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One Year In, New European Patent Court Already a Force in Genomics IP Disputes

European Union DNA Biotech

This story has been updated to include comment from Bruker/NanoString Technologies.

NEW YORK – When the European Union introduced a consolidated venue for patent infringement cases last June, it immediately became an important factor in the genomics tools market.

That's because 10x Genomics, maker of single-cell and spatial omics analysis technologies, wasted no time testing the waters of what the Unified Patent Court had to offer. On the day the court went live, 10x filed lawsuits against two competitors in the high-resolution transcriptomics market, Vizgen and NanoString Technologies. Several months later, it also sued Curio Bioscience, a Broad Institute spinout, using the same court.

For 10x, the UPC offered a chance to enforce its intellectual property in multiple countries at once, including several of Europe's biggest markets such as Germany and France. The court "provides parties an expeditious path and powerful remedies to protect intellectual property from those improperly using it," 10x Chief Legal Officer Eric Whitaker said in an emailed statement. "Given the broad recognition of our patents across Europe, the UPC is an effective venue to safeguard our inventions and preserve our ability to invest in continued innovation."

This is the central idea driving the court, which despite its recent launch is a relic of the pre-Brexit era. Still, the UPC is a "game-changer" for patent litigation in Europe, according to Kristof Neefs, a partner at Belgian IP law firm Inteo. "Where patentees used to have to litigate in every jurisdiction, the UPC's decisions can cover up to 17 European Union member states, so an injunction will have a bigger impact," he said in an email.

In essence, UPC is a parallel legal universe where firms can pursue just one case to enforce their European patents, rather than several. Pre-UPC, companies had to file and manage patent infringement lawsuits on a nation-by-nation basis. That meant navigating multiple legal systems at once, not to mention finding legal representation to shepherd each case.

Theoretically, having just one venue means less complexity — and potentially less cost — for pursuing patent infringement claims. There is a risk, however, to match the potential reward. "If the UPC rules that a patent is invalid, the patentee loses its exclusive rights in all member states where the patent was in force," Neefs said.

"Any company in Europe or planning to be in Europe with a biotech-intensive product needs to be aware of what the UPC is and does," said Bethan Hopewell, a UK-based attorney at law firm Powell Gilbert, who has been following the establishment of the court for years. So far, 10x's case against NanoString has been a poster child for what can happen in the UPC. 

A long and tortured history

The UPC is the realization of a European-wide court that mirrors the way in which the US has a nationwide system for adjudicating intellectual property disputes, Hopewell said, but carries a "long and tortured history" that began decades ago and has not quite turned out as planned.

"It is diminished by a lack of participation," she said. Losing the UK as a consequence of Brexit was a huge blow, as London was meant to be the seat of the life science division. Moreover, many EU member states have not joined the UPC for various reasons. At present, the countries participating in the UPC are Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, and Sweden. Ireland, Czechia, Slovakia, Hungary, Romania, Greece, and Cyprus have signed the 2013 "Agreement on a Unified Patent Court" but have not yet ratified it for various reasons. Croatia, Poland, and Spain have not signed the agreement.

Though original proposals for a Europe-wide patent court date back to the 1970s, the system in place now was proposed in 2010 by the European Commission. By 2013, most EU countries had signed onto the Unified Patent Court Agreement, but it required ratification by 13 countries to take effect. It took a decade before that number was reached, with Germany submitting its ratification in February 2023 after some constitutional wrangling.

Of the countries not yet participating, observers are most closely watching Ireland, whose inclusion as an English-speaking nation would be helpful, given the language's use as a common tongue in many sciences. 10x and Curio have already tussled over the use of English in their proceedings before the local UPC court in Düsseldorf, Germany.

Ireland had been set to vote on a referendum about joining the UPC this month; however, in April the Irish government said it would defer the vote.

"While the government continues to believe that joining the UPC is essential and that the referendum should be pursued, it is clear to me that more time is needed for public discourse and engagement on the matter to help inform the debate," Peter Burke, minister for enterprise, trade, and employment, said in a statement.

If Ireland is to join, the UPC will be keen to set up a court there, Hopewell suggested. In addition to being an English-speaking country, Ireland would be one of the only so-called "common law" jurisdictions. Broadly speaking, this is a legal tradition — also used in the US — that is drawn from practices developed in England in which written texts or statutes form outlines of the law, filled in by "case law," or precedents set by judges as they apply the law to the conflicts before them. In a European context, this is juxtaposed with "civil law" where laws and punishments are codified, epitomized by the French and German systems.

One of the unaddressed challenges of the UPC is how it will blend these legal traditions, if at all. The court's rules of procedure have influences from both, Hopewell said. But because the UK is out and Ireland has not joined, the initial interpretations are being guided by judges from civil law backgrounds, "and that has an obvious impact," she said.

