D Young & Co LLP - Germany
Q: What options are open to a patent owner seeking to enforce its rights in your jurisdiction?
The United Kingdom is split into three jurisdictions, all of which have courts which can determine patent infringement claims:
- England and Wales;
- Scotland; and
- Northern Ireland.
The UK Intellectual Property Office also has jurisdiction to determine some disputes.
Of these jurisdictions, the majority of patent claims are commenced in England and Wales, which consists of two courts: the Patents Court and the Intellectual Property Enterprise Court (IPEC). This chapter focuses on the courts in England and Wales.
Q: Are parties obliged to undertake mediation/arbitration before bringing a case before the courts? Is this a realistic alternative to litigation?
The parties are obliged to consider the suitability of alternative dispute resolution (ADR) procedures, such as mediation and arbitration. This obligation exists both before and during a claim. If a party is unreasonable in declining ADR, the court has the discretion to make an adverse costs award against it. However, in practice, this is rarely imposed. The suitability of ADR will depend on the specific facts of the case.
Q: Are there specialist patent or IP courts in your jurisdiction? If not, what level of expertise can litigants expect from the courts?
England and Wales has two specialist patent courts: the Patents Court and the IPEC. Each has its own procedure and limitations.
The former is designed for larger companies with more complex or commercially significant claims; the latter for small to medium-sized enterprises with simpler or smaller value claims. The principal differences between the two courts are that before the IPEC the damages (or account of profits) recoverable is capped at £500,000 and the costs recoverable is capped at £50,000.
In both instances, the courts have specialist, technically trained judges.
Q: Are validity and infringement dealt with together or does your country have a bifurcated system?
Infringement and validity are addressed together by the same court (they are not bifurcated).
Q: Who may represent parties engaged in a dispute?
Before the English courts, there are a number of professions able to represent parties: barristers, solicitors and patents attorneys. Each has its own skill set and training.
For large-scale patent claims (particularly before the Patents Court), best practice is to instruct a mixed team of barristers, solicitors and patent attorneys. The norm is that the solicitors will have day-to-day oversight of the claim, advising on the strategy, procedure, evidence, costs and liaising with the other side. The solicitor will then work closely with the barrister and patent attorney. The barrister will normally advise on strategy, court craft and cross-examination, and will also deliver the advocacy. The patent attorney will normally advise on the specific technology and any parallel opposition proceedings before the European Patent Office. A smaller team, with few professions may be advisable for a claim before the IPEC.
Q: To what extent is pre-trial discovery permitted?
Discovery (referred to as ‘disclosure’) is available in principle both before a claim is commenced and during a claim.
Before a claim is commenced, the party seeking disclosure will usually need to show that the disclosing party is likely to be a party to proceedings and under a duty to disclose the documents. The disclosure of the documents will help resolve the dispute or save costs. Pre-action disclosure is uncommon and is usually ordered only where it would be useful to inform the terms of a licence or value of a settlement offer.
During a claim, the alleged infringer will be invited to give either disclosure in relation to the alleged infringement or a ‘product and process’ description. The latter is a document which describes the alleged infringement to a sufficient level to assess infringement. Normally, the alleged infringer will opt to give a product and process description.
The patentee may also be required to give disclosure on documents relevant to validity within a four-year window (ie, two years before and two years after the priority date). If a specific document is required, a party may also seek specific disclosure in relation to this.
In general, disclosure is more likely to be available before the Patents Court than the IPEC.
Q: Is cross-examination of witnesses allowed? If so, what form does this take?
Yes, cross-examination is usually allowed in the Patents Court and the IPEC. The length of cross-examination in the IPEC is, however, usually more strictly controlled.
The norm is for the witnesses to give evidence in chief by way of a written statement or report. The witness will then need to attend trial to be cross-examined. This takes the form of a series of questions by the other side about the witness’ statement or report and any other document in the case.
Q: What use of expert witnesses is permitted?
Expert witnesses are an extremely important part of patent litigation.
Each party will usually be given permission to adduce evidence from one independent expert. The expert owes a duty to the court, and this duty overrides any duty that he or she may have to those instructing him or her.
Depending on the issues in the case, the expert may give evidence and provide an opinion on:
- the person skilled in the art;
- the common general knowledge;
- whether a piece of prior art anticipates or renders obvious the patent;
- experiments; and
- aspects of infringement.
Q: Is the doctrine of equivalents applied by courts in your jurisdiction? If so, what form does it take?
Yes, the doctrine of equivalents was (re-)introduced by the Supreme Court in Actavis v Lilly in 2017.
The Supreme Court held that a two-stage test should be applied as follows:
- Does the variant infringe any of the claims as a matter of normal interpretation?
- If not, does the variant nonetheless infringe because it varies from the invention in a way or ways that is or are immaterial?
To determine the latter question, the Supreme Court posed three further questions:
- Notwithstanding that it is not within the literal meaning of the relevant claims of the patent, does the variant achieve substantially the same result in substantially the same way as the invention (ie, the inventive concept revealed by the patent)?
