UPC Preliminary Injunctions: PI limited in scope based on Principle of Proportionality

On 31 October, the Dusseldorf Local Division issued its decisions on the matter of preliminary injunctions requested by Valeo Electrification against three companies in the Magna group, citing infringement of two of their European patents.

The Panel deemed that it was more likely than not that Valeo’s patent was valid and that Magna were infringing, and so the claimant’s request for preliminary measures was granted, albeit in a limited form. The Court stated that it was not the case “that provisional measures should always be granted simply because the Applicant has an interest in them. Rather, the Court has the discretion to weigh up the interests of the parties and in particular to take into account the potential harm for either of the parties resulting from the granting or the refusal of the injunction”.

Magna’s products were gearboxes, with automotive giant BMW being amongst its customers. Due to the nature of the product, if a full injunction were to be granted against Magna, BMW would suffer extensive damage, judged by the Court to far exceed the damage suffered by Valeo as a result of infringement. This is because the design of the cars utilising the challenged embodiments did not allow for a simple removal and replacement of Magna’s product with Valeo’s, and so an injunction on Magna’s products would require redesign and reapplication for homologation of BMW’s vehicles, incurring significant cost and delay to manufacturing. As BMW’s contract with Magna specifically allowed for BMW to enforce a claim for compensation against Magna in such an event, the Court deemed that the damage to Magna if a full injunction was granted would significantly exceed the damage presently caused to Valeo as a result of the infringement.

Hence, the injunction was issued against Magna, but with Magna allowed to fulfil existing current obligations to BMW. This decision highlights that there is some flexibility and discretion bestowed on Courts to carve out certain acts from its injunctive relief. It is notable that the Düsseldorf court was prepared in this case to be flexible when it came to the potential impact of an injunction against a third party on a key player in the German motor industry.