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2025 Week 41
The UPC Court of Appeal’s second ruling on the merits is out in the Philips v. Belkin case. This decision broadens who can be considered an “infringer” beyond those directly performing the infringing acts, while clarifying the liability of managing directors for infringements committed by their companies.
Recap: the first instance decision
As previously reported in UPC Weekly 2024 Week 38, the Munich Local Division found that Belkin had infringed Philips’ Standard Essential Patent (SEP) EP 2 867 997 B1 relating to the Qi wireless charging standard. The court granted an injunction and ordered recall and destruction of infringing products.
Claim interpretation: to accept or to reject
At first instance, infringement and validity turned on a single point of claim construction. As a reminder, the contested features were:
“… means for acknowledging the request to enter a requested negotiation phase by transmitting an acknowledgement to the power receiver; the acknowledgement being indicative of an acceptance or rejection of the request to enter the requested negotiation phase; …”
The Munich Local Division interpreted “an acceptance or rejection” as “an acceptance and optionally a rejection”. This meant that, to fall within the scope of the claim, a power transmitter need not be capable of indicating both acceptance and rejection – only acceptance suffices.
The Court of Appeal (CoA) agreed, confirming that it is not necessary for the power transmitter to be designed such that it can also reject negotiation requests. Even if the transmitter always sends acknowledgements indicating acceptance, the feature is still realised.
In support of this conclusion, the CoA noted that even if the power transmitter only sends acknowledgements accepting the request to enter the negotiation phase, then this serves its purpose of indicating to the recipient whether the power transmitter supports the negotiation phase. This reinforces a functional approach to claim construction. The Court of Appeal also agreed with the Munich Local Division’s findings that the description, and statements made by the proprietor during examination of the application at the EPO, support their interpretation of this feature.
The Court of Appeal therefore upheld the Munich Local Division’s decision, confirming that the patent was both valid and infringed.
Importantly, we now have UPC CoA precedent (consistent with UPC CoA order in Alexion v Amgen, discussed in detail in UPC Weekly 2025 Week 2) that statements made by the applicant during the grant procedure can be seen as an understanding of the skilled person at the filing date. European patent attorneys and applicants should therefore exercise caution during prosecution to avoid making statements that could later narrow claim interpretation in UPC infringement proceedings.
Managing directors liable for infringement?
Philips brought the infringement action against not only three Belkin companies, but also their managing directors. At first instance, the Munich Local Division found the defendant managing directors liable, not as “infringers”, but as “intermediaries” under Art. 63 UPCA:
- Where a decision is taken finding an infringement of a patent, the Court may grant an injunction against the infringer aimed at prohibiting the continuation of the infringement. The Court may also grant such injunction against an intermediary whose services are being used by a third party to infringe a patent.
- Where appropriate, non-compliance with the injunction referred to in paragraph 1 shall be subject to a recurring penalty payment payable to the Court.
The defendant managing directors were not liable for damages but were subject to the injunction, including liability for recurring penalty payments for breach of the injunction.
The Court of Appeal rejected the Munich Local Division’s suggestion that directors could be personally liable as an intermediary based solely on their job title.
Firstly, the Court of Appeal clarified the extent of the term “infringer” within the meaning of Art. 63(1) UPCA, first sentence. The term “infringer” encompasses not only someone who carries out the infringing acts themselves, but also someone who does not themselves commit the infringing acts, but to whom the infringing acts of a third party are attributable because they are an instigator, accomplice or accessory. This means that a final order can be issued against a person who commissioned the acts, or incited the infringer to commit the acts. Someone who was complicit in performing the infringing act, such that they and the infringer were working together on the basis of a joint plan, could also be liable if they were aware of the circumstances giving rise to the patent infringement, and also aware that such acts were unlawful.
Secondly, the Court of Appeal decided that the mere position of “managing director” does not make the managing director an accomplice to a patent infringement. Managing directors may nevertheless be liable for patent infringement as an instigator, accomplice or assistant, if the infringing acts of a third party are attributable to them such that they can be considered an “infringer” within the meaning of Art. 63(1) UPCA, first sentence, defined above. A managing director can only be held liable if the action complained of goes beyond the typical duties of a managing director, for example where they deliberately use the company to commit patent infringement, or if the managing director knows that the company is infringing a patent and, although it is possible and reasonable for them to do so, does not take any action to stop the patent infringement.
Interestingly, the Court of Appeal also advised that if a managing director seeks legal advice on the question of patent infringement, they can generally rely on this advice until a first-instance decision establishing patent infringement has been issued.
The Court of Appeal therefore overturned the first instance decision, ruling that:
- the defendant managing directors cannot be considered “intermediaries” because a managing director of a company cannot be a “third party”, and therefore an intermediary, in relation to that company; and
- in this case, the defendant managing directors cannot be considered “infringers” as it cannot be established that they had the necessary awareness of the unlawfulness. This was in part because the defendant companies had obtained legal advice from a solicitor or patent attorney that concluded that there was no patent infringement (and the defendant managing directors were also entitled to rely on this assessment).
This decision provides welcome clarification on director liability for patent infringement. It confirms that personal liability requires more than just holding a corporate role; it demands active involvement or wilful inaction in the face of known infringement. The ruling also underscores the importance of proactive legal risk management, including obtaining formal freedom-to-operate or non-infringement opinions.
A quick note on the meaning of “offering” under Article 25(a) UPCA
The CoA also clarified the definition of “offering” as an infringing act, adopting an economically driven interpretation, and ruling that an offer does not require all contractual details or readiness to deliver. Even an invitatio ad offerendum - a mere invitation to negotiate, without even specifying price - can constitute an infringing offer. This broadens the scope of actionable conduct under UPC infringement provisions.
