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The UPC Court of Appeal (CoA) has held that when considering the liability of managing directors for the infringement of a patent by their companies, their mere status as managing directors does not make them an accessory to their company's patent infringement; more deliberate involvement is required as well as the knowledge that the company's acts are infringing. This approach also applies to other third parties who, like any director, must be acting as an instigator, accomplice or accessory to the company's infringement (or any party's infringement) to be liable.
In the same decision the CoA confirmed that remedial measures (recall, removal from distribution channels and destruction of infringing items) are the norm to accompany injunctive relief and that the burden of proof is on the infringer to show that these are not proportionate.
The case is also interesting in that Philips had already attempted to enforce the same patent against two of the three defendant companies in a German national court and had failed. The UPC CoA applied German national law in relation to res judicata, resulting in the final order here applying only to the activities of those two defendant companies outside Germany. However the defendant not involved in the national proceedings was liable and the German national decision did not impact on the UPC's ability to find infringement of the non-German designations (BE, FR, FI, IT, NL. AT and SE) and the finding of invalidity in the German proceedings did not form part of the res judicata as only the outcome was relevant, not the underlying reasons.
In an unusual step demonstrating the importance that the UPC puts upon this decision of its CoA, a summary of this decision appeared on the UPC website's News page on the day of the judgment (see here: UPC Court of Appeal has ruled on the liability of company directors for infringement committed by their companies | Unified Patent Court).
The CoA's findings
The CoA granted a permanent injunction to Philips in the latter's disputes with various Belkin entities (3 October 2025, CoA 534/2024, 19/2025 and 683/224 - here in German) and held that the question of who is "offering" infringing goods within the meaning of Art 25(a) UPCA (and so is infringing) is to be determined on basis of an "autonomous interpretation" of Articles 63 and 25 UPCA in conjunction. The CoA also commented on the ordering of remedial measures such as recall, removal from distribution channels and destruction stating that this was the norm for an injunction and that the infringer bears the burden of proof and must demonstrate that the measures are disproportionate if they are not to be ordered.
The CoA concluded that,
- Under Art 25(a), "offering is to be understood in the economic sense and is not to be based on the legal understanding in the sense of a binding contractual offer. The offer therefore does not have to contain all the details that would be necessary for the immediate conclusion of a contract by mere acceptance of the offer. It is sufficient to present an object in such a way that viewers can make an offer for transfer, e.g. for the conclusion of a purchase, rental or lease agreement. So the "invitation ad offerendum" is already covered. Therefore, it is not necessary to indicate a price". "A willingness to deliver or the possibility of delivery is not relevant for the concept of offering".
- It follows that, under Art 63(1), in conjunction with Art 25(a), an 'infringer' is also someone who does not themselves carry out the infringing acts specified in Art 25, but to whom the infringing acts of a third party are attributable because they are an instigator, accomplice or accessory to the infringing acts.
- The mere position of managing director does not make them an accomplice or accessory to a company's patent infringement.
- A managing director (or director) can only be held liable if
the contested action of the managing director goes beyond their
typical professional duties as managing director.
- This is particularly the case if the director deliberately uses the company to commit patent infringements.
- However, it also applies if the managing director knows that the company is committing a patent infringement and, despite it being possible and reasonable for them to do so, they fail to take action to stop it.
- Liability only arises if the managing director is aware not just of the circumstances from which a patent infringement arises, but that the company's acts constitute patent infringement (ie is aware of the illegality of the acts).
- If the managing director seeks legal advice on the matter, they can generally rely on this advice until a decision has been issued by the Court of First Instance establishing the company's patent infringement.
In this case, various Belkin companies had (inter alia) appealed the finding by the Munich Local Division (LD) (CFI_390/2023, 13 September 2024 (German)) of liability of their managing directors for infringement of Philips' patent for a wireless inductive power transmission system. The CoA held that the required conditions for liability under Art 63(1) UPCA had not been fulfilled in respect of various Belkin managing directors.
The CoA confirmed that under Art 63(1) the infringer can be injuncted whether or not it has any knowledge of the infringement but that the intermediary must have knowledge of the illegality of the acts, not just the circumstances.
