OrthoApnea S.L. & Vivisol B BV v [individual respondent] – UPC Court of Appeal, 21 November 2024, Case no. UPC_CoA_456/2024
The UPC Court of Appeal held that the respondent’s invocation of infringement by equivalence as a response to the Appellants’ Statement of Defence does not constitute an “amendment of a case” that requires the respondent to apply for leave of the Court under R. 263 Rules of Procedure (“RoP”). The Court of Appeal therefore set out guidance that not every new argument raised by a party constitutes an amendment of a case that requires the party to apply for leave of the Court.
Background
The respondent, being the proprietor of European Patent EP 2,331,036 (“EP 036” or the “Patent”), issued patent infringement proceedings before the Brussels Local Division of the UPC against OrthoApnea S.L. and Vivisol B BV (“OrthoApnea”). The respondent alleged that OrthoApnea infringed the Patent, ‘a device for treating night time breathing problems’ also known as a snore/sleep brace. In particular, the respondent alleged that OrthoApnea’s product, called NOA infringed the Patent.
The parties had been in correspondence regarding the alleged infringement since March 2021, and by a letter dated 14 June 2021 OrthoApnea rejected the allegation of infringement by arguing that the coupling elements of the NOA do not prevent further closing of the month and, consequently the NOA does not infringe one of the integers/features of claim 1 of the Patent, i.e., integer/feature 1.2.4 of the Patent.
The respondent had applied for an order for the preservation of evidence (including preservation of evidence by detailed description), and by an order dated 21 September 2023, the Brussels Local Division granted the preservation of evidence. The Brussels Local Division appointed an expert who submitted her report on 28 September 2023. After conducting a couple of experiments regarding the disputed integer/feature 1.2.4 of the Patent, the expert noted that in one of the experiments, the pieces of the NOA were held in a laterally tilted position, and in this position the NOA mapped onto to feature/integer 1.2.4. However, the expert noted that she could not determine whether the laterally tilted position actually occurs when the NOA is used by patients.
Whilst the respondent’s case per its Statement of Claim was based on literal infringement, after service of OrthoApnea’s Statement of Defence in which OrthoApnea maintained that the NOA does not comply with claim feature/integer 1.2.4, the respondent introduced argument for infringement by equivalence in its Statement of Reply. OrthoApnea objected to the respondent’s Statement of Reply and primarily requested the judge-rapporteur to reject the following:
i. the extension of the basis of the request by invoking equivalence;
ii. the newly alleged facts; and
iii. the new (amended) claims.
In the alternative, OrthoApnea requested that the deadline for its Statement of Rejoinder be extended to 18 August 2024.
By an order dated 8 July 2024 (the “Primary Order”), the judge-rapporteur rejected OrthoApnea’s primary requests but extended the deadline for filing Statement of Rejoinder to 1 August 2024.
OrthoApnea sought a review of the 8 July 2024 order by the panel of the Brussels Local Division. In the review application, OrthoApnea only maintained its primary request regarding the respondent’s introduction of infringement by equivalence. By an order dated 19 July 2024 (the “Review Order”), the Brussels Local Division rejected the review application and upheld the Primary Order. However, the panel granted OrthoApnea leave to appeal against the review order.
OrthoApnea appealed the Primary Order and the Review Order on, inter alia, the following grounds:
– Equivalence is a new legal argument for which the respondent should seek leave of the Court under R. 263.1 RoP to change its claim or amend its case.
– R. 13 RoP and recital 7 of the preamble of the RoP require that the claimant set out in the Statement of Claim the reasons why the facts alleged constitute patent infringement, including legal arguments. In particular, in this case, OrthoApnea already informed the respondent that there was no literal infringement.
– A defendant should be able to make the decision to either settle the case or request expert evidence based on the Statement of Claim.
Decision of the Court of Appeal
On the admissibility of the appeal, the Court of Appeal held that the appeal against the Primary Order is inadmissible as the appropriate remedy against the judge-rapporteur’s case management order is not an appeal but an application for review under R. 333.1 RoP. However, the appeal against the Review Order is admissible.
Regarding invoking infringement by equivalence for the first time in the Statement of Reply, the Court of Appeal held that the introduction of equivalence argument – in this case – does not constitute an amendment of the case. An amendment of a case occurs when the nature or scope of the dispute changes. Therefore, not every new argument would constitute an “amendment of a case” requiring a party to apply for leave under R. 263 RoP. The Court of Appeal elucidated this with the following example: in an infringement case, if the plaintiff invokes a different patent or objects to a different product, it will qualify as an “amendment of a case”.
Given that the equivalence argument is based on the same patent and is directed against the same product, it does not change the nature or scope of the dispute, and it is in line with the infringement argument put forward by the respondent in the Statement of Claim. Further, OrthoApnea’s defence is not unreasonably prejudiced as it has the opportunity to respond to the equivalence argument both in its Statement of Rejoinder and at the oral hearing in the main proceedings.
The Court of Appeal also held that R. 13 RoP and recital 7 of the preamble to the RoP do not preclude a claimant from raising any new argument after the submission of the Statement of Claim. However, whether a new argument is admissible or not depends on (i) the circumstances of the case, (ii) why the argument was not raised in the Statement of Claim, and (iii) the procedural opportunities for the defendant to respond to the new argument. Therefore, in making this decision, the Court of First Instance can exercise certain discretion, whereas the Court of Appeal’s review is limited.
If a party opposes raising any new argument as admissible, the Court will decide on admissibility after hearing the parties. However, the Court may defer the decision until later in the proceedings. In the event the Court finds that the new argument is inadmissible and the opposing party has submitted a defence on the substance of the new argument, the Court can take this into account when awarding costs. Further, the Court can raise the issue of admissibility of a new argument on its own motion.
Conclusion
The key takeaway from this procedural order is that not every new argument raised by a party constitutes an amendment of the case for which the party needs to apply for leave of the Court under R. 263 RoP. In particular, if the new argument – including invoking infringement by equivalence – does not materially change the nature or the scope of the dispute, and if the other party is not unreasonably prejudiced, then the party raising the new argument does not need to apply for leave of the Court under R. 263 RoP for changing or amending its case. Although the order acknowledges that the UPC is yet to develop a line of case law on the doctrine of equivalents, it does not address the principle in any substantive way.
The order can be read here.
