SO CLOSE YET SO DIFFERENT!

REFRESHING INSIGHT FROM the COURT OF APPEAL of the Unified Patent Court (UPC) regarding inspection of infringing goods/saisie-contrefa?on

Court of appeal -Luxembourg July 23, 2024 Progress Maschinen & Automation AG to AWN and Schnell S.p.A (https://www.unified-patent-court.org/en/node/936)

UPC Court of appeal had to rule on how to balance patentees’ needs of speed and efficiency and the protection of trade secrets. Its stance is obviously interesting in respect to UPC’s cases but also with regards to French infringement cases. Indeed, the UPC’s rulings are based on the same regulations as the French judges who regularly deal with this issue, namely the TRIPS Agreement and Directive 2004/48 on the enforcement of intellectual property rights, especially its article 7[1].

?The decision dealt more specifically with the saisie-contrefa?on/inspection of infringing goods before the filing of an action on the merits.

?In this case, Progress had requested the right to carry out a saisie-contrefa?on/inspect premises of AWM and Schnell. More than 4 months after the inspection took place, Progress had still filed no lawsuit on the merits because the items collected by the expert in charge of the saisie-contrefa?on had not been handed over to Progress due to trade-secret constraints. Schnell sought therefore to challenge the validity of the saisie-contrefa?on. The Court of First Instance of the UPC, Local Division Milan, in a decision dated 8 April 2024 revoked the provisional measures to inspect premises and to preserve evidence.

In the eye of a French practitioner this was a clear-cut situation because French regulation (article R. 615-3 of the French intellectual property code) not only sets this fixed period of 20/31 days to file a case on the merits but also its starting point i.e. the day when the saisie is performed.

UPC rules impose this fixed period of 20/31 days as well but leave to the judge ordering the saisie to state in its order its starting point. In the case at hand, this starting point was set in an ambiguous way given the trade secrets constraints.

?In its decision of July 23, 2024, the UPC Court of Appeal took the opposite position of the First instance Court’s decision and ruled that the countdown had simply not started even several months after the inspection since the issue of trade-secret had not been settled. Court’s motivation is most interesting because it seeks a solution to preserve one of the highlights of the saisie-contrefa?on, namely, to make it easier for the claimant to decide whether to prosecute the potential infringer.

Indeed, the UPC Court of Appeal states it wishes to offer to the patentee a tool enabling him to decide, in the light of the results of the saisie/inspection, whether to pursue the infringer on the merits.

Interestingly this objective is not stated in the Directive 2004/48, nor in the texts establishing UPC but Court rules that it is implicit.

The result is -once again- very patent friendly because the longer the management of the trade secret takes the more the claimant can postpone launching its case of the merits. This is a quite refreshing prospect in the light of the current French cases glued into trade secrets issues!

Incidentally, it is worth noting that the solution found by the UPC's Court of Appeal also contributes to maintaining good statistics in terms of time frames, since the objective of a decision on the merits in just one year can be more easily achieved when the debates on access to confidential documents have already been dealt with!

Obviously, article R .615-3 of the French intellectual property code prohibits the shifting of the starting point.

Indeed, the French regulation currently in force stating that the countdown starts when the saisie-contrefa?on is performed has the merit of clarity and simplicity. While, as experienced in the commented decision, the starting point is up to debate with UPC’s scheme. In this regard, the UPC Court's decision provides a very instructive commentary of UPC’s non-binding guidelines on the use of templates for saisie-contrefa?on orders (Point 13).

Will UPC flexibility and pragmatism be likely to encourage the launch of actions before the UPC rather than the French courts? Respective costs are not to be compared, but the potential territorial scope of UPC decisions may trigger greater interest from French stakeholders...

For more in-depth analysis of the French regulation in this respect, you can read my French post :https://www.dhirubhai.net/posts/francine-le-p%C3%A9chon-joubert_juridictionunifiaezedesbrevets-jub-upc-activity-7224781114710597633-iJqD?utm_source=share&utm_medium=member_desktop

[1] 1. Member States shall ensure that, even before the commencement of proceedings on the merits of the case, the competent judicial authorities may, […], order prompt and effective provisional measures to preserve relevant evidence in respect of the alleged infringement, subject to the protection of confidential information. […]

3. Member States shall ensure that the measures to preserve evidence are revoked […], if the applicant does not institute, within a reasonable period, proceedings leading to a decision on the merits of the case before the competent judicial authority, the period to be determined by the judicial authority ordering the measures where the law of a Member State so permits or, in the absence of such determination, within a period not exceeding 20 working days or 31 calendar days, whichever is the longer.

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