Context: In the summer, the Unified Patent Court’s (UPC) upheld Edwards Lifesciences’ EP3646825 (“A system comprising a prosthetic valve and a delivery catheter”) based on a late-filed but accepted auxiliary request (July 20, 2024 ip fray article).
What’s new: Today the Munich Local Division (LD) rendered its judgment in the related infringement proceeding against Meril Life Science (PDF) and granted a 16-country injunction (Belgium, Bulgaria, Denmark, Germany, Estonia, Finland, France, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Austria, Portugal, Sweden and Slovenia). A carve-out narrowly relates to “XL devices that have already been scheduled for implantation in an individual patient by 15 November 2024.” The 73-page ruling provides guidance on a variety of questions, ranging from jurisdictional to public-interest considerations.
Direct impact: Meril will predictably seek an enforcement stay from the Court of Appeal (CoA). In order to grant the injunction, the Munich LD had to resolve (and reject) numerous defenses, but that fact will not make it easier for Meril to win an enforcement stay unless the appeals court is easily persuaded by one or two arguments that today’s decision is manifestly erroneous. What is more realistic than a complete stay, and still rather difficult to obtain, is a broader carve-out on public-interest grounds.
Wider ramifications: This is the second UPC injunction for the week, following one granted by the Paris LD in an ink cartridges case (November 13, 2024 ip fray article).
Technology
TAVI (Transcatheter Heart Valve Implantation) is a minimally invasive procedure where the prosthetic heart valve (THV) is catheterized and implanted via an artery or vein, which means that it must initially be “crimped” (compressed) and then expanded at its destination.
The ruling describes the plaintiff’s valves under the SAPIEN brand as the most widely used ones for TAVI procedures on a global basis, as “the gold standard in safety and reliability,” and notes that “[i]t has been approved in Europe for high-risk, intermediate-risk, and inoperable patients” (and now for use in low-risk patients, too).
At the same time, the decision acknowledges that “for patients with extra-large annuli, the XL-sized ‘Myval’ valve from Meril sometimes still seems to be the best option.” Apparently Edwards allows the use of Meril’s products in those situations, subject to review by its own physicians.
Procedural history
The infringement complaint was filed on June 1, 2023 (the first day on which the UPC accepted filings), with the Munich LD. A little over two months later, Meril Italy started a revocation action in the Paris seat of the Central Division (CD), but different Meril entities were named as defendants to the infringement complaint and they brought revocation counterclaims (on November 2, 2023).
The CD’s judge-rapporteur allowed Meril to have it both ways by letting one entity pursue revocation in the form of a stand-alone claim while two other Meril entities pursued revocation as a counterclaim to the infringement complaint. Nevertheless, those revocation requests got consolidated after the Munich LD referred the counterclaims to the CD Paris by order of March 28, 2024. The CD Paris heard the revocation claim and counterclaims on June 7, 2024, and adjudicated them on July 19, 2024.
Meril appealed the validity decision, and argued to the Munich LD that it should stay the infringement case pending the appeal, but the Munich LD actually believes the CD Paris decision is correct (and the standard for a stay would be a manifestly erroneous decision). Meril’s argument that its right to be heard had been infringed, but that did not convince the Munich LD, which addresses Meril’s criticism of the CD Paris decision in detail. All in all, 14 pages are devoted just to the validity part, despite the fact that it had been adjudicated by the CD.
Back to the infringement case. The Munich LD heard that one on September 24. Much later, on October 16, Meril asked the Munich LD to delay its decision (which at the time had already been scheduled for today) in order to ask the European Commission (EC) for more information on an antitrust investigation of Edwards, and Meril also wanted the court to order further briefing, which would have delayed the judgment considerably. Just before issuing the infringement ruling, the Munich LD rejected that request as late-filed and noted that after the September 24 hearing it already asked the EC for further information, but apparently there is none to be shared for now.
Local Division’s jurisdiction
Meril raised two arguments against the Munich LD’s jurisdiction over the case:
- Meril disputed that the UPC could adjudicate infringement actions predating its June 1, 2023 starting date.
- Meril said that venue in Munich was not proper: Edwards should have sued in Dusseldorf.
The first two headnotes of today’s judgment address those points:
- The Unified Patent Court has jurisdiction over acts of infringement committed before the entry into force of the Agreement on a Unified Patent Court on 1 June 2023. This is in line with Article 3(c) and 32(1)(a) UPCA, in the absence of any conflicting intertemporal provisions.
- The claimant’s choice among the potentially competent German local divisions will ultimately determine the competence of the chosen German local division.
