Dyson v. Dreame: The UPC Refers to the CJEU for the First Time
What It Means for M&A and IP Strategy
Date: 6 March 2025 (case registered at the CJEU on 11 March 2026 as C-196/26)
Territory: EU / UPC
Relevant for: Companies involved in tech M&A, consumer electronics importers, patent holders, brands with parallel sales inside and outside the EU, e-commerce platforms
The Court of Appeal of the Unified Patent Court (UPC) has — for the first time in its history — referred four questions to the Court of Justice of the EU (CJEU), arising from the dispute between Dyson and Dreame, a Chinese consumer electronics manufacturer. At the heart of the case: can the UPC exercise jurisdiction over patent infringements occurring outside UPC territory (specifically in Spain), and can a European authorised representative whose role is limited to regulatory compliance be held liable as an intermediary? The CJEU's answers will shape the UPC's international jurisdictional framework for years to come.
Background
Dyson brought an action for provisional measures against several entities within the Dreame group — a Chinese manufacturer of hair dryers and other household appliances — based on patent EP 3 119 235 B1. The UPC'is Hamburg Local Division granted a preliminary injunction, extending it to cover activities in Spain, a country outside the UPC's terrtorial jurisdiction.
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At the same time, Eurep GmbH — a German company acting as the authorised representative for Dreame International under EU product safety regulations (EU Regulations 2023/988 and 2019/1020) — was named as a defendant. Eurep does not sell or distribute products; its role is exclusively regulatory compliance. |
The Four Questions Referred to the CJEU
The UPC Court of Appeal stayed part of the proceedings and referred four questions centred on two fundamental issues:
Jurisdiction beyond UPC territory:
- Can the UPC extend its jurisdiction to a Chinese company infringing a patent in Spain (outside UPC territory), where a European "anchor defendant" — a UPC-registered intermediary — is also party to the proceedings?
- Is it sufficient that the same products are sold through websites that are identical except for their language, across all UPC member states and beyond?
- Liability of a regulatory representative:
- Can a company performing exclusively regulatory functions as an authorised representative be classified as an "intermediary" within the meaning of Directive 2004/48, and held liable on the same basis as the direct infringer?
What This Means for M&A and IP Strategy
This case is more than a patent dispute between Dyson and Dreame. It sets the framework for patent enforcement in Europe through the UPC and directly affects how transactions should be structured.
1. Due diligence when acquiring tech companies with EU sales
If a target sells products through a single e-commerce platform across the EU — including countries outside UPC jurisdiction — there is a risk that the UPC will assert jurisdiction over it through an "anchor defendant" within UPC territory. This risk is currently unresolved; the CJEU's answer will change how it is assessed. Until then, it must be flagged as an open issue in the IP section of any due diligence exercise.
2. Structuring corporate presence in the EU
The case calls into question a common practice: appointing an EU Representative or Authorised Representative for regulatory compliance purposes may create a jurisdictional entry point for the UPC against a parent company based in a third country. For transactions involving Asian or US vendors entering the EU market through a subsidiary or representative, this is a critical structural question that must be addressed at the deal-structuring stage.
3. E-commerce and parallel sales
A single multilingual website through which products are supplied to multiple EU countries is the standard model for tech and consumer electronics businesses. Following the CJEU's ruling, this model may automatically trigger UPC jurisdiction across all countries of sale simultaneously. For companies planning expansion or entering transactions in this segment, the case materially changes the patent risk assessment.
4. Intermediary liability — a new risk dimension
If the CJEU rules that a regulatory representative qualifies as an "intermediary" under Directive 2004/48, this will create an entirely new category of risk for structures with functionally separated entities: a separate distributor, a separate regulatory agent, a separate logistics operator. Each of them may fall within the scope of a patent infringement claim.
Recommendations
- In M&A due diligence: add to the IP checklist a review of the target's EU sales structure — the existence of unified e-commerce platforms, appointed EU Representatives, and the distribution model across UPC and non-UPC countries.
- When structuring deals with non-EU vendors: revisit the functions and contractual status of the EU Representative — the boundary between regulatory compliance and commercial activity is becoming a jurisdictional dividing line.
- For patent holders: the case opens new enforcement tools against third-country infringers through the UPC — European IP protection strategy should be reviewed in light of the UPC's potential "long arm" jurisdiction.
- Monitor: the CJEU's ruling in C-196/26 is expected within 12–18 months and will become one of the most significant UPC precedents to date. This is a must-watch.
| For advice on IP due diligence, transaction structuring involving IP risks, and patent strategy within the UPC framework, please contact our team. |
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