A First Substantive Decision of the UPC Court of Appeal – 10x Genomics vs Nanostring

In a recent decision in case UPC_CoA_335/2023, the UPC’s Court of Appeal overturned a preliminary injunction granted by the Court of First Instance (Munich Local Division) to 10x Genomics, Inc. against Nanostring Technologies based on EP 4108782. As previously reported, the Munich Local Division held at first instance that there was a sufficient degree of certainty that the asserted patent was valid and infringed, and thus granted the preliminary injunction.

The Court of Appeal agreed in their decision with various findings of the Munich Local Division in relation to the methodology for grant of provisional measures at the UPC, including the standard of proof and burden of proof. In particular, the Court of Appeal held that the applicable standard of proof for establishing infringement and validity for provisional measures should not be too high or too low, in line with the requirement for a “sufficient degree of certainty”. In this regard, the Court of Appeal rejected an argument of the defendant (based on German national case law) that revocation only needs to be shown to be possible to deny grant of a preliminary injunction. The Court of Appeal further held that the burden of proof for infringement lies with the claimant, while the burden of proof for invalidity lies with the defendant. These findings, in a first decision of the UPC on appeal from a first instance decision on preliminary measures, usefully help to cement the UPC’s general approach to provisional measures.

Turning to substantive issues, the Court of Appeal did not assess infringement as they disagreed with the Munich Local Division’s finding of validity. Their decision is the first in which the UPC’s Court of Appeal have addressed substantive issues of patentability and thus is of particular interest, also in view of the divergence with the Munich Local Division’s decision, which itself was also a first substantive decision of any UPC Court of First Instance. In more detail, although the Court of Appeal agreed with the Munich Local Division’s finding of novelty over the cited art, they disagreed with their finding of inventive step. On this basis, they overturned the preliminary injunction.

In deciding that “it is, on the balance of probability, more likely than not” that the subject matter of claim 1 would prove to lack inventive step, the Court of Appeal fully reassessed the findings of the Munich Local Division in relation to the prior art, and also considered new prior art submitted by the defendant on appeal. They also reassessed various points of claim interpretation, and made a general statement of principle that “the description and drawings of a patent must always be used as explanatory aids for the interpretation of the patent claim and not only to resolve any ambiguities in the patent claim”. This statement is in line with established principles of European patent law, but helpfully confirms this as the approach before the UPC.

While not identifying any specific error in the Munich Local Division’s decision, the Court of Appeal reached a different conclusion. It appears that one factor in their decision was a broader interpretation of one of the claim features compared to the Munich Local Division, relating to the number of incubation steps permitted in claim 1. Also, the Court of Appeal appeared to adopt a broader assessment of what would have been obviously considered by the person skilled in the art starting from the prior art. In doing so, the Court of Appeal did not specifically employ the problem-solution analysis used by the European Patent Office for assessment for inventive step, or identify a single closest prior art.

In conclusion, the Court of Appeal’s decision provides a first insight into their approach in relation to inventive step, and illustrates that an appeal at the UPC can involve a full reassessment of claim interpretation and the prior art. The Court of Appeal also usefully comment on the general standards applicable in applications for provisional measures and the general approach to be adopted in relation to claim interpretation at the UPC.