Now that the first European Unified Patent Court (UPC) orders are being issued, we can start to see some of the theory that has been so widely discussed over the last months and years put into practice. The first orders naturally relate to applications for preliminary injunctions and other provisional/protective measures.
One available tool for reducing the risk of provisional and protective measures is use of a protective letter which we wrote about recently on Lexology. Protective letters set out the reasons why provisional and protective measures should not be granted, for example non-infringement arguments and arguments against the validity of a patent. Protective letters are not available in many of the national legal systems of the contracting member states of the UPC, so their availability and usefulness before the UPC has been a topic of significant interest.
The very first order granting a preliminary injunction gives provides some interesting food for thought with respect to the effectiveness of protective letters under certain circumstances. In this case, the applicant, myStromer AG, applied for a preliminary injunction against Revolt Zycling AG based on European patent EP2546134. Both the applicant and respondent make speed pedelecs, a type of e-bike that can reach an electrically assisted top speed of 45 km/h.
myStromer applied for a preliminary injunction to prevent Revolt Zycling from selling, importing and storing the allegedly infringing bicycles in Germany, the Netherlands, France and Italy, and requested that Revolt Zycling surrender the relevant bicycles that were being shown at the EuroBike trade fair, which was ongoing at the time in Frankfurt, in order to prevent further marketing of the bicycles during the fair.
Revolt Zycling had previously filed a protective letter with the UPC in which it requested that any application for provisional measures be rejected, or alternatively, that any application for a preliminary injunction not be granted without a hearing. The protective letter asserted that there is no infringement due to exhaustion, and that in any case the patent is not infringed by Revolt Zycling’s product. The protective letter did not challenge the validity of the patent, which is not mandatory according to Rule 207 of the UPC Rules of Procedure.
Ultimately, the UPC granted the application for a preliminary injunction without hearing Revolt Zycling. The explicit reasoning provided for not hearing Revolt Zycling referred to the urgency of the situation:
The applicant has made a credible case that it would suffer irreparable damage as a result of a delay (R. 212.1 of the Code). The "EuroBike 2023" is an important leading trade show that is of considerable relevance for the entire industry. It enables the defendant to come into contact with potential customers and thus to establish its own market presence. It is obvious that the exhibition of the alleged infringing product at this trade fair could lead to an irreversible loss of sales or market share of the applicant. The products of both parties are substitutable directly competing products.
The overall discussion of the facts in the case, however, suggests that if validity of the patent had been reasonably challenged in the protective letter, the outcome may have been different. Furthermore, the arguments provided by Revolt Zycling in its protective letter related to non-infringement were deemed insufficient and the court also determined that exhaustion had not occurred.
While it is difficult to draw general conclusions from a single case, this UPC decision does demonstrate that merely filing a protective letter does not guarantee refusal of an application for provisional measures or even a hearing before provisional measures are granted. Care must be taken to provide thorough and prima facie relevant and sufficient arguments for non-infringement and, preferably, for invalidity as well in order to provide the best chance of avoiding the granting of provisional measures. Thus, the quality and relevance of the arguments presented in a protective letter should be ensured. This does not mean, however, that every possible argument needs to be, or even should be, presented in a protective letter.
Ultimately, it appears that even strong arguments may not be enough to avoid grant of provisional measures without a hearing in particularly urgent situations, such as an ongoing trade show.
This blog article was originally published on Lexology in August 2023.