Context: Medical device maker Abbott is on a roll. Yesterday, a settlement with SiBionics before the Unified Patent Court’s (UPC) Dusseldorf Local Division (LD) contractually produced the effect of the remedies Abbott was seeking as a plaintiff, with the defendant merely having saved on litigation expenses (July 3, 2024 ip fray article). But Abbott also has to defend at times, particularly against rival Dexcom.
What’s new: Today, Abbott scored a defensive victory in the UPC’s Paris LD (PDF). A Dexcom case was dismissed because Abbott’s revocation counterclaim succeeded.
Direct impact: Dexcom needs a successful appeal to revive this case. And as the patent was invalidated with respect to all UPC contracting states at issue, including Germany (despite an attempted carve-out by Dexcom), this decision — short of a successful appeal — also disposes of parallel litigation in the Mannheim Regional Court.
Wider ramifications: With respect to the UPC’s jurisdiction over the revocation counterclaim, the decision clearly states that a revocation counterclaim may go beyond the territory targeted by the infringement claim. Due to differences between the parties challenging the patent in the UPC and in the Federal Patent Court of Germany, lis pendens rules do not apply according to the decision.
The patent-in-suit is EP3435866 (“analyte monitoring system”). According to the judgment, there is a global dispute over that patent. The UK part was revoked as the result of a stipulation before the England & Wales High Court of Justice. In Germany, Dexcom is suing Abbott in the Mannheim Regional Court. In response, Abbott filed with the Federal Patent Court of Germany a nullity action targeting the German part of that patent. That nullity complaint was brought on May 9, 2023. That was the last month before the UPC opened its doors, which proved helpful as will be discussed further below.
Dexcom sued ten Abbott entities in the UPC, and sought an injunction with respect to any UPC contracting states to have ratified the UPC Agreement (UPCA) in time, but limiting the prayer for injunctive relief in Germany to seven of the ten defendants, as three of them are already defending against the case in German national court.
The three Abbott entities with respect to which Dexcom elected to carve out Germany are two U.S. companies and a German one. They were the obvious targets for the Mannheim action. The other seven include six Abbott subsidiaries in France, Belgium, the Netherlands (two), Italy and Sweden, but also another one in Germany that was not previously sued (Abbott Diagnostics GmbH, domiciled in Wiesbaden).
For the infringement part per se, that carve-out would probably have worked. Given that the U.S. parent company can ultimately also be held liable for what its international subsidiaries do, there would have been an argument, however, that effectively the entire Abbott group was already being sued in Germany over the German part of that patent. But that is not the issue.
The real problem here came up when Abbott sought, by way of a counterclaim, the revocation by the UPC of the patent-in-suit for the entire UPC territory, including Germany. Dexcom tried to duck that counterclaim on procedural grounds, invoking EU law (Brussels Ibis Regulation) in conjunction with the UPCA and its provisions for the transitional period during which certain matters can be litigated in national court as well as in the UPC.
Dexcom wanted to keep at least the German part alive. The Federal Patent Court has, so far, only rendered a non-binding preliminary opinion, and scheduled a hearing for early 2025. Presumably, Dexcom was hoping to get some leverage in Germany in the meantime, benefiting from the infamous injunction gap by enforcing a sales ban before a final decision on validity. Whether the Mannheim court would indeed have ordered an injunction is another question. Maybe Dexcom was clutching to a straw, or they were confident that they could prevail in the Federal Patent Court nex tyear.
The UPC’s Paris LD determined that it had jurisdiction, and revoked the patent in all of the countries with respect to which it was challenged. The patent’s invalidation disposed of the infringement claim, leaving Dexcom empty-handed at least for now.
Interestingly, the Paris LD was not persuaded by the argument that under French law, a nullity counterclaim would have to be very strictly related to the infringement claim. The judges held that there is nothing in the statutes governing the UPC that would, in other words, explicitly require such congruence. And in any event, most of the Abbott entities that are being sued in the UPC, also with respect to Germany, are not parties to the German action. (Here, again, there is a legitimate question of whether it puts form over function to focus on legal entities when they are all under the control of the same parent company.)
The parties are the masters of their claims, but this does not mean that a carefully tailored infringement claim can limited the defendant’s revocation claim.
Dexcom also made an argument unter Art. 29, 30 and 71c of the Brussels Ibis Regulation. That combination would apply to a situation in which there is a conflict between an action in national court and one before the UPC. But Art. 71c(2) of the Brussels IBis Regulation says this:
Articles 29 to 32 shall apply where, during the transitional period referred to in Article 83 of the UPC Agreement, proceedings are brought in the Unified Patent Court and in a court of a Member State party to the UPC Agreement.
As the German nullity action was brought prior to the transitional period (which began on June 1, 2023, only about three weeks later), the criteria of Art. 71c are not met.
The lis pendens argument concerning the Federal Patent Court action over the German part of the same patent failed because of differences in the parties. In the Federal Patent Court, only defendant #8 (a German Abbott subsidiary) is challenging the (German part of the) patent.
The decision acknowledges that the German nullity case and the revocation counterclaim in the UPC are related cases, a fact that does not make a stay of the UPC revocation counterclaim mandatory. The court decided to exercise its discretion in favor of making the revocation decision now, given that the Federal Patent Court won’t rule until much later (next year, in fact).
If Dexcom appeals (which appears quite likely), some important clarification concerning parallel jurisdiction may be provided.
The decision was made by the following panel: Presiding Judge (and judge-rapporteur) Camille Lignières, Judge Rute Lopes, Judge Carine Gillet, and Technically Qualified Judge Alain Dumont.
Dexcom is represented by Bird & Bird AARPI’s Anne-Charlotte Le Bihan and Laurent Labatte (both from France), supported by Hoffmann Eitle’s David Sproston and Mark Jones (both from the UK).
The different Abbott entities have different lawyers representing them (only two share the same counsel of record): Taylor Wessing’s Christian Dekoninck, Gisbert Hohagen, Eelco Bergsma, Thomas Adocker, Dr. Christian Lederer, Dr. Dietrich Kamlah and Dr. Wim Maas, and August Debouzy’s François Pochart.