“The UPC is already decisive for settlements”

The UPC’s impact was clear from the start. In the first two days after its launch in June 2023, Ocado filed three infringement suits against competitor Autostore. The two manufacturers of warehouse automation systems had previously butted heads in national courts. However, the UPC never had the chance to hear the case as the two companies announced a settlement at the end of July 2023.

At this point, Ocado and Autostore had been fighting in the US, the UK and Germany for almost three years. Neither side confirmed that the three UPC lawsuits ultimately made the difference. But the timing speaks for itself. The UPC lawsuits would have further raised the financial stakes in what was already an intense dispute. Certainly, a Europe-wide injunction would have multiplied the pressure on Autostore.

Settlements over Christmas

The UPC has seen a number of settlements since then, but particularly at the turn of this year. In January, for example, the two automotive suppliers Valeo and Magna announced a settlement in their dispute over gearboxes.

The settlement between Panasonic, Xiaomi and Oppo also finally came into force in December. In October, the Japanese patent holder and two Chinese implementers had reached an agreement in principle to settle their behemoth dispute featuring twelve UPC lawsuits.

“The number of settlements in the last quarter of 2024 was significantly higher”

Surprisingly, Abbott and Dexcom also settled their dispute over glucose-monitoring devices, as did Huawei and Netgear in their fight over wifi 6 patents.

“There have always been settlements”, said a litigator when asked about the situation. Another expert said, “The number of settlements in the last quarter of 2024 was significantly higher than in previous years.”

However, there has long been consensus among experts that UPC lawsuits would significantly increase the pressure on defendants to settle.

Time factor and territorial reach

The prospect of obtaining an injunction for 18 UPC countries in Europe is particularly attractive to patent holders. In addition, the UPC largely adheres to its tight deadlines. Within a year, patent owners can obtain a Europe-wide injunction, while implementers can have a patent revoked in the first instance. Furthermore, the competence of its judges means users have largely accepted the new court.

“People wondered whether the judges were prepared to issue injunctions – the answer is yes”

When the court launched, the main question still on everyone’s lips was whether the judges were prepared to issue preliminary and permanent injunctions. Nearly two years later, the answer is a resounding yes. Where judges have considered a patent-in-suit to be likely valid, they have issued a preliminary injunction — in line with the Court of Appeal’s guidance. They have also handed down some permanent injunctions in main proceedings.

A self-confident court

Netgear recently experienced this in its dispute with Huawei. Shortly before Christmas, the local division Munich granted an injunction against Netgear’s wifi 6 routers. The decision had far-reaching consequences. Netgear was banned from selling its wifi-6-capable routers in Belgium, Finland, France, Germany, Italy, and Sweden. Almost simultaneously, the same division issued an anti-anti-suit injunction against a potential anti-suit injunction that Netgear requested in the US. Huawei would have had to enforce the Munich injunction for it to become affective. Nevertheless, it did not take long for Netgear to comply and accept a licence.

“It did not take long for Netgear to comply and accept a licence”

But things could have been worse. Last November, the local division Munich under presiding judge Matthias Zigann ruled that Meril Life Sciences had infringed Edwards Lifesciences’ EP 3 646 825 with its Myval Octacor transcatheter heart valves. The consequences of the ruling are drastic for the Indian medical device manufacturer. It may no longer sell the product in UPC countries and the judgment applied immediately. Edwards did not have to provide security or formally enforce the judgment.

However, the dispute continues. It has probably reached such a scale and intensity that a settlement based a single judgment is unlikely — especially given Meril immediately launched a new product on the market.

Uncertain outcome

Oppo was also on the receiving end of a permanent injunction in its dispute with Panasonic. The two agreed on the main features of a licence agreement shortly after the hearing. Nevertheless, as the proceedings had not yet been formally concluded, the local division in Mannheim issued an injunction against Oppo. It took until the end of the year for the parties to submit the corresponding applications to withdraw the lawsuits and receive the UPC’s approval.

“It was uncertain how the UPC would decide – the situation called for a settlement”

The settlement agreement in principle came only a few days after the UK Court of Appeal had issued an interim licence in the parallel case between Panasonic and Xiaomi, and after the local division Munich had heard the dispute with Oppo. At the time it was uncertain how the UPC would decide the case. The overall situation called for a settlement rather than a continuation, especially as five more complex and expensive proceedings would have followed.

Conclusion at year’s end

Traditionally, companies are more willing to conclude litigation before the end of the year so that the licence deals can still be taken into account in the annual balance sheets. The individuals involved can also benefit, reports an in-house lawyer, in the form of good bonuses for advantageous deals, for example.

“Individuals can also benefit in the form of bonuses for advantageous deals”

The financial stakes in the gearbox dispute between Valeo and Magna were reputedly high. Involved parties claimed it was around a billion euros. Valeo wanted to prohibit Magna from installing the patented gearboxes in certain BMW models and had filed two PI motions and four infringement actions with the Düsseldorf local division. Magna had responded with counterclaims for revocation. There were also actions before the Regional Courts of Düsseldorf and Munich, as well as entitlement actions by Magna in France.

Proportionate injunction

In October, the Düsseldorf local division then issued two PI orders against Magna prohibiting the use of the infringing technology in Germany and France. Magna may no longer use its product for future car models. However, the court exempted the current BMW models because it would have been disproportionately costly and time-consuming to modify them (case IDs: UPC_CFI_368/2024 and UPC_CFI_347/2024).

It was a reasonable judgment that perhaps made peace possible. Until shortly before Christmas the parties continued to argue over whether another BMW model should fall under the exemption. Then, finally, on 30 December Valeo applied to withdraw the lawsuit with Magna confirming the measures to the court soon after. It seems the UPC’s sharpest sword of injunction does not always have to hover in order for parties to reach an agreement.