHR issue:
What is the legal basis for the Decision of the Presidium of the UPC on the provisional distribution of actions related to patents in IPC sections (A) and (C) pending before the central division?
I might be mistaken, but I have never seen a court disregarding its founding text as blatantly as the Presidium of the UPC has done here. When the decision of the Presidium was issued, 08.05.2023, the UPC had not even yet entered into force, and the distribution of IPC classification units for the various sections of the central division had not yet been amended.
The amendment of Art 7(2) UPCA carried out by the Administrative Committee on 26.06.2023 under Art 87(2) UPCA is clearly in breach of the VCLT. When looking at the spirit and scope of Art 31 and 32 VCLT, there is no interpretation possible of the provisions of Art 7(2) UPCA in view of the crystal clear wording.
Art 87(2) UPCA was never conceived to cope with the consequences of Brexit. The common understanding of Art 7(2) UPCA mentioned in the decision of 26.06.2023 has never been put in relation with Art 31-32 VCLT.
Art 87(2) UPCA was set up to amend the UPC after all of its contracting states have each adopted new Union law or ratified an international treaty relating to patents. The Brexit does not fall under either criteria.
Following Brexit, the only legally correct way to amend Art 7(2) UPCA would have been to convene a Diplomatic Conference to that effect. There would have been plenty of time to do so between after June 2016. This might have delayed the entry into force, but would not have been rebuttable as it is presently. This is the more necessary since the UPCA does not even contain any exit clause!
There is a constant thread going through actions of the Court, its Presidium or of the Administrative Committee: quick actions, high efficiency. But this should not be at the cost of basic legal rules or legal certainty.
It will also be interesting to see what the CJEU will have to say when according to Art 21 UPCA, the UPC will file a request for a preliminary ruling at the CJEU. Let’s hope for a legal and not a political decision.
This shows that patents are poorly conceived and managed, no one knows how to interpret them and everyone wants to have their say without a minimum of consistency and certainty. Let’s face it: it’s a game for its own sake, without any scientific or legal basis, a jackpot Sure, if a company discovers something sensational, it’s fair to give them credit and economic advantage, but the rest is all a waste of public money and contributes little to progress. In my opinion one should only look at the market success of a product and that should be an indication of its relevance to progress, all other analyses are just random and unreliable. Forgive me for venting, but I am increasingly disappointed by a sector that has little to do with technological reality and real society.