Enforcement of provisional measures before the UPC

In the proceedings concerning provisional measures in the order of 5 December 2023 in the 10x Genomics v NanoString case (original order in German/ non-binding machine translation, English), the Munich Local Division imposed a penalty payment of EUR 100,000.00 because of respondents’ non-compliance with the preliminary injunction. Before the UPC, the general rule for the enforcement of injunctions in Article 82(3) UPCA refers to national law. Respondents unsuccessfully argued that enforcement of provisional measures required a prior service of the court order from the applicant to the respondents according to Article 82(3) UPCA in connection with German and French national procedural laws. Allegedly, at least a prior notification of the enforcement is required due to respondents’ common interest in protection of legitimate expectations (in German: “allgemeine Vertrauensschutzgesichtspunkte”). However, both arguments were dismissed by the Munich Local Division.

The following aims at shedding light on particularities and underlying principles for enforcement of a preliminary injunction granted by the UPC, in particular on the relevant procedural laws and requirements for enforcing provisional measures (1), in the service of such court orders via CMS (2), and on the period of time for the debtor to comply with injunctions (3). The two recent decisions of the UPC on this issue (Genomics v NanoString and myStromer v Revolt Zycling) are discussed as illustrative examples.

What are the relevant procedural laws and requirements for enforcing provisional measures?

Enforcement procedures governed by national laws?

The UPCA and the RoP could be understood as if they stipulate that enforcement procedures shall be governed – in general – by the law of the Contracting Member State where the enforcement takes place: According to Article 82(3) UPCA and Rule 354.1 sentence 2 RoP, without prejudice to the UPCA and the Statute, enforcement procedures shall be governed by the law of the Contracting Member State where the enforcement takes place. Any decision of the Court shall be enforced under the same conditions as a decision given in the Contracting Member State where the enforcement takes place.

Decisions and orders may provide for (periodic) penalty payments payable to the Court in the event that a party fails to comply with the terms of the order (Rule 354.3 RoP). Decisions and orders of the Court shall be directly enforceable from their date of service in each Contracting Member State (Rule 354.1 RoP sentence 1, subject to Rules 118.8 and 352 RoP).

However, despite the wording in Article 82(3) UPCA and Rule 354.1 RoP suggesting otherwise, in practice, national laws will only apply in rare cases, in particular, if the debtor refuses to pay the penalty payment after being ordered to do so by the UPC (cf. myStromer v Revolt Zycling, LD Düsseldorf, section II.2.b) of the grounds; German original/ machine translation). This is because the detailed provisions in the UPCA and RoP concerning the enforcement of orders leave only little room for national laws.

Example requirements in national procedural laws pertaining to enforcement under Article 82(3) UPCA and Rule 354.1 sentence 2 RoP

According to national procedural laws of Contracting Member States, certain requirements must be met before an enforcement of a provisional order can take place. For example, in Germany, enforcement requires the applicant to serve the respondent with the respective court order, and, in France, this service must even be effected by a court bailiff (as correctly stated by NanoString in 10x Genomics v NanoString, LD Munich)¹.

Requirements for the enforcement of orders of the UPC

According to Rule 118.8 RoP, to which the aforementioned Rule 354.1 RoP refers, orders of the Court referred to in paragraphs 1 and 2(a) shall be enforceable against the defendant only

• after the claimant has notified the Court which part of the orders they intend to enforce, and
• after the notice and a certified translation of the orders in accordance with Rule 7.2 RoP, where applicable, into the official language of a Contracting Member State in which the enforcement shall take place provided by the claimant have been served to the defendant by the Registry.

Moreover, such court order may be subject to the rendering of a security (whether by deposit or bank guarantee or otherwise) by a party to the other party for legal costs and other expenses and compensation for any damage incurred or likely to be incurred by the other party if the decisions and orders are enforced and subsequently revoked (Rules 118.8 and 352.1 RoP). Please consult our insights regarding the enforcement of UPC decisions and orders  for additional details.

However, neither the Düsseldorf Local Division nor the Munich Local Division saw any reason to order their preliminary injunction subject to such rendering of a security (cf. myStromer v Revolt Zycling, LD Düsseldorf, section II.8 of the grounds; 10x Genomics v NanoString, LD Munich, section VII of the grounds).

National procedural laws and additional requirements are not applicable to provisional measures, such as provisional injunctions

As an exception to the aforementioned principles, provisional measures according to Article 62 UPCA, such as an injunction order subject to a (recurring) penalty payment, are not governed by national laws.

In penalty proceedings in case of enforcement of preliminary injunctions, the aforementioned Article 82(3) UPCA takes precedence over Article 82(4) UPCA in conjunction with Rule 354.3 and .4 RoP (“without prejudice to this Convention”) (cf. myStromer v Revolt Zycling, LD Düsseldorf, section II.2.b) of the grounds; 10x Genomics v NanoString, section I of the grounds).

This is also apparent from (i) Article 82(3) UPCA only mentioning “decisions”, not “orders”, as well as from (ii) Rule 118.8 RoP only applying to the orders of the Court referred to in paragraphs 1 and 2(a) – whereas paragraph 1 only refers to Articles 63, 64, 67 and 80 UPCA, and paragraph 2(a) only refers to infringement actions and pending revocation actions; thus, neither of both paragraphs refers to Article 62 UPCA concerning provisional and protective measures (cf. 10x Genomics v NanoString, LD Munich, section I of the grounds).

