Global Patent Litigation: Trends, Tools, and

Strategies to Enforce Your Patent Rights GloballyData Metrics, Win Rates, and Other Key Considerations for Parties Pursuing a Global Approach

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Michael Crichton, Partner, Gowling WLG, Ottawa

C. Gregory Gramenopoulos, Partner, Finnegan Henderson Farabow Garrett & Dunner, Washington, D.C.

Vincenzo Jandoli, Partner, Avvocati Associati Franzosi Dal Negro Setti, Milan, Italy

Roland Küppers, LL.M., Partner, Taylor Wessing, Düsseldorf

Chris Thornham, Partner, Taylor Wessing, London

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These materials have been prepared solely for educational and informational purposes to

contribute to the understanding of U.S. and international intellectual property law. These

materials reflect only the personal views of the authors and are not individualized legal

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situation. Thus, the authors and Finnegan, Henderson, Farabow, Garrett & Dunner, LLP

(including Finnegan Europe LLP, and Fei Han Foreign Legal Affairs Law Firm), Gowling WLG,

Avvocati Associati Franzosi Deal Negro Setti, and Taylor Wessing, cannot be bound either

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5

AgendaI. Introduction: The Global Litigation Landscape

A. What are the top countries for litigating patent disputes?B. What trends can be observed in global patent litigation?C. Case examples

II. Comparison of Top Jurisdictions for Litigating PatentsA. Legal frameworks and courts of first instance for patent disputesB. Objective litigation metrics including win rates, time to trial, and costsC. Available remedies, including damages and injunctionsD. Procedural and substantive differences between jurisdictions

III. Tools and Planning StepsA. Four tools for effective planningB. Addressing key questions for each jurisdictionC. Forum selection and timelines

IV. Strategies to Develop a Winning Global Patent Litigation PlanA. Inter and intra country strategiesB. Special considerations and planning for individual jurisdictionsC. Leveraging procedural and substantive differences between jurisdictions

6

▪ Founded in January 2002

Michael C. Elmer, Finnegan, Henderson

▪ Members: Top Patent litigators from +30 countries

Argentina, Austria, Australia, Belgium, Brazil, Canada, Chile,

China, Denmark, England, Finland, France, Germany, Greece,

India, Ireland, Israel, Italy, Japan, Korea, Mexico, Netherlands,

New Zealand, Norway, Russia, Scotland, Spain, South Africa,

Sweden, Switzerland, Taiwan, Turkey, and United States

7

• Win rates, time-to-trial, and other global patent litigation data were not readily available

• Companies could not make informed decisions about how, when, and where to litigate

• Substantive and procedural differences in legal systems were not fully appreciated

• More transparency was needed to develop effective global litigation strategies

8

Why Was the Global IP Project Started?

Activities• Data collaboration agreement with Darts IP (www.darts-ip.com)

• Treatise: Global Patent Litigation: How and Where to Win

― Co-authored by Global IP Project members

― Published by Bloomberg Law

― Third Edition – Published in April 2019

• Website (www.globalpatentmetrics.com)

9

Most Active Countries for Patent Litigation

Average Annual Filings (2006-2016)

China, 8400, inf onlyU.S. 4280

Germany, 1200

France, 350

India, 200

Japan, 150

Taiwan, 140

England, 140-150

Italy, 120

Canada, 72

10

Trends in Global Patent Litigation

Global trend toward specialized patent courts

• China, Switzerland, Russia, etc.

Litigation in U.S. v. Rest of the World (RoW)

• U.S.: Damages are usually important; injunctions are not readily

available (eBay v. MercExchange); broad discovery and right to jury

trial; attorney fees not automatic

• RoW: Injunctions are usually more important (automatic to winning

party); damages are a lower priority; limited or no discovery; no jury

trial; “loser pays” more prevalent

11

Trends in Global Patent Litigation

NPEs Now Going Global

12

65 68 6375

90

146

119

169 173

0

20

40

60

80

100

120

140

160

180

200

2009 2010 2011 2012 2013 2014 2015 2016 2017

Number of actions concerning NPE related litigation (EU)

Non-Practicing Entities litigating in the EU (2009 – 2017)