- Would it be obvious to the person skilled in the art, reading the patent at the priority date, but knowing that the variant achieves substantially the same result as the invention, that it does so in substantially the same way as the invention?
- Would such a reader of the patent have concluded that the patentee nonetheless intended that strict compliance with the literal meaning of the relevant claims of the patent was an essential requirement of the invention?
The court concluded that if the answer to these questions is ‘yes, yes, no’, then the variant does infringe.
Q: Are there problems in enforcing certain types of patent relating to, for example, biotechnology, business methods or software?
The courts are highly competent in addressing patents in all technical areas.
There are certain types of invention which may be excluded from patentability. These include:
- a discovery, scientific theory or mathematical method;
- a literary, dramatic, musical or artistic work or any other aesthetic creation whatsoever;
- a scheme, rule or method for performing a mental act, playing a game or doing business, or a computer program;
- the presentation of information;
- anything contrary to public policy or morality;
- a method of treatment of the human or animal body by surgery or therapy; and
- a method of diagnosis practised on the human or animal body.
In general, biotechnological inventions are patentable, subject to certain exceptions, which include:
- the human body, at the various stages of its formation and development, and the simple discovery of one of its elements, including the sequence or partial sequence of a gene;
- processes for cloning human beings;
- processes for modifying genetic material in the germ line genetic identity of human beings;
- uses of human embryos for industrial or commercial purposes;
- processes for modifying the genetic identity of animals that are likely to cause them suffering without substantial medical benefit, and also animals resulting from such processes; and
- any variety of animal or plant or any essentially biological process for their production.
Q: To what extent are courts obliged to consider previous cases that have covered issues similar to those pertaining to a dispute?
Judgments in previous cases that have covered similar issues are very important. In particular, in some instances a court will be bound by the ratio of a previous case (as part of a system of precedent). The ‘ratio’ is the legal reasoning for a decision (as distinct from the facts and the actual decision). A court is bound to follow the ratio of the judgment of more senior courts. For example, the Patents Court is bound by the ratio of the English Court of Appeal, the UK Supreme Court and the European Court of Justice.
Q: To what extent are courts willing to consider the way in which the same or similar cases have been dealt with in other jurisdictions? Are decisions from some jurisdictions more persuasive than those from others?
The courts will usually consider the judgments of Commonwealth courts, foreign courts which address European patents and the European Patent Office (especially the Enlarged Board of Appeal).
The judgments of the main foreign European patent courts and the European Patent Office are becoming increasingly persuasive (although not binding). The Supreme Court has indicated that, where there is a consistent body of case law before the Enlarged Board of Appeal at the European Patent Office, the UK court should be slow to depart from it.
Q: What realistic options are available to defendants seeking to delay a case? How might a plaintiff counter these?
Once a claim has commenced, the civil procedure rules set out a timetable for a case management conference. At this conference, the court gives directions as to how the claim should be conducted to trial, with certain deadlines for disclosure and evidence.
The parties have some flexibility to agree or apply for extensions to deadlines imposed by the civil procedure rules and case management directions. However, the court usually wants the trial to be held within 12 months of the claim commencing and any extensions should not jeopardise this. The parties can also apply for a stay of proceedings in order to allow settlement discussions to take place and, in limited circumstances, for opposition proceedings before the European Patent Office to conclude.
Q: Under what circumstances, if any, will a court consider granting a preliminary injunction? How often does this happen?
To obtain a preliminary (referred to as an interim) injunction, the patentee should demonstrate that there is a serious question to be tried and that the balance of convenience favours an injunction. To satisfy the balance of convenience (sometimes referred to as ‘the least irremediable prejudice’), the court considers:
- whether damages will be an adequate remedy for the patentee;
- whether the patentee’s cross-undertaking in damages will be an adequate remedy for the alleged infringer; and
- the status quo and any special factors.
In practice, it is difficult for a patentee to show that it will suffer irreparable harm and interim injunctions are therefore rarely granted. Where they are granted, it is usually in pharmaceutical actions where the patentee (originator) can demonstrate an adverse effect on pricing and its monopoly.
Q: How much should a litigant budget for in order to take a case through to a decision at first instance?
For the Patents Court, if both infringement and validity are an issue, the costs are likely to exceed £500,000 (including lawyer fees, expert fees, court fees and other disbursements). For those claims which are complex or of significant value, the costs can exceed £1 million.
For the IPEC, again if both infringement and validity are at issue, the costs are likely to be between £150,000 and £300,000 (including lawyer fees, expert fees, court fees and other disbursements).
Q: How long should parties expect to wait for a decision to be handed down at first instance?
One to three months.
Q: To what extent are the winning party’s costs recoverable from the losing party?
The general rule is that the successful party is entitled to recover a portion of its legal costs. The amount of costs will depend on the court, the costs regime applied in the court and whether the successful party lost on specific issues.
