UPC stays of proceedings

Decisions in parallel UPC infringement and EPO opposition proceedings may conflict, for example, where the EPO revokes a patent that has formed the basis of a UPC infringement action.

To prevent such conflicts, Article 33(10) of the Agreement on a UPC (UPCA), and Rule 295 of the Rules of Procedure of the UPC (RoP), allow a UPC court to stay its proceedings provided a rapid decision is expected from the EPO.

In Meril v Edwards, the UPC Court of Appeal made clear that such EPO decisions include those issued by opposition divisions.

Case background

At first instance, Edwards brought a UPC infringement action against Meril on the basis of a European patent, and Meril counterclaimed for revocation. The oral hearing was scheduled for 16 January 2025.

Meril opposed the same patent before the EPO. The EPO opposition division accelerated the opposition proceedings, and issued a non-binding preliminary opinion that the grounds of opposition prejudice the maintenance of the patent as granted. Oral proceedings were scheduled for 17 January 2025, one day after the UPC oral hearing.

Meril also requested the UPC Court of First Instance to stay the infringement proceedings, pending a decision from the EPO opposition division.

However, the Court of First Instance rejected Meril’s request, on the basis that the EPO opposition division’s decision is likely to be appealed, meaning a final EPO decision cannot be expected rapidly.

In contrast, the UPC aims to allow a final oral hearing to take place within one year, therefore the UPC is expected to issue its decision before a final decision is issued by the EPO.

Appeal

Meril appealed against this decision.

The UPC Court of Appeal acknowledged that the relevant provisions (Article 33(10) UPCA and Rule 295(1) RoP) do not require a final EPO decision to be expected rapidly: a rapidly expected decision from the opposition division is sufficient, even if it is likely to be appealed.

Accordingly, the Court of Appeal found that the Court of First Instance was wrong to refuse to grant the stay on the basis that the EPO opposition division’s decision is not final.

However, the Court of Appeal recognised that the court is not required to stay proceedings if a rapid (final or non-final) EPO decision is expected. Article 33(10) UPCA and Rule 295(1) RoP state that the Court “may” stay proceedings. Therefore, whether to stay proceedings is at the discretion of the court.

The Court of Appeal emphasised that in deciding whether to stay proceedings or not, the court should consider the balance of interests of the parties, and the specific circumstances of the case. Such circumstances include the stage of the opposition proceedings (factoring in non-final decisions and the potential for appeal, versus final decisions), the stage of infringement proceedings, and the likelihood of revocation in the EPO opposition proceedings.

The Court of Appeal also suggested some alternative ways for the court to prevent conflicting decisions, which avoid staying proceedings during the written proceedings:

• Proceed with the infringement proceedings, but reschedule the oral hearing to take place after the EPO issues its oral or written decision;
• Hold the oral hearing as scheduled, but request the parties to inform the court of the outcome of the opposition proceedings, and then decide whether further procedural steps are required; and
• Proceed with the infringement proceedings, and exercise the powers granted under Rule 118.2(b) RoP to stay proceedings during the oral proceedings, when the case is ready for a decision.

Remittal

Given that the Court of First Instance has discretion to stay the proceedings, and was more familiar with the particular circumstances of the case, the Court of Appeal remitted the case back to the Court of First Instance.

The Court of First Instance once again acknowledged that the UPC aims to allow a final oral hearing to take place within one year. This aim had not been met in the Meril v Edwards case, and rescheduling the oral hearing would significantly further delay the UPC’s decision on the merits.

In contrast, the Court of First Instance recognised that the EPO opposition division normally announces its decision at the end of oral proceedings. Therefore, even holding the oral hearing as scheduled, the EPO’s decision was expected to be available to the court before it issues its decision on the merits. In addition, the opposition division’s decision is likely to be appealed.

Therefore, taking into account the interests of the parties and the relevant circumstances, the Court of First Instance exercised its discretion in dismissing the request to stay the proceedings again.

However, the court planned to request the parties to inform them of the outcome of the opposition proceedings, and then decide whether further procedural steps are required, as had been suggested by the Court of Appeal.

Decision of the EPO opposition division

During the oral proceedings, the EPO opposition division decided to maintain the patent as amended on the basis of an auxiliary request.

The same auxiliary request was filed in the UPC infringement proceedings, and we await the UPC’s decision with interest.

Comment

Overall, the Court of Appeal has made clear that a court may stay infringement proceedings where the opposition division of the EPO is expected to give a rapid decision, even if such decision is likely to be appealed. However, such a decision to stay proceedings is subject to the court’s discretion, and the court should take account of the interests of all parties, and the relevant circumstances when making its decision.

The EPO will accelerate opposition proceedings if it is informed of parallel UPC infringement or revocation proceedings. However, given that the UPC aims to allow a final oral hearing to take place within one year, it seems unlikely that UPC courts will stay infringement proceedings even if an EPO decision is expected imminently. Nevertheless, it appears that EPO decisions should be taken into account by UPC courts, with the aim of preventing conflicting parallel decisions.

Case details at a glance

Decision level: Court of First Instance, Nordic Baltic Regional Division
Case: UPC_CFI_380/2023
Order: ORD_16663/2024
Parties: Meril Life Sciences PVT Limited & Ors v Edwards Lifesciences Corporation
Date: 20 August 2024
Decision: dycip.com/ord-16663-2024

Decision level: Court of Appeal, Luxembourg
Case: UPC_CoA_511/2024
Order: ORD_61000/2024
Parties: Meril Life Sciences PVT Limited & Ors v Edwards Lifesciences Corporation
Date: 21 November 2024
Decision: dycip.com/ord-61000-2024

Decision level: UPC Court of First Instance, Nordic Baltic Regional Division
Case: UPC_CFI_380/2023
Order: ORD_65290/2024
Parties: Meril Life Sciences PVT Limited & Ors v Edwards Lifesciences Corporation
Date: 11 December 2024
Decision: dycip.com/ord-65290-2024