Technology and artificial intelligence are reshaping the industry at unprecedented speed, and EIP is embracing this transformation to lead rather than follow. The new Tech & AI function has been created to harness emerging technologies, integrate AI solutions across operations, and strengthen security, ensuring we remain at the forefront of innovation, productivity and client service.

This strategic shift addresses three critical priorities: rapidly upskilling our development team to deliver AI-driven solutions, securing EIP internally and externally in the age of AI, and accelerating adoption through ongoing training initiatives. At the heart of this transformation is our newly appointed Tech & AI leadership team: Chris Fournier as Head of Tech & AI, Paul Evans as Head of Tech & AI Delivery, Mark Challis as Head of Cyber & AI Security, Rob Lewis as Applications, AI & Data Manager, and Olu Aseru as Tech & AI Adoption Manager. With decades of combined expertise between them within the firm, this team will ensure EIP continues to set the standard for innovation in intellectual property law.

“Our Tech & AI function reflects our commitment to delivering cutting-edge solutions for our clients and maintaining resilience in a rapidly evolving digital landscape.” Said Magnus Hallin, CEO.

According to Art. 82(2) UPCA and Rule 354.3 RoP, a party may be sanctioned with a recurring penalty payment, payable to the UPC, if the party does not comply with the terms of an order of the court. In Kodak v. Fujifilm (UPC CoA 699/2025, order of 14 October 2025), the UPC Court of Appeal set out a series of principles according to which these “penalty orders” are imposed and enforced.

When can a penalty order be issued?

A penalty order will normally be issued in a final order in an application for provisional measures, or a decision on the merits. However, penalty orders may be issued separately, connecting a recurring penalty payment to an order contained in an earlier order or decision.

A separate request for a penalty order, is admissible regardless of whether it is the first request for a penalty order, or whether a penalty order was requested earlier but rejected. A separate request for a penalty order does not require an appeal against the main decision.

Reasonable and proportionate penalty

The amount of the penalty payments is set by the Court, taking into account the importance of the order in question. The amount should be “sufficiently deterrent to be coercive”, but remain within reasonable limits “for it to be an appropriate (proportionate) penalty”.

Clear definitions of time periods and actions required

A penalty order must specify the circumstances that will lead a party incurring a penalty payment.

The penalty order may also set a maximum amount of penalties that may be incurred per order, or overall. This, however, does not prevent the Court from increasing such maximum amount in any further order.

Where compliance is not required immediately after service of the order or decision, the order or decision on the merits should generally specify the time period for compliance with each order.

Claimants’ and defendants’ responsibilities

The suggested penalty amount for non-compliance with the relevant order(s) as well as the time period(s) for compliance therewith, must be included in the claimant’s application for the imposition of penalty payments.

In the rare case that no time period is specified in the order or decision containing a penalty order, it is the responsibility of the claimant to set a time period for compliance with the relevant order(s). It then falls on the defendant to dispute the reasonableness of the time period set by the claimant immediately after notification by the claimant or service of the enforcement notice[2], as the case may be; the defendant should not wait until the time period has already lapsed.

When a time period is set by the claimant and the parties disagree, it is left to the court to determine a reasonable time period based on the submissions of the parties in the enforcement proceedings. This time period applies retrospectively; a time period that is too short triggers the commencement of a reasonable period as established by the Court.

Enforcement follows a prior penalty order

Any order to pay any penalty sum in enforcement proceedings pursuant to this Rule, must be based on a prior penalty order having been made, either in the operative part of the main decision or order, or of a further order or decision to that effect.

If a claimant alleges that a defendant has not complied with a penalty-reinforced order, a penalty does not become automatically payable, but the claimant must request that the court order the defendant to pay the penalty.

The penalty amounts and the time periods set for compliance, as provided for in the order or decision, will generally be the basis for calculating the amount payable by the defendant. The court may, however, deviate from that basis in favour of the defendant for reasons of reasonableness and proportionality, if the circumstances of the case so require. Relevant factors in this regard include, amongst others, the severity of the established breach, its duration, and the defendant's ability to pay.

It is for the defendant to present and substantiate facts that reasonably prevented it from fully complying with a penalty-reinforced order or that otherwise justify the imposition of a lower amount of penalties than the amount that would follow from the penalty amounts and the time periods set for compliance, as provided for in the order or decision or later order or decision.

Evidence of compliance

The burden of proof that a penalty-reinforced order has been fully complied with lies with the defendant.

The order or decision should specify the evidence required to demonstrate that a penalty-reinforced order has been complied with. The form of this evidence is preferably set out by the claimant with their request that an order be reinforced with penalty payments.

If the defendant can reasonably foresee that the orders and evidence requested by the claimant may require it to disclose confidential information, this should be raised by the defendant as early as possible. Although it would still be possible to file a confidentiality request later, confidentiality issues generally do not stay the time period set for compliance with a penalty reinforced order.

