Context: Last week, Edwards won a Unified Patent Court (UPC) injunction against Meril in the Munich Local Division (LD) (November 15, 2024 ip fray article). It is, however, not the only Edwards v. Meril case before the UPC. Edwards is asserting EP3769722 (“Low profile delivery system for transcatheter heart valve”) in the Nordic-Baltic Regional Division (RD).
What’s new: On Thursday (November 21, 2024), the UPC’s Court of Appeal (CoA) decided on an interlocutory appeal by Meril in the case over EP’722 (PDF). The two key holdings are that (i) new (purely) legal arguments may be raised on appeal and (ii) the fact that an upcoming decision by a European Patent Office (EPO) opposition panel is appealable (and even likely to be appealed) is not in and of itself dispositive of a request for a stay of proceedings. The court also clarifies the statutory basis for a request for a stay during the written procedure.
Direct impact: The CoA remands for a new decision on the request for a stay, and notes that there are different means of addressing a potential problem of divergent decisions, only one of which is a stay. The infringement hearing is scheduled for January 16, 2025, and the EPO opposition hearing for the very next day. It is now in the lower court’s discretion to balance the reasons weighing for or against a stay, but it cannot deny the motion merely because of the appealability of a first-instance opposition decision.
Wider ramifications: The questions resolved by the CoA in that single decision are both bound to reoccur. What will come up particularly often is that a stay is sought over an upcoming EPO opposition hearing that is a first-instance (and not Technical Board of Appeal (TBA)) hearing. The CoA now rules out that the mere appealability of an opposition ruling would make a stay of proceedings ineligible. It also suggests rather strongly that a UPC infringement case should not be heard shortly before an EPO opposition hearing, while the CoA has previously already stated that decisions in parlalel UPC revocation and EPO opposition proceedings are not irreconcilable.
Meril brought an interlocutory appeal because the Nordic-Baltic RD denied its application for a stay of proceedings pending an EPO opposition decision. Here’s the chronology of events:
- March 7, 2024: The law firm of JA Kemp opposes the grant of EP’722. Law firms don’t have to disclose their clients in EPO opposition proceedings. It would not be surprising in the slightest if the client was Meril, against which Edwards filed a UPC infringement complaint over this patent on October 27, 2023.
- March 18, 2024: Meril also seeks, as a counterclaim in the UPC, the revocation of the patent at issue. And on the same day, Meril requested a stay of the infringement proceedings pending the EPO’s opposition decision.
- July 18, 2024: A non-binding preliminary opinion by the EPO is negative on the validity of the patent in its granted form, and in light of the upcoming (January 16, 2025) UPC infringement hearing, the EPO accelerates its proceedings and schedules its opposition hearing for January 17, 2025.
- August 20, 2024: The Nordic-Baltic RD denies the motion for a stay. At this point it is already known that Edwards will, if necessary, try to amend the patent-in-suit (both in the UPC and in the EPO). The denial is primarily based on Meril having chosen the wrong statutory basis to request a stay, and on the upcoming EPO opposition decision being likely to be appealed and, therefore, not final.
1. Motion for stay during written procedure must be based on Rule 295(a) RoP in conjunction with Art. 33(10) UPCA
Meril’s mistake in the CFI was to seek a stay under Rule 295(g) RoP in conjunction with Rule 118.2(b) RoP, a statutory basis that is not applicable prior to the oral proceedings. Here, the parties were still at the stage of the written procedure.
At that earlier stage of proceeding, the proper basis is Rule 295(a) before the European Patent Office or a national authority where a decision in such proceedings may be expected to be given rapidly”) in conjunction with Art. 33(10) UPCA:
Rule 295(a) RoP:
“where it is seized of an action relating to a patent which is also the subject of opposition proceedings or limitation proceedings (including subsequent appeal proceedings)”
Art. 33(10) UPCA:
“”A party shall inform the Court of any pending revocation, limitation or opposition proceedings before the European Patent Office, and of any request for accelerated processing before the European Patent Office. The Court may stay its proceedings when a rapid decision may be expected from the European Patent Office.”
