In the “Belkin v. Philips” decision (UPC_CoA_534/2024), the Court of Appeal of the Unified Patent Court has, for the first time across Europe, specified the conditions under which managing directors may be held personally liable for patent infringements. For company management, the ruling provides greater legal certainty—but also sets clear requirements for compliance and response obligations.

The decision by the Court of Appeal of the Unified Patent Court (UPC) in the “Belkin v. Philips” case provides, for the first time, Europe-wide clarity on the personal liability of managing directors in cases of patent infringement. This ruling is directly relevant to managing directors and board members of companies operating in the European single market.

Key Points of the Decision

The EPG Court of Appeals rejects the notion that managing directors are automatically personally liable for patent infringements committed by the company. Crucially, the mere fact of holding an executive position and fulfilling general management and organizational duties is not sufficient to establish personal liability. Liability may only be considered if the managing director

• deliberately uses the company to infringe a patent,
• or fails to act despite having positive knowledge of a clear legal violation.

A key criterion is awareness of the illegality: The managing director must know—or, through gross negligence, willfully ignore—that a patent infringement has occurred. If the managing director seeks qualified legal advice and follows it, he or she is generally protected until a court of first instance issues a ruling.

In this specific case, the EPG-Court of Appeals ruled out personal liability on the part of Belkin’s managing directors because it could not be established that they had sufficient awareness of the illegality of their actions. Liability for failure to act, disclosure, and damages rested exclusively with the companies.

Implications for Practice and Compliance

For managing directors, the decision provides some relief, but it also sets a clear expectation for how the company is organized:

• No Piercing of the Corporate Veil: Personal liability remains the exception. A managing director who fulfills their duty of care, investigates reports of potential patent infringements, and seeks legal advice minimizes their risk.
• Compliance obligations: The decision emphasizes the importance of a functioning IP compliance system. Reports of potential intellectual property infringements must be documented, assessed, and—if necessary—escalated to senior management.
• Duty to respond: In the event of specific cease-and-desist letters or court notices, it is necessary to carefully review and, if necessary, adjust business conduct. Failure to act despite clear indications may result in personal liability.
• Legal advice provides protection: Seeking and following qualified legal advice is a key protective measure for managing directors. Action to avoid liability risks is only necessary once a court has found a patent infringement.

Analysis and Outlook

The decision by the EPG Appeals Court establishes a uniform, Europe-wide—and ultimately rather restrictive—standard of liability for managing directors. It is thus in line with previous German case law, but goes a step further in clarifying the protective mechanisms (legal counsel, compliance). For corporate practice, this means:

• Managing directors are not without protection, but they must take compliance and documentation seriously.
• Companies should regularly review and adapt their processes for handling intellectual property warning letters and for documenting reviews and decisions.
• D&O insurance policies should be reviewed in light of the new liability risks.

Conclusion:
The EPG Appeals Court’s “Belkin/Philips” ruling does not impose stricter requirements on managing directors; rather, it provides legal certainty and a clear framework for action. Those who prioritize compliance and seek professional advice are well protected—personal liability remains the exception for serious breaches of duty.

We are very pleased that our firm (Recognized Firm), as well as three of our managing partners (IP Star) and one “Rising Star,” have been recognized by Managing IP.

We are particularly pleased that this recognition confirms our consistently excellent work and the highest standards of quality in the field of intellectual property.

Many thanks to all our clients and colleagues who have contributed to this achievement and who so greatly appreciate our daily efforts.

Congratulations to Dr. Dorothea Hofer, Juergen Feldmeier, Dr. Christian Gärtner, and Sophia Steinmüller on their awards.

Handelsblatt and Best Lawyers have honored “Germany’s Best Lawyers 2026” and we are very pleased to have been mentioned here again. This award is based on surveys of commercial lawyers, so we would like to thank all our colleagues who have recommended us so highly.
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EU Regulation 2025/2645 was published in the Official Journal of the European Union on December 30, 2025, and entered into force directly in all member states on January 19, 2026, without the need for national implementing legislation. This means that, for the first time, a uniform EU system for compulsory licenses in crisis or emergency situations is now available.

How did this come about and what was the original idea?

Actually, an EU regulation (SEP Regulation 4-2023 (EUIPO)) was planned for patents that are indispensable for a technical standard (e.g., 5G, Wi-Fi), so-called SEPs (standard essential patents). This EU regulation was intended to create a transparency and licensing framework with SEP registration, essentiality checks, and more extensive “FRAND” mechanisms (fair, reasonable, and non-discriminatory terms).

However, the SEP Regulation failed miserably and was officially removed from the EU Commission’s work program in February 2025 because no agreement between member states and interest groups was foreseeable.