Requirements for enforcement of provisional injunctions

The Court may decide on penalty payments provided in the order upon request of the other party or of its own motion, wherein the procedure foreseen in Rule 264 RoP shall apply (Article 82(4) UPCA and Rule 354.4 RoP).

Since a penalty payment does not only have a deterrent function, but is also a punitive sanction for the violation of the court order, imposing penalty payments imply the unwritten requirement that the debtor is culpable (cf. myStromer v Revolt Zycling, LD Düsseldorf, section II.5.a) of the grounds; confirmed by LD Munich in 10x Genomics v NanoString, section IV of the grounds).

Calculation of the penalty payment, in particular, the type, extent and duration of the infringement, the degree of culpability, the benefit for the infringer resulting from the infringing act and the danger of past and potential future infringing acts shall be taken into account (cf. myStromer v Revolt Zycling, LD Düsseldorf, section II.5.b) of the grounds).

The Munich Local Division clarified that court orders according to Rule 354.1 RoP are directly enforceable from their date of service, e.g. via the UPC Case Management System (cf. 10x Genomics v NanoString, LD Munich, section I of the grounds). If you are interested, please read more about the service of the Statement of claim here.

This leads to the question when a court order is considered as “served” via the UPC Case Management System (“CMS”).

When is a document considered to have been served via UPC CMS?

Service of the statement of claim by means of electronic communication is deemed to have taken place on the day when the relevant electronic message was sent (GMT+1, Rule 271.6(a) RoP). Where service is effected within the closed electronic system of the CMS according to Rule 271.2 RoP, because a representative accepted service on behalf of a party pursuant to Rule 8.1 RoP, the access code to the CMS sent to the representative is the relevant electronic message (cf. Meril v Edwards Lifesciences, LD Munich, page 3, para. 1; original order in German/ non-binding machine translation, English).

Afterwards, all written pleadings and any other document shall be served to the other party by means of electronic communication (except for submissions containing a request for ex parte proceedings), Rule 278.1 RoP. Since, according to Rule 278.4 RoP, the aforementioned Rule 271.6 RoP shall apply mutatis mutandis, after a representative accepted such service, all documents are to be served via CMS.

When service of a document is effected via the CMS, the respective document is not served by sending an “electronic message” according to Rule 271.6(a) RoP. The party only receives a notification that a new document is ready to be retrieved from the CMS. This raises the question of when the service is actually effected via the CMS. The Munich Central Division clarified that the notification generated by the CMS is the “means of electronic communication” as meant in Rule 278.1 RoP or, as the case may be, the “relevant electronic message” as meant in Rule 271.6 RoP (which rule applies mutatis mutandis to written pleadings, see Rule 278.4 RoP) (cf. Astellas Institute for Regenerative Medicine v Healios, CD Munich, grounds).

In view of the above, the service of a document via the CMS takes place on the day on which the notification was sent to the respective party (GMT+1).

By when has the respondent to react after service of a preliminary injunction via CMS?

The court order is served and therefore enforceable in the moment when the order is posted in the CMS in a way that the parties have access to the court order. The question therefore is how much time the respondent has to react accordingly to fulfill the preliminary injunction.

Since imposing a penalty payment requires the debtor to be culpable (cf. myStromer v Revolt Zycling, LD Düsseldorf, section II.5.a) of the grounds; 10x Genomics v NanoString, LD Munich, section IV of the grounds), debtor needs to be allowed adequate time for implementing the necessary actions to comply with the court order. However, the specific period of time to be considered adequate in the given situation is at the discretion of the Court and may, for instance, depend on the actions to be necessary as well as the resources available to the debtor.

So far only two court orders imposing penalty payments have been issued. The current picture on how the UPC exerts its discretion is, therefore, rather rough:

• The Munich Local Division found that non-compliance with a preliminary injunction, e.g. by continuing to offer patent infringing products on the website, at least six days after service of the respective court order justified imposing a penalty payment (10x Genomics v NanoString, LD Munich, sections II to IV of the grounds).
• The Düsseldorf Local Division was rather strict in finding that deactivating an Instagram account half a day after the service of the court order (which took place at 3:30 pm at a trade fair) justified imposing an, albeit low, penalty payment even if the respondent in the meantime in particular deactivated offers on its website, sent letters to its distributors informing them about the injunction, modified the products presented in its trade fair booth within 15 minutes, and closed its trade fair booth the following day (myStromer v Revolt Zycling, LD Düsseldorf, section II.2 and II.5.c) of the grounds).

With many preliminary injunctions already issued, interesting constellations may soon be subject to future rulings on the enforcement of such injunctions. For example, taking into account that an ex parte preliminary injunction may be served by uploading the court order in the CMS and the service being effected by the system sending a notification to the so far unknowing debtor (see above), and being well aware of the UPC uploading documents in the CMS, for instance on Sunday evenings, the question could arise whether and when debtor’s (outside) legal counsel needs to be prepared to receive and forward such documents to its client in order to enable the client to comply with its obligations in due course, such as an injunction.

_{¹ Please find a detailed outline of national enforcement proceedings for enforcing the orders issued by the UPC for Austria, Belgium, Bulgaria, Denmark France, Finland, Germany, Italy, the Netherlands, Portugal, and Sweden in Augenstein/Flythström, Enforcement of Decisions of the Unified Patent Court (2023), AIPPI Law Series Volume 9.}