Interestingly the CoA drew support for its finding that simply by being a managing director that person would not be liable for the infringing acts of the company from UK law. Since the UK had originally sought to become a UPCA contracting state, "for reasons of legal certainty, such far-reaching liability of the managing director would have required an express provision by the legislature. The necessity of an express provision is also supported by the fact that, in view of the uncertainties that are regularly associated with the question of the validity of the patent and its infringement, especially in the case of companies such as Belkin, which are active in a field of technology in which a large number of patents with different subject-matter are in force, such liability is associated with an incalculable risk for the managing director".
Article 63(1) 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.
Recognition of judgments under the Brussels Regulation (BR) and res judicata
Belkin had argued that the earlier decision of the Regional Court of Dusseldorf in a dispute over the same patent between some of the same parties (Belkin GmbH and Belkin Ltd but not Belkin International which was also a defendant in the UPC action) where the patent had been found invalid and the infringement action was dismissed – should preclude any action against all of the defendants in the UPC action. The CoA did not agree.
- To start with Belkin International was not party to the German national decision and therefore there could be no res judicate effect against it. The CoA applied German national law to determine the effect of the national decision on a non-party, finding that the conditions under which re judicate may exceptionally be extended to third parties under this law were not met in this case. It also held that Art 36(1) BR on mutual recognition of judgments did not apply here.
- The CoA held that the reasoning behind the decision of the Regional Court of Dusseldorf did not form part of the res judicata, only the actual result as between the parties: "the res judicata effect only covers the operative part and not the reasons underlying the operative part and thus the interpretation of the patent."
"According to the relevant German civil procedure law (see paras. 164-165), the res judicata effect of the judgment of the Regional Court of Düsseldorf does not cover the interpretation of the patent. According to Section 322(1) of the German Code of Civil Procedure, judgments are only res judicata insofar as they decide on the claim brought by the action or counterclaim. Res judicata is thus limited to the immediate subject matter of the dispute, i.e. to the legal consequence which, on the basis of a specific set of facts, forms the subject matter of the decision at the end of the oral proceedings. The determination of the preliminary legal relationships or other preliminary questions on which the decision is based, from which the judge draws the conclusion as to the existence or non-existence of the legal consequence claimed by the plaintiff, does not become legally binding."
The CoA continued: "Even if one were to follow Belkin's opinion and thus consider the main reasons for the Regional Court's judgment to be covered by its legal force, this would not lead to a different result in this case."
"In any case, until the entry into force of the UPCA a European patent was subject to the national law of each of the contracting states for which it had been granted, as can be inferred from Art. 2(2) and Art. 64(1) UPCA. Consequently, any action for infringement of a European patent, as can be inferred from Art. 64(3) UPCA, had to be examined on the basis of the relevant national law applicable in each of the states for which the patent had been granted and was effective (see ECJ, judgment of 13 July 2006, C-539/03 ECR 2006, I-6535, Roche Nederland and others, paras. 29 and 30; judgment of 12 July 2012, C-616/10, ECLI:EU:C:2012:445, Solvay v Honeywell and others, para. 26). If the decisions of the national courts do not concern the same national parts of the patent, they do not concern the same legal and factual situation (see ECJ, Roche Nederland, paras. 27 and 31; Solvay/Honeywell and others, para. 25). The assessment of the factual and legal situation by the court first seised therefore has no effect on the assessment of the different factual and legal situation by the court last seised."