The CoA clarified that Rule 295(m) RoP, a catch-all clause, doesn’t apply either because there is a specific rule in place (Rule 295(a) in conjunction with Art. 33(10) UPCA).
2. New legal arguments on appeal
Different jurisdictions have different approaches to new arguments raised on appeal for the first time. In the United States, appeals are limited to the evidentiary record and litigants must preserve (and make sure they do not waive) legal arguments in the court below, with limited exceptions. In Germany, only a final appeal (third round) is limited to questions of law, but second-instance courts often admit new evidence.
Under Rule 222(2) of its Rules of Procedure, the UPC “may” disregard “[r]equests, facts and evidence which have not been submitted by a party during proceedings before the Court of First Instance.” Here, Edwards objected to Meril’s request for a stay of proceedings relying on a different statute in the CoA than in the CFI.
The CoA decision explains that a new argument based on the facts and evidence submitted in the CFI, and consistent with the requests made in the CFI, does not even fall under that (discretionary) rule.
Here, the request for a stay was made in the CFI, so it is not new. The underlying facts (the EPO opposition proceeding) were raised in the CFI, too. On appeal, Meril merely showed that it had learned from the failure of its motion in the court below and now relied on the correct statutory basis.
The UPC is, with respect to new arguments raised on appeal, more flexible than U.S. courts, but not as extremely permissive as German second-instance courts.
3. Appealability of opposition decision is not dispositive
Edwards obviously sought to downplay the importance of the EPO’s negative non-binding preliminary opinion. It argued that the EPO would (at minimum) uphold the patent in the proposed amended form. But the argument that somehow got the most traction with the court below was that a negative opposition decision would be appealed to the EPO’s Technical Boards of Appeal.
The CoA has now clarified that an upcoming EPO decision may (in the court’s discretion) give rise to stay regardless of whether it is final. While Rule 118.2(b) RoP refers to what the UPC believes the EPO’s final decision will be, the applicable statute in the relevant situation here is merely that there will be a rapid decision.
If the UPC stayed infringement proceedings only if an EPO opposition is already about to be decided by a Technical Board of Appeal, the applicability of that statute would be severely limited. That is no longer a concern: the CoA has set the record straight.
Therefore, “the Court of First Instance erred in refusing to grant the requested stay solely on the basis of its finding that a final decision in the opposition proceedings could not be expected rapidly.” Instead, the circumstances of the case and the balance of the interests of the parties should now be looked at on remand.
Based on what the CoA says, it is not impossible for the Nordic-Baltic RD to deny a stay once again. But between the lines it does sound like the CoA sees a strong policy reason for avoiding contradictory outcomes between an infringement hearing that takes place one day and an EPO opposition hearing that takes place the next day (given that EPO opposition decisions typically come down at the end of the relevant hearing). That, however, does not necessarily mean that the infringement proceedings need to be stayed. The CoA explains other case management options such as
- postponing the infringement hearing (so as to get the benefit of knowing the outcome in the EPO, or possibly even have access to the written reasons);
- holding it as scheduled, but obtaining information from the parties on the outcome and deciding the next step on that basis; and
- adjudicating the infringement case, but potentially staying under Rule 118.2(b).
The CoA defers to the court below, which is better-placed to make that determination.
Panel and counsel
Panel: Presiding Judge Dr. Klaus Grabinski, Judge-rapporteur Peter Blok and Judge Emmanuel Gougé (who started at the CoA only on September 9, 2024, replacing another French judge).
Counsel for defendant-appellant Meril: Hogan Lovells’s Dr. Andreas von Falck, Dr. Alexander Klicznik, Kerstin Jonen and Dr. Lars-Fabian Blume.
Counsel for plaintiff-appellee Edwards: Powell Gilbert’s Bryce Matthewson, Siddharth Kusumakar and Adam Rimmer; Gulliksson’s Jens Olsson; and Thum & Partner’s Bernhard Thum and Dr. Jonas Weickert.