Trends in Global Patent Litigation

NPEs Now Going Global

• In Europe, NPEs favor Germany the most, followed by the UK, the

Netherlands, France, and Italy

13

Source: Darts-ip, NPE Litigation in the European Union (2018)

4%

France

19.5%

Germany

5.5%

The Netherlands

4.2%

United Kingdom

6%

Italy

96% 80.5% 94.5% 95.8%94%

Trends in Global Patent Litigation

14

Source: Darts-ip, NPE Litigation in the European Union (2018)

Case Examples: Global Patent Litigation

Unwired Planet v. Huawei

• Cases filed in the UK and DE; asserted patents (acquired from

Ericsson) claimed to be essential (SEPs) to wireless standards (2G,

3G, and 4G).

• Google and Samsung settled earlier; settlement recently reached

with Huawei (2020).

Philips v. Asus

• Asserted wireless patents include SEPs and implementation patents.

• Ongoing litigation in DE (more than one dozen patents); earlier cases

in the UK and NL.

15

Comparison of Top Jurisdictions

for Litigating Patents

16

Legal Frameworks

Around the World

LegalSystem

Common Law

Civil Law

Litigation

Unified

Bifurcated

Australia,

Canada,

England,

India,

Israel, NZ,

S. Africa,

U.S.

Brazil, China, France,

Germany, Greece, Italy,

Japan, NL, Russia, S.

Korea, Spain, Switzerland,

Taiwan

Australia, Canada, England, France,

Greece, India, Israel, Italy,

Japan, NL, NZ, S. Africa,

Spain, Taiwan, U.S.

Brazil, China,

Germany,

Russia, S.

Korea

17

CountryCommon v.

Civil Law Unified v. Bifurcated

Number of trials for validity/infring/

damages

Canada Common Unified Usually 2

China Civil Bifurcated 2

England

and WalesCommon Unified 2

France Civil Unified 1

Germany Civil Bifurcated 3

Italy Civil Unified 1

US Common Unified 1

Legal Frameworks

Around the World

18

CountryNumber of First-Instance

Infringement CourtsBusiest Infringement

CourtBusiest Invalidation Forum (Bifurcated)

Canada 1Federal Court

Toronto/OttawaN/A

China 78 + 4 + 31 + 3 (IP Courts)Invention: Beijing 1st

Utility Model: Guangdong Guangzhou

State Intellectual Property Office (SIPO)

England

and Wales1 + 1 (IPEC)

Patents CourtLondon

N/A

France 1High Court

ParisN/A

Germany 12 Düsseldorf Federal Patent Court

Italy 22Corporate Court

MilanN/A

US 94 +2 (Fed. Claims, ITC)District Court of

DelawareN/A (PTAB)

Number and Location of First-Instance

Patent Infringement Litigation Courts

19

20

Legal Framework in Germany – Bifurcation

Appeal

Federal Court of Justice

Infringement action

District Court

Judgment Possible stay

Court of Appeal

Appeal on points of law

Nullity action

Judgment

Appeal

Federal Patent CourtDefendant files Nullity action

Patent revoked Patent limited Patent upheld

21

Courts of First Instance in Germany

Berlin

Hamburg

Braunschweig

Leipzig

Erfurt

Dusseldorf

64.5% patentee win rate

(inf)

Frankfurt

Mannheim

60% patentee win rate

(inf)Saarbrücken

Nuremberg

Munich

62% patentee win rate

(inf)

▪ 12 specialized courts for

patent infringement

disputes (Forum Shopping)

▪ 900 patent-related civil

actions filed in Germany

per year:

˃ Dusseldorf 450

˃ Mannheim 200

˃ Munich 150

˃ Others 100

▪ Federal Patent Court rules

on nullity actions

▪ 250 nullity actions filed

annually

▪ 50% patentee win rate

(Global IP methodology: win

= maintained + ½ partially

nullified)

▪

22

Legal Framework in Germany

Special feature:

Bifurcated system Nullity and infringement

proceedings are separate

Infringement case can be

stayed pending the outcome

of the parallel invalidity attack

Benefits:

Short infringement

proceedings

Reducing procedural costs

Disadvantage:

