Litigation and eligibility: Portugal

Q: What options are open to a patent owner seeking to enforce its rights in your jurisdiction?

In Portugal, both administrative and judicial actions are available to patent owners, although most patent infringement cases are dealt with through civil suits. Customs intervention can also be availed of in order to prevent the import of infringing goods.

A complaint may be lodged with the competent administrative authorities or the Public Prosecutor’s Office. The administrative authorities and law enforcement agencies are proactive in combating counterfeiting – for example, complaints can be filed online.

Civil and criminal court proceedings can be initiated by a patent owner or licensee at a state court or arbitration court. The choice between these two forums depends largely on the specific legal situation and, of course, the willingness of the parties to accept a non-judicial dispute resolution process.

Q: Are parties obliged to undertake mediation/ arbitration before bringing a case before the courts? Is this a realistic alternative to litigation?

According to the new IP Code, there is no obligation to initiate proceedings through mediation or arbitration, whether institutionalised or not. This is a change from the previous code where Portuguese law provided for mandatory arbitration, albeit exclusively with regard to litigation between pharmaceutical companies (on reference medicines and generic drugs). ARBITRARE, a Portuguese institutionalised centre of mediation and arbitration which is fully dedicated to industrial property, is competent to hear disputes between applicants and the Portuguese patent and trademark office (INPI), as well as between private parties.

Q: Are there specialist patent or IP courts in your jurisdiction? If not, what level of expertise can litigants expect from the courts?

The first-instance IP Court based in Lisbon has been in operation since 2012. It comprises three judges specialising in the IP field, backed by several part-time judges. The court is competent to:

• hear cases relating to IP rights infringement;
• assess the invalidity of IP rights; and
• decide on appeals of INPI decisions.

Despite the specialised nature of the IP Court, this usually does not preclude the appointment of external experts in most patent cases, either as part of expert panels or as assistants to the court.

The court docket is experienced and responsive, and the long delays and backlogs that were common in the commercial courts before the establishment of the IP Court are now a thing of the past.

Further, according to the new IP Code, which enters in force from 1 July 2019, the INPI is now competent to handle administrative invalidity proceedings for trademarks, designs, appellations of origin and geographical indications.

Q: Are validity and infringement dealt with together, or does your country have a bifurcated system?

The IP Court is competent to decide on both the validity and infringement of patents. Accordingly, when a patent infringement case is brought before the court, the alleged infringer will typically initiate a counterclaim for nullity (also in the IP Court).

However, there have been parallel proceedings regarding the same patent and same parties in the arbitration court and the IP Court, which is essentially a type of bifurcated proceeding.

As previously mentioned, the new IP Law no longer provides for mandatory arbitration with regard to disputes between pharmaceutical companies. Arbitration courts are not competent to declare the nullity of a patent, as constitutional case law has made clear that a declaration of nullity can be requested only before the IP Court, but the new IP Code allows that invalidity may be argued and considered merely inter partes. In May 2017 the Constitutional Court had decided that it would be unconstitutional for arbitration proceedings to refuse to consider nullity arguments if these are made as an exception and strictly as a defence against infringement.

We believe that this will not be the end of parallel proceedings, as the alleged infringer is not prevented from filing a nullity action at the IP Court in parallel to pending arbitration proceedings, but this will be highly unlikely under the new law.

From the same May 2017 decision, it seems that the Constitutional Court is of the opinion that arbitration proceedings should not be suspended if there is a parallel nullity case at the IP Court. This may well entail a contest between the parallel proceedings in deciding the likelihood of nullity in arbitration versus the declaration of actual nullity in the IP Court.

Q: Who may represent parties engaged in a dispute?

Only a lawyer who is a member of the Portuguese Bar is entitled to represent parties in court. For administrative proceedings directly (and exclusively) addressed to INPI, a qualified patent and trademark attorney can represent parties, regardless of whether he or she is a lawyer.

As in other jurisdictions, patent litigation normally involves a team with both legal and technical skills, while the parties are actively represented in court by one or more lawyers managing the team.

Q: To what extent is pre-trial discovery permitted?

Portuguese law does not foresee a formal pre-trial discovery phase. However, the Portuguese Industrial Property Code contains a body of injunctive measures to:

• obtain and preserve infringement evidence; and
• support follow-up proceedings against the alleged infringer, including the disclosure and seizure of elements (eg, samples, materials, means of production and shipments) needed to prove infringement and other kinds of evidence (eg, banking, accounting or commercial documents).

