Context: The Unified Patent Court (UPC) is arguably the world’s leading jurisdiction for preliminary injunctions (PIs) over patents, which it formally calls provisional measures, and the discussion discussed herein should be conducive to its popularity as a PI venue. Late last year, two overlapping UPC panels threw out PI motions brought by U.S. company Insulet over the same patent and same accused products, just that one motion targeted the Korean product maker named EOflow in the Milan seat of the Central Division (CD) while its Italian distributor Menarini had to defend itself in the Milan Local Division (LD). The patent-in-suit was deemed invalid and the proposed claim amendments were thrown out (November 23, 2024 ip fray article). The dispute continued only with respect to EOFlow as Menarini settled on the basis of a cease-and-desist covenant. The dispute also has a U.S. part where trade secrets were found infringed and damages of $452M awarded (December 4, 2024 Insulet press release).
What’s new: After upholding or lifting various PIs granted by various divisions of the Court of First Instance (CFI), the CoA has now reversed the CD Milan’s denial in Insulet v. EOFlow. A new and narrower claim construction resulted in a different validity assessment, yet the CoA identified a likely infringement. Insulet now has a 17-country PI (PDF) in place against EOFlow insulin pumps deemed likely to infringe EP4201327 (“Fluid delivery device with transcutaneous access tool, insertion mechanism and blood glucose monitoring for use therewith”).
Direct impact: EOFlow will now have to elect between trying to achieve a different outcome in the main proceedings and giving up like its Italian distributor apparently did. If the main proceedings continue, EOFlow will have to persuade the Milan CD that the CoA’s second panel’s assessment of the likely outcome on validity or infringement (with validity probably getting more attention) was wrong.
Wider ramifications: The CoA order provides certain clarifications. In particular, the second panel notes that claim construction is (like in other jurisdictions) a matter of law, and faults the CD Milan for having relied on the defendant’s expert testimony only because the plaintiff failed to provide contradictory expert testimony. In this regard, the decision notes that the skilled person (in the U.S. often abbreviated as PHOSITA for “person having ordinary skill in the area”) is, in other words, an imaginary construct that does not exist in flesh and blood. The decision clarifies the two types of knowledge that skilled person is assumed to possess. It also clarifies that unless a product maker makes a cease-and-desist covenant, the fact that a distributor in a given country did so does not eliminate the risk of renewed infringement. The CoA also granted a request for information regarding distribution channels. And 100% of the fees can be shifted to one side if only a negligible part of a case is lost by the generally prevailing side.
Late on a day that is a public holiday in many European countries (Labor Day), the CoA’s second panel issued this landmark ruling.
It is a clear message to all divisions of the CFI that claim construction is their job, and they can’t just rely on one party’s expert testimony.
As for the notional skilled person, “[d]he decisive factor is not the individual knowledge and abilities of a person, but rather the general specialist knowledge that is customary in the relevant field of technology, as well as the average knowledge, experience, and abilities in this specialist field.” And that knowledge, like claim construction, is for the Court, not an expert witness, to determine.
The UPC has now repeatedly made it clear that only a cease-and-desist covenant involving a contractual penalty (which obviously must be sufficient so as to dissuade from further or renewed infringement) will serve to avoid being enjoined after a past infringement has been identified. Here, it is easy to see that if EOFlow had not been enjoined with respect to Italy, Menarini’s cease-and-desist covenant (plus certain legal risks to Menarini under Italian public procurement regulations) wouldn’t necessarily have prevented EOFlow from shipping products to Italian customers in circumvention of Menarini.
The admissibility of claim amendments became moot here as the CoA believes the patent is not more likely than not to be invalid. Put differently, it is likely valid.
Balancing of interests
In the balancing of interests, the CoA attached major importance to the fact that there are different market segments based on technical characteristics, and the availability of technically distinguishable insulin pumps was therefore deemed irrelevant. In an otherwise redacted paragraph, the order notes that there is evidence of “price undercutting” by EOFlow.
There also appear to be some lock-in effects, making it somewhat costly or difficult for Insulet to sell its products to hospitals and patients who have already opted for EOFlow’s product. And the related prescriptions generally last four years.
The main proceedings will presumably lead to a decision in or around December 2025. The CoA does not hold it against Insulet that it awaited the CD’s decision on the PI motion before starting the main proceedings.
Para. 111 addresses the fact that the accused product was already on the market in 2023 while the patent-in-suit was granted only in June 2024. There may be cases, as the decision notes, where a PI could be denied because it would change the status quo in a given market. Here, however, the CoA concluded that there was no established market as any distribution of the accused product was limited in time and geography. There were also court decisions in Germany that shut down distribution in that country relatively quickly.
The apparently very limited sales volume of the accused product in the relevant markets was not given much weight as a PI is about potential future harm. In other words, it’s a prospective remedy.
Patients’ interests were considered, but in the end the CoA deems it acceptable that customers of EOFlow products must switch to a different product, which may require another medical examination in some cases.
A German injunction over a different patent (EP1874390 on a “fluid delivery device”) shut EOFlow out of the German market, but that fact does not prevent the UPC from ordering an injunction that also covers Germany and relates to a different patent. Here, again, the only alternative would have been a cease-and-desist covenant involving contractual penalties.
While the balancing part of the decision does not actually rely on the trade secrets situation in the U.S., it probably didn’t help EOFlow psychologically.
No enforcement security was ordered at this juncture.
Full cost award
Para. 136 notes that “[t]he request regarding information in relation to the quantity and the price obtained for the attacked embodiments was in relation to the successful claims relatively minor and caused no further costs.” The CoA did, as mentioned above, grant Insulet’s request for information for the most part. That does not mean that PI proceedings can be used to get access to information provided after the main infringement proceedings in order to develop a damages claim, but in this case the CoA considered it justifiable to seek information regarding distribution channels with a view to preventing further or renewed infringement.
Panel and counsel
Panel: Presiding Judge Rian Kalden, Judge Ingeborg Simonsson, Judge-rapporteur Patricia Rombach, Technically Qualified Judge Steven Richard Kitchen and Technically Qualified Judge Udo Matter.
Counsel for plaintiff-appellant Insulet: Peterreins Schley’s Dr. Frank Peterreins (founding name partner) Dr. Marc Grunwald, Dr. Simon Reuter and Constanze Wedding, as well as patent attorney Felix Gloeckler (“Glöckler” in German).
Counsel for defendant-appellee EOFlow: Hoyng Rokh Monegier’s Dr. Mirko Weinert and team.
The CoA decision does not list the Bird & Bird team that had fended off the PI motion in the first-instance proceedings because they represented Menarini and that part of the dispute was settled along the way: Dr. Christopher Maierhoefer (“Maierhöfer” in German), Dr. Claus Becker, Jonathan Hechler, Giovanni Galimberti, Edoardo Bàrbera and Evelina Marchesoni.