Injunction gap Infringement decision can be

(preliminarily) enforced before

the parallel invalidity attack is

decided

Requirements for a stay of the

infringement proceedings are

high

Burden of proof on the

infringer

Legal Framework in Germany - Injunction Gap

0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34

Nullity procedure

Infringement procedure

Infringement action

Duration in months

Hearing

Statement of

defence

Preliminary opinion

Hearing

Judgment

Nullity

action

Injunction gap

23

Canadian Court System• Federal Court

o Exclusive jurisdiction to hear impeachment

actions (declaring a patent or any claim to be

invalid or void).

o National court with jurisdiction across Canada

(no forum-shopping)

o Two main types of patent litigation cases: o Infringement actions with counterclaim for

invalidity

o Includes new PM(NOC) proceedings

(discussed below)

o Impeachment proceedings

• Provincial Superior Courts

• Note: Given federal jurisdiction and IP expertise, vast majority of actions are brought in the Federal Court.

Legal Framework in Canada

Handles vast majority of

patent cases as a partially-

specialized IP Court

Approximately 45 Judges

total

Approximately 10 Judges

focused on IP

24

Patent Infringement

• Non-bifurcated system (validity and infringement are tried together)

• 6-year limitation period (Patent Act s. 55.01): plaintiff can only claim a

remedy with respect to an act of infringement occurring within 6 years of

commencement of the action

• Federal Court of Canada and any provincial superior court are proper

venues (Patent Act s. 54; Federal Courts Act s. 20)

• Given federal jurisdiction and IP expertise, vast majority of actions are brought in

the Federal Court

Patent Impeachment

• Federal Court (Patent Act s. 60): any “interested person” can initiate an

impeachment action for declaratory judgment of invalidity and/or non-

infringement

Patent Infringement

Actions in Canada

25

New PMNOC REGULATIONS in Canada• Patented Medicines (Notice of

Compliance) Regulations (PMNOC

Regulations) overhauled in September

2017

• Objectives of New Regulations • Applications replaced with actions

• Elimination of dual litigation

• Right of appeal for innovators

• Relief sought• Declaration for infringement /

Counterclaim for invalidity

• Broadened scope of enforceable claims

• Quia timet actions for unlisted patents

• Commencement of Proceedings• 45-day deadline to commence action

• Mandatory document production for

generic

• Mandatory document production for

innovator

Pharmaceutical Patents

26

Global Patent

Litigation Metrics

27

Global Patent Litigation: Annual Filings

and Win Rates (2006-2016)

28

Note: Patent owner “win” is on a per case basis and an infringement case that went to a first-

instance trial decision on the merits and at least one claim was held valid and infringed.

Country Annual Patent

Litigation

Filings (avg.)

Patentee win rate on first-instance decisions

on the merits

China 8400 (inf., 2011-

2016)

Infringement:

• Invention patents: 13% (1/8) (2012–2016)

• Utility models: 50% (1/2) (2012–2016)

Validity:

• Invention patents: 33% (2012–2016)

• Utility models: 100% (2/2) (2012–2016)

U.S. 4280 Overall: 55.5%; Contested: 22.3%; Trial: 61.6%; Jury verdict: 65.7%;

Bench trial: 53.7%

Germany 1200 Infringement: 64% (699/1061) (2006–2016)

Nullity actions in Federal Patent Court: 50% (2006–2016)

Combined win rate (only if same patent): 32%

France 350 33%

India 200 100% (2/2)

Patent Litigation: Most Active Countries By

Annual Filings (2006-2016)

29

Country Annual Patent Litigation

Filings

Patentee win rate on first-instance decisions

on the merits

Japan 150 Invention patents: 24% (127/522)

Utility models: 14% (3/21)

Taiwan 140 (2008-2016) Invention patents: 14% (43/311)

Utility models: 21% (91/426)

Design patents: 35% (28/79)

(2008-16)

England and

Wales

140-150 40% (59/147)

Italy 120 43% (150/352)

Canada 72 52% (32/61)

Note: Patent owner “win” is on a per case basis and an infringement case that went to a first-

instance trial decision on the merits and at least one claim was held valid and infringed.

