On 4 July 2024, the Paris Local Division issued its first (and the UPC's second) decision (ORD_37297/2024) on the merits, as part of a wide-ranging dispute between US companies, Dexcom and Abbott Laboratories, relating to patents for glucose monitoring systems, and Abbott's FreeStyle Libre product. The Court found Dexcom's European patent EP 3 435 866 B1 (the Patent) invalid on the grounds of lack of inventive step and also rejected Dexcom's auxiliary requests. As a result, the Patent has been found, subject to appeal, invalid across all 17 of the current contracting Member States of the UPC.
Further, as a result of the finding of invalidity, the Court declined to give a ruling in relation to Dexcom's claim of infringement. This means that, should the case go on appeal, and the appeal against invalidity is upheld, the infringement issues would then fall to be considered. This is an important factor to consider in relation to timeframes for UPC actions when comparing against national proceedings.
The Court's decision also deals with some interesting points in relation to jurisdiction, particularly when proceedings are also on foot before a national court. The Court concluded that, whilst a claimant can exclude certain acts of infringement in order to avoid the inconvenience of parallel proceedings between the UPC and national courts during the UPC transitional period, this does not restrict a defendant in challenging the validity of the European patent in its entirety.
Background
The dispute concerning the Patent was already before certain national courts before the UPC proceedings began. For the German national part, there are infringement proceedings against certain of the defendants before the Mannheim Regional Court, and revocation proceedings before the German Federal Patent Court. In addition to a series of UPC actions (relating to numerous patents owned by both parties), there are also proceedings before other national courts in both Europe (including the UK) and the US, and before the European Patent Office (EPO).
In July 2023, Dexcom sued several Abbott entities in the Paris Local Division of the UPC. Dexcom sought remedies for infringement arising in all territories that had ratified the UPC Agreement, including Germany, other than in relation to certain of the Abbott Defendants who are the defendants in the Mannheim infringement proceedings.
Abbott counterclaimed to revoke the Patent in its entirety (and in relation to the auxiliary requests). It relied on arguments relating to added subject matter, lack of novelty and lack of inventive step.
Jurisdiction issues
There were two issues relating to the Court's jurisdiction. First, Dexcom argued that the Court should decline jurisdiction in the revocation counterclaim in relation to the German part of the Patent, given the proceedings before the German court. Abbott meanwhile sought revocation of the Patent in its entirety.
Dexcom argued that the scope of the revocation counterclaim should be identical to the scope of its infringement claim: it had excluded certain acts of infringement that were already pending before the German court for certain of the Abbott Defendants.
The Court rejected Dexcom's argument and concluded that it was irrelevant that Dexcom had chosen to exclude certain acts of infringement from its claim in the UPC against some of the Defendants. First, the application for revocation was supported by other Abbott Defendants and it would be contrary to the principle of a fair trial to deprive them of the right to defend themselves by a counterclaim for revocation of the Patent in its entirety.
Further, there was no provision in the UPC Rules of Procedure that limited a party bringing a counterclaim for revocation to those parts of the patent asserted against it in the infringement action.
The second issue arose because the German court was seized of proceedings before 1 June 2023, when the UPC entered into force. This required the UPC Court to consider the rules relating to lis pendens (identical parties and subject matter) and related actions. In a lis pendens situation, the UPC Court would have been obliged to decline jurisdiction in favour of the German court as first seized. However, the Court concluded this was not a lis pendens situation because there was no identicality of parties and subject matter as the parties were different. However, the two actions were 'related actions' as both concerned the same patent and involved two of the same parties. This meant that the UPC Court had a discretion as to whether to decline jurisdiction, which required an assessment of the respective timings: the German Federal Court had delivered its Preliminary Opinion in March 2024, with a scheduled oral hearing for January 2025. Given the UPC Court was issuing its decision on 4 July 2024, it was not in the interests of the proper administration of justice to decline jurisdiction in favour of the German national court nor to stay the UPC proceedings.
Validity
Turning to the substantive challenge on validity, the Court rejected Abbott's added matter and novelty attacks against the main claim. However, it concluded that the invention set out in claim 1 of the Patent did not involve an inventive step over a certain piece of prior art combined with common general knowledge. Further, the first auxiliary request also lacked inventive step; and the second auxiliary request added subject matter.
When considering inventive step, the Court (similar to the Düsseldorf Local Division decision in Kaldewai v Bette (ACT_459767/2023)) did not explicitly mention the EPO's problem and solution approach. However, the Court did apply a test closely akin, if not entirely identical, to the EPO's notorious inventive step test, noting that "in order to assess inventiveness, it would be necessary to determine whether, given the state of the art, a person skilled in the art would have obtained the technical solution claimed by the patent using their technical knowledge and carrying out simple operations".
As a result of the finding of invalidity, Dexcom's infringement action had no legal basis, and was dismissed. It is likely that this case will go on appeal (with judgment also expected shortly in a further claim brought by Dexcom before the Munich Local Division).
The Court ordered that Dexcom should bear the costs of the proceedings, with amounts to be determined by the Court in separate proceedings. The Court dismissed Abbott's request for an interim award of costs of EUR 100,000 for not being sufficiently justified.