UPC_CFI_508/2023, UPC_CFI_509/2023 – Air Up Group v Guangzhou Aiyun Yanwu

Expert Commentary

Service of PI proceedings Background and decision 1. For a year, the Registry have tried all methods indicated in the The Hague Service Convention to serve the Statement of Claim in preliminary injunction (“PI”) proceedings on the Chinese defendants. The Court refers to Art. 15 of the The Hague Service Convention, which provides that “Each Contracting State shall be free to declare that the judge […] may give judgement even if no certificate of service or delivery has been received, if all the following conditions are fulfilled: a. the document was transmitted by one of the methods provided for in this Convention; b. a period of time of not less than six months, considered adequate by the judge in the particular case, has elapsed since the date of the transmission of the document; c. no certificate of any kind has been received, even though every reasonable effort has been made to obtain it through the competent authorities of the State addressed”. 2. The Court states that the Rules of Procedure require (at least) service by an alternative method (R. 275.1 RoP), but that such alternative service is not possible if that is contrary to the law of the state where service is to be effected (R. 275.4 RoP) which appears to be the case here. 3. The Court refers to R. 275.2 (which would allow to declare steps for alternative service already undertaken as good service) and states that under that rule it is not possible to consider steps already taken to effect normal service as good service, and that therefore there is a gap (as the latter possibility is not provided for). The Court (nevertheless) gives an Order stating that the steps already taken to effect normal service are to be considered as good service and that the service is effective as of the date of the Order. The defendant is given 14 days to file an Objection against the application of provisional measures. Comment 1. It is by now clear that China is not willing to cooperate with the service of the Statement of Claim as provided for in The Hague Service Convention. 2. However, I do not understand the parties, the Registry and the Court. There is absolutely no problem to effect very speedy service in PI proceedings under the The Hague Service Convention. Apparently, nobody has read the last paragraph of Art. 15, which reads as follows: “Notwithstanding the provisions of the preceding paragraphs the judge may order, in case of urgency, any provisional or protective measures.” 3. So, what should happen is that the claimant asks the judge to set the conditions for a request for a PI. The Court would be wise to set as a condition that the Statement of Claim is sent (e.g. by email) to the Chinese company, and that furthermore the claimant convinces the Court that the Chinese company knows (or should know) about (i) the Statement of Claim and its contents (the case should be filed in English); (ii) the date on which the defendant has to respond; (iii) the date on which the oral hearing takes place; and (iv) that the defendant has to be represented by an UPC representative. Lastly. the Chinese company should be warned that in the event of non-appearance, the Court may issue a default decision. 4. So, my conclusion is that in fact there is no problem!