Territorial scope of injunction
In another headnote, the Munich LD held that it is sufficient to prove an actual or imminent infringement in just one UPC contracting state in which the patent-in-suit is registered in order to obtain an injunction covering all contracting states in which it is registered.
Initially, Edwards wanted an injunction for all UPC contracting states at the time of the decision, except (if applicable) Malta, but had to provide a specific list of countries as an auxiliary request.
Meril ducked the injunction with respect to Romania. Edwards made the request at the September 24 hearing to add Romania, but could have done so anytime after Romania joined the UPC system at the start of that month. According to the decision, “Edwards failed to prove at the oral hearing that the renewal fee for Romania had been paid in time and the patent is valid in Romania.” Edwards was not interested in delaying the proceedings, so the court decided to leave Romania out of the consideration.
Proportionality defense largely unsuccessful
Even in the amended form, the patent was found infringed. The court then turned to Meril’s proportionality defense to an injunction, and essentially rejected it.
The Munich LD holds that even in the absene of an explicit mention of third-party interests or the public interest in the UPC Agreement (UPCA), it can be considered by the court. And it says that “the court will give due consideration to the possibility of the infringer entering into a license agreement or initiating proceedings for a mandatory license.” The outcome of a compulsory-license case will then, of course, be considered.
Here, Meril already sought a compulsory license from the Federal Patent Court of Germany, and lost in March 2021 because it was considered an “unwilling licensee” due to its failure to seriously try to obtain a license.
Like the Federal Patent Court, the Munich LD now also held that the only respect in which there can be a valid public-interest argument is “valve prostheses for annuli exceeding 30 mm in diameter.” That is where Meril’s “XL” product can help patients who would otherwise not have an adequate solution available.
What is debatable and may be discussed on appeal is that Edwards doesn’t generally allow Meril to sell that XL product. Instead, doctors who want to treat a patient with it must contact Edwards through its Medical Request Portal and let Edwards’s physicians decide. Then they are, potentially, granted a single-use license. According to the decision, “the Medical Request Portal for the Myval valve prosthesis is functioning effectively.”
The court therefore made an exception only with respect to orders for Meril’s XL product that have already been placed by today and for which an implantation in a particular patient has already been scheduled.
Meril doesn’t get a general grace period either, as the Munich LD already delayed the adjudication of the infringement case in order to await the CD Paris decision on validity. And the court also declined to make the injunction subject to a condition subsequent relating to a parallel revocation proceeding. In that context, the court expresses its misgivings of Meril’s “attempt[] to outmaneuver the different divisions of the Unified Patent Court by creating a new entity, ‘Meril Italy’, with the intention of filing a standalone nullity action with the CDP in order to disrupt and/or prolong the infringement proceedings,” a behavior that the Munich LD believes the UPC should not reward.
The following paragraph is somewhat reminiscent of a FRAND analysis in a standard-essential patent (SEP) case just like the Federal Patent Court’s categorization of Meril as an unwilling licensee:
“In the absence of a legal foundation, it is not possible to order a payment in lieu of an injunction. It could be deemed appropriate to consider this option when evaluating the interests of both parties, provided that the defendant has offered a sufficient financial settlement. However, this is not the case in the present circumstances. The proposed lump sum payment of €100,000 by Meril during the licensing negotiations is an inadequate and unreasonable offer. The value of the infringement action is estimated to be approximately €8 million. The market value of one single device is five digits.”
Not only is Meril enjoined but recall and destruction as well as an accounting (for the purpose of determining damages), along with a preliminary damages payment of €66K, have also been ordered.
The only remedy sought by Edwards but deemed disproportionate was to order Meril to publish the decision on its own website.
Panel and counsel
Panel: Presiding Judge (and here, judge-rapporteur) Dr. Matthias Zigann, Judge Tobias Pichlmaier, Judge Margot Kokke (The Hague) and Technically Qualified Judge Dr. Stefan Wilhelm.
Counsel for Edwards Lifesciences: Bird & Bird’s Boris Kreye (who in SEP cases typically defends, particularly Nokia) and Elsa Tzschoppe; Thum & Partner’s Bernhard Thum and Dr. Jonas Weickert; and Powell Gilbert’s Siddharth Kusumakar, Tess Waldron and Bryce Matthewson.
Counsel for Meril: Hogan Lovells’s Dr. Andreas von Falck (who little more than two weeks ago won an injunction for a PepsiCo subsidiary (October 31, 2024 ip fray article)), Dr. Roman Wuertenberger, Dr. Lukas Wollenschlaeger, Beatrice Wilden, Dr. Alexander Klicznik and Dr. Felipe Zilly; and Wildanger’s Peter-Michael Weisse (who in SEP cases typically represents plaintiffs), Ole Dirks and Dr. Eva Maria Thoerner.