“Litigation in Europe continues to be marked by strategic jurisdictional battles and choices…. Recent decisions in both the UK and CJEU show favorable outcomes for rights owners.”
The first half of 2024 has been a significant one for IP in Europe. This article does not attempt a comprehensive review of all IP developments across Europe in 2024, not least because the detail of the Unified Patent Court’s (UPC’s) decisions and operations are outside the scope of the article. The first half of the year yielded some significant early jurisprudence in the UPC, including the first appellate decisions on preliminary injunctions, claim construction, access to documents and opt-outs. The profile of the new court’s users has also evolved with significant increases in filings made by pharma companies and by NPEs. Likewise, the proportion of requests for Unitary Patents (which may be enforced only in the UPC) rose. The Court’s first wave of final decisions on the merits began in May 2024 for cases filed during summer 2023, meaning that the first substantive final decisions should follow during July.
EU Legislative Developments
In a move related to the UPC, in February 2024 the European Parliament approved the proposals (with some amendments at first reading), for four Supplementary Protection Certificate (SPC) Regulations for medicinal- and plant protection products, including unitary SPCs (a new “companion” to the unitary patent). These had been proposed by the European Commission in April 2023. Accordingly, the European Union Intellectual Property Office (EUIPO) would become a central examination authority. The proposals also still include the (criticized) centralized pre-grant opposition procedure before the EUIPO.
While not strictly IP rights, many readers will be interested in the European Commission’s proposals for reform of the regulations for marketing approval of medicinal products. The ‘EU Pharma Package’. These were first published in April 2023 and included substantial changes to the current regime, including speeding up approval for new medicines (by shortening the EMA’s assessment and Commission’s authorisation periods), reducing the standard period of marketing data protection by 2 years (making it possible for generic or biosimilar products to be launched earlier) but increasing the extensions available to this period, e.g. for re-purposed drugs or those with additional indications. These proposals were adopted but in amended form by a vote of the European Parliament in April 2024: some of these amendments were substantial, e.g. removing the proposed one-year extension of regulatory data protection for additional indications.
In both cases for these measures of great significance to the pharmaceutical industry, the legislative process will likely continue after the EU elections, which took place in June 2024. Further changes are therefore possible.
Outside the life sciences, the EU’s proposals for a new Standards Essential Patents (SEP) Regulation have attracted headlines. The proposed regime, also originating from the European Commission in April 2023, would give new powers to the EU Intellectual Property Office (EUIPO). This Office, until now tasked principally with dealing with administering trademark prosecution and opposition work, would now have a SEP-related remit including the review of whether patents declared essential were indeed essential and determination of FRAND licensing rates. The latter would take place instead of determination by EU national courts or the UPC, likely slowing down the resolution of cases, although there are provisions for the EUIPO FRAND determination to be terminated in the event of parallel litigation.
In May, the EU adopted reformed legislation for design rights. Among other things, these will redefine ‘design’ and ‘product’ to include digitally embodied designs. The theme resonates with, for example, a January 2024 decision of the Commercial Court of Barcelona considering the alleged copyright infringement by exhibition of NFTs in a virtual world.
Finally, no discussion of 2024 EU legislation would be complete without mention of the AI Act. This legislation was finally approved by the Council on 21 May 2024 and is expected to enter into force in August 2024. While not an IP statute, the AI Act imposes obligation that interact with the enforcement and exploitation of IP rights such as in relation to certain obligations imposed on providers of ‘high risk’ AI systems to make available information to others in the supply chain to ensure that compliance obligations for ‘high risk’ AI systems are observed.
Court of Justice of the European Union (CJEU)
January 2024 saw the CJEU give a judgment with potentially significant effects for the automotive industry in C-344/22 (Audi v GQ). Audi alleged that a distributor of non-original spare parts for Audi vehicles infringed its “four rings” trademark by offering grills which contained an element designed for the attachment of the Audi trademark. It meant that the car grill itself incorporated the shape of the Audi trademark, making it technically possible to further attach the trademark. The CJEU held that the EU Trademark Regulation must be interpreted as allowing the manufacturer of motor vehicles from prohibiting a third party from using a sign identical with, or similar to, its trademark in relation to spare parts for those motor vehicles, where that sign consists of the shape of an element of the spare part designed for the attachment thereto of the emblem representing that trademark, regardless of whether there is a technical possibility of attaching that trademark to the spare part without reproducing the shape of the trademark itself.
In April 2024, the CJEU issued a judgment in case C-470/21 (La Quadrature du Net) concerning the interaction between the protection of personal data and IP enforcement in the context of alleged online infringement of copyright. The CJEU ruled that the applicable EU law, including the Charter of Fundamental Rights, did not preclude EU countries’ national laws from providing authorities with access to personal information for identifying potential infringers, subject to certain conditions (including how the data is stored – such as separation of certain elements of the data and storage only for the period strictly necessary – and judicial oversight).
