CJEU provides guidance for EU courts on the threshold for patent PIs (preliminary injunctions) which will also apply to the UPC

The CJEU has recently issued a preliminary ruling dealing with the requirements needed for a patent preliminary injunction (PI) under Art. 9(1) of the Intellectual Property Enforcement Directive 2004/48/EC, holding that the provision precludes "national case-law under which applications for interim relief for patent infringement must, in principle, be dismissed where the validity of the patent in question has not been confirmed, at the very least, by a decision given at first instance in opposition or invalidity proceedings". The CJEU decision will be seen as an encouragement for courts to grant preliminary injunctions under "untested" (eg. recently granted) patents, which has an impact beyond the German national system from where the reference originated, on other European courts and even the UPC. (Phoenix Contact GmbH & Co. KG v Harting Deutschland GmbH & Co. KG, Harting Electric GmbH & Co. KG (C-44/21)).

The question had been referred by the Regional Court Munich I. The background to the question was that the Munich Appeals Court had in 2019 adapted its case law (cf. decision Elektrische Anschlussklemme, published in GRUR 2020, 385) regarding the requirements for patent preliminary injunctions to be in line with the courts in Duesseldorf and Mannheim/Karlsruhe. Specifically, the Appeals Court Munich had held that the required certainty of validity for grant of a PI is "in principle" ("im Regelfall") only given if the patent has already survived an inter partes invalidity proceeding at least first instance (i.e. EPO opposition or German revocation action). This case-law as practiced for many years already by the courts in Duesseldorf and Mannheim/Karlsruhe allows for a number of exceptions, e.g.

• in generics cases
• in cases where the defendant was already heard during the prosecution
• if the patent has been respected for years by the competitors
• if the validity attacks are prima facie baseless
• if the patent validity of a parallel (foreign) patent has been confirmed
• if expiry is imminent

but those are the exceptions to the above-mentioned rule, and absent those exceptional scenarios, the rule is applied.

Before this change in the case-law of its Appeals Court, the Regional Court Munich I had become one of the go to courts in Germany for patent PIs because it would grant PIs for example also in respect of patents which had just been granted in cases where they found the invalidity arguments of the defendant unconvincing. This practice had to be discontinued once the Appeals Court handed down the above-mentioned decision.

In its reasoning the CJEU focusses on two aspects:

1. that a European patent upon grant enjoys a presumption of validity (see paragraph 41 of the decision)
2. that Art. 9 Directive 2004/48/EC provides instruments for mitigating the harm the defendant suffers as a result of the provisional measures if that measure turns out not to be justified later (see paragraphs 42-48).

With regard to those risk mitigating instruments, the CJEU discusses three instruments specifically that:

1. the provisional measure shall lose its effect if the applicant does not (upon request by the defendant) institutes proceedings leading to a decision on the merits (Art. 9(5))
2. the provisional measure can be made contingent on the lodging of adequate security or other assurance of compensation of prejudice suffered (Art. 9(6)),
3. when the provisional measure is revoked or lapses due to an act or omission of the applicant or where it is later found that there is no (imminent) infringement, the applicant can be ordered to provide compensation to the defendant (Art. 9(7)).

The outcome of the CJEU's decision will be that the above-mentioned German courts will have to modify their case-law. However, given the limited nature of the question referred to the CJEU and answered by it, the European courts will still have the option to reject PIs due to concerns about the validity, or, for example if the validity issues are too complex to be answered without involvement of court appointed technical experts which is (according to German practice) not possible in PI proceedings. But the important difference is that the courts will have to come to an outcome without reference to such general rule to be applied in principle as was previously set out by the Appeal courts' case-law, but will make the decision solely based on the individual assessment.

The key test for the courts (at least the German infringement courts under the German system which do not deal with revocation itself) will be how they deal with a scenario where the court cannot glean a clear conviction about the merits of the defendant's invalidity arguments. In other words, is it the burden on the defendant to convince the court of the invalidity or is it on the applicant to convince the court of the validity. The reasoning from the CJEU, with its emphasis on the presumption of validity, may suggest that the CJEU believes the latter to be the case.

More generally, as stated above, the CJEU decision may well encourage European courts to grant preliminary injunctions in relation to newly granted or otherwise "untested" patents. It will also have an impact on the approach the UPC may take on the granting of preliminary injunctions as the UPC will be subject to EU law – the UPC Agreement acknowledges the "primacy" of EU law in terms of the substantive law to be applied by the UPC (Article 20 UPC Agreement "The Court shall apply Union law in its entirety and shall respect its primacy" and also see Art 24 which lists Union law first in the list of sources of law).

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