Context: Many Unified Patent Court (UPC) litigators were profoundly concerned when the Court of Appeal (CoA) overturned two parallel decisions to maintain German as the language of proceedings for licensing firm Ona Patents’ infringement actions against Apple and Google (item 4 of this September 25, 2024 ip fray article). While ip fray was not prepared to interpret the CoA’s stance as making it impossible to maintain a local division’s (LD) language of proceedings against a language-switch motion by a large global player (and defended that view on LinkedIn), others thought that “Big Tech” could now litigate any UPC case in English, also in light of the fact that Ona Patents has parallel cases pending in German national court, where the language of proceedings is obviously German.
What’s new: There now is, subject to an appeal, new precedent that shows local companies filing suit in the UPC LDs based in their country (or linguistic region) do stand a chance of getting to litigate a case against “Big Tech” in their language. In ParTec v. Nvidia, the President of Court of First Instance (CFI), Judge Florence Butin, denied a motion by Nvidia to switch the language of proceedings to that of the patent-in-suit, English (PDF).
Direct impact: Nvidia will presumably appeal.
Wider ramifications: Affirmance of this decision would result in a far greater balance in the UPC’s language-regime case law. Reversal, however, would indeed vindicate all those who said that the UPC was simply going to accommodate “Big Tech’s” preference for English-language proceedings in pretty much every case. Assuming that Nvidia appeals, the UPC is now standing at a crossroads now where there either will be some line-drawing and the possibility of different outcomes based on a case-specific inquiry or where the language of proceedings will always be English if that is the language of the patent and the defendant is a global corporation.
Three months ago, German supercomputer firm ParTec (which previously sued Microsoft in the Eastern District of Texas (June 10, 2024 ip fray article) brought a UPC complaint against Nvidia, seeking an 18-country injunction (October 28, 2024 ip fray article). ParTec founder and CEO Bernhard Frohwitter, an attorney-at-law who practiced patent law for decades, explained at a press conference that the UPC was chosen as a forum because it is “pragmatic and efficient” (November 7, 2024 ip fray article).
Mr. Frohwitter, whose current business is an operating company but who also at the helm of a well-known non-practicing entity (IPCom), is also the CEO of BF exaQC AG, ParTec’s licensing agent and co-plaintiff against Microsoft and Nvidia. Both plaintiffs are based in the Munich area and tiny compared to Nvidia.
What obviously makes this case distinguishable from the two Ona Patents cases is that ParTec and BF exaQC are small German companies. They speak German internally, while Ona Patents is based in Spain.
President Butin recognized that UPC case law favors using the language of the patent in any related proceedings, but she quotes the CoA on this as also saying that this applies “as a general rule and absent specific relevant circumstances pointing in another direction.”
Here, Nvidia had three valid arguments for switching to English:
- English is the language of the patent;
- it is the primary language of the defendant; and
- it is the “commonly used language in the relevant field of technology.”
Nvidia raised other arguments, such as that ParTec was suing Microsoft in the U.S. (and, therefore, obviously in an English-language jurisdiction), that did not appear relevant to the court. But the three above-mentioned ones were considered.
The following countervailing factors ultimately outweighed those factors: “the nationality, domicile and respective sizes of the parties.” Especially the last item has not been given sufficient weight yet by the CoA in the opinion of many observers.
The order summarizes the parties’ arguments, and it is interesting that ParTec’s counsel argued, in the CFI’s words:
“Art. 49 para. 5 UPCA constitutes an exception that must be interpreted narrowly, and the concept of ‘fairness’ aims to ensure equal opportunities – including a fair hearing – which are not prejudiced in the present case.”
In other words, the question is not whether English would also be an acceptable language of proceedings to the German party. There must be something more than just the need to obtain translations: it is not necessarily unfair to expect a well-resourced defendant like Nvidia to have translations furnished.
The final part of the order compares the companies’ financial numbers, with Nvidia’s 2024 sales of approximately $60B versus ParTec’s 2023 sales of approximately €100M, and recalls the policy goal of the UPC providing small and medium-sized enterprises (SMEs) with access to justice:
“This context must be considered when weighing the respective interests of the parties, taking into account the objective of ensuring fair access to justice for medium-size enterprises facing difficulties in enforcing their patents which is an important goal of the UPCA.”
That SME angle is also found in the second headnote of the decision.
Apparently Judge Butin agrees with ParTec that fairness, as defined in the statute, is not merely a question of whether one language may appear a more efficient choice than the other, but the question is whether the party moving to switch the language of proceedings is treated unfairly by the plaintiff’s choice of language.
It is easy to imagine scenarios in which a defendant could resaonably argue that the plaintiff’s language selection is unfair. For example, if a large company sued in English and the defendant was a small local reseller, then there might be a fairness argument.
As for the parties’ “nationality and domicile,” the decision notes that the two plaintiffs as well as one of the two defendants (Nvidia’s German subsidiary) are German companies, with only Nvidia’s U.S. corporate parent not being Germany. That means three out of four parties here are registered and based in Germany.
In the end, President Butin found that Nvidia could defend itself in German “without significant inconvenience” (and without being “significantly impaired in organizing their defense”) while “adopting English would disadvantage the Claimants [who chose] to file their action in German for valid reasons.”
In terms of appellate case law, MED-EL v. Advanced Bionics is important precedent for favoring another language over English as the language of proceedings because the other language is spoken where the parties are based (see item 12 of ip fray‘s September 14, 2024 UPC Roundup). In that case, it was taken into consideration that German is an official language of Switzerland, though not the only one.
ParTec v. Nvidia (if affirmed on appeal) could be apposite in more cases than MED-EL v. Advanced Bionics. It has the potential to contribute significantly to the UPC’s case law with respect to language selection, shifting the focus to a more comprehensive definition of fairness.
ParTec and BF exaQC are jointly represented in the UPC case against Nvidia by professionals from four firms. The only lawyer on ParTec’s side to be mentioned in this order is Dr. Roman Sedlmaier of IPCGS. There is a larger team for the dispute as a whole:
- IPCGS (lead): attorney-at-law Dr. Roman Sedlmaier (lead counsel) and patent attorney Jan Gigerich
- Krieger Mes & Graf v. der Groeben: attorney-at-law Axel Verhauwen (a leading Dusseldorf-based patent litigator)
- df-mp: David Molnia (a dual-qualified German/European as well as U.S. patent attorney, known from various other high-profile cases, particularly for Nokia (to whom he used to be adverse, but they hired him because of the excellent work he did against them) and InterDigital)
- Frohwitter Intellectual Property Counselors: patent attorney Mathias Himmelsbach
Nvidia is represented by Bardehle Pagenberg. Its lead counsel is Johannes Heselberger. There can be no doubt that many more Bardehle lawyers are involved as well, but so far only Mr. Heselberger has been named in a publicly accessible UPC document.