An Overview of European Patent
Litigation and Enforcement Measures
for AIPLA Corporate Practice Committee
Susan Kirsch, Partner
October 2015
A Comparison of the UK, German, and
French Patent Courts
United Kingdom
The European Courts - UK court structure
Supreme Court
appeal (with leave; points of law only)
* Infringement
action and/or
claim/counterclaim
for revocation
*
Court of Appeal
appeal
High Court (“Patents Court”)
appeal
appeal
IPEC
*
Transfer
possible in
some cases
UK Intellectual Property Office
Application for revocation only
4
UK - IPO
•
Normally validity-only cases
• Can hear infringement if both parties agree, but very unusual
•
Primarily a written procedure, but hearings available
• Hearings in 1 day, but no more than 2 days
•
Disclosure requests possible, but unusual
• “Specific” most likely; “standard” inappropriate
•
Cross-examination available
• Prior request required; normally allowed
•
6-10 months from initial claim to trial
• Costs: £50-£150K for revocation only
• Recoverable costs are small, per fixed scale
• But off-scale costs (“approaching full compensation”) awardable
proportionately for breaches of rules, delaying tactics,
unreasonable conduct, etc.
5
UK Courts
•
Choice of courts:
• Patents Court (High Court)
• Intellectual Property Enterprise Court (“IPEC”)
•
Not bifurcated: infringement and validity together
•
Quick to trial/decision (9 – 12 months)
•
Discovery
•
Evidence in chief in writing
•
Expert evidence, comprehensive cross-examination
•
Appeals are quick (~6 months)
6
UK - IPEC or High Court?
–
IPEC
–
–
–
–
–
Recoverable costs capped to £50,000 for the
liability phase and £25,000 for the damages phase
Damages awards are capped at £500,000 per
action
Pro-active case management
Two day trial maximum
High Court
–
–
–
Unlimited damages
Pro-active case management (increasingly)
Costs recovery for successful party (~70%)
7
UK - Preliminary Injunctions
–
–
Preliminary injunctions rare in patent cases,
except for certain pharma cases
Test:
–
–
–
Serious issue to be tried
Irreparable harm
Balance of convenience
–
–
Cross-undertaking in damages
Speedy trial option available as an
alternative to PI relief
8
UK – Disclosure of documents
–
–
“All the cards on the table” – not as burdensome as
US discovery however more than elsewhere in EU
(exception is Ireland)
Requirement generally limited to two years either
side of the priority date
–
–
If relevant, documents should be disclosed, even if damaging
to own case but cannot be used elsewhere without
permission
Obligation (ongoing) is to search for, and disclose,
documents currently or formerly in a party's control though
based on a reasonable and proportionate search
9
UK - Experts
–
–
–
–
–
Detailed reports are evidence in chief
Oral cross-examination during trial
Duty of experts to help the court on matters within
their expertise
Skilled person or team – critical to get the right
expertise
Manner of instruction of experts is increasingly
scrutinised
10
UK - Final Remedies
–
–
–
Injunctions – usually granted, but discretionary
Damages (compensate patentee for its loss)
– Lost profits (sales the patentee would have made)
–
–
–
–
–
–
–
–
–
Lost sales (primary and ancillary)
Price depression
Springboard and post-expiry sales
– Reasonable royalty (sales patentee would not have made)
Account of profits (infringer's profit)
– Rare (infringer may deduct a proportion of its overheads in
addition to direct
costs)
Delivery up/destruction
Limited punitive damages
11
Germany
The European Courts – Germany
•
Preservation of evidence
• Seizure orders
• Protective briefs
• Interim injunctions
•
Bifurcated procedure - Infringement
Four main district courts - speed varies (~10-15 months)
Very short trials (hours)
Expert evidence rare, no cross-examination
Invalidity arguments largely discounted
Stay of injunction pending validity court ruling cannot be
relied upon
• Düsseldorf very pro-patentee
•
•
•
•
•
13
Germany - Bifurcation
• Bifurcated procedure - Invalidity
• One court in Munich
• Slower than infringement courts (18-24 months)
• Will not rule if there is an EPO opposition on the
same patent Appeals (so can be very slow)
• Take some time (~4 years)
• Still bifurcated at second instance
• Infringement and validity only combined in the
Supreme Court
14
Germany: Preliminary Injunctions
–
–
Infringement must be reasonably clear
Validity must be reasonably certain:
–
–
–
–
a decision in nullity or opposition proceedings, or
submissions filed by infringer in application process
arguments of infringer obviously without merit
Timing: PI application must be filed within
one month of notice/awareness of
infringement, or patent was confirmed in
opposition/nullity proceedings
15
Germany: Final Remedies
–
Injunctions
–
–
–
Damages (compensate patentee for its loss)
–
–
–
–
–
no discretion: granted if infringement found
non-compliance: fine/imprisonment
lost profits (sales the patentee would have made)
reasonable royalty (sales patentee would not have made)
Account of profits (infringer's profit)
Delivery up/destruction
No punitive damages
16
France
The European Courts – France
•
Preservation of evidence
• Saisie-Contrefaçon
• Protective letters
• Interim injunctions
•
•
Not bifurcated
Since 2009, one specialist court in Paris
• Inexperienced first instance judges
• Court of Appeal more experienced
•
•
•
No cross-examination
Short trials
Relatively inexpensive
18
France: Preliminary Measures
Saisie-contrefaçon
–
–
–
Saisie-contrefaçon – pre action seizure of infringing
materials
Aim: proof that on a certain date, infringing acts
took place in France by seizing samples, documents
etc.