Avv. Vincenzo JandoliFRANZOSI DAL NEGRO SETTI

E-mail: jandoli@franzosi.com

Milan Turin Venice Rome

67.6560

50

33.33

W L

Win Rates Can Vary

Among First-Instance Courts:

Italy (2018-2019)

Milan Turin Venice Rome

35 4030.76

40.9

W L

Urgent proceeding Full scale litigation

30

31

Time to Trial and Costs

Country

Average time (months)

from filing to first-instance

decision on the merits

Average cost of first-instance

proceeding (USD $)

England 17.2 $1.35 M

Germany 12 (infringement); 25 (validity)

$100,000–$500,000 infringement

action and defending parallel

nullity action

Canada 30 $500,000–$1.5 M

China 8.7 (infringement); 6 (validity) $50,000–$200,000

Italy 42 $100,000-$200,000

US 30 $4 M

Avv. Vincenzo JandoliFRANZOSI DAL NEGRO SETTI

E-mail: jandoli@franzosi.com

Avv. Vincenzo JandoliFRANZOSI DAL NEGRO SETTI

E-mail: jandoli@franzosi.com

3633

30

47

54

0

10

20

30

40

50

60

Milan Turin Venice Bologna Rome

Time to Trial Can May

Among First-Instance Courts:

Italy (Damages Incl.) (2018-2019)

32

Number of Proceedings Commenced in

Canada

53

6864

49

57

72

54 5650

47

101

43

52

70

50

63

5053

57

6760

83

6763

48

79

68

53

26

34

4437

103

121 121116 117

155

121 119

98

126

169

96

78

104

94100

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Patent Infringement

PMNOC Regulations

Cumulative

33

Patentee Win Rate 2006-2017:

First-Instance in Canada

1

2

1

1 1

6

1

5 4

23

1

3

1

1

4 4

1

3

3 3

54

2

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

NU

MB

ER O

F C

ASE

S W

ON

Patent Owner Alleged Infringer

Average Win Rate for Patentees: 43%

34

PE vs. PAE vs. NPE

in Canada

0

20

40

60

80

100

120

2010 2011 2012 2013 2014 2015 2016 2017 2018

PE vs. PAE vs. NPE Cases (Total Number)

Competitor PAE NPE

0%

20%

40%

60%

80%

100%

2010 2011 2012 2013 2014 2015 2016 2017 2018

PE vs. PAE vs. NPE Cases (%)

Competitor PAE NPE

35

Pharmaceuticals: Patentee Outcomes in

PMNOC Decisions in Canada

36

37

Number of Infringement Proceedings

Commenced in Germany

― Patent-related civil actions started in Germany*

― Selected courts

571

665

491 489460 460

498

422488

425

328

250283 306

215175168 158 174 186 163

108

181144

0

100

200

300

400

500

600

700

2009 2010 2011 2012 2013 2014 2015 2016*** 2017** 2018** 2019

DC Düsseldorf DC Mannheim DC Munich

* Data may include cases concerning utility models, employee’s inventions and/or plant variety rights** Source: JUVE News *** Source: Estimate based on JUVE News

38

Patentee Win Rate (2006-2017):

First-Instance Infringement in Germany

― Average win rate for patentees: 64% (855/1364)

Patent Nullity Actions

Commenced in Germany

― Nullity proceedings started and terminated before the Federal Patent Court*

228255

297

261

226 221 217

284

244219227

242

276258 262 261

242

206 206

244

0

50

100

150

200

250

300

350

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

New Proceedings Action proc. Terminated

* Source: Annual reports of the Federal Patent Court

39

― 1st instance patent nullity actions (2006-2016; 1.486 actions filed)

― Success rate for patentee: 50%* (519 of 1.027 decisions)

Patentee Win Rate (2006-2016):

First-Instance Patent Nullity Actions

418

179

430

At least oneclaim amended= partially nullified

Nullified

Maintained

*Global IP methodology: win = maintained + ½ win (partially nullified)

40

Remedies

41

Type of Damages Available

Country Reasonableroyalty

Lostprofits

Infringer’sprofits

Statute oflimitations(years)

Largest everdamages award(USD $)

Canada Yes Yes Yes 6 $515.3 M

China Yes Yes Yes 2 $44 M

England and Wales

Yes Yes Yes 6 $6.15 M

France Yes Yes No 3 $12.3 M

Germany Yes Yes Yes 3 $2.7 M

Italy Yes Yes Yes 5 $7 M

U.S. Yes Yes No 6 $2.54 B

42

Preliminary Injunction Win Rates

29%2/7

58%7/12

69%24/35

41%34/83

31%332/1070

0%

10%

20%

30%

40%

50%

60%

70%

80%

Canada England Germany Italy U.S.