Strong objections came from large technology patent traders, among others, who argued that regulation would weaken incentives for innovation. Industry also opposed this regulation because it could not agree on the proposed mechanisms. There was also skepticism that the European Union Intellectual Property Office (EUIPO) in Alicante, Spain, which was to be established under this regulation, would have sufficient expertise. This is not surprising, as the EUIPO had previously been responsible exclusively for trademarks and designs and did not have any technically trained staff or experience in the field of SEPs.

But even though the SEP Regulation failed, it was part of a larger modernization project in the field of EU-wide intellectual property law.

Following the failure of the SEP Regulation, the EU undertook a strategic realignment and recognized that a functioning crisis IP instrument was urgently needed, especially since the Covid-19 pandemic.

Regulation 2025/2645, which has now entered into force, was therefore created as a more pragmatic measure focused on crisis management, with clear conditions and a limited scope of application, namely for crisis or emergency situations – unlike the more comprehensive but politically controversial SEP Regulation.

This new EU regulation now harmonizes the legal framework for compulsory licenses across the EU in crises, instead of relying on heterogeneous national systems.

Aim and purpose of the new regulation:

With the introduction of an EU-wide compulsory licensing system (“Union compulsory license”), the European Commission can now allow the use of patented technologies in exceptional crises or emergencies (e.g., health or supply crises) without the consent of the patent holder.

These compulsory licenses apply throughout the EU and no longer just nationally, so that cross-border supply chains can be secured in the event of a crisis.

Conditions for granting:

However, an EU-wide compulsory license may only be granted if:

1. a crisis or emergency mode has been activated under existing EU crisis mechanisms;
2. the use of the patent in question is necessary for the supply of crisis-relevant products;
3. all other options (especially voluntary license agreements) have been exhausted or do not lead to a solution in time;
4. the rights holder has been heard and given the opportunity to comment.

Key features of the system:

– Non-exclusive, time-limited (until the crisis is over) and non-transferable
– License fees (reasonable remuneration) must be paid for the use of the patented teaching, but may be refunded if a patent is not granted
– Products may not be exported—only within the EU
– Licensing is granted as a last resort
– An advisory committee accompanies the procedure

Practical development: How will Regulation 2025/2645 affect the market?

Short term (2026–2028):

The regulation is primarily intended to be a reserve instrument – it should only be activated in very serious crises.

It could become relevant for the first time, particularly in the areas of public health, medical care, and critical infrastructure.

It is hoped that companies and patent holders will strengthen mechanisms for early voluntary licensing in order to avoid a compulsory license imposed by the state.

Example:

Suppose there is a health crisis in the EU and a patent-protected active ingredient is crucial for a life-saving drug that only a single rights holder can supply. Since production cannot be ramped up quickly enough, the Commission activates the crisis mechanism and, after consulting the patent holder, grants an EU-wide compulsory license in accordance with Regulation 2025/2645. Several European manufacturers are allowed to produce the active ingredient for a limited period of time, pay a fixed fee to the patent holder, and thus ensure rapid supply to the population within the EU.

Medium term (2028–2032):

In the medium term, standard processes for the European Commission and advisory boards are to be developed, including procedural standards and evaluation methods for appropriate remuneration.

In many cases, the regulation will act as a “failsafe,” strengthening the EU’s negotiating power in licensing issues during crises, without, however, being used automatically on a massive scale.

Patent holders will be more willing to offer FRAND license agreements at an earlier stage in complex situations in order to prevent impending compulsory licenses.

Long term (2033+):

The EU could use this crisis compulsory licensing regime as a basis for developing further IP coordination mechanisms, e.g., in areas such as climate protection technologies or critical digital standards.

There could be a political debate on further SEP or FRAND reforms that apply outside of crises, based on lessons learned from the failed SEP regulation attempt.

Conclusion:

EU Regulation 2025/2645 is not an SEP regime – it serves a very specific purpose: EU-wide compulsory licenses only in clearly defined crisis situations.

The originally planned SEP regulation has been completely abandoned.

The new regulation is more of a crisis prevention tool, designed to make IP practice in the EU more stable, coordinated, and predictable in the long term, especially in emergency situations.

Our managing partners Dr. Dorothea Hofer and Jürgen Feldmeier have been named IAM Global Leaders 2026!

We are delighted to receive this special award and would like to thank everyone involved.

Handelsblatt and Best Lawyers have honored “Germany’s Best Law Firms 2025” and we are very pleased to have been mentioned here again. This award is based on client feedback and colleague votes, so we would like to express our sincere thanks to all our colleagues and clients who recommended us in such large numbers.
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Handelsblatt and Best Lawyers have honored “Germany’s Best Lawyers 2025” and we are very pleased to have been mentioned here again. This award is based on surveys of commercial lawyers, so we would like to thank all our colleagues who have recommended us so highly.
Click here for the article.