Ex parte: authorized by the Court, executed by bailiff
and an expert designated by plaintiff
19
France: Preliminary Injunctions
–
Usually granted inter partes.
–
–
–
ex parte possible but rare
Infringement must be reasonably clear.
Court can:
–
–
require patentee provide bond/security, as a condition of
granting PI
require alleged infringer provide bond/security, as condition
of allowing continuation of alleged infringing acts
20
France: Final Remedies
–
Injunctions
–
–
–
Damages (compensate patentee for its loss)
–
–
–
–
–
usually granted if infringement found
non-compliance: fine/imprisonment
lost profits (sales the patentee would have made)
reasonable royalty (sales patentee would not have made)
Account of profits (infringer's profit)
Delivery up/destruction
No punitive damages
21
Costs
An overview
Costs
–
Enforcement Directive, Art. 14
–
–
UK
–
–
–
–
High: £150-300k (in IPEC) - £600k -several million (in High Court)
In High Court, loser pays around 70% of winner’s costs, or costs awarded
on an issue by issue basis, and if not agreed, the court will assess costs
IPEC, costs capped at £50k for liability stage/£25k for quantum stage
Germany
–
–
–
Unsuccessful party should pay “reasonable and proportionate legal costs
and other expenses”
Medium: €100k-over 1 million, but court fees higher than UK
Loser pays winner according to statutory limits, e.g. a modest case costing
€50k, loser will pay ~50 %
France
–
–
Low: €50k-350k
Loser pays winner fees based on external counsels' fees and disbursements,
23
and the length and complexity of the case
Stays
–
If a patent is opposed at the EPO, will the
national courts stay their parallel
proceedings?
–
–
UK – in general, no, but see Actavis v Pharmacia.
Germany –
–
–
–
–
bifurcated system.
Infringement court will only stay proceedings if the invalidity
argument is very strong.
Nullity court will not hear a national revocation action while EPO
opposition is pending.
France – in general, no.
24
European Patent Litigation
Statistics
Graham & Zeebroeck, 17 Stan. Tech. L. Rev. 655
(2014)*
* Data set: Darts IP database, 2000-2010
26
27
28
The proposed Unitary Patent Court (UPC)
Procedure
How will the UPC change things?
Why is the UPC a big deal?
•
With the advent of the European Unified Patent
Court, European patents will become enforceable
across a single jurisdiction encompassing
approximately 360 million people (approximately
400 million with Poland). This would be about equal
to the U.S. market size, but patent litigation costs
would be significantly less.
What the UPC offers
– All parties:
– flexible language regime
– same procedure everywhere
– emphasis on written submissions plus one day hearing
– but discretion in procedural matters
– bifurcation, document production, use of witnesses/experts
–
–
–
–
experienced judges and a technical judge if required
speed – 12 months – to judgment
single appeal court ensures harmonisation
one set of proceedings, one set of costs
– Patentees: enforcement (including PI relief) through a single
court system in all relevant countries
– Defendants: one counterclaim or revocation action deals with all
threats
Court Structure
So far, English an
available language in all
courts except France
Court of Appeal
Luxembourg
CJEU on
EU law issues
Court of Appeal
So far:
England & Wales,
Netherlands, France,
Germany x4,
Belgium, Finland,
Denmark, Ireland
Likely :
Romania, Bulgaria,
Cyprus & Greece
Sweden, Estonia,
Latvia & Lithuania
Czech republic &
Slovakia
Appeal
facts & law
limited
procedural
appeals
Central Division
London
Paris
Munich
Local divisions
Legally
qualified judge
Technically
qualified judge
Regional divisions
Optional
technically
qualified judge
Legally
qualified judge
(local)
What will each court do?
