UPC grants penalty payment for non-compliance with production order
Koninklijke Philips N.V. (“Philips”) v Belkin International, Inc., Belkin GMBH and Belkin Limited (collectively “Belkin”) - UPC_CFI_390/2023 relating to EP 2867997 B1
Order of 18 December 2024 - ORD_60616/2024
Philips sought a penalty payment to be imposed on Belkin for non-compliance with a previous Order of the Court for Belkin to provide information relevant to the calculation of damages. Pursuant to Art. 82 UPCA, penalty payments are payable to the Court and may be imposed to both enforce compliance with the Court’s orders and to penalise prior non-compliance. In this case, the Court agreed that Belkin violated its previous Order in terms of time and content, but not form, and imposed a €46,000.00 penalty payment.
Background
In the Court’s previous Decision of 13 September 2024 (which we summarised in our previous article here) Philips successfully asserted their wireless charging patent EP 2867997 against Belkin at the Munich local division of the UPC. In the 13 September Decision, Belkin were ordered, pursuant to Art. 67(1) UPCA, to provide Philips with information relevant to the calculation of damages, including: information relating to the origin and distribution channels of Belkin’s infringing products, names and addresses of Belkin’s suppliers and commercial customers, quantities of products delivered, received or ordered and the prices paid for the products concerned.
Philips notified Belkin with a letter dated 20 September 2024 that they intended to enforce the Court’s previous Decision in full, requesting that Belkin provide the requested information by 7 October 2024.
Belkin appealed the Court’s Decision of 13 September 2024 and requested that the Court of Appeal ordered a suspension of enforcement of the Decision. Belkin additionally committed in any event to providing the requested information within one week of service of the Decision of the Court of Appeal. On 30 October 2024, Belkin were served with the Court of Appeal’s dismissal of their application for a suspension.
Having not received the requested information, Philips then filed an Application on 11 November 2024 for the imposition of a penalty payment for Belkin’s non-compliance with the Order. Subsequently, on 12 November 2024, Belkin produced the requested information. However, Belkin provided the requested information in paper form in 16 separate boxes:
This led Philips to further complain on 25 November 2024 that:
- The information was not provided electronically, making it impossible to analyse;
- Belkin had not complied with the production order in full, as some information was missing or redacted; and
- The information is, in part, incomprehensible.
Form of the Information
The Court decided that no penalty payment could be imposed on Belkin for providing the requested information on paper. The Court clarified that neither Art. 67 UPCA nor the UPC Rules of Procedure specify the format of information to be provided. The Court further highlighted that it is incumbent on the requesting party (in this case Philips) to formulate any request for information “as specifically as possible with regard to the desired form of the provision of information”. As Philips did not request to receive the information in an electronic format, no penalty payment could be imposed. Without a highly specific request, parties are generally free to choose the form in which information is provided (electronically or on paper).
Late Production of the Information
The Court decided that a penalty payment should be imposed on Belkin, pursuant to Art. 82(4) UPCA, for late production of the requested information. The Court agreed with Philips that the correct deadline for providing the requested information was 7 October 2024 and that neither the filing of an Appeal nor the request for a suspension in the Appeal, nor the offer to provide the documents within one week of service of the Court of Appeal’s decision, were valid reasons to miss the 7 October deadline.
The Court noted that Belkin even missed the date they offered to provide the requested information, which would have fallen on 6 November 2024 (7 days after service of the Decision of the Court of Appeal). The Court indicated that Belkin should have no excuses for the late production of the information, which should have been foreseen having been confronted with the infringement action since 2023.
Content of the Information
Belkin did not contest Philips’ allegation that the provided information was incomplete. The Court therefore decided that the information was indisputably incomplete.
Determination of the Amount
Philips requested that a penalty payment of € 20,000 be imposed on Belkin for each day from 7 October 2024 until the production order was fully complied with. However, the Court referring to Art. 82(4) UPCA indicated that the penalty payment must be “proportionate to the importance of the order to be enforced” and thus ordered a significantly lower penalty payment.
The Court further decided that, as this appears to be the first Decision of the UPC on the question as to when information ordered in a decision should be provided, exceptionally Belkin were entitled to wait until the Decision of the Court of Appeal denying suspensive effect was issued. Thus, the penalty amount would, in this case, be calculated from 30 October 2024, rather than from 7 October 2024.
The Court determined the amount of the penalty payment in two parts:
- A penalty of € 500.00/day for the period of 31 October 2024 to 25 November 2024, for providing the information late and then incomplete (26 x € 500.00 = € 13,000.00); and
- An enhanced penalty of € 1,500.00/day for the period of 25 November 2024 to 17 December 2024 (22 x € 1,500.00 = € 33,000.00). The penalty enhancement was applied as Belkin was made aware that the information was incomplete and they had failed to rectify the information.
Commentary
This Decision provides the first indication of when requested information must be provided by a party in response to a Decision. This Decision also serves a reminder to be highly specific when requesting information, to be accurate when providing requested information and to be responsive when incomplete information is identified. The Court notes that this penalty is on the lower end of the range of possible penalty payments. Much higher penalty payments could be ordered for longer breaches of an Order or for failing to comply with a more important Order, such as an injunction.