NanoString Technologies, Inc, NanoString Technologies Germany GmbH & NanoString Technologies Netherlands B.V. v 10x Genomics, Inc & President and Fellows of Harvard College – Court of Appeal – Luxembourg, 26 February 2024, Case no. UPC_CoA_335/2023 App_576355/2023, by Sarah Taylor and Julia Traumann, Pinsent Masons
The Unified Patent Court (‘UPC’) Court of Appeal has overturned an earlier decision of the Munich Local Division that had awarded a preliminary injunction (‘PI’) to 10x Genomics in its dispute with NanoString Technologies. The Court of Appeal considered it more likely than not that the unitary patent in issue, EP 4 108 782 B1 (‘EP ‘782’) would be held to be invalid in the main proceedings due to a lack of inventive step, and therefore there was no sufficient basis for granting the PI.
The applicants (‘10x Genomics’) issued the request for a PI on the first day of operation of the UPC – 1 June 2023 – pursuant to Article 62(1) of the UPC Agreement (‘UPCA’) and Rule 211.1 of the UPC Rules of Procedure (‘RoP’) to restrain the respondent’s (‘NanoString’) activities in respect of its CosMx Spatial Molecular Imager (SMI) products for RNA detection.
Rule 211.2 RoP requires the court to have a “sufficient degree of certainty” that the patent in suit is valid. In granting the PI, the Munich Local Division found that this should be interpreted as meaning “a preponderant likelihood is necessary, but also sufficient. Therefore, for a sufficiently certain conviction on the part of the Court, it must be more probable that the patent is valid than that it is not valid”.
NanoString appealed. The Court of Appeal hearing took place on 18 December 2023, with the reasoned decision – the Court of Appeal’s first ruling on the substance of a PI application – being issued on 26 February 2024.
The Court of Appeal overturned the first instance decision. Unlike the Munich Local Division, it determined that EP’782 was likely to be held to be invalid due to a lack of inventive step. The court therefore considered that the test for awarding a PI in UPC proceedings had not been met.
The Court of Appeal provided guidance on the assessment of the merits for awarding provisional measures, such as a preliminary injunction, in accordance with the RoP. It confirmed that, in order for such measures to be granted, the court must consider it on the balance of probabilities at least more likely than not that the applicant is entitled to initiate proceedings and the patent will be infringed.
However, in respect of validity, it stated that a sufficiently certain conviction is lacking, if the court considers, on the balance of probabilities, it to be more likely than not that the patent is invalid. In contrast, the Munich Local Division had stated that such conviction requires that the validity of the patent in suit is more likely than invalidity.
The Court of Appeal went on to note that while the burden of proof for establishing the right to bring proceedings and the infringement (or imminent infringement) of the patent lies with the applicant, the burden of proof for establishing invalidity lies with the defendant.
In assessing validity, the Court of Appeal agreed with the Munich Local Division that claim 1 of EP’782 was not anticipated by the prior art. However, unlike the Munich Local Division, it found that a “sufficient degree of certainty” existed that an obviousness argument could be successfully made in main proceedings against the validity of granted claim 1 of EP’782. This finding was a result of the Court of Appeal taking a different view to the interpretation of claim 1.
The court outlined the principles for claim interpretation pursuant to Article 69 of the European Patent Convention (‘EPC’) and the Protocol on the Interpretation of Article 69 EPC, confirming that the description and drawings in the patent must always be consulted as explanatory aids for the interpretation of the relevant claim and not only be used to resolve any ambiguities in the claim. With this approach in mind, the Court of Appeal adopted a wider interpretation of claim 1 of EP’782 than the Munich Local Division, leading it to conclude that a successful obviousness argument may be made and therefore that the validity of the patent had not been established with the required “sufficient degree of certainty”.
Overall, the Court of Appeal found that there was no sufficient basis for the issuance of a PI.
This decision will provide at least some temporary relief to NanoString, despite the UPC declining to stay the proceedings even though NanoString recently filed for Chapter 11 bankruptcy in the US. Also worth noting is the fact that an injunction is still in place in Germany in favour of 10x Genomics and the oral hearings in the main UPC proceedings for both EP ‘782 and EP ‘928 are expected to take place later this year, so the outcome of this dispute is still far from certain.
As a final comment, it is worth noting that Court of Appeal implicitly confirms the Munich Local Division’s rejection of the defendants’ argument that according to German national case law, the revocation of the patent only needs to be possible. Despite many comments about the expected influence of ‘couleur locale’, and in particular, the influence of German case law, the UPC appears to be taking an independent approach to developing its own case law on the application of the UPCA and the RoP.