–
Court of Appeal
–
–
Central Division
–
–
–
–
Appeals from Central, Regional and Local divisions
Three locations: Paris (IT and technology), London (life sciences)
and Munich (engineering)
Actions for revocation or declarations of non-infringement in the
absence of an infringement action
Non-EU based defendants may be sued for infringement in Central
Division
Regional and Local divisions
–
–
Claimant may choose local or regional division to bring
infringement claim
Invalidity claims (with/without infringement claim) may be
transferred to the Central Division
33
Anticipated UPC Timeline
Event
Weeks to Trial
(1 day trial)
Stage 1: Issue Identification
Claim
52 weeks
Defence and Counterclaim
12
months
Response to Defence and Counterclaim
Stage 2: Preparation
Interim Conference
~30 weeks
• Identify Issues
• Assess need for witnesses, experts, disclosure of
documents, further evidence, separate hearings for
cross-examination
• Encourage parties to discuss settlement
Stage 3: Hearings
Witness/expert hearings (if any)
~15 weeks
Oral hearing (1 day)
Judgment
Stage 4: Appeal
34
Types of UPC Action
•
•
•
•
Infringement claims
Declaration of non-infringement
Invalidity/Revocation claims
In certain circumstances, infringement claims and
invalidity claims may be heard at the same time, or
the court may bifurcate the claims and hear them
separately
35
UPC – Bifurcation
•
Bifurcation of infringement/validity
• Article 33.3 of the UPC Agreement – whether to
bifurcate or consolidate is left to the discretion of the
local division
• Rules of procedure give no guidance except that
infringement will be stayed if invalidity is highly likely –
a difficult threshold to meet?
• Industry is against it; lawyers will make use of it.
Forum-shopping will result
• Some local divisions could be pro-patentee caused by
inter-division competition for patentee's business
UPC – Preliminary Remedies
•
The UPC will have the power to:
• order provisional measures to preserve evidence and the
inspection of premises, or “saisie-contrefaçon” (Article 60.1
and .3 of the UPC Agreement)
• order a party to produce evidence (Article 59 of the UPC
Agreement),
• order a party not to remove assets from the jurisdiction, or
“freezing orders” (Article 61.1 of the UPC Agreement)
• grant provisional and protective measures such as
preliminary injunctions against an alleged infringer or any
intermediary (Article 62.1 of the UPC Agreement)
• order the seizure or delivery up of suspected infringing
products, seizure of property and blocking of bank accounts
(Article 62.3 of the UPC Agreement)
UPC – Final Injunctions
• Expected to be issued as a matter of course
• Bifurcated proceedings:
• May be issued anyway
• May be issued subject to the condition subsequent
that the patent is not found to be invalid
• May be stayed and will be stayed if there is a high
likelihood that the patent is invalid
• May be granted subject to a cross-undertaking
Unitary Patent – Revocation
•
Minimising pan-European revocation at one sitting
probably the most compelling reason for opting-out
• Do you want to put your important cases at risk in an
untested court, and for all countries?
•
Over time it seems likely that UPC case law will
converge with national case law (same judges) so
perhaps reasons for opting out decrease with time?
• Even if UPC outcomes are similar to national courts, is there
a risk bias? Do you prefer:
• 70% chance of winning in UPC
• Or win 7/10 times in national courts?
•
EP and opt-out for important cases that are likely to
be challenged?
Court fees and legal costs, May 2015 Consultation Paper
– Fixed court fees at each major stage e.g. for infringement, for
counterclaim, for damages determination, for appeal
– Infringement claim, DNI, or counterclaim €11,000
– Revocation claim €20,000
– Value-based fees are payable in addition for infringement and
counterclaim
– Each party will assess value of case
– Judge-rapporteur will decide value at the Interim Conference
– value €1m = fee €5,000
– value €30m = fee €150,000
– value > €50m = fee €220,000
– Possibility of reimbursement for withdrawal, early settlement,
and use of single judge, and of reduced fees and legal aid for
SMEs or persons without means.
Court fees and legal costs, May 2015 Consultation Paper
– “Reasonable and proportionate” costs recoverable by the
successful party
– Recovery unlikely to be as high as in the UK (60-70%), but will
be much higher than in Germany
Value of
Action €
UPC €
UK €
Germany €
1M
150,000
60-70%
~25,000
5M
600,000
~85,000
10M
800,000
~160,000
30M
1M
~450,000
.50M
3M
~450,000
An Overview of European Patent
Litigation and Enforcement Measures
for AIPLA Corporate Practice Committee
Susan Kirsch, Partner
October 2015