2024-05-28 - CoA - Carrier v. BITZER Electronics

1. Article 33(10) UPCA and Rule 295(a) RoP must be applied and interpreted in accordance with the fundamental right to an effective legal remedy and a fair and public hearing within a reasonable time as guaranteed by Article 6 of the European Convention for the Protection of Human Rights and Fundamental Freedoms and, to the extent that European Union Law is concerned, Article 47 of the Charter. These provisions must also be applied and interpreted in accordance with Articles 41(3), 42 and 52(1) UPCA on the basis of the principles of proportionality, flexibility, fairness and equity (point 2 of the Preamble of the RoP). 2. In accordance with these principles, proceedings must be conducted in a way which will normally allow the final oral hearing at first instance to take place within one year whilst recognizing that complex actions may require more time and procedural steps, and simple actions less time and fewer procedural steps (point 7 of the Preamble of the RoP). Case management must be organized in accordance with this objective (point 7 of the Preamble of the RoP). It follows that, as a general principle, the Court will not stay proceedings. Otherwise, the Court cannot ensure that the final oral hearing will normally take place within one year. 3. The mere fact that the revocation proceedings before the UPC relate to a patent which is also the subject of opposition proceedings before the EPO is not sufficient to allow an exception to the principle that the Court will not stay proceedings. The Convention on the Grant of European Patents and the UPCA allow third parties to challenge the validity of a patent in both opposition and revocation proceedings and allow them to initiate revocation proceedings while opposition proceedings relating to the same patent are pending. 4. The principle of avoiding irreconcilable decisions does not require that the UPC always stay revocation proceedings pending opposition proceedings. Firstly, decisions in which the UPC and EPO issue different rulings on the revocation of a European patent are not irreconcilable. Where one body upholds the patent and the other revokes it, the latter decision will prevail. Secondly, the interests of harmonising decisions on the validity of a European patent can be promoted by ensuring that the body that decides last can take the decision of the body that decides first into account in its decision. That means that the interests of harmonisation in general do not require a stay by the UPC where it can be expected that the UPC will issue its decision first. 5. Pursuant to Article 33(10) UPCA and Rule 295(a) RoP, an exception to the principle that the Court will not stay revocation proceedings pending opposition proceedings applies when a rapid decision may be expected from the EPO. The terms “rapid” and “rapidly” in these provisions must be interpreted in the light of the principles set out above and the relevant circumstances of the case, such as the stage of the opposition proceedings and the stage of the revocation proceedings. The term “may” in Article 33(10) UPCA and Rule 295(a) RoP means that the Court has a discretionary power to stay the proceedings when a rapid decision may be expected from the EPO. Whether or not a stay is granted depends on the balance of the interests of the parties. 6. The mere fact that the EPO has granted a request to accelerate the opposition proceedings is not sufficient to stay revocation proceedings before the UPC. Rule 298 RoP provides that the Court may stay its proceedings “in accordance with Rule 295(a) RoP” pending accelerated opposition proceedings. Therefore, in that situation the same criterion applies, namely the requirement of Rule 295(a) RoP that the decision in the opposition proceedings may be expected to be given rapidly. Obviously, acceleration is relevant to the assessment, since the pace of the proceedings determines when the decision of the EPO can be expected. Acceleration as such is however not sufficient for establishing the expectation of a rapid decision within the meaning of Rule 295(a) RoP.

Carrier Corporation holds EP 3 414 708 (adaptive sensor sampling for cold-chain distribution, validated in DE/FR/UK). On 28 June 2023 BITZER filed an opposition at the EPO; on 29 June 2023 BITZER filed a revocation action at the Paris CD (UPC_CFI_263/2023) against claim 1. On 1 November 2023 Carrier asked the EPO to accelerate the opposition. On 1 December 2023 Carrier applied under Art. 33(10) UPCA / R.295.1(a) RoP for a stay of the UPC revocation pending the EPO opposition outcome, arguing that the opposition subsumes the revocation territorially and substantively and that parallel litigation is inefficient. The Paris CD rejected the stay request on 8 January 2024 and granted leave to appeal. Carrier appealed. The CoA (Panel 1a — Grabinski P, Barutel, Blok rapporteur) — sitting as a 3-legal panel (non-technical matter, consistent line of case law) — REJECTS the appeal and lays down the LANDMARK six-headnote framework on staying UPC proceedings pending EPO opposition: **H1**: Art. 33(10) UPCA and R.295(a) RoP must be applied and interpreted per Art. 6 ECHR and (for EU-law matters) Art. 47 Charter, and per UPCA Articles 41(3), 42, 52(1) on proportionality, flexibility, fairness and equity (Preamble point 2). **H2**: Proceedings must normally allow the final oral hearing at first instance to take place within ONE YEAR (Preamble point 7); case management must serve this objective. As a GENERAL PRINCIPLE, the Court will NOT stay proceedings. **H3**: Mere pendency of EPO opposition on the same patent is NOT sufficient to allow an exception. EPC and UPCA expressly allow revocation proceedings while opposition is pending. **H4**: Principle of avoiding irreconcilable decisions does NOT require the UPC always to stay. (i) UPC and EPO rulings on revocation are not irreconcilable — where one upholds and the other revokes, the revocation prevails. (ii) Harmonisation is achieved by the body deciding later taking the earlier decision into account; so harmonisation does not require a stay where UPC is expected to decide first. **H5**: The Art. 33(10) / R.295(a) exception applies when a RAPID decision may be expected from the EPO. 'Rapid'/'rapidly' is interpreted in light of the principles and the relevant circumstances (stage of opposition, stage of revocation). 'May' = discretionary power; balance of parties' interests. **H6**: Mere EPO acceleration is NOT sufficient (R.298 RoP still applies R.295(a)'s 'rapidly' criterion). Acceleration is relevant to assessing the expected pace, but not determinative. Applied: UPC oral hearing scheduled 21 June 2024; EPO oral proceedings scheduled 25 October 2024; UPC decision expected first. No rapid EPO decision expected. Continuing the revocation in parallel with the opposition places no unreasonable burden — revocation is already at oral-procedure stage (low incremental cost). Respondent's legitimate interest in a UPC freedom-to-operate decision outweighs Carrier's stay interest. Appellant's CJEU referral request on composition of CoA panels is dismissed (non-technical subject matter; no Art. 267 TFEU question); previous consistent case law confirmed (UPC_CoA_320/2023 etc.). Incidental holdings: the right to be heard does not require a second written round on a stay request (CFI has broad discretion). Appellant's amendments of pleadings admitted on both (composition; 30 April 2024 CFI order on amendments) because respondent raised no reasonable objection. Appeal rejected.