UPC: No liability for holding companies without active participation in patent infringement

Background

Align Technology owns patent EP 4 346 690 with unitary effect for an “automated management of clinical modifications to [orthodontic] treatment plans using three-dimensional controls”. 

Align Technology applied on August 27, 2025 for provisional measures against companies from the Angelalign group for allegedly infringing embodiments, i.e. software that modifies the orthodontic treatment plan and the aligners manufactured according to the software. The defendants included:

• The Cayman Islands based company operating regional subpages of the website offering the embodiments in some European countries and coordinating their distribution within Europe (Defendant 1)
• The French entity selling and marketing the embodiments in France and operating certain European regional subpages of the web shop (Defendant 2)
• The Dutch entity being the shareholder of the French, German and Italian entities (Defendant 3)
• The German entity commercializing the embodiments in Germany (Defendant 4)
• The Italian entity distributing the embodiments in Italy (Defendant 5)
• The Chinese entity operating and maintaining the software accessible in UPC territory (Defendant 6). 

The LD Düsseldorf considered the patent more likely than not to be valid and assumed infringement. It ordered a preliminary injunction against all defendants, including the Cayman Island based Defendant 1 and China based Defendant 6, but excluded Defendant 3, the holding company. 

LD Düsseldorf decision

Jurisdiction and competence 

The LD Düsseldorf considered that the UPC had international jurisdiction under Articles 31 and 32(1)(c) Unified Patent Court Agreement combined with Articles 7(2), 71b(1) and (2) of the Brussels Regulation (recast) because the allegedly infringing embodiments were offered in Germany, the territory of infringement. It also considered it was internally competent because Defendant 4 had its principal place of business in Germany, all other defendants had a commercial relationship with Defendant 4, and they were all accused of the same infringement. 

Novelty, inventive step and sufficiency of disclosure 

The LD Düsseldorf held that it was not more likely than not that the patent was invalid.

• Novelty: none of the prior art documents directly and unambiguously disclosed the critical feature of an automatically and real-time based modified treatment plan upon a user requested modification within a pre-determined threshold.
• Inventive step: applying the UPC Court of Appeal’s approach (see our previous article), none of the prior art documents, even combined, would lead the reasonably skilled person to the patent claim.
• Sufficiency: as the defendants did not substantiate their sufficiency objection, it was assumed that the person skilled in the art would be able to carry out the invention using common general knowledge without inventive effort or undue burden. 

Lack of liability of the holding company

The LD Düsseldorf rejected Align Technology’s argument that Defendant 3, the entity directly controlling and supporting the other European subsidiaries, was an infringer. It confirmed the Court of Appeal approach developed in the Philips v. Belkin case (see our previous article): merely being a shareholder or a financial holding company is not sufficient to establish patent infringement liability. A managing director, or by extension, a financial holding company, can only be held liable if their action goes beyond the typical professional duties or role associated with their position. Liability requires either deliberate use of the company or its subsidiaries to infringe the patent, or knowledge of the patent infringement combined with a failure to take possible and reasonable action to stop it. 

Align Tehchnology did not raise any action taken by Defendant 3 going beyond its typical role as a shareholder/holding company and did not establish knowledge of infringement with a failure to act.  The liability claim against Defendant 3 was therefore rejected. 

No unreasonable delay

As the software feature was launched in May 2025, the patent was granted on July 23, 2025 and the application for provisional measures was filed on August 15, 2025, the LD Düsseldorf did not consider there to be any unreasonable delay. 

Balance of interests

When assessing the balance of interests, the LD Düsseldorf held the following elements to be in favor of Align Technology:

• The parties are direct competitors and not sole providers in the relevant market
• There is a risk of market loss and irreversible harm to Align Technology if clinicians choose Defendant embodiments and stick to their initial provider for the duration of a treatment plan
• The two months during which the defendants’ software was on the market were not sufficient to establish a status quo deserving protection
• The Defendants could continue offering their software and aligners without the additional feature launched in May 2025. 

Key takeaways

With this order, the UPC confirms its approach to liability. While a holding company may be liable for patent infringement, the patent-holder needs to establish that the holding company is aware of the infringement but did not act against it or used the company or its subsidiaries to perform patent infringement.