A recent decision at the Court of First Instance of the UPC shows the direction the UPC is moving in, with regards to claim interpretation and invalidity.
On 26 August 2024, the UPC Court of First Instance (Hamburg Local Division) issued their decision (UPC_CFI_54/2023) on the dispute between Broadcom/Avago and Tesla over EP 1 612 910. The patent was upheld in amended form, with Tesla not being found to infringe the amended patent.
This case involves a procedural difference with EPO Opposition procedure in terms of how auxiliary requests are handled. The patent was found to be partially valid based on an auxiliary request that was modified by the court in the decision. This outcome is not unusual at the EPO, but the way in which it happened here is a result of the UPC handing down its decisions in one go, rather than during the oral hearing.
This is one of many disputes between Avago and Tesla at the UPC, with Tesla also being successful in having Avago’s patent EP 1 838 002 revoked at the Munich Local Division on 30 August 2024 (UPC_CFI_52/2023). In both of these decisions, the previous Nanostring/10x Genomics (UPC_CoA 335/2023) decision was cited when deciding how to interpret the claims. This reinforces the existing notion that the UPC is keen to build a new body of case law upon which to base its decisions. This suggests that we can expect consistency in the approach of the UPC across divisions.
It is yet to be seen whether Avago will continue to be driven to defeat on their other pending infringement actions.
Avago brought an infringement action against Tesla on 1 June 2023, the first day of the UPC’s operation. The action accuses Tesla of infringing their patent EP 1 612 910, directed towards power control systems, in the ‘Tesla Model Y’ vehicles which are manufactured and sold in Germany.
Tesla contested Avago’s ownership of the patent, and also counterclaimed for the invalidity of the patent, to which Avago responded with a series of auxiliary requests. Tesla argued that the auxiliary requests were inadmissible, as Avago did not use the UPC’s Case Management System (CMS).
Tesla argued that Avago was not the proprietor of the patent, despite being listed as the proprietor on the register. This was based on the assignment of the patent from Broadcom to Avago being signed by the same person, which they argued to be an inadmissible self-dealing. The UPC ruled that, according to Rule 8.5 of the Implementing Regulation, that there is a rebuttable presumption that the person identified in the register is entitled to the patent.
On 5th June 2024, the Judge-rapporteur ordered the production of documents referenced in the Power of Attorney documents signed by Avago and Broadcom, including resolutions from both companies’ board of directors (ORD_28831/2024). However, Tesla was denied access to an authorisation document for Avago being assigned documents, as this was not considered relevant. Thus, whilst the UPC is willing to order documents that one side may not have access too, they do not appear to allow for ‘fishing’ for errors in documents without a specific reason.
With regard to the ‘self-dealing’ issue, it was ruled that German law does not apply in this case, and rather Singaporean or Californian law should be applied based on the respective company headquarters.
Notably, in arriving at these positions, the Local Division referred to several sources, including the EPC, case law from the German Supreme Court, and commentary on the interpretation of the UPC by the UPC Court of Appeal’s own President, Klaus Grabinski. The range of sources indicates that at least this Division is willing to look further afield for guidance in handling such matters. It will be interesting to see whether a Division outside Germany or CoA would take different legal basis for similar decisions.
Tesla argued that Avago’s auxiliary requests, to amend the patent in response to the revocation counter-claim, were inadmissible because Avago refrained from using CMS. However, these amendments were submitted within the time limit outlined in Rule 30.1 RoP in conjunction with Rule 29 (a) RoP.
The decision outlines that, as there is no explicit statement in the Rules of Procedure that applications submitted outside CMS are to be excluded, and the UPC was in its initial phase at the time, the amendments are admissible. It does appear that the Court does not intend to continue to allow non-use of CMS as the UPC matures. However, the decision refrains from deciding on “whether and from what point in time the UPC started work stricter standards should be applied”.
With regard to the interpretation of the claims of the patent, the UPC cites its own case law, NanoString/10x Genomics (UPC_CoA 335/2023), and Article 69 of the EPC. In particular: “The interpretation of a patent claim does not depend solely on its exact wording in the linguistic sense… Rather, the description and drawings must always be used as explanatory aids”.
Based on this philosophy, the decision goes on to interpret the patent claims functionally. In particular, feature 1.3 of the patent describes a “power supply circuit”. However, as the description does not mention any special features of the devices supplied by the power supply circuit, the patent does not require that the power supply circuit be a single independent circuit as alleged by Tesla. Rather, it could be made up of several modules each with independent outputs. This functional interpretation was also applied to other claim features.
In particular, the decision notes that “In the case in dispute, it does not matter under what conditions and to what extent the grant history is relevant for the interpretation of claims before the UPC”. Following the Court of Appeal’s decision earlier this year in VusionGroup v. Hanshow (UPC_CoA_1/2024), it appears that the Division has chosen to avoid the issue of the use of the file wrapper in interpreting claim features in this case.
In accordance with the functional claim interpretation, independent claims 1 and 3 were found to lack novelty over D1. Auxiliary request 1 of Avago covered limiting claim 1 to claim 2, and limiting claim 3 to claim 4. However, whilst limiting claim 1 to the feature of claim 2 was found to be valid, claim 3, and all auxiliary requests pertaining to claim 3, were found to be invalid.
Article 65(3) UPCA describes that “where the grounds for invalidity relate to only part of the patent, the patent shall be limited by a corresponding amendment to the claims and declared partially invalid”, without prejudice to Article 138(3) EPC.
None of Avago’s submitted auxiliary requests covered amending claim 1 to claim 2 and deleting claims 3 and 4 entirely. Avago submitted auxiliary request 1bis at the end of the oral hearing, covering the limitation of claim 1 to claim 2 and the deletion of claim 3. However, irrespective of the admission of auxiliary request 1bis, the Division determined that auxiliary request 1 with the deletion of claim 3 is legally valid. This is because this amendment was “part of the plaintiff’s defence against the revocation action from the outset”, and the two independent claims 1 and 3 are not based on each other in such a way that the cancellation of one claim would require the cancellation of the other.
This appears to be a procedural difference between the UPC and the EPO, in that the UPC has decided to amend the claims of a Request ex officio, in order to uphold an auxiliary request in part. In contrast, in EPO opposition proceedings, the proprietor may be able to negotiate with the Opposition Division for an amended request during the oral hearing. Therefore, it appears that it may not be necessary to file full auxiliary requests merely to delete claims that might be found invalid. However, the ultimate outcome here does not appear to be different to what we would expect at the EPO.
This reflects the fact that the UPC judgment is handed down ‘in one go’ some weeks after the hearing, so unless the issue had somehow been raised as a preliminary point by the judges, the patentee would have no opportunity to react to the finding that one claim was invalid during the hearing.
It will be interesting to see how this is applied in the future, particularly as to what is considered “part of the defence from the outset”, and how far this can extend to amendments not contained in the admitted auxiliary requests. However, it does appear that the UPC is willing to take common-sense actions with respect to revocation actions.