A new development in one of the first cases filed at the Unified Patent Court (UPC) underscores how the EU’s new patent venue offers both powerful tools and potential downsides for patent owners. Soon after the UPC’s launch in June 2023, its Munich Local Division issued the court’s first-ever preliminary injunction (PI), in litigation filed against NanoString Technologies by 10x Genomics and the President and Fellows of Harvard College (Harvard), barring two of the defendant’s flagship RNA detection products from sale in all 17 countries then participating in the UPC. That PI and a related US jury verdict prompted the defendant to declare bankruptcy. However, the tables have since turned in the defendant’s favor: The UPC Court of Appeal later overturned that PI due to concerns over the patent’s validity, and now the Munich Central Division has revoked the second of the two patents-in-suit.

As detailed in prior RPX coverage, the parties’ dispute first hit the courts in May 2021 with the first of two US lawsuits filed in the District of Delaware, followed soon after by a complaint in Germany’s Munich Regional Court and one brought in the UPC’s Munich Local Division in June 2023 (one of the court’s first few cases). An early setback for NanoString came in the US and German suits: In April 2022, the defendant filed a motion for an anti-suit injunction (ASI) in the Delaware litigation seeking to bar the plaintiffs from pursuing injunctive relief in Germany. However, in May of that year, the Munich court responded by issuing an anti-anti-suit injunction (AASI) barring NanoString from pursuing its ASI, the first time that a German court had issued an AASI in a life sciences case (as such orders are more typically issued in standard essential patent, or SEP, disputes). On the same day, the German court issued a ruling that NanoString had infringed the German portion of the EP 2 794 928 patent, one of the two patents also asserted in the UPC litigation, imposing a permanent injunction barring the defendant from selling its products in Germany.

Two more setbacks for NanoString then followed, the first occurring in the UPC leg of the campaign: In September 2023, the court issued the aforementioned 17-country PI as to the other asserted patent (EP 4 108 782, a divisional of the ’928 patent). In granting that injunction, the Munich Local Division held that a plaintiff’s NPE status has no bearing on a company’s standing to request preliminary injunctive relief (referring to patent owner Harvard, which is technically an NPE but filed suit alongside its commercial partner and licensee, 10x Genomics). Then, in November, a Delaware jury issued a $31M infringement verdict against NanoString, causing its stock price to plummet and prompting the company to seek Chapter 11 bankruptcy protection in February 2024 and request a related stay of the PI. Yet the UPC declined to stay the case, denying the motion on procedural grounds rather than resolving the question of whether the initiation of Chapter 11 proceedings constituted a “declaration of insolvency” as required under UPC rules.

However, the tide began to turn in NanoString’s favor in February, when the UPC Court of Appeal reversed the PI. The appellate court determined that the Munich Local Division applied an overly narrow interpretation of a key claim limitation and that it had been wrong to reject some of the defendant’s arguments related to invalidity. To the contrary, the Court of Appeal found that the patent is likely invalid for lack of an inventive step (or, in US parlance, that it is likely invalid as obvious), based on which it held that the PI could not stand. This allowed NanoString to resume sales of its impacted products in 16 of the 17 countries previously subject to that injunction, with sales in Germany still subject to the aforementioned national injunction.

This past April, life sciences research and diagnostics company Bruker Corporation then announced that it had agreed to acquire NanoString’s business for around $392.6M in cash, stating that it believed that business would be break-even by 2026. The deal closed the following month.

The day after that acquisition closed, NanoString got more good news in the German national litigation, when the German Federal Patent Court (the court responsible for invalidity, or nullity, actions under Germany’s bifurcated patent litigation system) invalidated the German part of the ‘928 patent. Soon after, Bruker announced that NanoString would ask the Munich Higher Regional Court to lift the German injunction, citing a December 2023 ruling from that appellate court that granted it the right to have the injunction lifted upon payment of a bond—the ruling having identified concerns with the lower court’s May 2023 infringement decision as overlooking a “disputed feature” of the ‘928 patent, per Bruker. On July 18, Bruker announced that it had paid a bond of unspecified size, as a result of which sales for NanoString’s products immediately resumed in the German market. The plaintiffs have appealed the invalidation, according to Bruker.

On October 17, the UPC’s Munich Central Division then invalidated the ‘928 patent in its entirety—i.e., its German, French, and Dutch portions—finding a lack of novelty and lack of an inventive step. The court also denied the patent owner’s request to amend its validity case in light of the Court of Appeal’s February decision as to the likely invalidity of the related ‘782 patent, citing the requirement that parties lay out their cases as early as possible under the “front-loaded system of UPC proceedings”.

Notably, the Central Division additionally declined to stay the proceedings pending the outcome of the German nullity appeal based on the Court of Appeal’s September 2024 decision in Mala Technologies v. Nokia Technologies, which outlines circumstances where the UPC must cede jurisdiction based on a pending national action. Under that decision, the Central Division held in part that a stay is not warranted here because the parties to the UPC and German revocation actions, while belonging to the same corporate family, are not the same legal entities and thus not the “same parties” as required by the one of the EU regulations interpreted by Mala (Article 29 of the Brussels I Recast Regulation). The court also declined to exercise its discretionary power to stay the case under Article 30 of that same regulation under the circumstances of the case, including the parties’ unanimous desire to have the UPC resolve the case as soon as possible, as well as various benefits stemming from “procedural economy”. 

The twists and turns in this litigation serve as an example of the unique ways in which the UPC presents both high potential rewards and great risk to patent owners. The court’s geographic reach (now spanning 18 countries, with the addition of Romania on September 1) offers the prospect of both injunctions and damages spanning that large combined market, which rivals that of the US. However, patent owners also face the risk of equally sweeping revocation actions—which can be devastating for litigation involving a small set of patents, as this case illustrates.

For further coverage of this litigation, see “UPC Overturns First Preliminary Injunction as Another NPE Takes the Plunge” (March 2024). More on other recent developments with the UPC, including the latest on certain SEP issues, can also be found in RPX’s third-quarter review. RPX members additionally have exclusive access to a webinar produced in parallel with that report that takes a closer look at the UPC, including a primer on the court and the Unitary Patent, the UPC’s caseload and NPE filings, and a look at what is attracting patent plaintiffs and litigation funders to the court, plus a deep dive on outcomes and remaining uncertainties on some key issues.