The CoA held that Article 34 UPCA did not provide for any deviation from this:
"According to this provision, in the case of a European patent, the decisions of the court shall have effect in the territory of those Contracting Member States for which the European patent has effect. Belkin unsuccessfully argues that it necessarily follows from the interaction between Article 34 UPCA and Article 36 Brussels I Regulation that if the interpretation is binding on one Member State, that interpretation must be applied to all Contracting States in which the contested patent is in force. Article 34 UPCA only concerns the territorial scope of decisions of the Unified Patent Court and has no influence on the legal force of a decision of a national court of a contracting member state. In particular, it cannot be inferred from Article 34 UPCA that if the Unified Patent Court is bound by a decision of a national court, the binding effect also extends to other contracting member states. It follows from Article 34 UPCA only that prohibition orders issued by the Unified Patent Court generally apply to all contracting member states. However, this does not apply without restriction. In special circumstances, such as in the case of a territorial limitation of the action (Court of Appeal, 3 March 2025, UPC_CoA_523/2024, APL_51115/2024, Sumi v Syngenta, para. 103), the territorial scope of the decision is limited. The same applies if, as in this case, the legal force of a decision by a court of a Contracting Member State precludes a decision by the Unified Patent Court for the territory of that Contracting Member State. In this case, the territorial scope of an injunction issued by the Unified Patent Court cannot extend to the territory of that Contracting Member State . However, this does not mean that an injunction is also excluded for other Contracting Member States."
Recall, removal from distribution channels and destruction
The CoA confirmed that the ordering of remedial measures is the norm for an injunction:
"Article 64 UPCA grants the patent proprietor a civil law claim to the measures mentioned, provided that this is not precluded by reasons of proportionality. Article 64 UPCA implements Article 10 of Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 (the Enforcement Directive). The background to the Directive was that in some Member States, procedures and remedies such as the recall of infringing goods from the market at the expense of the infringer were not available (Recital 7). The Enforcement Directive was intended to approximate these legal provisions in order to ensure a high, equivalent and homogeneous level of protection for intellectual property in the internal market (Recital 10). This high level of protection can only be guaranteed if the remedies of recall, removal from the distribution channels and destruction are the norm. Only if the measures are disproportionate, which may be the case, for example, if the infringement is minor or if the infringer is willing and able to eliminate the infringing nature of the product, can they be ruled out. However, all circumstances of the individual case must always be taken into account. For example, an infringement that can be classified as serious may justify ordering recall, removal from distribution channels and destruction even if the infringer is willing and able to eliminate the infringing characteristic of the product."
The CoA commented that Belkin had "rightly" pointed out that "a recall is usually very burdensome for the infringer due to the interference with its customer relationships and removal from distribution channels. However, this does not justify refraining from ordering remedial measures as a rule. If, due to the established patent infringement, the patent holder must expect further patent-infringing use of the contested embodiments, the existing risk situation regularly justifies the aforementioned remedial measures."
At first instance the Munich LD had assumed that there were no indications that the recall and removal from the distribution channels could be proportionate and that the same applied to destruction. However, Philips challenged this on appeal, successfully.
The CoA held that Philips was not obliged to present the weighing criteria in detail.
" [as explained above] ... the ordering of the aforementioned remedial measures is the norm. The infringer therefore bears the burden of proof and demonstration of the lack of proportionality. This is also supported by the fact that the disadvantages for the infringer resulting from the requested remedial measures (i.e. the severity of the interference with customer relationships, in particular its consequences) are generally unknown to the patent holder bringing the action. The same applies to the infringer's willingness to bring the material into a non-infringing state and to the interests of third parties. Only when the infringer has fulfilled its burden of proof and presentation in this respect is it incumbent on the patent holder bringing the action to respond to this submission."
Acknowledging that proportionality is always a consideration, the CoA confirmed that in examining an application for remedial/corrective measures, in accordance with Article 64(4) EPC, shall take into account the requirement of proportionality between the seriousness of the infringement and the remedial measures to be ordered, the willingness of the infringer to bring the material into a non-infringing state, and the interests of third parties. However, Belkin did not present any specific circumstances as to why these measures were disproportionate in this particular case, but merely made a general statement that these remedial measures would be generally very burdensome for the infringer. Belkin had therefore failed to satisfy its burden of proof and presentation in relation to such measures not being ordered as would be the norm for a permanent injunction.
At the first instance, Philips had not provided a deadline for the provision of information on the infringements and distribution channels. The CoA said it was too late for this to be provided now but that if no deadline is set in the final order or decision, it is up to the plaintiff to set a deadline for the defendant to take the aforementioned remedial measures when notifying the defendant of the intention to enforce the order pursuant to UPC Rules of Procedure 118.8.
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