In the Patents Court, assuming there is no costs management order, the costs recovery is usually between 60% and 80%. If a costs management order is in place, the costs recovery can be up to 100%.
In the IPEC, the costs recovery is capped at £50,000 and is usually between £30,000 and £40,000.
Q: What remedies are available to a successful plaintiff?
The patentee is usually entitled to the following remedies:
- a final injunction;
- damages or an account of profits;
- delivery-up or destruction of any infringing goods;
- publication of the decision;
- a declaration of infringement and/or contested validity; and
Q: How are damages awards calculated? Are punitive damages available?
The patentee will be required to elect between damages or an account of profits. The former considers the loss suffered by the patentee, which can be calculated by its lost profit from like-for-like sales or a reasonable royalty rate. The latter is calculated by reference to the infringer’s profits made from the infringing item.
This assessment will take place as part of a damages inquiry or account of profits hearing, which is a separate procedure commenced after the trial on liability. In the IPEC, the amount of damages or account of profits recoverable is limited to £500,000.
The general principle is that the patentee should be put in the same position as if the infringement had not happened. The damages are therefore compensatory, not punitive.
Q: Under what circumstances might a court grant a permanent injunction? How often does this happen?
The court has discretion as to whether to grant a permanent injunction. However, in practice, this is usually granted.
Q: Does the losing party at first instance have an automatic right of appeal? If not, under what circumstances might leave to appeal be granted?
No, a party may appeal only with permission from either the court giving the judgment or the higher court. From the Patents Court and the IPEC, the appeal lies with the English Court of Appeal.
The appeal should only be on a question of law, not fact. To obtain permission the appellant must show that it has a real prospect of success or that there is some other compelling reason for the appeal to be heard.
Q: How long does it typically take for the appellate decision to be handed down?
Nine to 15 months.
Q: Is it possible to take cases beyond the second instance?
Yes, it is possible to appeal from the English Court of Appeal to the UK Supreme Court. However, to obtain permission to appeal, the party must meet a higher standard than normal; namely, that there is an arguable point of law of general public importance which should be considered. In practice, it is rare to obtain permission to appeal.
Q: To what extent do the courts in your jurisdiction have a reputation for being pro-patentee?
The courts adopt a balanced approach between patentee and alleged infringer.
The availability of evidential tools (eg, expert evidence, experiments and cross-examination) often means that it is the jurisdiction of choice to attack weak patents.
Q: Have courts in your jurisdiction handled cases relating to standard-essential patents and fair, reasonable and non-discriminatory Huawei v ZTE decision? If so, what have they decided?
The courts regularly address standard-essential patents (SEPs) and fair, reasonable and non-discriminatory (FRAND) licensing.
In Unwired Planet v Huawei, the English Court of Appeal upheld the following approach to SEPs and FRAND: “The approach advocated by the Court of Justice of the European Union to licensing in Huawei v ZTE is not mandatory but only an example of conduct which is not anti-competitive”.
If a SEP is held to be valid and infringed, the Patents Court will determine a FRAND licence. It is likely that the Patents Court, when determining the terms of a FRAND licence, will conclude that it should be a global licence. The royalty rate for the FRAND licence is likely to be based on comparable licences, the ‘top-down’ approach or a combination of the two.
If the prospective licensee did not accept the FRAND licence, the Patents Court will likely grant a FRAND injunction.
The FRAND injunction will lapse if the prospective licensee subsequently takes the court determined FRAND licence. If the court determined FRAND licence then lapses, the SEP owner can apply to the court to reinstate the FRAND injunction.
The ability to obtain a global FRAND licence or an injunction makes the Patents Court a very attractive jurisdiction for SEP owners.
Q: If they have not handled such cases, how would you expect them to approach the issue?
Q: Has your jurisdiction signed the Agreement on the Unified Patent Court? If so, when do you expect it to be ratified?
The United Kingdom has signed the Agreement on the Unified Patent Court and ratified it.
Q: Will your country play host to one or more divisions of the Unified Patent Court?
The United Kingdom will host a branch of the central division (which will have jurisdiction over revocation actions for pharmaceuticals, life sciences, chemicals, medical devices, agriculture and food). It will also host a local division. Both divisions will be located in London.
Q: Are there any other issues relating to the enforcement system in your country that you would like to raise?
The courts have the following advantages:
- the length of time to a final, unappealable decision (and, therefore, commercial certainty) is short;
- there are rigorous evidential tools available to establish a case;
- the courts have considerable discretion to give declaratory relief, meaning that they are not limited to simply determining infringement and/or validity;
- the judges are IP specialists with science and engineering qualifications, meaning that decisions are predictable, consistent and well-informed;
- decisions are given in a well-reasoned judgment, which is exportable to other jurisdictions; and
- the court’s decisions cover an important economic jurisdiction.
Taking these together, the courts are an attractive jurisdiction for litigants to clear the way for their products.