Meril Life Sciences PVT Ltd. et al v. Edwards Lifesciences, Order of the Court of Appeal of the UPC, 21 November 2024, Case no. UPC_CoA_511/2024
In Edwards v Meril, the Court of Appeal has decided to set aside the impugned order rejecting Meril’s request for a stay of the infringement proceedings pending the decision of the EPO on the validity of the patent at issue. The case has been referred back to the panel of the Court of First Instance for further consideration.
Background
The case revolves around the European Patent EP 3 769 722 (EP 722) owned by Edwards Lifesciences Corporation, which pertains to a low profile delivery system for transcatheter heart valves. Edwards brought infringement proceedings in respect of EP 722 against Meril before the Nordic-Baltic Regional Division of the UPC.
In parallel, opposition proceedings in relation to EP 722 have been brought by JA Kemp in the EPO. On 18 July 2024, the EPO issued a preliminary non-binding opinion stating that the grounds for opposition prejudice the maintenance of EP 722 in its granted form. Following that, the EPO accelerated the opposition proceedings.
On 18 March 2024, Meril filed counterclaims for revocation of EP 722 in the UPC infringement proceedings and requested that the infringement proceedings are stayed pending the decision by the Opposition Division of the EPO on the validity of the patent. In response, Edwards filed applications to amend EP 722 and maintained that no stay should be granted.
In the order of 20 August 2024, the Court of First Instance rejected Meril’s request to stay the infringement proceedings. The Court of First Instance stated in its decision, amongst other things, that it is obvious that a final decision of the EPO cannot be expected rapidly as the future decision of the EPO will be subject to an appeal. The Court stated that it must respect the fundamental right to an effective legal remedy and a fair and public hearing within a reasonable time, and must ensure that the final oral hearing takes place within one year.
Not satisfied with the Court’s decision, Meril appealed.
Arguments
Article 33(1) of the UPC Agreement (UPCA) provides that the Court may stay proceedings if a rapid decision may be expected from the EPO. This is further particularised by R. 295(g) RoP and R 118.2(b) of the UPC Rules of Procedure (RoP), on which Meril relied and submitted that a decision of the Opposition Division can be expected in the near future as the EPO proceedings have been accelerated and, based on the preliminary opinion issued by the EPO, there is a high possibility that the patent will not be maintained in its granted form. Meril also stated that there is in fact no requirement for a final decision to be expected soon but it is rather sufficient for the purposes of the request that the EPO decision is expected rapidly. It would also be in the interest of the procedural economy to await the decision of the EPO on validity, so the EPO and Court decide on the same set of claims in case the patent at issue is not upheld in its granted form.
Edwards replied to reject Meril’s arguments and stated that the Court should adhere to its general principle and decline to stay the proceedings. In Edwards’ opinion, the stay of proceedings has not been justified by Meril as the preliminary opinion of the EPO confirms that the patent at issue is novel and involves inventive step. All insufficiency and added matter concerns save for one have been rejected and the one outstanding issue is now addressed by auxiliary request 1. Given that the auxiliary request 1 has already been filed in the UPC proceedings and will also be filed at the EPO, it is clear that the patent will likely be upheld in amended form which negates Meril’s argument in relation to the confusion. Edwards also stated that the Court of Appeal should not allow Meril to rely on arguments that have not been submitted during the first instance proceedings. Edwards further reiterated that there needs to be an expectation for a final decision of the EPO to be handed rapidly for the proceedings to be stayed, and this is not the case at present.
Decision and reasoning
The Court of Appeal sided with Meril in relation to setting aside the impugned order but decided to refer the case back to the panel of the Court of First Instance that issued the impugned order for further consideration of Meril’s request for a stay.
In its reasoning the Court of Appeal explained that the law does not preclude any party from submitting a new legal argument on appeal, provided that the argument is based on the facts and evidence submitted to the Court of First Instance. It further explained that Meril’s request must be decided on the basis of R. 295(a) RoP in conjunction with Art. 33(10) UPCA.
The Court of Appeal stressed that there is no obligation to stay the proceedings and it is rather a discretionary power of the Court to do so.
As stay of proceedings in this type of scenario serves to prevent conflict between the findings of the EPO and UPC, it is crucial for the Court to base its decision on the balance of interests of the parties and the circumstances of the case, including the stage of the opposition proceedings, the stage of the infringement proceedings and the likelihood that the patent will be revoked in the opposition proceedings. The fact that the decision of the EPO expected in the near future is not final and that it will likely be appealed is not a deciding factor in this case. It is merely one of the factors to be considered.
The Court of Appeal confirmed that Meril was correct to argue that provisions of Art. 33(10) UPCA and R. 295(a) RoP do not require a final decision of the EPO and therefore the proceedings may be stayed in expectation of a rapid decision of the Opposition Board of the EPO. It concluded that the approach of the Court of First Instance to making a decision was incorrect. The Court of First Instance should have considered whether a rapid decision of the Opposition Division could be expected rather than a final decision, taking into account the balance of interests of the parties and other circumstances of the case. Evidentially, the expectation of a rapid decision of the Opposition Board was justified in this case considering the opposition proceedings were expedited.
The Court of Appeal considered that, having a better degree of knowledge in relation to the relevant aspects of the infringement proceedings and the counterclaims for revocation, the Court of First Instance must be the one to exercise its discretion to order a stay of the infringement proceedings in this case or apply any other alternative measures to avoid the conflicting decisions being issued.
Comment
The Court of Appeal in this case reiterated the importance of taking measures to avoid conflicting decisions in parallel infringement and opposition proceedings and stated that such conflicts should, in principle, be avoided, even if the conflicting EPO’s decision is appealable and its effects are suspended pending appeal. Interestingly, the Court of Appeal did not take liberty to decide on whether a stay should be granted, giving the Court of First Instance that has been dealing with the facts of the case more closely an ability to choose an appropriate measure. It is however clear that a stay of infringement proceedings could be achieved by relying on Art. 33(10) UPCA and R. 295(a) RoP regardless of whether a final EPO decision is expected soon or not.
The entire order can be read here.
