Hand Held Products v Scandit (UPC_CFI_74/2024)

• Hand Held Products brought an application for a preliminary injunction against Scandit. The application alleged that Scandit's software development kit allowed users to develop software that performed the patented functions and therefore infringed Hand Held Products' patent concerning barcode scanning technology.
• The preliminary injunction was awarded on the basis of indirect infringement of the patent. The court held that the software development kit more likely than not indirectly infringed the patent.
• Scandit argued that the kit did not implement the patented features directly, and that the kit required the user to carry out further customisations to infringe the patent. Scandit argued that any potential infringement was a result of the action of customers, rather than the kit itself.
• The court held that there was no direct infringement, but indirect infringement was likely. The kit provided the tools that allowed customers to develop software capable of infringing the patent. The kit had to be incorporated into the operating system of a device to be infringing or to be used for the claimed method. In coming to its decision, the court summarised the legal test for indirect infringement:

“A patent shall confer on its proprietor the right to prevent any third party not having the proprietor’s consent from supplying or offering to supply, within the territory of the Contracting Member States in which that patent has effect, any person other than a party entitled to exploit the patented invention, with means, relating to an essential element of that invention, for putting it into effect therein, when the third party knows, or should have known, that those means are suitable and intended for putting that invention into effect.”

• The Munich LD held that the kit was a means relating to an essential element of the invention, which allowed users to create a program that made literal use of the claimed invention. The court considered that Scandit had the necessary knowledge for indirect infringement by reference to videos and documentation published by it, which showed it was offered to customers to make use the patented invention.
• In light of the indirect infringement finding, the Munich LD stated that ordering the preliminary injunction was necessary as per Rule 206.2(c) RoP to prevent the continuation of the infringement or at least to prevent imminent infringement. Hand Held Products was also found to have acted with the requisite urgency and the weighing of interests favoured the grant of the preliminary injunction.
• Although the Munich LD noted that the disadvantages for Hand Held Products could not be compensated monetarily in the event of non-grant of the preliminary injunction, this was offset by the fact that Scandit also could not be compensated monetarily in the case of wrongful grant of the preliminary injunction. However, in this situation, the court stated that the interests of the patent proprietor are "regularly to be given preference". That was especially the case here as Scandit had conceded that the use of its kit was possible and still useful without the infringing functionality, and that adaptation of the kit was possible in principle.
• The court considered whether a relative prohibition, such as warnings to customers, would prevent further infringement. The court explained that in a case of indirect or contributory infringement, it must always be assessed whether a relative or absolute prohibition should be issued. Here, the court considered that Scandit could remove the disputed function from the kit by means of a software update. This update would not mean that the kit was unusable and the kit could still be used for non-infringing functionalities. However, the court noted that it would be much more difficult to control the behaviour of a large number of customers, especially as the software developed with Scandit's kit would mostly be used within the customers' internal operations. As such, the court held that an absolute prohibition was justified in the circumstances of this case.
• Scandit requested security for costs in the sum of €500,000, arguing that the hearing and proceedings for the recognition and enforcement of a foreign claim for damages in the USA (where Hand Held Products is located) would result in considerable legal costs, which, even if successful, would not have to be reimbursed by Hand Held Products. Hand Held Products did not comment on this request and therefore the court held the request to be undisputed under Rule 171.2 RoP. Accordingly, the Munich LD ordered Hand Held Products to pay the requested €500,000 security.

This analysis is based on a machine translation of a decision not available in English.