The case, registered under docket number ACT_459987/2023, revolved around the alleged infringement of European Patent EP 3 646 825, which pertains to prosthetic heart valve technology. Edwards, a leading developer of artificial heart valves, claimed that Meril's "Myval Octacor" valve and associated delivery systems infringed on their patent. The dispute has a complex history, including a revocation action filed by Meril Italy Srl (ACT_551308/2023) and subsequent counterclaims for revocation by Meril GmbH and Meril Life Sciences Pvt Ltd (CC_584916/2023 and CC_585030/2023).
Despite Meril's arguments regarding public interest and patients’ need for various valve sizes, the court found in favor of Edwards, ordering an injunction and other corrective measures while addressing the interests of third parties and public health. This is the first time the UPC has thoroughly considered the standard for evaluating third-party and public interest in issuing injunctions.
Key issues
Apart from the technical infringement and validity analyses, the LDM’s decision features several key findings highlighted in the headnotes that are of interest to anyone involved in UPC proceedings. They include the following points:
a) Third party interests, licensing considerations, and public interest in single-use licenses
Meril argued that the interests of third parties and the public, particularly patients with severe heart disease (aortic valve stenosis), necessitated a denial of (full) injunctive relief. They contended that their "Myval Octacor" valve offered significant advantages over Edwards' products and that it was essential for practitioners to have a range of options for treatment. Meril emphasized that their product met the size spectrum desired by the medical community, especially for patients with extra-large heart valve openings (“annuli”), which Edwards' products could not adequately address. They argued that denying access to their product would have serious consequences for patients who could not be treated with Edwards' valves.
The defendants also highlighted their attempts to obtain a license from Edwards. They argued that Edwards had been unreasonable in their licensing negotiations, particularly by demanding access to samples and documentation that Meril was unwilling to provide. Meril contended that they had made sufficient efforts to obtain a license and that Edwards' refusal to grant a license was unjustified. Meril therefore proposed that if an injunction were to be granted, it should not apply to the sizes of the "Myval Octacor" valve that Edwards did not offer.
The court acknowledged the importance of considering third-party interests and the public interest when exercising discretion in granting injunctive relief and other corrective measures. However, it found that Meril had not sufficiently demonstrated that their product offered significant advantages over Edwards' products. The LDM also noted that the German Federal Patent Court had previously even dismissed Meril's request for a mandatory license, finding that it was an unwilling licensee due to their refusal to provide necessary samples and documentation to Edwards. It emphasized that Edwards had a legitimate interest in reviewing specific documents and documentation to assess the safety and quality of the "Myval" valve. Meril's refusal to provide this information and their termination of license negotiations indicated that they were an unwilling licensee. The court concluded that Meril's arguments regarding licensing considerations were not persuasive.
The LDM furthermore held that while there was a public interest in ensuring access to XL-sized valve prostheses for patients with annuli larger than 30 mm, this interest could be adequately addressed through Edwards' online Medical Request Portal (MRP). The MRP is a system by Edwards allowing doctors to request the use of an XL valve of the "Myval" type if they consider it clinically necessary. The attending physician can upload relevant patient data via this portal. A team of doctors at Edwards immediately reviews this data. If they determine that their product is not an option in this case, an exception to the injunction or cease-and-desist undertaking can be granted via a single-use license. The court concluded that this mechanism adequately addressed the public interest and that no further arrangements or limitations with regard to injunctive relief were necessary, apart from the aforementioned limitations in the operational part of the decision.
b) Jurisdiction over pre-agreement infringements
The issue of jurisdiction over acts of patent infringement that occurred before the Agreement on a Unified Patent Court (UPCA) came into force on June 1, 2023, was a significant point of contention.
Meril argued that the UPC lacked jurisdiction to adjudicate claims based on activities that commenced before June 1, 2023. They contended that the court should not have the authority to rule on acts of infringement that occurred prior to the UPCA's effective date.
In its ruling, the LDM affirmed its jurisdiction over acts of patent infringement that occurred before the UPCA came into force. This decision aligns with Article 3(c) and Article 32(1)(a) of the UPCA, which do not contain any conflicting intertemporal provisions that would limit the court's jurisdiction. The court emphasized that accepting Meril's argument against this jurisdiction would result in a legal vacuum where no court, either the UPC or national courts, would have the authority to adjudicate claims for damages related to pre-Agreement infringements. Such an outcome would be untenable, even considering statutes of limitations, which only apply if timely raised by the defendant. Therefore, the court concluded that it retains concurrent competence with national courts during the interim phase and will have exclusive jurisdiction over all European patents post-interim phase, ensuring that claims for damages from pre-Agreement infringements are duly addressed.
c) Claimant's choice of competent division
The claimant's choice of the competent division was another debated issue.
