Swiss e-bike manufacturer, myStromer AG, and its competitor, Revolt Zycling AG, were both exhibiting their bicycles at Eurobike 2023 in Frankfurt, one of Europe’s largest bike trade fairs.
MyStromer AG, based in Oberwangen, is a Swiss manufacturer of fast e-bikes with a speed of up to 45 km/h.
MyStromer applied for a preliminary injunction at the Düsseldorf local division of the Unified Patent Court (UPC) against Revolt Zycling because it claimed that the way Revolt Zycling’s hub motor was mounted in the bike frame infringed myStromer’s European patent number EP2546134B1. This patent is in force in a handful of EU countries, including Germany, the Netherlands, France and Italy.
MyStromer applied for a preliminary injunction to prevent Revolt Zycling from selling, importing and storing the allegedly infringing bicycles in Germany, the Netherlands, France and Italy, and requested that Revolt Zycling surrender the bicycles being exhibited at the Eurobike trade fair, in order to prevent further marketing of the bicycles during the fair.
Revolt Zycling had previously filed a so-called “protective letter” with the UPC in which it requested that any application for provisional measures be rejected, or alternatively, that any application for a preliminary injunction not be granted without a hearing.
The protective letter is one available legal remedy for reducing the risk of provisional and protective measures. The protective letters should set out the reasons why such measures should not be granted. The letters include, for example, arguments about non-infringement and against the validity of a patent. Such protective letters are known in Germany but are not available in many of the national legal systems of the contracting member states of the UPC. Their availability and usefulness at the UPC have been a topic of discussion and significant interest.
The protective letter filed by Revolt Zycling asserted that there is no infringement due to the “exhaustion” of the patents and that in any case the patent is not infringed by Revolt Zycling’s product. The protective letter did not challenge the validity of the patent. Such a challenge is not mandatory according to Rule 207 of the UPC Rules of Procedure. Mystromer’s patent had been neither opposed before the European Patent Office nor subject to national invalidity proceedings.
The Court granted the application for a preliminary injunction without hearing any arguments from Revolt Zycling as a so-called “ex parte preliminary injunction”. The injunction was granted within hours of myStromer filing its application. The Court assumed a high degree of urgency due to the Eurobike trade fair ending three days after the date of the application. The explicit reasoning provided for not hearing Revolt Zycling referred to the urgency of the situation
“The applicant has made a credible case that it would suffer irreparable damage as a result of a delay (R. 212.1 of the Code). The “Eurobike 2023” is an important leading trade show that is of considerable relevance for the entire industry. It enables the defendant to come into contact with potential customers and thus establish its own market presence. It is obvious that the exhibition of the alleged infringing product at this trade fair could lead to an irreversible loss of sales or market share of the applicant. The products of both parties are substitutable directly competing products.”
On the day the UPC’s decision was issued, a bailiff confiscated all of Revolt Zycling’s bikes, leaving empty its booth at the trade fair.
There are two further interesting takeaways of the case.
MyStromer had further requested an amount of €16,000.00 as an interim award. An interim Award is a temporary award until the UPC has given its final decision. The UPC did not grant the full amount, but only an award amounting to the actual court fees of €11,000.00.
In addition, the UPC has ordered the seizure of infringing products and a recurring penalty payment of up to EUR 250,000 for each case of infringement. It is interesting to note that the amount of the penalty ordered complies with the ceiling according to the German Code of Civil Procedure (ZPO).
It seems that, if the validity of the patent had been reasonably challenged in the protective letter, the outcome may have been different. The court’s decision demonstrates that merely filing a protective letter does not guarantee refusal of an application for provisional measures or even a hearing before provisional measures are granted. Care must be taken to provide thorough and relevant arguments for non-infringement and, preferably, for invalidity as well in order to provide the best chance of avoiding the granting of provisional measures.
In this case, it seems that the filed protective letter was counterproductive and a crucial factor for granting the application for a preliminary injunction without hearing arguments presented by Revolt Zycling. In some cases, such as where there is no substantial line of defence, a protective letter could even be detrimental because, without a protective letter on file, the court might be even more inclined to hear the defendant before granting a provisional injunction. It further appears that even strong arguments may not be enough to avoid granting provisional measures without a hearing in particularly urgent situations, such as an ongoing trade show.
It is clear from the case that the quality and relevance of the arguments presented in a protective letter should be ensured. A potential defendant should carefully consider in each case whether to file a protective letter, at all.
Our offices in Paris and Munich have already been advising clients on their patent enforcement strategies in Europe under the new UPC agreement. We are also supporting our clients with possible protective letters before the UPC. Get in touch if you have any questions.
