UPC grants first permanent injunction

The Dusseldorf Local Division ("DLD") of the UPC has granted the first permanent injunction in a case on the merits (Franz Kaldewei v Bette GmbH & Co, UPC_CFI_7/2023) (3 July 2024). The injunction prohibits Bette from selling certain shower trays and certain parts for use in such shower trays in Austria, Belgium, Denmark, France, Italy, Luxembourg and The Netherlands. Germany, which is Bette's biggest market by far, was not the subject of the UPC proceeding. Bette had raised patent revocation as a counterclaim and the court upheld the patent in suit (EP 2 375 337) in a limited version which Kaldewei had filed as an auxiliary request and limited the injunction accordingly.

The decision contains a number of interesting points:

• Standard for novelty assessment: In line with previous case-law and unsurprisingly the DLD states that only what is immediately and directly apparent from the allegedly novelty-destroying publication or public prior use can be considered in the novelty-assessment and that findings that a person skilled in the art only obtain on the basis of further considerations or by consulting other publications or uses cannot be considered.
• Standard for inventive step assessment: With respect to inventive step the DLD looked at whether the considerations the skilled person would have had to make to arrive at the alleged invention went beyond routine developments. It further, considered, whether the skilled person tasked with solving the problem which the patent described would have had reason to combine the piece of prior art with the other pieces of prior art and/or common general knowledge as claimed by Bette.
• Right based on prior use of the invention: Art. 28 UPCA provides that someone who would have enjoyed rights based on prior use in a Contracting Member State under a hypothetical national patent shall "in that Contracting Member State" enjoy the same rights in respect of a patent for the same invention. The DLD interprets this to mean that a right of continued use exists only for the specific Contacting Member State in which the conditions for such right are given under the respective national law. The DLD did not recognize a prior use right of Bette with the argument that Bette had only presented arguments about possession of the invention and its use in Germany but not for the Contracting Member States at issue in the proceeding.
• Possibility of no permanent injunction if infringer has given up the infringing activities: Bette had argued that there was no basis for a permanent injunction based on Art. 63 (1) UPCA as this provision refers to an "injunction aimed at prohibiting the continuation of the infringement". Bette argued in this respect that they had given up supplying the allegedly infringing embodiments and had switched to a non-infringing alternative. The DLD suggests in the judgment that the possibility of a continuation of infringement (and therefore the permanent injunction) may indeed fall away if the defendant establishes that it has given up using the infringing embodiment. The DLD concluded, however, that Bette had not met its burden to substantiate and prove this in view of the fact that Kaldewei had shown that at least in one of the countries at issue there had been further use acts in the interim. Accordingly, the requirements for a permanent injunction appear higher than under national German practice. Under national German practice, an infringing act in the past is thought to create a danger of repetition (entitling the right holder to the injunction) for as long as the infringer has not provided a cease-and-desist declaration with a contractual penalty. A mere discontinuation of infringement is not considered sufficient.
• Request to lay open of books vs. requests for information about turnover with and costs of infringing acts and provision of invoices or delivery notes: The DLD concluded that the request to lay open books (according to Art. 68 (1) UPCA, Rule 131.1 and 141 RoP) is only available in the later damage setting proceedings, whereas requests for information about turnover with and costs of infringing acts as well as the provision of invoices or delivery notes shall be possible already in the first initial proceedings on the merits. In this respect the DLD refers to Rule 191 sentence 1 alt. 2 RoP as well as considerations of procedural expediency. In detail the DLD ordered to provide the claimant with information on the extent of infringement, including the origin and distribution channels of the infringement products, the identity of all third parties involved in their manufacture or distribution, details of advertising of such products and individual cost factors and profits realised.
• The DLD, further, made a preliminary damages award of EUR 10,000 as an initial payment with more to be ordered should the infringing acts continue.
• In addition the DLD ordered to recall infringing products, informing the third parties from which they were being recalled that the court had found them to infringe the patent in issue (and to give the third parties a binding undertaking on reimbursing costs incurred and to bear the packaging, transport, customs and storage costs associated with the return and take-back of the products) and to cease and desist from distributing them.
• Removal of the products from the channel of commerce (Art. 64 (2) (d) UPCA): With regard to the removal of products from the channel of commerce the DLD stated that only requests which are specific enough and are within the legal and factual means of the infringer can be granted. The DLD granted only the claim for requesting commercial customers to cancel pending orders. It did not grant claims to asserting contractual recall claims (stating that this is too unspecific), claims requesting contractual customers to inform about the location and possessor of the products (stating that there is no basis for such claim) and claim for removal of parts which lead to a contributory infringement (as those parts could be used in Germany, which is not subject to the UPC proceeding).
• The orders in respect of the injunctions, information on sales and distribution, product recall, cease and desist, and in relation to provisional damages, were deemed to be only enforceable once the plaintiff has notified the court "which part of the orders it intends to enforce and has submitted a certified translation of the orders into the official language of the Contracting Member State in which enforcement is to take place, and after the notification and the (respective) certified translation have been served on the defendant".
• Retroactive extensions: Rule 9.3 (a) RoP provides for the possibility to request the (retroactive) extension of an already expired deadline. Both Bette and Kaldewei made such request as they had not seen an order setting a filing deadline in the CMS in time. However, Bette did so only in the oral hearing and after having filed some of its evidence late. The DLD rejected the extension stating that (i.) the request for the extension needs to be made latest when filing the evidence for which the extension is sought and (ii.) the request of extending the filing deadline could not be made in the oral hearing, as the filing deadline served to prepare the oral hearing.
• Costs: Costs were ordered at 50/50 in relation to the counterclaim (for revocation) and 15%/85% (plaintiff/defendant) in terms of the costs of the action otherwise.  The upper limit of the reimbursable representation costs for the action was set at EUR 47,600 for the plaintiff and EUR 8,400 for the defendant. For the counterclaim, the upper limit for both parties is set at EUR 28,000 each.

It is very encouraging that the first merits decisions come within the time-frame envisioned by the UPC. Further, it is noticeable that with the exception of the consideration that ceasing infringing activities may be sufficient to prevent a permanent injunction and the preliminary damages award, the decision closely mirrors German practice.