Source: England: DARTS-IP; France: DARTS-IP (2006–2016); Germany: Global IP Project; Italy: DARTS-IP (2006–2016); United States: LegalMetric Nationwide Report, Preliminary Injunctions in Patent Cases Jan. 2000–Dec.2017. Of 1,070 preliminary injunction decisions, 296 were granted and 36 were granted-in-part.

43-

Remedies in Germany – Overview

― Injunction (permanent)

― Removal/recall from trade channels

― Destruction

― Information on sales, suppliers and customers

― Rendering of accounts

― Damages

― Cost reimbursement:− Attorneys‘ and patent attorneys‘ fees

• Winning party is entitled to reimbursement

• Reimbursement limited by statutory fees calculated on the basis of the value-in-litigation

− Court fees

− Necessary costs for proceedings, e.g. translation costs, travel expenses, etc.

44

▪ Required: Exceptional circumstances render economic consequences of the injunction unreasonable, i.e.

− patent concerns an essential functional component of a complex product

− no or at least no reasonable possibility of licensing

− aspects of good faith (e.g. finding of non-infringement by lower courts).

▪ In the specific case, the FCJ did not award an exceptional grace period.

▪ Arguments: “airscarf” not functionally essential component, but rather special equipment; car remains

usable without it; lack of licensing possibility not substantiated by defendant.

Remedies in Germany –

Proportionality of Injunction?• Federal Court of Justice, judgment of 10 May 2016, case

no. X ZR 114/13, Wärmetauscher („Heat exchanger“)

• Car manufacturer was sued for infringement of patented,

seat-integrated fan for convertibles (Daimler’s “airscarf”).

• FCJ stipulated requirements for exceptional grace period

for distributing already existing infringing products due to

disproportionality of immediate injunctive relief

45

Practically only relevant for damages, rendering of accounts:

− Objection to be raised by defendant, not taken into consideration by the court ex officio

− 3 years from the end of the year in which the patentee had/should have reasonably had

knowledge of the infringing act(s) in Germany

− Claims for unjust enrichment (Restschadensersatzanspruch) still available if more than 3

years have passed

• within 10 years since (known) infringing act and damages were incurred or

• within 30 years from the date of (unknown) infringing act and damages incurred more than 10 years before.

− Calculation methods of the infringer’s profits and reasonable royalty are available

• FCJ, judgment of 26 March 2019, case no. X ZR 109/16 – Spannungsversorgungsvorrichtung (“Power Supply

Device”)

Remedies in Germany –

Statute of Limitations

46

▪ Summary proceedings

▪ Requirements:

− Clear-cut infringement

− No reasonable doubts about patent‘s validity

― First instance inter partes proceedings on validity

― or prior successful patent enforcement

― or expiry of patent is imminent

− Urgency, usually within 1-2 months (varying by court)

― after obtaining knowledge of infringement/infringer

― after confirmation of patent‘s validity

− Preliminary relief required to avoid considerable damages (balance of

interests)

― Usually inter partes proceedings in patent cases

― Standard of proof: prima facie evidence

Remedies in Germany –

Preliminary Injunction Proceedings

47

Successful plaintiff’s remedies:• Damages or an accounting of profits for post-grant infringement

• Plaintiff may elect one or the other, but profits are only available where plaintiff demonstrates that it would be equitable to grant such a remedy

• Reasonable compensation (reasonable royalty) for pre-grant (laid open period) infringement

• Permanent injunction• Subject to equitable considerations

• Delivery up or destruction

Usually (but not always), the Court will award costs to the successful party (plaintiff or defendant)

• Typically, costs awards represent 20-40% of a party’s actual attorney fees, and 100% of all reasonable disbursements

Remedies in Canada

48

How and When Damages Accrue in Canada

49

Procedural Differences Between

Germany and Canada

50

Document Discovery• Affidavits of documents list all documents (or bundles of documents) that are relevant and

non-privileged

• Onus on each party to prepare one’s own affidavit – scope is relatively broad

• Obligation to update the affidavit of documents with new relevant documents

• Protective and confidentiality orders routinely granted

Oral Discovery• One representative per party examined orally (akin to 30(b)(6) witness in the US)

