UPC denies request to extend action to an additional party

In a procedural order issued on 2 September 2024, the Munich Local Division of the Unified Patent Court (UPC) rejected Panasonic Holdings Corporation’s application to extend its patent infringement case against Guangdong OPPO Mobile Telecommunications Corp. Ltd. and OROPE Germany GmbH to include OTECH Germany GmbH.

Panasonic initially filed an infringement action against OPPO and OROPE on 4 August 2023. OROPE, which provides marketing and administrative support for both OPPO and OTECH, had temporarily managed smartphone sales for OTECH in 2020 before fully transferring this business line to OTECH later that year.

In February 2024, Panasonic accessed OROPE’s 2020/2021 annual report, which had been available online since August 2023. The report revealed OTECH's role in OPPO's sales activities, leading Panasonic to believe OTECH should also be included in the infringement proceedings. On 5 June 2024, Panasonic applied to the UPC to extend the case to OTECH.

OPPO and OROPE opposed the extension, arguing that Panasonic could and should have acted sooner. The Court held that given that Panasonic had not denied it, Panasonic was aware of a June 2023 blog post reporting that the Mannheim Regional Court had issued patent injunctions against several German resellers, including OTECH, in a case brought by Nokia. Although the full judgment had not yet been published, the blog post should have prompted Panasonic to investigate OTECH’s involvement earlier. The grant of the German national injunction indicated OTECH’s engagement in patent-related disputes concerning its sales, giving Panasonic sufficient grounds to have been able to act earlier.

The UPC's Munich Local Division denied Panasonic's application to add in OTECH as a party due to concerns over procedural delays and the timing of the request. The key issues highlighted by the court were:

1. Representation and Procedural Efficiency

Panasonic requested that OPPO and OROPE’s legal representatives accept service on behalf of OTECH, as they had in related proceedings before the Munich Regional Court. This would have allowed Panasonic to avoid the additional expense and complexity of serving OTECH separately. However, OPPO and OROPE’s legal representatives said they were not representing OTECH before the Munich Local Division at that time. Panasonic’s attempt to minimize costs consequently seems to have failed, as the legal representatives of OPPO and OROPE simply did not indicate that they would be representing OTECH at that moment.

This created further uncertainty for the court, as it raised the question of who would ultimately represent OTECH, if anyone. The court expressed concerns that adding OTECH at this late stage would create delays, because adding a new party would likely require additional procedural steps. Since OPPO and OROPE had already filed a counterclaim for revocation of the asserted patent, with the written procedure scheduled to conclude by October 2024, adding OTECH would likely extend the case timeline, potentially pushing the main hearing, scheduled for January 2025, beyond that date.

2. Panasonic’s Delay in Filing the Application

The court criticized Panasonic for its delay in filing the application to add OTECH. Although Panasonic accessed OROPE’s annual report in February 2024, it had been available online since August 2023. Moreover, Panasonic had been aware of OTECH's involvement as early as June 2023 through the Nokia-related blog post. The court found that Panasonic had ample opportunity to file the application much sooner, which would have mitigated procedural delays.

3. Parallel Proceedings in the UK

The court also referenced parallel proceedings in the UK, where Panasonic had strongly opposed any delays. This suggested that Panasonic prioritized maintaining hearing and trial schedules over adding new defendants, such as OTECH, which would have inevitably extended the case timeline.

Lastly, the court noted that Panasonic could still file a new, separate action against OTECH at any time. While this would involve additional time and costs, it would prevent disruption to the current proceedings. The Munich court did accept that the decision should be appealed so that the UPC Court of Appeal could hand down it views given that this point had not thus far been litigated through the UPC system.  We anticipate that the Court of Appeal will uphold the first instance decision and this will set the bar for litigants needing to ensure that all parties are properly joined in from the very start of proceedings.