Full Decision Text

1 Order of the Court of First Instance of the Unified Patent Court Local Division Munich issued on December 9th 2024 Headnotes: 1. Rule 275.1 RoP also applies if a foreign authority refuses formal service according to the Hague Service Convention seriously and definitively. A serious refusal of service is also given if a request for service is not processed for more than six months without any apparent reason. 2. To be considered as an alternative method of service (Rule 275.1 RoP), the method must be factually and legally possible. 3. According to Rule 275.2 RoP, an unsuccessful attempt to serve documents by means of Rule 274.1 a) (ii) RoP usually is not acceptable as good service. Only if an attempt of service under Rule 274 RoP has failed and service by an alternative method or at an alternative place is neither possible nor reasonable, the court may order that an unsuccessful attempt of service under Rule 274 RoP is good service. Local Division Munich UPC_CFI_508/2023 ACT_597609/2023 App_64018/2024 2 APPLICANT air up group GmbH, Friedenstraße 22a, 81671 Munich, Germany represented by: Jan Boesing DEFENDANT Guangzhou Aiyun Yanwu Technology Co., Ltd., A09-3, No.9, Chentian Dashigang S.Road, Huangshi Street, Baiyun District, Guangshou, China PATENT AT ISSUE EP 3 655 341 PANEL/DIVISION Panel 1 of the Local Division Munich DECIDING JUDGE/S This order has been issued by the judge-rapporteur Tobias Pichlmaier LANGUAGE OF THE PROCEEDINGS English SUBJECT-MATTER OF THE PROCEEDINGS Application for preliminary measures; service 3 SUMMARY OF FACTS The proceedings concern an application for preliminary measures. The defendant is domiciled in China. The applicant has not requested for an ex-parte proceeding. Therefore, the service of the application at the defendant's domicile was arranged. The history of service is as follows: 27/12/2023 Applicant files application for interim measures and pays court fees 04/01/2024 Court’s registry starts preparations for the formal service of the application in China according to Article 5 (1) of the Hague Service Convention 02/02/2024 In order to speed up the service, Applicant at the suggestion of the Court’s registry by email asks Mr Andy Long whether informal service of the application by email would be accepted on a voluntary basis (Article 5 (2) of the Hague Service Convention); due to the pre-litigation correspondence with Mr Andy Long this approach was promising; the email remains unanswered 21/02/2024 In order to speed up the service, Court’s registry asks Mr Andy Long by email to indicate whether service of the application by email is accepted on a voluntary basis; also this email remains unanswered 07/03/2024 Court’s registry requests for the required copies and translations for formal service in China 02/05/2024 Submission of the required copies and translations by the applicant after there were considerable difficulties in having all the documents translated in a short time 24/05/2024 Posting of the service documents by registry requiring the defendant to lodge an Objection to the Application for provisional measures within a time limit of two weeks from the service of the documents 11/06/2024 Receipt of the service documents by the competent authority in China according to the tracking number 4 04/07/2024 Court’s registry sends an inquiry to the competent Chinese authority regarding the status of service; no answer from the Chinese authority received 11/07/2024 Court’s registry informs Applicant about the date of service of the application to the Chinese authorities (11/06/2024). 23/10/2024 Court’s registry sends another inquiry to the competent Chinese authority regarding the status of service 24/10/2024 Request from the competent Chinese authority to send the service documents for these proceedings again by email 08/11/2024 Court’s registry sends the service documents combined with another request for further feedback on the status of service 18/11/2024 Information from the competent Chinese authority that the service documents have been submitted to the Supreme Court for further process REQUEST Applicant requests the court to find I. The steps already taken to bring the request for preliminary injunction in the proceedings ACT_597609/2023 to the attention of Defendant constitute good service pursuant to R. 275.2 RoP. Service shall be deemed effective as of the date of this order. II. The order according to item I. is published on the Court’s website with the names of the parties and the file number, so that the order can be found under the decisions published on the website. 5 GROUNDS FOR THE ORDER 1. Service requirements Where an application is made under Article 62 UPCA, it is necessary to serve the application to the defendant to give him the possibility to lodge an objection to the application for provisional measures within a time limit to be specified. The requirement of service arises from Rule 209.1, 270.2 RoP and Article 32 (1) (c) UPCA. Service of the application may only be waived if the Court orders provisional measures without the defendant having been heard (Rule 212.1 RoP); no such application has been made in the present case. 2. Attempt of service in accordance with Rule 274.1 RoP If the defendant is domiciled in China, an application for preliminary measures is to be served according to the Hague Service Convention (Rule 274.1 (a) (ii) RoP). According to Article 5 of the Hague Service Convention, both formal and informal service is possible. In the case of informal service, the service documents may also be served by electronic means, for example by email, provided that the law in the receiving state does not object to such a form of service. China allows service by electronic means such as email with the consent of the recipient (UPC_CoA_69/2024). Both formal and voluntary informal service are admissible methods under the Hague Service Convention and thus fall under Rule 274.1 RoP. Since this is an application for preliminary measures, Court’s registry initially tried to effect informal service according to Article 5 (2) of the Hague Service Convention in order to expedite the service. Subsequently, Court’s Registry arranged formal service in accordance with Article 5 (1) of the Hague Service Convention by transmitting the service documents to the competent Chinese authority on 24 May 2024. According to the tracking number, the service documents were received by the competent 6 authority in China on 11 June 2024. In the correspondence conducted with the Chinese authority, the latter never claimed that the documents had not arrived. 3. Failure of service in accordance with Rule 274.1 RoP In the present case, neither an informal nor a formal service in accordance with Rule 274.1 (a) (ii) RoP and Article 5 of the Hague Service Convention could be effected: Consent to an informal service could not be obtained, the formal service has not yet been effected. According to Article 15 of the Hague Service Convention each Contracting State shall be free to declare that the judge may give judgment even if no certificate of service or delivery has been received, if all the following conditions are fulfilled: a) the document was transmitted by one of the methods provided for in this Convention, b) a period of time of not less than six months, considered adequate by the judge in the particular case, has elapsed since the date of the transmission of the document, c) no certificate of any kind has been received, even though every reasonable effort has been made to obtain it through the competent authorities of the State addressed. On this basis, the following can be stated here: a. Court’s Registry transmitted the service documents to the competent Chinese authority on 24 May 2024. The service documents were received by the relevant authority in China. However, according to the Hague Service Convention, it is not the receipt of the documents that is decisive for the period specified in Article 15 (2) b), but their transmission. Consequently, for the purposes of Article 15 (2) of the Hague Service Convention, it is not important whether the defendant actually received the document and thus had an effective opportunity to take note of the contents of the document (HCCH, Practical Handbook on the Operation of the Service Convention, 2016, para. 315). 