The divide between common and civil law may be acutely felt in patent cases because common law affords the process of discovery — the ability of both sides to request evidence in the hands of their opponents and the burden to produce that evidence — while civil law doesn't. In civil law, "you have to make good your case on the evidence you can find," she said. There are provisions to seize evidence, "but you have to put quite a lot of detail and effort into actually identifying what you think you need," she said. That means the initial allegations of infringement need to be more specific and less high-level than may be required in common law jurisdictions.

Different courts

After 10x sued NanoString, the case went to the "court of first instance," which has locations in Milan, Munich, and Paris that address all jurisdictions, as well as local divisions for cases tied to particular countries. These primary courts offer one of the large benefits for litigating patents in the UPC, as they are staffed with experienced patent judges, Neefs said, which instills confidence in users. "Although some national patent courts in European markets are similarly experienced, that is definitely not the case in all of them," he said.

Other countries are also vying to have courts of first instance, some of which may be responsible for particular technology areas, Hopewell said, noting that their location could have bearing on how a case plays out. For example, Germany is considered to be more in favor of injunctions than other jurisdictions, Hopewell said, and indeed, 10x won a preliminary injunction against NanoString in its UPC case. "How much that becomes part of the UPC tradition remains to be seen," she said.

NanoString then appealed the injunction to the UPC's sole court of appeal. Based in Luxembourg, it has two panels of five judges, who hail from across the continent. Here, 10x experienced the potential risk in dealing with a centralized patent. In February, this court overturned the preliminary injunction and noted "substantial concerns" about the validity of the patent-in-suit held by 10x Genomics. At the time, NanoString said it is "highly probable that the patent will not prove to be legally valid."

"These things can change very quickly," Hopewell said. "You have the rug pulled away, and all of a sudden you're in not such a great position."

Whether 10x's patent will be wholly invalidated remains to be seen. Last month, the German Federal Patent Court invalidated 10x's European Patent No. 2794928B1 in Germany, the same patent 10x is using to sue NanoString before the UPC. In an email, a NanoString spokesperson said that the UPC has scheduled hearing in September to address the patent's validity. The case was put on hold pending NanoString's recent bankruptcy filing, so no trial date is set yet, 10x's Whitaker said. The appeals court's validity concerns will be addressed and resolved in the main action, he said, noting that 10x is pursuing a permanent injunction. 

10x also saw mixed results in its case against Curio Bioscience. On April 30, the local court in Düsseldorf issued a preliminary injunction in France, Germany, and Sweden against Curio's Seeker spatial biology platform after finding that it likely infringes a claim of European Patent No. 2,697,391, held by 10x Genomics. But Curio said it can offer an alternative version of the product that it maintained will not infringe this claim and noted that the court said it could not establish likely infringement of the primary claim of the patent by either version of its product.

According to Whitaker, Curio is not appealing the preliminary injunction. "We are closely monitoring Curio's compliance with the injunction," he said, noting that another Curio product, Trekker, "was not at issue in the UPC, but we have alleged that it infringes our patents in litigation pending in the US."

How 10x's suit against Vizgen is progressing isn't clear. Vizgen declined to comment, citing the ongoing proceedings. Elsewhere in the life sciences and diagnostics industry, Abbott and Dexcom have brought their fight over continuous glucose monitoring technology to the UPC. The firms are also embroiled in patent litigation in Germany, the US, and the UK.

Unsettled questions

Companies are interested in the UPC, Neefs said, but may do well to look where 10x's leap will land it. They may also want to evaluate their ability to wage a legal battle at the highest levels.

"While many of our clients have expressed interest in the UPC, the cost of litigation is significantly higher than a national patent infringement action in Belgium," Neefs said. "So, it is often a matter of weighing the benefits of a wider injunction to the costs related to proceedings."

Beyond the major question about whether to pursue one case at the UPC or several cases in individual countries, the unified court presents other considerations for firms with European patents.

UPC cases require the establishment of so-called "unitary" European patents, which are only enforceable before that court, as opposed to traditional European patents, which are valid throughout the EU, but which must be enforced at the national level. Inventors or assignees can choose which type of patent they would like to hold; the choice is nonbinding with the potential to withdraw the unitary patent designation, but a patent can only exist on one track at a time, so to speak.

"Companies need to consider who has the authority to opt out of the patent," Hopewell said. "If it's a licensed patent, do you need the licensee's consent?" Who has the right to prosecute or enforce patents is also an open question. "There's lots of discussion about actually reviewing old licenses to make sure there are no issues that arise," she said.

How strict the UPC's tests are for the application of an inventive step is another open question, she added.

Neefs said that the so-called "research exemption to patent infringement" is also at issue. This allowed researchers to use patented inventions for experimental purposes without incurring risk of infringement. "The provision has now been changed to a narrower exemption, and it remains to be seen how it will be interpreted by the UPC," he said.

"A lot of the book is yet to be written," Hopewell added. "That makes it all the more important to pay attention."