Start of the time period for compliance with a penalty reinforced order

If the penalty reinforced order is contained in an order for provisional measures the time period for compliance starts upon service of the order for provisional measures on the defendant. If the order does not specify a time period for compliance, the time period for compliance starts with notification of the time period set by the claimant. In both cases, it is necessary for security to be provided by the claimant, if applicable.

If the penalty reinforced order is contained in a decision on the merits, the time period for compliance starts upon service of the notification pursuant to Rule 118.8 RoP, provided that all other requirements for enforcement are met including, if applicable, the provision of security by the claimant.

Translation not required

Orders that are only enforced by means of the possible forfeiture of a penalty sum do not require translation. There is no requirement that the enforcement notice[3] itself – which should be drafted in the language of the proceedings – be translated.

[1] https://www.unifiedpatentcourt.org/en/node/149385

[2] i.e. the notice under R118.8 of the parts of a decision that the claimant intends to enforce

[3] i.e. the notice under R118.8 of the parts of a decision that the claimant intends to enforce, if such notice is required

Semiconductors and the products which utilise them may be protected by a range of registered and unregistered IP rights, including:

copyright (written designs, instructions, layouts, software and applications, copyright in data etc);

patents (the high-level functional designs as well as innovation in the structure or operation of devices);

designs (chip layouts and circuit design);

database rights (the collection of data associated with chip design and manufacturing);

topography rights (the layout designs of integrated circuits).

IP rights, such as patents, generally require that the right holder discloses their ideas to the public. The right holder is awarded limited legal protection in return for putting their innovation into the public domain. This might not always be desired. Sometimes, keeping information confidential can offer a better form of protection. For example, the secrets of manufacturing processes may not be discoverable from the finished product. Keeping such know-how behind closed doors may offer the owner better protection than disclosing it in return for a patent.

This is where trade secrets come in.

A trade secret is a special category of confidential information. They are statutorily defined to mean information that:

(i) is secret, meaning it is not generally known among, or readily accessible to, persons within the circles that normally deal with the kind of information in question;

(ii) has commercial value to the business; and

(iii) has been subject to reasonable steps taken by the person lawfully in control of the information to keep it secret.

In the UK, trade secrets are primarily protected under common law through the doctrine of breach of confidence (protecting against the unauthorised use of information which is confidential in nature and disclosed in circumstances importing an obligation of confidence). This is supplemented by the Trade Secrets (Enforcement, etc.) Regulations 2018, which implemented the EU Directive 2016/943 (Trade Secrets Directive). 

Under the Trade Secrets Directive and Regulations, trade secrets are infringed through unlawful acquisition, use or disclosure.

In the context of semiconductors, trade secrets may be used to protect material compositions, proprietary manufacturing processes and testing methodologies.

The loss of a trade secret can have one of the most significant impacts on a company’s competitive edge. Therefore, ensuring that a company has a well-organised trade secret framework and governance which is fit for all key territories, is essential in today’s geopolitical landscape.

What qualifies as a trade secret can be wide ranging. As such, protecting them requires a holistic approach, including strong legal safeguards like contracts (e.g., non-disclosure agreements, restrictions on use and employee and trade restrictive covenants). This should be coupled with robust internal policies, such as employee training, physical and electronic access controls and security measures. Steps should be taken to safeguard proprietary information like manufacturing processes, source code, chip designs, and chemical formulations from both internal and external threats.

In the event of misappropriation of a trade secret, the owner would need to demonstrate to what the trade secret relates. This is in part because a court needs to be able to define the secret in order to make orders relating to it (which is often harder than it sounds) and the steps taken to protect it. This involves:

Step 1: Identify – Businesses must carefully assess their important know-how to determine exactly whether it constitutes economic value to the business. This may require a dedicated team of people with knowledge of the information and strategic understanding of the company’s objectives.

Step 2: Internal Measures – Consider what measures would be appropriate to protect such information. For example:

Limiting access to certain employees;

Controlling physical access e.g. housing R&D in a different building to other operations;

Classifying documents to demonstrate that the organisation clearly distinguishes between different categories of information;

HR policies and procedures around the protection and use of such information and how to report a disclosure/breach;

Training around the protection of information; and

Upgrading and/or adoption of systems and processes to ensure protection of the information.

Step 3: Legal Documentation – Robust contractual provisions can protect trade secrets. For example, an NDA could in certain circumstances prohibit reverse engineering of shared samples. Furthermore, such provisions can make it easier to pursue remedies for breach, including injunctions to prevent further use or disclosure, and compensation for loss suffered as a result.

Step 4: Monitoring and enforcement – Despite available legal protections, semiconductor companies face significant challenges in protecting trade secrets both from internal and external threats. Therefore, it is important that companies carry out ongoing monitoring of the information and take necessary action as soon as reasonably practicable in the event of misappropriation or compromise to the security of its information.