7 Until today, no certificate according to Article 6 of the Hague Service Convention has been received from the competent Chinese authority. b. The Court has to realise that more than six months have elapsed since the date of the transmission of the documents to the competent Chinese authority. c. The Court considers it adequate to give a judgment in the present case after the expiry of six months since the date of the transmission of the documents. This is justified in this case for two reasons: (1.) The subject matter of the proceedings is a request for preliminary measures. This is therefore an urgent matter. The Hague Service Convention itself provides in Article 15 (3) that the court is not prevented by Article 15 from ordering preliminary measures in urgent cases. (2.) Due to the known handling of requests for formal service by the competent Chinese authority, it is not to be expected that the request for service will be successful if further delay occurs. It is not only the experience of European national courts (e.g. Higher Regional Court Munich, GRUR-RR 2020, 511), but also of the Unified Patent Court (LD Mannheim, UPC_CFI_332/2024), that requests for service from the Chinese authority in many cases are either not forwarded at all or objected to and returned. d. Every reasonable effort has been made to obtain a proof of delivery through the competent Chinese authorities. Twice an inquiry to the respective Chinese authority was sent regarding the status of service. 4. Alternative attempt of service under Rule 275.1 RoP If service in accordance with Rules 270-274 RoP is unsuccessful, an attempt must be made, if possible, to effect service by an alternative method or at an alternative place (Rule 275.1 RoP). Rule 275.1 RoP also applies if the foreign authority refuses service seriously and definitively (divergent: LD Mannheim, UPC_CFI_332/2024). A serious refusal of service can also be assumed if a 8 request for service is not processed for more than six months without any apparent reason. The Rules of Procedure do not provide for an exception to the requirement of alternative service (Rule 275.1 RoP). Such an exception would also not be in line with the apparent intention of the provisions on service to exhaust all available options to give the defendant the opportunity to take note of the application and to defend himself (correctly LD Mannheim UPC_CFI_219/2023). In view of this, it seems inappropriate to penalise the defendant by not making further service attempts if the foreign authority refuses service in violation of the Hague Service Convention. However, a prerequisite for further service attempts is that such attempts are possible at all. To be considered as an alternative method of service (Rule 275.1 RoP), the method must be factually and legally possible. An attempt of alternative service can only be dispensed with if there is no legally and factually possible alternative for service. a. Service by an alternative method is not possible in the present case. Both the applicant and the court have tried unsuccessfully to effect service of the application both formally and informally. No other admissible alternative means of service are apparent; in particular, China has opposed to send judicial documents directly to persons in China by postal channels (Article 10 (a) of the Hague Service Convention; see UPC_CoA_69/2024). Attention is drawn to Rule 275.4 RoP in this context, which does not allow the order of an alternative method of service that is incompatible with the law of the state in which service is to be effected. The Court is neither aware nor can it reasonably be expected to find out whether further service methods such as service by public notice (a method that is provided for example by German national law, but not by the RoP) is compatible with Chinese law. 9 b. Service at another place is also not possible. No other place is known where the application could be served. c. Further delay caused by service by an alternative method or at an alternative place would also be unreasonable in view of the fact that these are proceedings for preliminary measures. The present case shows that the urgency of a provisional measure is difficult to reconcile with the long duration of service abroad. 5. Confirmation of good service Under Rule 275.2, it may be ordered that steps already taken to communicate the statement of claim to the defendant by an alternative method or at an alternative place constitute good service. According to the clear wording of Rule 275.2 RoP (“…steps already taken to bring the Statement of claim to the attention of the defendant by an alternative method or at an alternative place…”), only an (unsuccessful) attempt to serve the document by an alternative method or at an alternative place may be approved as good service. By contrast, an unsuccessful attempt to serve documents by means of Rule 274.1 a) (ii) RoP usually is not acceptable as good service under Rule 275.2 RoP. In the view taken here, Rule 275.2 RoP contains an unintended gap: If an attempt of service under Rule 274 RoP has failed and service by an alternative method or at an alternative place is neither possible nor reasonable, the court may order that also an unsuccessful attempt of service under Rule 274 RoP shall constitute good service. 10 ORDER 1. The steps already taken to bring the request for preliminary injunction in the proceedings ACT_597609/2023 to the attention of Defendant constitute good service pursuant to Rule 275.2 RoP. 2. Service shall be deemed effective as of the date of this order (Rule 275.3 (b) RoP). 3. The Objection to the application for provisional measures is to file within fourteen days (Rule 275.3 (c) RoP). 4. The registry shall publish this order (including the names of the parties and the file number) on the Court’s website. Tobias Pichlmaier Judge-rapporteur

Key Holdings

• The UPC Local Division Munich ruled that steps already taken to effect normal service of preliminary injunction (PI) proceedings on Chinese defendants are considered good service, effective from the date of the Order, despite difficulties under The Hague Service Convention.
• The Court noted a gap in R. 275.2 RoP, which does not explicitly allow considering steps for normal service as good service for alternative service, but nevertheless issued an order to deem service effective.
• Defendants were granted 14 days to file an objection against the application of provisional measures.
• The commentator suggests that Art. 15 of The Hague Service Convention allows for speedy provisional or protective measures in urgent cases, even without full service, if the defendant is aware of the proceedings.

Tags

• Hague Service Convention
• International Law
• Preliminary Injunction
• Procedural Issues
• Service

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