UPC Court of Appeal: Directors are not intermediaries

On 29 October 2024, the Court of Appeal of the Unified Patent Court issued a decision on a request for suspensive effect concerning an order by the Court of First Instance in a patent infringement dispute between Koninklijke Philips N.V. (Plaintiff) and several entities within the Belkin corporation, including its managing directors (Defendants).

In earlier proceedings at first instance, the Munich Local Division issued an order granting the remedies sought by Philips in their infringement claim and dismissing Belkin’s counterclaim for revocation. The order imposed restrictions on Belkin’s activities, including those of its managing directors, related to the disputed embodiments.

Belkin appealed, requesting that the first instance decision be given suspensive effect and, inter alia, arguing that the ruling concerning its managing directors was incorrect and unenforceable, as, contrary to the opinion of the Munich Local Division, the directors could not be classified as "intermediaries” under Article 63 of the Unified Patent Court Agreement (UPCA), given that the companies within the Belkin group could not be considered "third parties" under the provision.

In its decision of 29 October 2024 the Court of Appeal ruled that the appeal would not generally have suspensive effect but agreed to suspend enforcement against Belkin's managing directors. It found a manifest legal error in the Court of First Instance’s treatment of the directors as intermediaries under Article 63 UPCA. Additionally, the Court of Appeal overturned the requirement for the managing directors to bear legal expenses and the costs associated with publicising the judgment, deeming these aspects of the ruling legally flawed. The Court of Appeal upheld other parts of the decision, emphasising the importance of balancing the interests of both parties. This case highlights the Unified Patent Court's commitment to ensuring precise legal interpretation while balancing the interests of all parties in complex cross-border patent disputes.