The Court of Appeal (CoA) recently rejected two applications, in separate proceedings, to suspend the enforcement of orders for corrective measures to be taken with regard to infringing products, pending the outcome of the relevant substantive appeals to the CoA against the findings of the Court of First Instance (CFI). Those decisions by the CoA reinforce the front-loaded procedure before the UPC, highlighting the need to file substantiated requests and the reluctance of the CoA to admit arguments that were not made in the original statements of case.
It is set out in Art. 74(1) UPCA that an appeal shall not have suspensive effect unless the CoA decides otherwise at the motivated request of one of the parties. According to Rule 223(2) RoP any application for suspensive request should set out (a) the reasons why the lodging of the appeal shall have suspensive effect and (b) the facts, evidence and arguments relied on.
The relevant circumstances that could justify an exception to the principle that an appeal has no suspensive effect include evident errors in the contested order or decision, or if the enforcement of the contested decision would render the appeal devoid of purpose.
It seems so far that the UPC may be less flexible than UK courts when considering the appropriateness of granting applications for suspensive effect (similar to granting a stay of an injunction in the UK). UK courts, when granting a stay, have the discretion to include a variety of terms or conditions; for example, the Court could exercise its discretion to require infringing products to be placed under joint control pending the outcome of an appeal (rather than destroying them) or require a defendant to pay a weekly sum as an interim payment on account of damages in lieu of an injunction (Adaptive Spectrum and Signal Alignment Inc v British Telecommunications plc [2014] EWCA Civ 1513).
Granting an application for suspensive effect with such conditions attached could be a satisfactory result for both parties before the UPC, but it remains to be seen if this will happen in practice.
Knaus Tabbert AG v. Erwin Härtwich, Yellow Sphere Innovations GmbH (UPC_CoA_365/2025)
The first application for suspensive effect was in the context of the Düsseldorf Local Division refusing to order security to be put up by the patentee to compensate any damage suffered by the Defendant from destroying products, in the situation that the infringement decision was set aside on appeal.
The Defendant in the first instance proceedings, Knaus Tabbert AG, was found by the CFI to have infringed EP 3 356 109, co-owned by Yellow Sphere Innovations GmbH and Erwin Härtwich, directed towards a vehicle frame. Part of the order handed down was for Knaus Tabbert AG to destroy any infringing products, which amounted to entire caravans (worth up to €41,400 each) because they inextricably comprised the infringing frame. The CFI rejected an unsubstantiated request by the Defendant that the patentees should be required to put up a security deposit, noting that "the Defendant has not put forward any reasons for making enforcement of this order dependent on provision of security".
The Defendant subsequently filed an application to the Court of Appeal seeking to suspend the order of the local division pending appeal, or at least make it subject to a security deposit, because of new evidence that had come to light raising concerns about the ability of the patentees to pay damages. However, the CoA found that there was no reason to admit submissions related to the financial situation of the patentees for the first time in the present proceedings because it was incumbent on the Defendant to present some such facts first during proceedings before the CFI when they could reasonably have done so. The CoA further held that the refusal by the LD to require security from the patentee was not manifestly erroneous, and there was no risk that enforcement of the order would render the appeal largely moot.
It appears that had concerns about the ability of the patentee to pay damages been raised properly at first instance, the CoA may then have allowed the new evidence relevant to the financial situation and may have decided, balancing the interests of both parties, that the appeal had suspensive effect or that security was now required.
This highlights the importance at the UPC concretely to set out, as far as possible, all grounds and evidence in the first relevant written pleading. In this case, the outcome might have been different if the defendant had substantiated their request for deposit of security at first instance.
The Defendant then appealed the decision to refuse the application for suspensive effect (UPC_CoA_413/2025). The CoA confirmed it "merely ruled that where facts, such as the alleged poor financial situation of Yellow Sphere, could reasonably have been submitted during proceedings before the CFI, as is the case here, such facts shall be disregarded if submitted for the first time in the procedure for suspensive effect (R. 222.2 RoP)" and found the appeal inadmissible.
Hurom Co., Ltd. v. NUC Electronics Co., Ltd (UPC_CoA_434/2025)
The second application for suspensive effect concerned an order, following a finding of infringement by the Mannheim Local Division, for the Defendant to provide the patentee with detailed information regarding the extent to which it had committed infringing acts. The information to be provided included manufacturing quantities and times, individual deliveries and offers, and the identify of all third parties involved in the distribution.
The Defendant argued in their application for suspensive effect that this information contained highly confidential business secrets, and such an irreversible disclosure to the patentee would cause unjustified irreparable damage in the event that the decision by the CFI was overturned on appeal. The Defendant argued that complying with the order would provide the patentee, a direct competitor, with sensitive economic business information that was at risk of being strategically misused for the patentee's own market positioning.
The CoA found that the mere claim that suspensive request is necessary because of a risk of irreparable damage, without further substantiation, does not demonstrate that the order by the CFI to provide such information is manifestly erroneous. They further held that the Defendant had not shown the appeal would become devoid of purpose without suspensive effect. The application for suspensive effect was dismissed.
This again highlights the need to fully substantiate arguments when seeking to suspend the enforcement of orders. The onus is on the applicant to justify an exception to the principle that an appeal has no suspensive effect and it is crucial to present the facts, evidence and arguments relied on in accordance with Rule 223(2)(b) RoP. In the present case, the Defendant could have included some specific examples as to how the misuse of the information would render the appeal devoid of purpose.
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