Deciding whether to keep inventions secret or to patent them, largely depends on the ability to detect the invention in a finished product. If an idea is patentable, and it is possible to detect it in the product, getting a patent might be commercially sensible. This might apply to features relating to the structure of a semiconductor device. A patent would allow the patent holder to exclude others from exploiting the technology, giving them a competitive advantage. Such an advantage might increase revenue, or for early-stage companies, it may help entice investors. However, in doing so the idea will be made public, as most patents are published during the application process. Conversely, it may make better commercial sense to keep an idea secret. For example, inventions relating to semiconductor manufacturing processes are not typically detectable in the end product. By filing a patent, you are telling the world about your important processes, but any resulting patent may not be enforceable, given the difficulty in detecting the use of the process.

In addition, patenting can be expensive, especially if you seek protection in a large number of jurisdictions. You may also need to police and enforce any granted patents, which can prove more difficult in ‘hidden’ technologies (e.g. in chips and behind APIs). Also, unlike patents, which publish after 18 months and only usually last up to 20 years, trade secrets can remain ‘secret’ indefinitely (assuming no leaks or independent third-party development). Above all else, commercial considerations are key, and early legal advice is essential to ensure appropriate and proper protection.

Trade secrets provide essential protection for proprietary confidential information. The complex designs and innovations that power semiconductor manufacturing are invaluable. However, as geopolitical competition heats up for economic and technological dominance, semiconductor companies increasingly become targets of IP theft. Board members need to be alert to this risk and be putting in place robust measures to protect their intellectual assets. By having a well-organised trade secret framework and robust internal governance, semiconductor companies will be better prepared to handle and respond to challenges posed by the geopolitical landscape.

By Ellen Keenan-O'Malley

UPC CFI 248/2024 (Munich LD), decision of 22 August 2025[1]

UPC CFI 564/2024 (Munich LD), decision of 16 October 2025[2]

Brita sued Aquashield and others for infringement of EP2387547, which Brita says protects its replaceable water filters (case ref. UPC CFI 248/2024). Aquashield responded with a counterclaim for revocation (case ref. UPC CFI 564/2024).

Aquashield distributes Philips-branded filters that are compatible with Brita’s filter system, though they function in a different manner to Brita’s own cartridges.

Indirect infringement and exhaustion

The decision of 22 August 2025 in the combined infringement action and counterclaim for revocation includes some interesting discussion in the context of indirect infringement. In particular, discussion of who is a “party entitled to exploit the patented invention” based on exhaustion of rights from sale of a system including consumable parts.

Following the assessment of validity, the surviving independent claim covered a complete filter system, i.e. the combination of a water jug and a filter. Since the defendants supply only the filter, the question of infringement shifted to one of indirect infringement.

One of the criteria for indirect infringement is that the defendant is supplying (or offering to supply) any person other than “a party that is entitled to exploit the patented invention” with means for putting the patented invention into effect[3].

The defendants argued that Brita’s authorised sale of the original filter systems exhausted any rights conferred by the patent[4], and that end-users of the defendants’ filters are therefore “a party entitled to exploit the invention”.

In the decision, the court provides comments on when rights may or may not be exhausted in the context of replacing a consumable part. In particular, the court noted that while proper use of a patent-protected product also includes the normal maintenance and repair, it does not include any measures that result in the reproduction of a product covered by a patent. The question is whether this replacement is permissible use in accordance with the intended purpose of the product, or whether it constitutes an impermissible new manufacture of the product. For consumable parts, replacement is a normal maintenance measure and will generally be a permissible use of the patent-protected product placed on the market unless the invention lies in the replaced part.

Unfortunately, the court did not have to decide the exhaustion issue based on these principles, because the patent as amended does not cover the filter sold by Brita, so Brita had never placed the product on the market in the first place.

Withdrawal of the counterclaim after decision issued

In the end, the court found in Brita’s favour, but it may have been a Pyrrhic victory. Brita’s patent was limited in a way that the UPC has explicitly stated does not cover Brita’s own filter cartridges, potentially leaving the door open for third party direct copies.

The decision of 16 October 2025 was issued after Aquashield applied to withdraw the counterclaim for revocation. The court held that withdrawal after a decision has been issued is permissible within the appeal period, even if an appeal is not filed. The result is that the decision of 22 August is ineffective in so far as it limits Brita’s patent, leaving a weakened but still effective moat in place around its filter cartridges.

Withdrawal of the counterclaim suggests that the parties reached a settlement following the decision of 22 August. Perhaps Brita did not have the appetite for an appeal, mirroring the ancient king of Epirus in believing that one more victory over Aquashield could ruin

[1] https://www.unifiedpatentcourt.org/en/node/137240

[2] https://www.unifiedpatentcourt.org/en/node/159547

[3] Article 26 UPCA.

[4] Article 29 UPCA.