Ericsson v AsusTek, Arvato, Digital River

A. Facts

The Applicant, Telefonaktiebolaget LM Ericsson (Ericsson), is the owner of European Patent EP 2 819 131 B1, relating to voltage-controlled oscillators (patent in suit). [1] The patent in suit has been granted and is in force in Contracting Member States of the Agreement on the Unified Patent Court (UPCA), including Portugal. [2]

The Defendants are ASUSTEK COMPUTER INC (AsusTek), a holding company from the ASUS group based in Taiwan that manufactures and sell laptops and notebooks; ARVATO NETHERLANDS B.V. (Arvato), a logistics company that provides shipping, storage, after sale and repair services to AsusTek and its products; and DIGITAL RIVER IRELAND LTD (Digital River), an Irish company that is an authorized re-seller of AsusTek's products. [3]

On 14 June 2024, the Applicant initiated proceedings before the Lisbon Local Division of the Unified Patent Court (UPC, Court), seeking provisional measures against the Defendants against the distribution and sale of laptop and notebook products incorporating Intel Wi-Fi 6E AX211 Module and the Intel Wi-Fi 6 AX201 Module (the Modules). The Modules are incorporated into Defendants' products since 2019 and 2021 respectively. [4] The Applicant alleged that said products were sold, market and/or distributed by the Defendants -among other UPC Contracting Member States- also in Portugal. [5]

With the present order, the Court dismissed Ericsson's application for provisional measures. [6]
 

B. Court's reasoning

Among other objections, the Defendants contested the competence of the Court. The Defendants further pleaded the lack of infringement and invalidity of the patent in suit. They also argued lack of urgency, suggesting that the Applicants had unreasonably delayed bringing the application for provisional measures to court. [7]
 

Jurisdiction and competence

The Court confirmed its international jurisdiction, which was not disputed by the parties. [8]

Furthermore, the Court held that the Lisbon Local Division has (territorial) competence to hear this case. [9]

The Defendants argued that the Lisbon Local Division lacked territorial competence under Article 33(1)(a) UPCA because the products sold in Portugal do not infringe (all) elements of the patent in suit. [10] The Court rejected this objection. [11] The Court noted that the Defendants did not contest the ‘territorial connection element' of the present case to Portugal, respectively the Lisbon Local Division, but argued that no infringement took place at all. [10] Arguments concerning whether infringement actually occurred relate, however, to the merits and are irrelevant for assessing the territorial competence of the Court at this stage. [10]

The Court further clarified that Article 33(1)(a) UPCA applies equally to intermediaries whose services are used for the alleged infringement, in this case Arvato. [12] In the Court's eye, the territorial competence is based on the territorial link (i.e., the place of infringement) rather than the ‘quality' of the accused party, as (direct) infringer or intermediary. [12] What is more, the Court highlighted that requiring the filing of separate proceedings against an intermediary in different UPC divisions would be contrary to the principles of "efficiency, economy of means and legal certainty" that govern the UPC. [12]
 

Requirements for provisional measures

Having established (international) jurisdiction and competence, the Court laid down the requirements under which the UPC may grant provisional measures. [13]

The Court explained that the Applicant must show with a "sufficient degree of certainty" that the patent in suit is valid and its rights are infringed – or such infringement is imminent. [14] In addition, granting preliminary injunction requires that "urgency and balance of interests are considered" [14] . The Court clarified that these requirements are cumulative, meaning that the failure to establish any one of them may lead to dismissal of the application; accordingly, the Court is allowed not to address all requirements, if one is not met. [15] Due to the summary nature of preliminary proceedings, (only) a prima facie analysis of the facts is needed. [15]

As for the required degree of certainty, the Court elaborated that both Applicant's entitlement to initiate proceedings and the validity as well as infringement of the patent in suit should be "at least more likely than not". [16]

Turning to the burden of proof, the Court found that the Applicant should present and prove the facts that establish its entitlement to preliminary measures, while the Defendant should prove whether the patent is invalid. [17] In particular, the Court emphasised that the Applicant bears the burden of proving urgency and must demonstrate that the request was filed without unreasonable delay after becoming aware of the alleged infringement. [18]
 

Urgency

The Court held that the Applicant failed to provide evidence allowing the Court to assess urgency and particularly Applicant's diligence (respectively lack of negligence) in seeking provisional measures in a timely manner. [19] As a result, the Court concluded that the application must be dismissed. [6]

In the Court's view, the Applicant did not provide sufficient evidence of the exact moment it became aware that Defendants' products incorporate the Modules in question. [20] The Applicant had relied only on the date of a test purchase of (i.e., 5 May 2024). [20] At the oral hearing before the Court, the Applicant's representatives further stated that they received instructions to investigate Defendant's products on 15 April 2024. [20]

The Court held that it is ‘reasonably unlikely' that any of the above dates was the date, in which the Applicant first became aware of the potential infringement. [20] Since the Applicant had been silent in this regard, the Court relied upon the year of the alleged infringement, that is the date in which the Modules in question were incorporated in Defendants' products (2019, respectively 2021). [20] Even if a later moment in time would be considered (e.g., 12 October 2023, the date when the Applicant launched proceedings against Lenovo referring to the same Modules), it could not be assumed that the present preliminary proceedings launched in June 2024 were initiated without reasonable delay. [21]
 

Validity and infringement

Although no longer necessary after having established lack of urgency, the Court addressed validity and infringement of the patent in suit as well. [22] The Court opined that prime facie the patent in suit is ‘more likely to be valid than not'. [23] Regarding infringement the Court arrived at the same result, finding that prima facie it is ‘more likely than not that the Patent is being infringed.' [24]

• [1] Ericsson v AsusTek, Unified Patent Court – Lisbon Local Division, decision delivered on 15 October 2024. Available at: https://www.unifiedpatentcourt.org/en/node/1191.
• [2] Ibid, para. 16.
• [3]  Ibid, paras. 24 et seqq.
• [4] Ibid, para. 31.
• [5] Ibid, paras. 34 et seqq.
• [6] Ibid, para. 56.
• [7] Ibid, para. 3.
• [8] Ibid, para. 40.
• [9] Ibid, paras. 41 et seqq.
• [10] Ibid, para. 42.
• [11] 11
• [12] Ibid, para. 43.
• [13] Ibid, paras. 44 et seqq.
• [14] Ibid, para. 44.
• [15] Ibid, para. 47.
• [16] Ibid, para. 45.
• [17] Ibid, para. 46.
• [18] Ibid, para. 52.
• [19] Ibid, paras. 52 and 56.
• [20] Ibid, para. 53.
• [21] Ibid, para. 55.
• [22] Ibid, para. 57.
• [23] Ibid, paras. 61-79.
• [24] Ibid, paras. 86-94.