Non-compliance with a first-instance decision has no adverse consequences if the decision is overturned on appeal

Fujifilm v Kodak – Court of Appeal, 3 August 2026, UPC_CoA_28/2026

Introduction

A successful first-instance claimant may enforce a UPC decision even while an appeal is pending. But what happens if the decision is subsequently overturned?

In Fujifilm v Kodak, the Court of Appeal has made the consequences clear: enforcement pending appeal is at the risk of the enforcing party. If the underlying decision is revoked, it is generally regarded as never having had legal effect. This also removes, retroactively, the legal basis for penalties imposed for non-compliance with that decision.

The background

The Mannheim Local Division had found that Kodak infringed Fujifilm’s patent and issued orders subject to recurring penalty payments. In subsequent enforcement proceedings, Kodak was ordered to pay penalties of EUR 1.72 million.

The situation changed fundamentally on appeal. The Court of Appeal set aside the infringement decision and held that Kodak did not infringe because it could rely on a private prior use right.

The question was therefore what should happen to the enforcement proceedings and the penalties already paid.

Revocation removes the basis for penalties retroactively

The Court of Appeal applied the principle previously established for preliminary injunctions in NanoString v 10x Genomics also to final decisions in infringement proceedings.

Revocation of the first-instance decision generally has retroactive effect. The revoked decision must be regarded as never having had any legal effect.

The consequence for enforcement is significant. Once the underlying decision disappears retroactively, so does the legal basis for a subsequent penalty order. This applies even where the penalties concern conduct occurring before the first-instance decision was revoked.

Accordingly, the Court set aside the penalty orders and ordered the penalties already paid by Kodak to be refunded.

The defendant cannot be blamed for non-compliance

The retroactive effect also determined the allocation of costs.

Fujifilm argued that Kodak had unnecessarily increased the costs of the enforcement proceedings through late or incomplete compliance with the first-instance orders.

The Court rejected this argument. If the underlying decision must be treated as never having had legal effect, Kodak must equally be treated as never having been obliged to comply with it. Its conduct therefore could not be criticised as late or incomplete compliance.

Fujifilm was consequently ordered to bear Kodak’s reasonable and proportionate costs of the enforcement proceedings.

Value of enforcement proceedings

The decision also provides useful guidance on determining the value of proceedings on appeal.

Even where the defendant files the appeal, the relevant interest does not switch to the defendant’s interest in having the decision set aside. Under R. 370.6 RoP, the relevant interest remains that of the party which initiated the proceedings at first instance – here, Fujifilm’s interest in having the decision upheld.

The amount of the penalties was also not decisive. Penalties are payable to the Court and contain coercive and punitive elements. The relevant consideration is instead the claimant’s interest in proper fulfilment of the obligations which the penalties are intended to enforce.

Takeaways

• If an enforced first-instance decision is revoked on appeal, it is generally treated as never having had legal effect and the basis for penalties disappears retroactively.
• The value of enforcement proceedings is determined by the claimant’s interest in compliance, not by the amount of penalties imposed.

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