On May 14, the CJEU heard arguments in a case concerning jurisdiction over patent litigation suits as between the courts of differing EU countries and the treatment of claims relating to rights in third countries (i.e. non-EU countries). The decision may also affect the jurisdiction of the UPC. In essence, according to the applicable jurisdiction legislation (the ‘Brussels Regulation’ as variously amended), disputes “concerned with … the validity of patents” are reserved to the exclusive competence of the courts of the states in which they are registered. Here, the patentee had brought infringement proceedings for infringement of its patent in multiple countries (both inside and outside the EU) in the Swedish national courts, basing its jurisdiction on domicile. The defendant counterclaimed for invalidity. The CJEU’s Advocate-General has advised the Court to rule that in such circumstances the national (here, Swedish) national court must decline jurisdiction over the infringement claims based on patents registered in other EU countries. It may also – but is not obliged to – decline jurisdiction over the infringement claims based on patents registered in third countries. The decision of the Court is not available at the time of writing.
Decisions from German National Courts
Since the access to court documents in many European countries (including Germany) is challenging, the following represent a sample of decisions from the EU’s most active patent litigation nation.
Intellectual Ventures settled with German network operators Deutsche Telekom, Telefonica/O2 and Vodafone after nine years of litigation. The lawsuits, filed by Intellectual Ventures with the Regional Courts of Mannheim, Munich and Düsseldorf, involved 16 patents, relating LTE, DSL and WCDMA technology.
The Munich Regional Court in April found that Samsung Electronics infringed Datang Mobile Communications Equipment’s patent, and currently may not sell 4G-capable mobile devices in Germany (case ID: 21 O 16085/22). The sales ban ordered by the Court required a security deposit to be provided by Datang.
The Federal Court of Justice upheld two patents relating to speech-coding technology held by VoiceAge (case IDs: X ZR 11/22 and X ZR 14/22). The Mannheim Court held in 2021 and 2022 that HMD was infringing these patents. Now that the German Federal Court of Justice upheld these two patents, the infringement proceedings will continue before the Higher Regional Court of Karlsruhe.
The Düsseldorf Regional Court held that Lindt & Sprüngli infringes a Katjes patent on the composition or manufacture for vegan chocolate (case ID: 4b O 58/23). Such patents are rarely the subject of patent disputes. The Düsseldorf Regional Court has now prohibited the Swiss market leader from using a certain composition for vegan chocolate in Germany. (Note: The authors’ firm represented Katjes in this case).
Decisions from UK Courts
The UK courts were characteristically active across a range of IP related disputes, all decisions for which are available to the public.
The only Supreme Court decision so far in 2024 is that of Lifestyle Equities v Amazon [2024] UKSC 8. Lifestyle Equities owns various UK trade marks for BEVERLY HILLS POLO CLUB covering a range of goods. The U.S. trademark registrations for the same marks and identical goods are owned by a separate entity. Lifestyle Equities did not consent to the sale of U.S.-marketed goods in the UK. Amazon advertised, offered for sale and sold the U.S. goods via its U.S. website (amazon.com – not UK website amazon.co.uk). It was possible for UK based consumers to view and purchase from the U.S. website. Lifestyle Equities sued Amazon in the UK courts for trademark infringement.
Lifestyle Equities’ claim was rejected at first instance and on first appeal. The key question before the Supreme Court was whether the average consumer in the UK/EU would consider the website to be directed at them. The answer was determined by a multi-factorial assessment of the consumer’s online journey, from when they landed on the website homepage through to the point of sale. Key factors suggesting that UK consumers were being targeted included:
- The ‘Deliver to United Kingdom’ notices which appeared based on the consumer’s UK IP address;
- The ‘Review your order’ page shows prices in Sterling & delivery times for the UK; and
- The fact that the US goods were unavailable on Amazon’s UK website.
Weaker factors against a finding of targeting included default prices being in USD and the option of switching to amazon.co.uk where consumers would find lower charges and delivery times.
After detailed consideration of the law on ‘targeting’, the Supreme Court held that Amazon’s use of the BEVERLY HILLS POLO CLUB marks on amazon.com amounted to use of the marks in the UK, thereby infringing Lifestyle Equities’ UK trade mark rights.
U.S. businesses operating online should assess how their website appears to UK consumers and the potential implications of this. Crucially it isn’t necessary for a U.S. business to intentionally target UK consumers for it to infringe UK trade mark rights.
