Kodak v Fujifilm (UPC_CoA_699/2025)
Decision date:
14 October 2025
Osborne Clarke summary
- This decision concerns a dispute between Fujifilm and Kodak in relation to Fujifilm's patent for planographic printing plates. Fujifilm had requested an injunction, orders to provide information in relation to the infringement to be provided within twenty-one days of the date of service of the decision, as well as orders for the destruction and recall of the infringing products. Fujifilm also requested a penalty be set in case of non-compliance with the injunction and the provision of information only.
- The Mannheim LD found Fujifilm's patent valid and infringed by Kodak and issued an injunction with an order for the payment of a penalty in case of non-compliance. It also granted the order for information, recall and removal from channels of commerce, but no penalty order was issued in relation to those orders.
- In relation to the order to provide information, the Mannheim LD exercised its discretion not to set a deadline for the information to be provided or for a penalty amount to be set. It held that these points should be addressed, if required, in an application to enforce the order.
- In April 2025, Fujifilm uploaded an enforcement notice to the UPC's case management system and requested that the Mannheim LD issued a warning to Kodak that in the event of a breach or failure to comply with the order in relation to the provision of information after the expiry of three weeks following service of the notification, Kodak should pay a penalty of up to €30,000 per day for delay and/or non-compliance. Fujifilm also uploaded similar notices with respect to the other orders but stated that the time period for compliance should be one week rather than three. Subsequently, Fujifilm also filed an application for the imposition of a penalty and for an order to take a substitutive measure.
- The judge-rapporteur rejected Fujifilm's requests for a warning. On review, the panel also denied the orders.
- Kodak argued that Fujifilm's enforcement notices: i) did not comply with the translation requirements of Rule 118.8 RoP; ii) they were unclear and conditional on the warning that had not been issued; and, iii) the time periods for compliance were not validly set and were too short. It also noted that it was working to comply with the orders. The Mannheim LD rejected these arguments. It also rejected Kodak's request for confidentiality with respect to information ordered to be provided.
- The Mannheim LD did order Kodak to pay a one-off amount of €100,000 within two weeks from the date of service of its order for failure to comply with parts of its original order and an additional penalty of €2,500 per day for further non-compliance until 4 August 2025. For every further day of non-compliance after 4 August 2025, the penalty amount was set at €10,000 per day. Kodak appealed to the Court of Appeal.
- The Court of Appeal gave guidance on the interpretation of the system of penalties set out in Rules 354.3 and 354.4 RoP. An order or decision may include a penalty amount (Rule 354.3 RoP). Generally, a penalty amount should be included in the order or decision on the merits as this "enhances legal certainty". However, there is an exception to the rule that a penalty amount may also be issued separately in a later order but which relates to an earlier order or decision. Additionally, the penalty amount for non-compliance may be set by the court, considering the importance of the order in question. The amount should be "sufficiently deterrent to be coercive, but also within reasonable limits for it to be an appropriate (proportionate) penalty".
- The penalty order must also specify the occurrence on which the penalty order should be paid, for example, as a lump sum or (preferably) for non-compliance per a specified time period, per item, per act etc. A penalty order may also set a maximum amount of penalties that may be paid overall, but that does not stop the court increasing the maximum amount in a further order for further non-compliance, if required (Rule 354.3 RoP).
- The suggested penalty amount for non-compliance as well as the time period for compliance must be included in the claimant's application. It is incumbent upon the defendant to comment on the penalty amount and time period suggested by the claimant during the relevant proceedings. If the claimant has not included a suggested amount and/or time period, the defendant may still comment on what it considers reasonable and feasible.
- If no time period for compliance is contained in the penalty order, it is the responsibility of the claimant to set a time period within the relevant order. It then falls on the defendant to dispute the reasonableness of that time period immediately after notification – it should not wait until the time period has elapsed.
- When a time period is set by the claimant and the parties disagree, the court must determine the time period based on the parties' submissions as per Rule 354.4 RoP. The reference in Rule 354.4 RoP to "penalty payments provided for in the order" means that any order to pay any penalty sum in enforcement proceedings according to this rule must be based on a prior penalty order having been made.
- If the claimant alleges that a defendant has not or has not in a timely fashion complied with a penalty-reinforced order, a penalty does not automatically become payable. The claimant must request that the court order the defendant to pay the penalty sum. The penalty amounts and time periods in the order will generally be the basis for the calculation, but the court may deviate from that in favour of the defendant for reasons of reasonableness and proportionality, if required. The court will take into account factors such as the severity of the breach, its duration, and the defendant's ability to pay.
- The burden of proof that a defendant has complied with a penalty-reinforced order lies with the defendant.
- On the basis of these principles, Kodak's appeal was successful in part. As per Rule 354.4 RoP, any order for the payment of a penalty sum due to non-compliance requires a prior order reinforced by a penalty payment that has not been complied with. As such, the Court of Appeal held that the €100,000 lump sum payment Kodak was order to pay should be set aside as it lacked legal basis because it was not part of the original order.
- The other penalty amounts set by the Mannheim LD were upheld. The Court of Appeal noted that the Court of First Instance has a "wide discretion" in this regard and Kodak had not convinced it that the amounts set were inappropriate. If Kodak believes there are mitigating factors that call into question the amounts, these must be submitted and substantiated by Kodak and decided upon by the Mannheim LD in proceedings pursuant to Rule 354.4 RoP.
- None of Kodak's other arguments were upheld. Kodak's complaint regarding inadequate translation was rejected because the information concerned was not essential to the local enforcer therefore a translation was not necessary.
Issue
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