Headwater v Motorola & Flextronics (UPC_CFI_149/2024 & UPC_CFI_127/2024)

• Headwater sued multiple Motorola entities and an alleged distributor for infringement of its patent (EP 069). Each of the defendants raised objections relating to the Munich LD's competence. The Munich LD rejected all of the preliminary objections.
• Defendants 1 and 2, both based in the USA, made a preliminary objection concerning the Munich LD's competence under Rule 19.1 RoP. The court dismissed these objections on procedural grounds as they were filed a day after the one month deadline for filing the objection.
• The objections by defendants 3 and 5 (defendant 4 having been removed from the case due to insolvency) were admissible but unsuccessful on the merits. The Munich LD's competence over defendant 3 arose from Article 33(1)(b) UPCA as its registered office is in Germany. The Munich LD had competence over defendants 1 and 2 also pursuant to Article 33(1)(b) UPCA because defendant 3 served as an anchor defendant, there was a business relationship between the defendants and the case concerned the same acts of alleged infringement.
• The court also found it had competence over defendant 5 pursuant to Article 33(1)(a) and (b) UPCA. The Munich LD found that there was a business relationship between defendants 1-3 and defendant 5 within the meaning of Article 33(1)(b) UPCA. Moreover, although defendant 5 was not part of the Lenovo or Motorola group, the court found that it was involved in the distribution of the challenged embodiments in Europe and that it had made a delivery of the attacked product manufactured by defendant 1 to Germany, bringing it within the scope of Article 33(1)(a) UPCA.
• In relation to Article 33(1)(b) UPCA, the court set out that the commercial relationship between an anchor defendant and its co-defendants must have a certain "quality and intensity". However, the court explained that this should not be understood too narrowly in order to avoid the potential for parallel proceedings with potentially irreconcilable decisions. Thus, being part of the same corporate group and being engaged in connected commercial activities such as R&D, manufacturing, sales and distribution was deemed sufficient to meet the business relationship requirement.
• The joint decision relating to the second defendant is available in full here.

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