Two cases between rival supermarket chains concerning branding reached the English Court of Appeal. In Marks & Spencer v Aldi [2024] EWCA Civ 178 the Court dismissed Aldi’s appeal that it had infringed M&S’ registered design rights for bottles for flavored gin liqueurs. Among other things, the Court held that the express provision for a grace period for design registration as to novelty also operated to exclude grace-period disclosures from influencing the scope of the registered designs for the purpose of assessing infringement. In Lidl v Tesco [2024] EWCA Civ 262 the Court upheld a finding that Tesco’s ‘Clubcard Prices’ logo for its discount price scheme infringed Lidl’s trademark in that Lidl’s trademark had a reputation in the UK (specifically associated with market-leading value) and that Tesco’s use of its logo was such as to take unfair advantage or, and/or be detrimental to, the distinctive character or repute of Lidl’s trademark. The unfair advantage relied on was that Tesco’s logo conveyed an implicit price-matching message to shoppers when in fact Tesco was not price-matching Lidl. The decision represents a rare example of a finding of infringement based on unfair advantage alone in circumstances where consumers may not in fact be confused. (Note: the authors’ firm represented Lidl in this case).
In patent proceedings, the intra-European nature of patent litigation was illustrated by two decisions. Advanced Cell Diagnostics v Molecular Instruments [2024] EWHC 898 (Pat) is notable as an example of the interaction between the UK courts and UPC: almost immediately after its patents were revoked in the UK, Advanced Cell Diagnostics started proceedings in the UPC. In Supponor v Aim Sport [2024] EWCA Civ 396 on the other hand, the UK patent had been found valid and infringed at a trial conducted in January 2023. The corresponding patents were then asserted in the UPC in an early-filed in July 2023 after the UPC opened. In April 2024 the English Court of Appeal dismissed the appeal against that decision.
The UK continues to be a busy jurisdiction for SEP-based litigation as an important part of those international struggles. Among other decisions, litigation involving Lenovo has provided several decisions in the first few months of 2024. In April Lenovo were permitted to bring a new claim against Ericsson seeking an interim injunction in the existing proceedings – see Lenovo v Ericsson [2024] EWHC 846 (Ch). However, on 23 May 2024 in Motorola and Lenovo v Ericsson [2024] EWHC 1257 the English Court refused to order an interim injunction (‘PI’) against Ericsson that would have been subject to a proviso negating its effect if Ericsson agreed to a global cross-licence on FRAND terms (to be determined by a court, as offered by Lenovo) or other acceptable mutual regime. The Court rejected Lenovo’s argument that it could not be properly compensated in damages for loss flowing from the refusal of the PI because, in such case, the effect of Ericsson’s PIs obtained in other countries such as Brazil and Columbia is that Ericsson may continue to operate in the UK while Lenovo is unable to continue to operate in those countries, thereby causing damage to Lenovo unless it agrees to Ericsson’s global offer. In short, the judge found that the damage caused by Ericsson’s patent enforcement overseas was not caused by the alleged infringement of Lenovo’s UK patent – there was no connection between the two.
PIs also produced decisions in the life sciences. Most dramatically, Bayer obtained an interim injunction restraining Aspire from marketing generic rivaroxaban to cover a 9 or 10-day period between expiry of the patent and the handing down of judgment in revocation proceedings against the patent, due after expiry. The judge granted the PI but subsequently revoked the patent. This was quickly followed by an expedited appeal of the substantive decision, with the appeals court dismissing the appeal in a decision announced on the day, delivered in writing eight days later. From the hearing of the PI prior to judgment to the appellate written decision was under one month.
A similar ex tempore decision with judgment to follow was delivered in the unusual proceedings brought by the Crypto Open Patent Alliance against Dr Craig Wright. The case brought a definitive end to Wright’s longstanding claims to be Satoshi Nakamoto, the pseudonymous founder of the Bitcoin cryptocurrency, and gave reassurance to the numerous parties sued by Wright that he does not own any IP rights associated with Bitcoin: the judgment is Crypto Open Patent Alliance v Wright [2024] EWHC 1198 (Ch). (Note: the authors’ firm represented Crypto Open Patent Alliance in this case).
Themes
Litigation in Europe continues to be marked by strategic jurisdictional battles and choices – between different national courts and now (for patent litigation) also the UPC. Recent decisions in both the UK and CJEU show favorable outcomes for rights owners. As regards legislative developments, the picture is more mixed: the reform of design laws should bring them into the digital age, a unitary SPC may be welcomed by pharmaceutical innovators, while the SEP Regulation attracts criticism from SEP net licensors.
Image Source: Deposit Photos
Author: Olivier26
Image ID: 42536385
