In its first substantive judgment, the Lisbon Local Division of the Unified Patent Court (UPC) has rejected an application for a preliminary injunction (PI) made by Telefonaktiebolaget LM Ericsson (“Ericsson”) in its decision of 15 October 2024. The application concerned the alleged infringement of EP 2 819 131 B1 (the “Patent”) by Asustek Computer Inc (“AsusTek”), Arvato Netherlands B.V (“Arvato”) and Digital River Ireland Ltd (“Digital River”) (together, the “Defendants”).
The Patent concerns voltage-controlled oscillators that generate a signal of differing frequencies which can be used to reduce interference in an electrical current. In asserting the Patent against the Defendants, Ericsson primarily sought a PI prohibiting the offering and selling of laptops and notebooks containing specific Intel modules (“Infringing Products”) by AsusTek and Digital River. Arvato is an intermediary which stores Asus products which contain the Intel modules for the purpose of onwards sale. Ericsson sought alternative wording to the proposed PI order, additionally requesting:
- that Arvato is prohibited from providing, storing, shipping or performing repair services in respect of the above-mentioned products;
- that the Defendants provide additional information in relation to their distribution and sales of the Infringing Products;
- delivery up of any stock of Infringing Products; and
- an Order for costs to be paid to Ericsson in addition to a penalty payment.
The Defendants objected to the application arguing that the Lisbon Local Division lacked competence pursuant to Art. 33(1) UPCA (as further explored below). The Defendants also asserted non-infringement and invalidity arguments.
CHALLENGE TO THE COMPETENCY OF THE LISBON LOCAL DIVISION
Ericsson lodged its case in the Lisbon Local Division on the basis that AsusTek, Digital River and Arvato offer and sell the Infringing Products in Portugal. The Defendants argued that the Lisbon Local Division did not have competence to hear the matter on the basis that:
- the Infringing Products do not infringe the Patent and Art. 33(1)(a) UPCA is expressly limited to matters of actual or threatened infringement; and
- 33(1)(a) does not apply to intermediaries.
With respect to (a), the Court highlighted that whether or not acts of infringement had been committed was an irrelevant consideration when challenging the competency of a local division and there, in this case, had been no challenge as to the territorial connection between the alleged infringements and Portugal. Regarding (b), the Court made clear that Art. 33(1)(a) is concerned with only the location of the infringement and not the nature of the infringer (being an intermediary). The Court therefore rejected both arguments (a) and (b), holding that the Lisbon Local Division was competent to hear this claim.
THE APPLICANT'S DILIGENCE AND URGENCY IN ITS APPLICATION FOR A PI
In considering the matter of urgency, a requirement for granting a provisional measure pursuant to Rule 209(2)(b) RoP, the Court noted that it must be able to objectively conclude that urgency exists which must be proved by the Applicant.
Ericsson was unable to provide an exact date on which it became aware of the Infringing Products and relied solely on the date of the test purchase of the Infringing Products. During the hearing, representatives of Ericsson raised an alternative and earlier date on which the representatives received an e-mail from Ericsson instructing them to investigate the Infringing Products. Despite this, the Court concluded that it was unlikely that either of these days were the date that Ericsson first became aware of the Infringing Products and, as such, Ericsson had failed to provide a date for the purposes of evaluating any unreasonable delay (for the purposes of urgency).
Ericsson also sought to rely on earlier decisions of the Hague and Düsseldorf Local Divisions in UPC_CFI_463/2023 and UPC_CFI_195/2024, which indicated that a lack of urgency only exists where the applicant behaves in such a negligent and hesitant manner so as to mean the Court can objectively conclude an unreasonable delay. However, the Court noted that the facts in these cases were not identical to those in the matter before it, stating that in those previous decisions more information was provided regarding the date when the applicants became aware of the infringement. On this basis, the Court found that Ericsson had failed to provide sufficient evidence to allow the court to assess urgency and to assess its diligence in bringing these proceedings. It consequently dismissed the PI request, without consideration as to the balancing of party interests which may otherwise be assessed when granting a PI.
THE NON-INFRINGEMENT AND INVALIDITY ARGUMENTS
Although the finding on urgency was sufficient to dismiss the request for provisional measures, the Court did go onto consider, for the purposes of clarity, the validity of the Patent and the alleged infringement claim.
As part of its considerations, the Court assessed AsusTek’s argument that mere ownership of a domain name (in this case being www.asus.com) does not constitute an infringement pursuant to Art. 25 UPCA. The Court rejected this argument based on the evidence that the domain name was being used to offer for sale the Infringing Products. The Court emphasised that, if the product is available to the public via the domain and perceived as such, it is undoubtably being offered. It was also irrelevant whether the public is able to determine, on the basis of the information provided on the website, whether the Infringing Products fall within the scope of the Patent.
Whilst the technical validity arguments raised are beyond the scope of this article, the Court concluded that prima facie the Patent is more likely than not to be valid (being considered novel and inventive over the pleaded prior art). It also contended that it is more likely than not that the Patent is being infringed (following the Court of Appeal’s approach to claim interpretation as set out in UPC_CoA 335/2023).
KEY TAKEAWAYS
- When seeking to challenge the competence of a UPC local division, the defendant must set out arguments against the territorial connection with the UPC Contracting Member State in which the local division is located. Whether infringement of the patent in question has in fact been committed is irrelevant to this determination.
- An applicant must provide sufficient evidence to demonstrate to the Court the urgency in making the application for provisional measures. Records should be kept as to the exact date when infringement was realised, or where this is not possible, other evidence should be provided to assist with ascertaining the date and allow the Court to assess any unreasonable delay in bringing the application.
- The Court is not required to assess all the requirements for granting a PI. The requirements (validity of the patent, actual or imminent infringement, urgency and balance of interests) are to be assessed on a cumulative basis and, as such, if one requirement is not satisfied the Court may, in its discretion, cease to address the other requirements.
- Art 25(a) UPCA provides that mere ownership of a domain name may constitute infringement where there is evidence that infringing products are being offered / sold through the same.
We await to see whether the decision will be appealed.
Link to judgment here.