Meril argued that the LDM lacked jurisdiction over the claims, particularly those involving the Düsseldorf-based Meril GmbH. They contended that national law should determine which German local division is competent, due to the absence of specific provisions in the UPCA regarding the distribution of local jurisdiction among the four local divisions of the Court of First Instance of the UPC in Germany. According to Meril, Edwards should have chosen the Local Division Düsseldorf, which would have been the appropriate venue for the Düsseldorf-based defendant.
The LDM upheld Edwards' choice of the competent division. The court ruled that the claimant's choice among the potentially competent German local divisions ultimately determines the competence of the chosen division. This decision is in line with the provisions of the UPCA, which do not explicitly address the distribution of local jurisdiction among the German local divisions. The court emphasized that applying national law to determine local jurisdiction would be impractical, particularly for defendants domiciled in German Länder (states) without a local division. Consequently, the LDM has jurisdiction over the first defendant, Meril GmbH, given that it is domiciled in Bonn and thus within the Federal Republic of Germany. The court also noted that the second defendant, Meril Life Sciences Pvt Ltd, has a permanent business relationship with the first defendant concerning the attacked embodiments, further justifying the LDM's jurisdiction over both defendants.
d) Referral and continuation of action and discretion on granting a stay
Edwards filed for infringement of EP 3 646 825 on June 1, 2023. The statement of claim was served on the defendants on July 7, 2023 and August 1, 2023. Meril Italy Srl, not a defendant in this case, filed a revocation action with the Central Division Section Paris on August 4, 2023. The defendants filed counterclaims for revocation with the LDM on November 2, 2023. With order dated March 28, 2024 it bifurcated and referred the two counterclaims to the Central Division Section Paris for decision (ORD_1340/2024). The Central Division Section Paris rendered a decision on July 19, 2024. The patent was upheld according to an auxiliary request. The Central Division consolidated the counterclaims for revocation with a separate revocation action filed by Meril Italy Srl and held a single oral hearing on June 7, 2024. On July 19, 2024, the Central Division delivered its decision, rejecting the revocation action and the counterclaims for revocation, and maintaining the patent in an amended form.
Following the Central Division's decision, the LDM resumed the infringement proceedings. The LDM emphasized that, subsequent to a decision by the Central Division on the referred counterclaim, the local or regional division is required to proceed with the next case management step, which regularly is a decision on the action for infringement.
However, Meril requested a further stay of the infringement proceedings pending their appeal of the Central Division's decision. The court rejected this request and emphasized that, in accordance with Article 32(3b) of the UPCA, a stay of the action for infringement may be based exclusively on Rule 295(c)(i) or (m) of the Rules of Procedure (RoP). The LDM explained that in this case there was no high likelihood that the relevant claims of the patent would be held invalid on appeal and that the decision by the Central Division was not manifestly and prima facie erroneous in a formal or material way.
Conclusion and takeaways for practitioners
The decision underscores several critical takeaways. Firstly, the UPC’s consideration of third-party interests, licensing efforts, and public interest in single-use licenses reflects a desire for a balanced approach, ensuring that patient needs are met while upholding patent rights. Secondly, the court affirmed its jurisdiction over pre-Agreement infringements, ensuring that claims for damages from such infringements are duly addressed, aligning with Article 3(c) and Article 32(1)(a) of the UPCA. Thirdly, the LDM upheld the claimant's choice of the competent division, reinforcing the flexibility provided by the UPCA in selecting the appropriate venue for litigation. Lastly, the court's discretion in granting or denying a stay was exercised in a way that emphasized the importance of proceeding with infringement actions unless there are compelling reasons to delay.
This should inform future litigants that when seeking or opposing injunctive relief, they must also consider the interests of third parties and the public. The court may take these into account, especially in cases involving significant public health implications. Parties should be ready to present evidence on how the public interest is served or harmed by the availability of the patented product. Based on this decision, from mostly German judges no less, it is feasible that the UPC will deal with third-party interests more readily and leniently than for example German courts that are often hesitant to let those considerations alter the judgment.
The court's findings also emphasized the importance of good faith efforts in licensing negotiations. Clients should be aware that they should be or at least appear to be willing to provide necessary documentation and samples to facilitate these negotiations. Being perceived as an unwilling licensee, however, can negatively impact the case.
Moreover, arguments regarding the lack of jurisdiction are not likely to be fruitful if they are only based on the disputes taking place before June 1, 2023 or because another Local Division seems geographically closer to one of the parties’ premises. Parties should also anticipate that the UPC has the discretion to grant or deny a stay of the infringement proceedings. They should be prepared to argue compelling reasons for or against a stay, particularly in the context of prior bifurcation decisions where the patent has been upheld. Mitigating circumstances must be clearly demonstrated to justify a stay.
The author thanks Sabrina Eggemann for her valuable assistance.
