UPC rules on scope of product by process features in claims

Yellow Sphere Innovations GmbH, Erwin Härtwich v Knaus Tabbert AG UPC_CFI_50/2024

Decision of 10 April 2025 (ORD_68984/2024[1])

This decision from the Düsseldorf local division has a number of noteworthy issues, including how a “product by process” feature is to be construed when assessing infringement, how a prior user right must be pleaded and evidenced, and how a claim for compensation for use between publication and grant of a patent application must be pleaded and evidenced.

The procedural history is a little complex, as the patent was originally granted to Erwin Härtwich and Alexander Christ. The rights of Alexander Christ were then assigned to Yellow Sphere Innovations GmbH, and Alexander Christ participated as a “Dritt-Widerbeklagter” (third party defendant). Knaus Tabbert disputed that the assignment gave the claimants the right to sue for actions before the assignment date, but on the wording of the document the court disagreed.

Jurisdiction and applicable law

Knaus Tabbert also disputed the jurisdiction of the UPC in relation to acts which took place before the UPC Agreement came into force. The Court rejected this argument, in line with previous decisions on this question.[2] Knaus Tabbert moreover asserted that the UPC should apply national law to the determination of infringement. The judgment, referring to prior caselaw,[3] determined that the UPC Agreement must be applied to acts after the UPC Agreement came into force, and to prior acts which continued after that date. In the case of a prior act which did not continue after the UPC Agreement came into force, it would be for the party seeking the application of national law to evidence that law. Knaus Tabbert having failed to do so, the Court applied the harmonised UPC Agreement law.

Intepretation of product by process feature

The patent EP 3356109 relates to a frame for a vehicle having a structural part which according to claim 1 must be “produced as a casting in a mould”, formed by a self-swelling foam resin, and at least partially coated from the outside with a protective layer. Knaus Tabbert asserted that their process involves the use of two moulds – one to form the inner foam resin portion, and a further one to apply the protective layer. The Court viewed this feature as a product by process feature, and held that for such features the technical content does not consist in the process as such, but in the technical properties imparted to the product by the process. The decisive factor is which specific features of the product are "encoded" by the process steps included in the patent claim. This view of product by process features is common in several European jurisdictions, but is rejected in the UK[4] and the USA.[5]

On this basis the Court considered that the claim feature was satisfied. It seems likely however that even on a process-limited construction of product by process features, “produced as a casting in a mould” could easily have been interpreted to cover the two step process of the defendant.

Overall, the Court considered that the Defendant’s products infringed, and also that the patent was valid having regard to the prior art that was cited.

Prior user right

A defence of prior use was rejected. The Court clarified that a possible prior user right under Article 28 UPCA is determined nationally so the defendant can only invoke the rights granted by the respective national regulations of the respective contracting member states, which are for the defendant to demonstrate. Knaus Tabbert had only advanced arguments under German law, so only a possible prior user right in Germany was considered. According to the Court, this requires an independent possession of the invention and to have made a firm and final decision to use the invention commercially. The information put forward by Knaus Tabbert was insufficient to substantiate either of these limbs of the requirement. Accordingly, the prior user defence was rejected.

Licence defence

In addition, Knaus Tabbert alleged that they were licensed under the patent through an agreement with Erwin Härtwich (the second claimant) and Alexander Christ (the third party defendant and prior co-proprietor of the patent). However, the Court considered that this licence was limited to a specific model of vehicle, which was not one of the ones asserted as infringements in the UPC action. Accordingly, this defence failed.

Compensation in respect of pre-grant acts

The claimants sought compensation in respect of acts committed before the grant of the patent (but after publication of the patent application), pursuant to Art. 32(1)(f) UPCA. However, similar to the prior user right, this UPC provision allows only the application of the corresponding national provisions, since there are no standardised rules. The claimants only set out the national requirements with respect to Germany, and so reasonable compensation for use was only granted in respect of Germany; to the extent that compensation in respect of other countries was sought, the claim was dismissed.

Outcome

The claimants having been successful on the merits, the court granted an injunction against the defendant subject to a penalty payment of up to €250,000 for each case of non-compliance. The defendant was ordered to disclose the origin and distribution channels of the infringing products and to recall products from such channels. The defendant was additionally required to destroy infringing products in its possession and pay €100,000 as provisional damages, with further compensation awarded in respect of any infringement since 9 April 2022, and for acts in Germany also from 8 September 2018 to 8 April 2022.

[1] https://www.unified-patent-court.org/en/node/95160

[2] Eg Phoenix Contact v. Industria Lombarda Materiale Electrico UPC_CFI_342/2024 Order of 10 February 2025, ORD_68781/2024 https://www.unified-patent-court.org/en/node/60588 cited in the decision; see also Esko-Graphics Imaging GmbH v XSYS Germany GmbH, XSYS Prepress N.V, XSYS Italia S.r.l. UPC_CFI_483/2024 Order of 10 February 2025 ORD_6847/2025 https://www.unified-patent-court.org/en/node/60576 not cited in the decision.

[3] Hurom v. NUC UPC_CFI_162/2024, Decision of 11 March 2025, ORD_11863/2025, https://www.unified-patent-court.org/en/node/70883

[4] See Hospira UK Ltd v Genentech Inc [2014] EWHC 3857 (Pat), 21 November 2014

[5] See Abbott Labs v Sandoz 566 F.3d 1282 (Fed.Cir., May 18, 2009); also The protection conferred by product-by-process claims, E.I.P.R. 2010, 32(12), 635-642 [D Smyth, G Grant]