These measures are typically requested in preliminary proceedings, given their urgency and relevance. Preliminary proceedings are normally followed by an action for main proceedings. This structure of preliminary proceedings followed by main proceedings is also present in arbitration proceedings.

Less frequently, preliminary measures may be decided ex parte. This may be highly valuable, for example, in urgent cases where there is an imminent need for the preservation of evidence or a risk of irreversible damage.

Q: Is cross-examination of witnesses allowed? If so, what form does this take?

Most evidence is presented in writing; nevertheless, cross-examination is possible and comes in many forms. For example, expert witnesses may be asked to respond to questions regarding written expert opinions or to react to a conflicting expert opinion. Normally, witnesses are required when facts (eg, public prior use) can be proved only by testimony. In these cases, cross-examination may well be critical to the case’s outcome.

Q: What use of expert witnesses is permitted?

Expert witnesses can be designated directly by the court (as either a single expert or a panel of experts, depending on the complexity of the case) and by the parties. Expert witnesses may give evidence in written form or orally in court. Expert opinions are not binding on the court, even if the experts were designated by the court itself.

In the case of a panel of experts, each party will normally appoint an expert and the court will appoint a third expert. The experts are required to produce a report, where agreement or disagreement can be expressed by any of the appointed experts regarding each of the matters in the report. The parties may object or request clarifications to the report. A second expert opinion may also be requested.

Q: Is the doctrine of equivalents applied by courts in your jurisdiction? If so, what form does this take?

Portuguese courts have applied the doctrine of equivalents on several occasions, but there is certainly no Portuguese doctrine of equivalents as yet. German case law is persuasive to this effect, as is English, French and Spanish case law. The finer points of equivalence may be difficult to argue or understand before an open court and a judge or arbitrator may well prefer to ask for expert evidence in this regard.

Q: Are there problems in enforcing certain types of patent relating to, for example, biotechnology, business methods or software?

Some problems may arise in very specific and highly complex fields which require technical expertise and sophisticated interplays of law and science. The relatively low number of patent litigation cases in Portugal is admittedly not a positive factor, but the ongoing work of the specialised IP Court is expected to continuously improve on this matter.

Q: To what extent are courts obliged to consider previous cases that have covered issues similar to those pertaining to a dispute?

Portuguese judges are tied to the general principle of not being bound by previous decisions and exclusively applying the law. However, relevant past decisions in the same field (generally arising from the superior courts) are frequently cited.

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?

Important cases decided abroad can be cited in a Portuguese court decision and relevant decisions are certainly persuasive, even though there is no clear trend on a predominant jurisdiction to be followed. In nullity matters, case law from the European Patent Office boards of appeal can also be cited.

Q: What realistic options are available to defendants seeking to delay a case? How might a plaintiff counter these?

A defendant may delay a case in multiple ways. Defendants have successfully delayed cases by requesting multiple expert panels, objecting on procedural matters and appealing unfavourable procedural decisions, among other tactics. A well-prepared plaintiff will normally front-load a case and make every effort to conduct a vigorous procedural case, avoiding a potential ensnarement. A well-prepared, proactive and responsive lawyer can make a substantial difference.

Q: Under what circumstances, if any, will a court consider granting a preliminary injunction? How often does this happen?

The grant of a preliminary injunction in a patent infringement case depends on the verification of a set of circumstances and fulfilment of certain requirements. The patent owner must prove ownership of or entitlement to exploit the patent and must provide evidence of immediate infringement (or the threat of an imminent act of infringement). There is no strict time limit to file for preliminary measures. Preliminary injunctions are frequently requested in Portugal, as a quicker and more effective way of enforcing patent rights.

Q: How much should a litigant budget for in order to take a case through to a decision at first instance?

The costs of a lawyer assessing infringement before litigation are relatively small. However, the costs of infringement proceedings vary significantly, depending on factors such as the value of the dispute, the complexity of the case and the degree of involvement of patent attorneys or expert witnesses. A cautious estimate for litigation on the merits at first instance can vary between €20,000 and €150,000. For more complex or important cases, higher amounts should be budgeted. Also, in arbitration proceedings, court fees can be quite substantial.

