Short Summary
This case concerns the withdrawal of infringement and revocation proceedings involving EP 2727342 at the Milan Local Division. Following Digital River Ireland Ltd.'s insolvency and winding-up order by the High Court of Ireland, both Ericsson and Digital River sought to withdraw their respective claims against each other. The Court allowed both withdrawals, with the main infringement action continuing against Asustek and Arvato, and ordered both parties to bear their own costs based on principles of fairness and equity.
Detailed Summary
On 14 June 2024, Telefonaktiebolaget LM Ericsson filed an infringement action concerning EP 2727342 against Asustek Computer Inc., Arvato Netherlands B.V., and Digital River Ireland Ltd. at the Milan Local Division. On 29 November 2024, the Defendants filed a joint statement of defence and counterclaims for revocation. On 28 February 2025, the Defendants applied to stay the proceedings under rules 295 and/or 311 RoP, citing Digital River's insolvency proceedings in Ireland. They submitted the decision of the High Court of Ireland dated 24 February 2025, which ordered that Digital River be wound up by the Court.
Following Digital River's insolvency, on 13 March 2025, Ericsson filed an application for leave to withdraw the infringement action against Digital River, submitting that Digital River should bear its own costs in the interest of equity, as the withdrawal was solely due to Digital River's insolvency. Digital River did not object and filed its own application to withdraw its counterclaim for revocation against Ericsson, requesting an interim award of costs of 5,500 EUR. Ericsson agreed to Digital River's withdrawal of the counterclaim and requested an interim order of costs of 5,500 EUR pursuant to rules 265.2(c) and 150.2 RoP. On 14 April 2025, Digital River's representatives confirmed that the liquidators appointed by the High Court of Ireland had confirmed their instructions to withdraw the counterclaim for revocation.
The Court applied rule 265.1 RoP, which allows a claimant to withdraw an action as long as there is no final decision, and rule 311.3 RoP, which permits withdrawal against an insolvent defendant. Since both parties agreed on mutual withdrawal, the Court allowed the withdrawal of the infringement action against Digital River, with the main action continuing against Asustek and Arvato. The Court also allowed the withdrawal of Digital River's counterclaim for revocation, with the counterclaim action continuing among Asustek and Arvato against Ericsson.
Regarding costs, the Court applied rule 265.2(c) RoP and Article 69 UPCA. The Court noted that the withdrawals were partial and that the main action and counterclaim would continue. The Court acknowledged that the delay due to insolvency would likely serve no purpose to Ericsson if the infringement action were successful. The Court considered that the mutual withdrawals were due to circumstances beyond any party's control and found no reason to conclude that any party was unsuccessful. Furthermore, since the patent invalidity action was filed by all three Defendants uniformly without differences in content, there was no increase in Ericsson's legal costs related to Digital River's counterclaim. Consequently, the Court held that principles of fairness and equity required both Ericsson and Digital River to bear their own costs in relation to the withdrawal proceedings. The decision was issued on 7 May 2025, with information provided regarding the right to appeal within two months of notification.
Practitioner Note
This case demonstrates the evidentiary and procedural standards applied in patent matters before Milan (IT) Local Division. Understanding the court's reasoning in Telefonaktiebolaget LM Ericsson vs Asustek Computer Inc., Arvato Netherlands B.V., and Digital River Ireland Ltd. is valuable context for structuring arguments or assessing risk in similar proceedings.
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