Context: This is another update on the development of the Unified Patent Court’s (UPC) case law (e.g., June 4, 2024 ip fray article).
What’s new: The UPC’s Munich Local Division (LD) has now published its May 21, 2024 order granting Dyson a preliminary injunction (PI) against SharkNinja over vacuum cleaners (PDF (in German)). The three key takeaways are that
- patentees seeking a PI within two months of the launch of an infringing product will be deemed to have filed on a timely basis,
- defendants to PI motions must limit their invalidity defense to three contentions, and
- a patentee has a strong case for being harmed by an ongoing infringement if competing products are sold at prices that are 50% to 60% lower than its own.
Direct impact: It is easy to see on what grounds SharkNinja may try to appeal, and it’s not inconceivable that the Court of Appeal may adopt a slightly narrower construction of at least one of the disputed claim limitations.
Wider ramifications: It will be interesting to see which of those holdings the Court of Appeal upholds, if it reaches them at all. ip fray believes the two-month window and the finding of competitive harm will be affirmed, but the hard limit of three invalidity contentions may (and hopefully will) be reversed.
Company founder James Dyson himself is the first-named inventor on the patent-in-suit, EP2043492 on “a hand-held cleaning appliance.” This patent does not cover a more efficient vacuum cleaner, but one that is structured in a way that it is particularly easy for users to wield in the combination of where certain elements are positioned, what shape they have and where most of the weight is.
SharkNinja had three non-infringement arguments based on narrower interpretations of certain claim limitations. The court rejected them all. ip fray has not attempted to research those arguments in detail, but believes at least one of the defendant’s arguments is not facially unreasonable and could succeed on appeal. But that is case-specific, and the claim construction guidance in the headnotes of the decision is unsurprising (the claim is the starting point of the analysis etc.).
What’s relevant with a view to other cases are three non-technical holdings, which will govern PI requests filed with the Munich LD unless and until the UPC’s Court of Appeal overrules them.
1. Urgency: within two months, patentees are on the safe side
There’s a two-month safe harbor for patentees seeking PIs. In this case, Dyson became aware of the relevant new SharkNinja products through a presentation at the IFA trade show in Berlin in early September 2023, but that was not yet a basis for an infringement analysis. It was only on September 27, 2023, that Dyson saw the products where shipping in France, and in early November for Germany. The PI request was brought on September 27, 2023. The Munich LD holds that (in light of the patentee’s need to examine the accused products, develop an infringement read and also prepare for invalidity contentions) two months are a clearly appropriate period that does not call into question the urgency of the request.
The court’s guidance does not really leave room for an argument that a two-month delay belies a patentee’s assertion that the grant of injunctive relief is urgent. It appears more likely that patentees might be able to convince the court that, in specific circumstances and taking into consideration the complexity of one or more questions involved, they actually needed more time, notwithstanding the urgency of the matter.
The rule relates to suspected infringements in two ore more countries, but that is precisely what the UPC is for.
The UPC’s Munich LD may have been led, at least in part, by German case law. Depending on where in Germany a party brings a PI motion, the filing will be deemed untimely after one or two months of obtaining knowledge of a violation of its rights.
ip fray considers the two-month safe harbor absolutely reasonable as a general rule, for the reasons stated by the court in the decision.
2. Hard limit of three invalidity contentions
The decision impose a strict limit on defendants: given the nature of PI proceedings where the court has to form an opinion “summarily,” the Munich LD is unprepared to entertain more than three invalidity contentions.
Presiding Judge Dr. Matthias Zigann already took a similar position while serving on the Munich I Regional Court, but in main proceedings. One key difference is that he told defendants they could expect the court to take a close look at only the three invalidity contentions they designate as the ones they consider strongest, while the rest would be dignified with only a cursory look.
Whether any of SharkNinja’s other invalidity defenses would have proved outcome-determinative here is not known. It’s not likely, given that defendants typically have a pretty good idea of what their best arguments are.
That said, ip fray believes defendants should not be enjoined without having a fair chance to raise invalidity arguments. There are situations in which, for instance, a party may have a list of disparate invalidity contentions. For instance, a theory of impermissibly added subject matter has nothing to do with one over novelty or the inventive step. The impact of an injunction is incisive, and the existence of multiple reasonable invalidity arguments can also be a basis for denying a PI. For instance, if each of five invalidity contentions had only a 20% likelihood of success, there is a statistical probability of 67% that the patent will be invalidated over at least one of them.
3. Competitive harm
Dyson argued that it was suffering significant competitive harm because of SharkNinja selling the accused products at prices that were 50% to 60% lower than Dyson’s. That argument was given a lot of weight by the court in its analysis of the hardships.
The quality of Dyson’s products enjoys a great reputation, but there are also other reasons for which the company can command relatively high prices. Still, if a company deemed by the court (here, on the basis of only a preliminary assessment) to infringe a rival’s patent sells products competing with the patentee’s products on price, then that fact counsels for the grant of injunctive relief.
Panel and counsel
Judges: Presiding Judge Dr. Matthias Zigann, Judge Tobias Pichlmaier, Judge Dr. Walter Schober (from Vienna), and Technically Qualified Judge Pascal Weber.
Counsel for Dyson: DLA Piper’s Dr. Constanze Krenz, David Kless (“Kleß” in German), Dr. Benedikt Hammerschmid, Dr. Joschua Fiedler.
Counsel for SharkNinja: Freshfields Bruckhaus Deringer’s Prince Wolrad of Waldeck and Pyrmont and Caroline Horstmann.