The UPC injuncts directors as "intermediaries" to infringement

In its latest infringement decision, Koninklijke Philips v Belkin (UPC_CFI_390/2023) the Local Division Munich has provided guidance on who may be injuncted as an “intermediary” under Article 63(1) UPCA. In this case, this has included directors and managing directors of the liable defendant companies.

In essence, the Munich Division states, an intermediary is a party able to influence the infringing act in the first place, or who can terminate it. There are no further requirements, such as the breach of duties of care.

An intermediary is not, the court continues, limited to providers of intermediary services. It is merely a party that offers a service that is used for infringement and thereby creates a precondition for the infringer to be able to carry out its infringing act. Also, the activity of the intermediary does not have to be visible to the purchaser of an infringing product.

A special relationship, such as the relationship of a managing director to the company it manages, does not prevent qualification as an intermediary, but offering a service does at least mean that the party providing it carries out a specific activity for remuneration. A managing director is both in a position to at least co-determine the company’s activities and their role implies remuneration. 

The decision in Koninklijke Philips v Belkin appears in principle, however, to apply even more broadly to other directors and members of the management body. Indeed, in this case, individual directors and managing directors were ordered to refrain from exercising those services of the defendant companies that enabled the infringing acts to be carried out. 

Whilst there is no liability for damages on the part of intermediaries under Article 63(1) UPCA, penalties for breach of the injunctions were applied.

The application of injunctions to directors in this decision, and the relatively broad reach that it appears to apply to "intermediaries" in an infringement, has the potential to considerably up-the-stakes for defendants in infringement actions in the UPC.