Fives ECL vs REEL GmbH,
UPC_CFI_274/2023 (HamburgLD), decision of 11 February 2026 [1] ; UPC_CoA_30/2024 (Court of Appeal), order of 16 January 2025 [2]
The parties compete in the market for specialised crane and handling equipment used in aluminium production. The patent in suit is EP 1 740 740, relating to a compact service module for installations used in electrolytic aluminium production. The damages dispute stems from a competitive tender for the “Alba Potline 6” project in Bahrain, with Alba (Aluminium Bahrain) as end customer/operator and Bechtel acting as the engineering intermediary. In December 2016 the parties submitted competing bids (2 December 2016) and then responded again (15 December 2016) after Bechtel requested pricing in case parts of the scope were split and continued separately. The claimant argued that, but for the defendant’s infringing offer, it would have secured the tender at its original December 2016 pricing. After the tender process was challenged and reopened, the claimant submitted a revised bid on 21 February 2017 including a price reduction of EUR 6.5 million and ultimately won the contract, arguing that the discount reflected lost profit caused by the defendant’s infringing December 2016 offer.
The present UPC proceedings build on earlier German infringement litigation before the Düsseldorf Regional Court (4c O 1/21). By judgment of 9 August 2022, the Düsseldorf court granted injunctive relief and declared the defendant liable in principle for damages for infringing acts committed since 2 December 2016. That judgment became final. In parallel, validity challenges in Germany were unsuccessful.
After the UPC commenced operations, the claimant brought an action before the Hamburg Local Division seeking to have the amount of damages (EUR 6.5 million plus interest) set and awarded, relying on Article 68 UPCA. The defendant raised a preliminary objection (Rule 19.1 RoP by analogy), contending that the UPC lacked competence under Article 32 UPCA to deal with a damages-quantification action following national proceedings. The judge-rapporteur upheld that objection by order of 17November 2023, and a subsequent request for panel review under Rule 333 RoP was rejected as inadmissible on 25 January 2024.
On appeal, however, the Court of Appeal set aside the Hamburg Local Division’s order and remitted the case. In its order of 16 January 2025 (UPC_CoA_30/2024)[1] it held, in headnote terms, that the UPC’s competence includes a separate action to set the amount for damages after a court of a Contracting Member State has already established infringement and an obligation in principle to pay damages, and that the UPC may decide on infringements committed before 1 June 2023 provided the invoked European patent had not lapsed at that date. Following remittal, the Hamburg Local Division dismissed the damages claim on the merits.
A key aspect of the Hamburg Local Division’s analysis is its approach to the applicable law. While competence had been confirmed on appeal, the Local Division treated applicable substantive law as a separate question and found no binding effect under Article 75(2) UPCA, because the Court of Appeal had not conclusively determined the applicable law. The Local Division then concluded that German law applied to the claim because the relevant factual circumstances were completed well before the UPC entered into force on 1 June 2023, and because applying UPCA substantive provisions retroactively would be inconsistent with non‑retroactivity principles. At the same time, the court observed that, because both German patent damages principles and Article 68 UPCA are rooted in Directive 2004/48/EC (the Enforcement Directive) the assessment would not differ materially on these facts, and it therefore rejected the claim both under German law and, alternatively, under Article 68 UPCA.
On substance of the damages claim, the claimant´s theory was lost profit caused by a forced price reduction(i.e., the claimant ultimately won the tender, but allegedly at a reduced margin). Applying German law (Art. 69 EPC in conjunction with § 139 PatG; §§249, 252 BGB, with estimation under § 287 ZPO), the court emphasised that lost profits require proof of causation and a showing that, in the ordinary course of events or under the specific circumstances, the profit would probably have been made. In price‑reduction scenarios, the reduction is compensable only to the extent the claimant can show that it would likely have enforced the higher price absent the infringement — meaning the court must be able to conclude, with sufficient probability, that the claimant would have won the tender with its original offer if the infringing offer is disregarded.
The claim failed because the court considered that it lacked the necessary anchor facts to make that counterfactual finding. The claimant relied largely on a comparison between its December 2016 position and its February 2017 discounted bid, yet did not provide the tender offers and underlying profit calculation in a form that would allow the court to verify comparability of scope and cost basis. The defendant disputed both the identity of scope and whether the headline price reduction translated into a corresponding profit reduction. The court was also not persuaded that the claimant had established the reasonableness of its original December 2016 pricing and margin in the market conditions at the time, and it was not convinced by the comparators used in the private expert evidence.
Further, non‑price tender factors undermined the probability that the claimant would have prevailed in December2016 even without the infringing offer. In particular, the court relied on evidence that the defendant had offered a detailed erection/installation concept in December 2016 whereas the claimant had not. Bechtel’s later request(after reopening) for the claimant to provide a comparable concept supported the view that this was a relevant evaluation criterion. Finally, the court held that procurement reality matters for causation. Where it was established that the customer would in any event have insisted on competing bids, the possibility of a non‑infringing alternative offer had to be considered. On that basis, the court accepted that a non‑infringing alternative based on the “Pavlodar” model was technically and economically plausible and could not be excluded as remaining competitive, meaning the claimant failed to prove that it would have won at its original price absent infringement. The court also noted that, while commercial pressure may explain why a discount was offered after reopening, neither the claimant nor its expert substantiated the specific EUR 6.5 million reduction with a transparent rationale sufficient for judicial estimation.
The Local Division reached the same outcome under Article 68 UPCA in the alternative. It recalled that Article 68 aims at compensating actual harm on a full-compensation basis without punitive effect and does not relieve a claimant from pleading and proving a substantiated counterfactual and attribution. Here, the lack of verifiable tender documentation and profit calculations, together with the plausible lawful competitive scenario, meant that the requirements for an award could not be met under Article 68 UPCA either.
Against that background, the decision provides several relevant aspects for UPC damages litigation following infringement judgments, which appear to apply irrespective of whether the underlying infringement decision is a national judgment, or is (as will be more usual) from the UPC. First, it highlights the evidentiary burden on quantum and causation, a standalone damages claim will stand or fall on the claimant’s ability to supply the documents and factual building blocks enabling the court to assess the counterfactual tender outcome. Second, for price‑reduction lost‑profit theories, parties should expect rigorous scrutiny of whether the original price was reasonable and whether the claimant would probably have won at that price absent the infringement, relying on high‑level comparisons or expert conclusions without producing the underlying bids and profit calculations is risky. Third, in procurement‑driven disputes, defendants will likely focus on lawful competitive alternatives and non‑price award criteria, and claimants should be prepared to address those factors directly if they wish to establish that the alleged infringement was the decisive cause of the asserted loss.
[1] https://www.unifiedpatentcourt.org/en/node/182805
[2] https://www.unifiedpatentcourt.org/en/node/18126
[3] Reported here: https://eip.com/uk/case-reports/upc-court-of-appeal-rules-that-upc-can-determine-damages-following-a-national-infringement-decision