Context:
- Yesterday we were first to report on the Unified Patent Court’s (UPC) Mannheim Local Division’s (LD) post-hearing anti-interim-license injunction (AILI) against Amazon and the referral of the matter to the European Commission (EC) with the potential effect of an EU complaint with the World Trade Organization (WTO) against UK court practice (December 25, 2025 ip fray article). For the avoidance of doubt, the €50M ($59M) maximum fine is just a ceiling for an initial fine, just like the €0.5M for each additional day of non-compliance. But the order also says that continued non-compliance could lead to a further increase.
- The record penalty threat has drawn unusual engagement on Christmas Day. We would not have published an article on such a day if we had not made an extraordinary discovery. The threatened penalty alone would have been newsworthy, but the decision also states the bright-line rule that all UK interim licenses are against UPCland’s ordre public (thus will not be recognized, period), and there was the Christmas Eve referral to the EC for potential action that could lead to a finding of the UK essentially being an IP rogue state if it wants to engage in rate-setting (or even just reserves the right to do so, as it incredibly has) even for undisputedly non-standard-essential patents (non-SEPs).
What’s new: We have conducted further research, the detailed results of which are reserved for our premium members (judges are entitled to free access). The starting point is a from the UPC Court of Appeal (CoA) decision in Fujifilm v. Kodak (October 18, 2025 ip fray article), which elaborates on Art. 354(3) of the UPC’S Rules of Procedure (RoP) by spelling out the need for deterrence:
This amount should be sufficiently deterrent to be coercive, but also within reasonable limits for it to be an appropriate (proportionate) penalty.
(emphases added)
The Mannheim LD decision references that holding and uses its keywords, but the quantitative determination itself focuses on “the sum in dispute” with a conservative extrapolation to the number of patents at issue in a portfolio-wide rate-setting case). There is ample support for the €50M maximum amount in EU law and practice, particularly when the largest companies in the world, one of which is Amazon, are on the receiving end. Both the Court of Justice of the European Union (CJEU) and the EC recognize that fines on Big Tech are pointless if they are viewed as a cost of doing business or, as former EU competition commissioner Margrethe Vestager said in a case involving Apple, merely “a parking ticket.”
Direct impact: Apart from its appeal on the merits, Amazon may also seek an adjustment of any fines, but it will have to wait until any fines have actually been imposed. In Fujifilm v. Kodak, the CoA declined to engage in a just-in-case review of hypothetical fines. If Amazon wanted the slightest chance to change the CoA’s mind, it would have to show that the €50M ceiling is wholly irrational, which it can’t. Much to the contrary, even an actual €50M initial fine may be defensible under EU law. In a recent context, the EC even justified 98% of a huge fine with the need for deterrence.
Wider ramifications: Unlike in cases such as the EC’s €120M fine on X over a blue checkmark (preposterous, yet true) or multi-billion-euro fines on Big Tech, a contempt fine on Amazon, particularly in a case involving another U.S. company (InterDigital), is highly unlikely to lead to transatlantic tensions. The U.S. government has shown that it will take action, most recently in the form of sanctions on Europeans who have engaged in the Orwellian suppression of (lawful) free political speech, including former EU commissioner Thierry Breton (also known as a key proponent of the SEP Regulation), and in a different context even on International Criminal Court (ICC) judges. But there is no transatlantic policy concern over the UPC Amazon matter, as discussed further below (in a second non-paywalled section).
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No clear and present danger of additional U.S.-EU friction over this case, which is distinguishable from free speech and technology policy issues
In the current climate, the question of whether a hypothetical fine on Amazon could adversely affect transatlantic relations deserves a brief look. But contempt sanctions in a dispute between two U.S. companies are particularly unlikely to give rise to any particular measures.
On Tuesday, the Trump Administration announced sanctions on former EU commissioner Thierry Breton and other Europeans who engaged in censorship targeting American platforms and voices:
The targets of those measures include officials of government-funded organizations that mislabel themselves as non-governmental organizations (NGOs). Under the EU’s Digital Services Act (DSA), such organizations serve as “trusted flaggers” and create situations in which platforms are effectively forced to remove content and block users even over perfectly lawful content, as evidenced by court rulings (December 25, 2025 article by NIUS, a publication that has its detractors but by which various high-ranking politicians from Germany’s governing party have accepted to be interviewed).
There is a fundamental difference between freedom of speech as it is protected by the U.S. Constitution and the European version, and the gap has widened. The First Amendment protect free speech, and particularly free political speech. Secondary legislation cannot restrict it. Only illegal conduct that has nothing to do with opinion, such as fraud, does not enjoy such protection even though it involves communications. In Europe, however, the freedom of speech can be, and indeed is, restricted in many ways. With the DSA, the EU and many of its member states sought to impose further restrictions. Organizations targeted by the U.S. sanctions such as HateAid openly admitted to their efforts to curb the expression of political opinions beyond pre-DSA legal frameworks by alling it “hate speech” or “disinformation”. By contrast, the Federal Constitutional Court of Germany has repeatedly held that even “unsettling” and “patently false” statements are not per se unlawful.
The U.S. government’s criticism of the EU censorship complex is officially based on cross-jurisdictional overreach by the EU. For example, Mr. Breton threatened a U.S. platform operator (Elon Musk) ahead of an interview with a U.S. presidential candidate (Donald J. Trump):
X is also accessible via the web. In order to comply, X would have had to block users based on their IP addresses, and even that method would not have been reliable as there are virtual private networks (VPNs).
According to Elon Musk, the recent €120M EC fine would not have been imposed on X if he had bowed to EU demands to engage in censorship. Other platforms allegedly did so, and the EC left them alone. The official reasons for the EU fine on X cannot be taken seriously. For example, X made the checkmark (verification symbol) available to all Twitter Blue subscribers, while previously it was granted or denied on an arbitrary basis. The change was communicated to all users and widely reported in the media. The theory that this constitutes a scheme to mislead users is not credible.
The sanctions on individuals are a warning shot for the EU. The Trump Administration has also threatened retaliation against certain EU companies such as SAP, Spotify and Amadeus if regulatory fines are imposed on large U.S. companies:
In the current climate, here is also the possibility of U.S. Congress adopting the GRANITE (Guaranteeing Rights Against Novel International Tyranny & Extortion) Act, which would allow U.S. companies on the receiving end of certain regulatory actions to sue officials, even judges, in U.S. district court. However, the focus is very much on free speech. If anything has given rise to free-speech concerns in the InterDigital v. Amazon context, it’s actually that a UK judge indicated he would not take it lightly if InterDigital did anything that could lead a foreign court to take sua sponte action against Amazon.
The EU is in a weak position due to its economic decline (an upcoming article will discuss how even the EU’s largest member state lacks patents in a critical area), digital non-sovereignty, and military dependence. That is why the EC’s enforcement of its digital regulations will have to be merely performative, looking strong despite being weak. The same applies to the UK.
But if Amazon tried to build pressure on the UPC over a contempt fine imposed by the UPC, it would not be hard for InterDigital, a politically savvy company, to dissuade the U.S. government from stepping in. It would also be difficult for the U.S. to take issue with a court ruling (as oposed to a regulatory decision) where Amazon knew exactly what risk it was taking and merely had to give up on a UK litigation while still being able to raise any arguments in the UPC and other courts.