UPC must wait for German nullity ruling in Nokia vs Mala

The Paris central division cannot rule on a revocation action brought by Nokia against Mala’s EP 2 044 709 until the Federal Court of Justice in Germany has made a final decision on a previously filed revocation action against the same patent.

The patent protects a technology for connectivity fault management in networks with link aggregation group connections. In both proceedings, different Nokia companies had applied for the revocation of the German part of the patent. In the UPC proceedings, Nokia had originally also applied for the revocation of EP 709 in other countries. However, as the patent protection in those countries has now expired, only the German part of EP 709 is still at issue.

After Nokia filed its revocation action at the UPC, Mala countered with a preliminary objection. Mala argued that, given the same party was suing against the patent in the parallel German proceedings, the court should declare itself not competent. Mala also requested that the UPC proceedings be stayed until the Federal Court of Justice has ruled on the German nullity proceedings. The Paris central division rejected both requests. Mala then appealed to the Court of Appeal in Luxembourg.

The Court of Appeal under presiding judge Klaus Grabinski, Peter Blok as judge-rapporteur, and Emanuela Germano has now partially overturned the judgment. They confirmed that the central division had rightly declared itself competent. However, they ruled the Paris judges should have stayed the UPC proceedings in view of the Brussels I regulation (case ID: UPC_CoA_227/2024).

Interpretation of ‘during’

The crux of the dispute between the two parties was whether the German proceedings take precedence over the UPC proceedings and whether the court must suspend the latter. It came down to the interpretation of the word ‘during’ in Article 71c(2) of the Brussels I Regulation. This states that “Articles 29 to 32 of the regulation shall apply where, during the transitional period referred to in Article 83 of the UPC Agreement, proceedings are brought in the Unified Patent Court and in a court of a Member State party to the UPC Agreement.”

Nokia argued that the provision only applies to proceedings that were actually initiated during the transitional period, i.e. only after the start of the UPC. Mala, on the other hand, argued that it is not so much the exact starting point of the parallel proceedings that is important, but rather that the proceedings are still ongoing during the transitional period.

The central division Paris agreed with Nokia’s interpretation. The Court of Appeal, however, ruled, “In the light of the objective of Art. 29 to 32 of the Brussels I Regulation, Art. 71c(2) must be interpreted as meaning that the provisions apply where, during the transitional period of Art. 83 UPCA, proceedings are pending before the UPC and a national court, even if the proceedings before the national court were initiated prior to the transitional period.”

The UPC could have referred the question to the CJEU, but ultimately did not take this step.

Federal Court of Justice first

The dispute in Germany preceded the UPC lawsuit and this is still ongoing. In response to an infringement action brought by Mala against Nokia for EP 709, the Finnish company filed a revocation action with the Federal Patent Court in 2021 via its German subsidiary Nokia Solutions and Networks GmbH & Co. KG. The court dismissed the action two years later. On 15 December 2023, Nokia then filed both an appeal against the Federal Patent Court’s decision at the Federal Court of Justice and a revocation action at the UPC central division Paris. The plaintiff in the UPC revocation action is Nokia Technology GmbH.

The Federal Court of Justice has not yet scheduled an oral hearing for the national revocation action (case ID: X 3 ZR 6/24). The UPC will therefore have to wait a while for the outcome of the German dispute.

In addition, an infringement case is pending at the Higher Regional Court Düsseldorf. Mala prevailed in the first instance when Düsseldorf Regional Court granted an injunction against Nokia, but the company has not yet enforced this. Nokia appealed against the decision to the Higher Regional Court (case ID: I-2 U 34/24).

Court of Appeal clarifies

With their ruling, the UPC Court of Appeal judges have decided in principle how to proceed with parallel proceedings during the transitional period. The judgment provides clarification for when parallel revocation actions against the same part of a European patent are pending before national patent courts and the UPC. However, it does not clarify how the UPC should proceed when parties direct a UPC revocation action against the grant in other UPC countries.

Everything now depends on the appeal decision of the Federal Court of Justice in the German revocation case. If the court decides that the German part of EP 709 is still valid, Nokia could pursue the revocation action at the UPC central division. This is because a different Nokia company filed the suit at the UPC than in the German proceedings. In the infringement case, the Higher Regional Court Düsseldorf does not have to wait for the judgment from the Federal Court of Justice.

However, if the Federal Court of Justice declares the patent invalid, the basis for the UPC proceedings would also cease to exist. This would then put an end to both the UPC and the German national proceedings.

Taliens for Mala, Bird & Bird for Nokia

Mala is relying on lawyer Thomas Lynker from Taliens’ Munich office, with Evelyn Höfer providing assistance. European patent attorney Thomas Kurig from Becker Kurig & Partner, also based in Munich, is providing technical support. Mala Technologies took over the patent from Israeli company Orckit IP.

Taliens has a long-standing relationship with Orckit IP and is conducting infringement proceedings for Orckit IP against Adtran Extreme Networks in Germany. The firm is also conducting national infringement proceedings for Mala against Huawei and Cisco in Germany.

Nokia is once again relying on its regular advisors from Bird & Bird and Cohausz & Florack. Lawyer Boris Kreye has the lead on the legal side, Christoph Walke on the technical side. Bird & Bird associate Lars Hessmann and European patent attorney Lars Grannemann from Cohausz & Florack provide support. Clemens Heusch and Armin Schwitulla from Nokia’s in-house department are also working on the case.