Context: On July 2, 2024, the Unified Patent Court’s (UPC) Munich Local Division (LD) held its trial in a Philips v. Belkin case over a patent declared essential to the Qi wireless charging standard (EP2867997 on “wireless inductive power transfer”). ip fray outlined the issues in the case in a LinkedIn post, and explained in an article why that case involves a standard-essential patent (SEP) but no FRAND (fair, reasonably and non.discriminatory licensing) defense (July 4, 2024 ip fray article). The proposed EU SEP Regulation fails to take market power into account as the article also mentioned).
What’s new: Today the Munich LD has handed down its decision. Philips largely won the case: the court entered a permanent injunction against three Belkin entities and three of the company’s directors and officers; awarded costs and provisional damages; but declined to order a recall and the destruction of infringing goods. The injunction covers Germany, Belgium, France, Finland, Italy, the Netherlands, Austria and Sweden, though the German part of the injunction, due to prior local proceedings, is carved out from the obligations imposed on certain defendants.
Direct impact: Belkin can try to appeal the decision, but unless it is granted an enforcement stay, it will probably consider settling the case through a license agreement.
Wider ramifications: The decision addresses important questions (that the UPC’s Court of Appeal (CoA) will probably be asked to review) regarding claim construction as well as director and officer liability, and with respect to the res iudicata effect of a prior final decision by a German national court.
The 65-page judgment (in German) had not been published by the time this article went live.
A significant part of the decision deals with claim construction. The key dispute there related to whether an accused embodiment (here, based on the specification of the Qi standard, which is entitled to a rebuttable presumption as to f what the accused products actually do) infringes a claim that envisions a message that can be an “accept” or a “reject” message even if there will always be an accept message (meaning the devices, provided that it is operational, will always declare itself ready to enter into what is called a negotiation phase between devices). The decision explains the primacy of the claim over the specification:
If the description discusses multiple exemplary embodiments as falling within the scope of the invention, the claim must be construed in such a way that its interpretation covers each of those exemplary embodiments. In this case, it means that an accused product that will always acknowledge a certain messages by sending an “accept” message (and will never send a “reject” message) must also be deemed to fall wihin the claim scope.
Even under that inclusive interpretation, Belkin’s invalidity arguments didn’t convince the court. As a result, the patent was deemed valid as granted, and the auxiliary requests that Philips had presented on a precautionary basis didn’t have to be reached.
With respect to both infringement and validity, the Munich LD merely took note of certain German judgments, but formed its own opinion. The fact that there had been litigation in the Dusseldorf Regional Court with an appeal that failed on formal (not substantive) grounds, thereby rendering the non-infringement ruling final in Germany, affected the UPC decision only with respect to Germany and even the only with respect to certain defendants. Also, the Munich LD declined to stay the case over a German invalidity appeal, given that it could take a couple of years.
Philips is suing not only three Belkin entities but also the managing director (i.e., president) of one of them and two directors of another Belkin entity. In Germany, patent infringement judgments have come down against corporate officers on various occasions. A settlement between IPCom and Deutsche Telekom was apparently driven largely by the desire of an outgoing Deutsche Telekom CEO to resolve a case in which he was being personally sued (on top of claims against the company).
The question was then whether such claims against corporate officers are also supported by the UPC Agreement (UPCA). With respect to permanent injunctions, though not in connection with damages, the Munich LD found support for that proposition in the second grammatical sentence of Art. 63(1) UPCA:
“The Court may also grant such injunction against an intermediary whose services are being used by a third party to infringe a patent.”
The decision then relies on a citation to a decision by the Grand Chamber of the European Court of Justice (C-148/21, C-184/21 – Christian Louboutin/Amazon Europe Core Sàrl) in a trademark infringement case where the question of what constitutes use of an intellectual property right was addressed. On that basis, only those who actively perform the acts of infringement are liable as infringers. They may be legal persons (companies). Whether directors and officers (D&O) are liable for inducing or abetting infringement did not have to be resolved (and was apparently not briefed extensively) in the case at hand. Instead, the D&O liability theory is based on the ECJ’s references in Tommy Hilfiger Licensing LLC v. Delta Center (C-494/15) to “[an] intermediary whose services are being used by a third party to infringe an intellectual property right.” That case was not a patent case either, but some of the ECJ’s holdings in that case broadly relate to “intellectual property rights.”
A “special relationship” between the intermediary and the actual infringer is not required by ECJ case law, and the Munich LD concluded that a non-requirement doesn’t mean an exclusion.
Directors and officers are then considered by the Munich LD to provide a “service” against remuneration.
Panel: Presiding Judge Dr. Matthias Zigann, Judge-rapporteur Tobias Pichlmaier, Judge Edger Brinkman (The Hague) and Technically Qualified Judge Dr. Anders Hansson (Stockholm).
This injunction is a noteworthy win for
- Bardehle Pagenberg’s Dr. Tilman Mueller (not to be confused with Professor Dr. Tilman Mueller-Stoy; the former is based in Hamburg and also frequently active on behalf of licensors of the Access Advance patent pool, while the latter is from Munich), Dr. Tobias Wuttke, Emely Rath, and Anita Peter (who according to what ip fray learned from a third-party reader had her first opportunity to plead in the UPC);
- Eisenfuehr Speiser’s Dr. Désirée Heintz and Dr. Christoph Fehn; and
- Philips in-house counsel Arie Tol and Edwin Montie.
The defendants (and now likely appellants) were represented by DLA Piper’s Dr. Philipp Cepl, Dr. Constanze Krenz, Dr. Benedikt Hammerschmid and Dr. Carl Prior.