Q: How long should parties expect to wait for a decision to be handed down at first instance?

There is a degree of uncertainty in Portugal on this matter and due to the relatively low number of patent cases, data on a few specific court decisions cannot easily be extrapolated. Arbitration proceedings tend to be swifter and the specialised IP Court has worked to reduce substantially the duration of proceedings. In the case of arbitration for pharmaceutical litigation, one year can be a reference term for a court decision.

Q: To what extent are the winning party’s costs recoverable from the losing party?

As a general rule, the losing party pays the court fees. The losing party is also responsible for the fees and costs of the successful party, but legal fees are normally capped. It is expected that larger portions of legal fees may be recovered by successful parties in the future.

Q: What remedies are available to a successful plaintiff?

Remedies include:

• the award of damages;
• injunctions prohibiting activities related to the patent infringement; and
• orders for the destruction of infringing products or the means used for said infringement.

Q: How are damages awards calculated? Are punitive damages available?

Damages awards are calculated by taking into account the infringer’s profits, the resulting damages and lost profits suffered, and the costs incurred through the patent’s enforcement and termination of the harmful conduct. The court may also use, as a basis for calculations, a theoretical royalty that the patentee would have received if the infringer had requested lawful authorisation to use the patent. Punitive damages are not available per se, but a court may take into account, within the margin allowed by all previous criteria, a case of repeated or particularly grievous infringement.

Q: Under what circumstances might a court grant a permanent injunction? How often does this happen?

A permanent injunction can be granted by the court only after the expiration of the infringer’s right to appeal the decision, thus confirming that the infringement effectively occurred. The decision can bring together the verdict to refrain from the performance of certain commercial activity, the destruction of goods and the payment of compensation.

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?

The right to appeal is guaranteed to a losing party at first instance, unless that party accepts the court decision or applies outside the official period for appeal (generally 30 days).

Q: How long does it typically take for the appellate decision to be handed down?

A full appeal of a decision on patent infringement in Portugal is likely to take more than two years.

Q: Is it possible to take cases beyond the second instance?

Portuguese law allows for applications to the Supreme Court, provided that the remaining applicable rules are observed (eg, those regarding the value attributed to the case). Nevertheless, this appeal can be based only on the legal aspects of the case. Constitutional matters may be appealed to the Constitutional Court.

Q: To what extent do the courts in your jurisdiction have a reputation for being pro-patentee?

Due to the lack of a consistent track record of decided patent infringement cases in Portugal, this question cannot be answered with certainty. There is some notion of arbitration proceedings being more pro-patentee than state court proceedings, but this may well be attributed to the past resistance of some arbitration courts to consider nullity arguments, even if exceptionally, as a defence (as previously mentioned, this was recently changed by the new IP Code).

Q: Have courts in your jurisdiction handled cases relating to standard-essential patents and fair, reasonable and non-discriminatory licensing since the ECJ’s Huawei v ZTE decision? If so, what have they decided?

No, we are not presently aware of any cases relating to Huawei v ZTE.

Q: If they have not handled such cases, how would you expect them to approach the issue?

The commercial courts – previously competent to handle patent cases – frequently made reference in their decisions to the constraints to competition that IP rights can cause. It can be expected that, when deciding on patent-encumbered standards, the IP Court will continue this approach while fully taking ECJ case law into account.

Q: Has your jurisdiction signed the Agreement on the Unified Patent Court? If so, when do you expect it to be ratified?

Portugal has already ratified the Unified Patent Court Agreement.

Q: Will your country play host to one or more divisions of the Unified Patent Court?

There are plans to host a local section of the Unified Patent Court in Lisbon, but there is currently no official confirmation or timeline in this regard.

Lisbon intends to host a mediation and arbitration centre for disputes falling within the scope of the Unified Patent Court Agreement.

Q: Are there any other issues relating to the enforcement system in your country that you would like to raise?

The most singular aspect of the Portuguese system used to be the mandatory arbitration for litigation between pharmaceutical companies based on reference and generic drugs (as previously mentioned, this is no longer applicable).

The new IP Code brings several changes, including an exclusive competence of the INPI to assess the validity of registrations of trademarks, designs, appellations of origin and geographical indications – subject to appeal to the Portuguese specialised IP Court. The new IP Code also brings the EU Trade Secret Directive into national law.