• Undertakings given where the representative does not know answer, or where further relevant documents should be produced

• Refusals motions and follow up examinations are common

• Discovery evidence may be read in at trial

• Matters refused on discovery cannot be presented at trial by the refusing party

• Ongoing obligation to correct answers

• No other discovery examinations, except inventor examinations permitted

Discovery in Canada

51

Expert witnesses• Experts are almost always used in patent litigation, though ultimately

claim construction is a legal issue

• Experts are regularly called upon to provide opinion evidence regarding the technology at issue in the case, and the quantification of monetary remedies

• Parties are limited to a total of five experts each

Expert reports• Claim construction and infringement/validity (multiple rounds of

reports)

• There are no pre-trial examinations (depositions) of experts; experts are only examined at trial

Experts in Canada

52

Trial before a single judge (no jury)• Opening statements

• Plaintiff’s evidence (reading in discovery admissions; fact and expert witnesses)

• Defendant’s evidence (reading in discovery admissions; fact and expert witnesses)

• Plaintiff’s reply evidence (fact and expert witnesses)

• Closing arguments of all parties

• Typical duration: 10-20 court days

Trial judge’s decision• Typically published within a few months of the end of trial, sometimes longer

• All issues addressed in written decision

• Thirty (30) days to appeal to Court of Appeal

Trial in Canada

53

▪ Permissible evidence in proceedings on the merits:

− Expert opinion

− Documents

− Visual inspection by the court

− Witness testimony

− Hearing of the party

▪ Standard of proof for preliminary injunctions:

− prima facie evidence (e.g. affidavit)

Evidence in Germany

54

▪ Types of experts

− Expert witness

− Court-appointed expert

▪ Expert witness/“Private expert opinion“

− Offered by one of the parties in support of own argument

− Written opinion has same evidentiary value as party‘s own statement

− Expert witness can be – but is practically rarely – examined by court

• (supplementary questions by the parties, no cross-examination)

▪ Court-appointed expert

− Neutral

− Delivers written opinion

− Examination by court during trial

• (supplementary questions by the parties, no cross-examination)

Experts in Germany

55

▪ Main arguments exchanged in writing

▪ Front-loaded proceedings

▪ Short trial

− One main hearing date (preparatory hearing as exception)

− Separate hearing if evidence procedure is necessary

▪ Court usually provides preliminary assessment at the beginning of the hearing

▪ Pleadings focused on specific issues

▪ Date for rendering court decision given at end of the hearing

− Exception: Decision at the end of the hearing („Stuhlurteil“)

Trial in Germany

56

Tools and

Planning Steps

57

Global Case Scenario

• Client

Manufacturer based in US, with sales in the US, Canada and Europe

Granted patents in the US, Canada, Europe (Germany, UK, Italy ,etc.) and China

• Competitor

Manufacturer based in China.

Starting to sell in the US, Canada and Europe.

• Questions for the client:

1) Attempt to negotiate global licenses?

2) Pursue infringement action in US?

3) Pursue infringement action in Canada?

4) Pursue infringement action(s) in Europe, but in which countries?

5) Pursue infringement action in China?

6) Wait for declaratory actions by competitor in some countries?

Best strategy?

58

59

A. Four tools for effective planning

B. Addressing key questions for each jurisdiction

C. Forum selection and timelines

D. Early case valuation methodology

Overiew: Tools and Planning Steps

Four Tools

Tool 1: Early Case Assessment

Afford to litigate?

Tool 2: Objective Data

What are chances of success?

Tool 3: Litigation Timeline and

Cost

How much? How long?

Tool 4: Case Valuation

Methodology

What will I get?

60

Typical early case assessment questions for a

company pre-suit:

1. Can you afford patent litigation?

2. Are you using/licensing the technology of your patent?

3. Does infringement cause significant damage to you/licensees?

4. Where might a case have most impact against your opponent?

5. Are you aware of any action an infringer could initiate?

6. Do you have a specific patent policy? Is it important that

competitors see you will pursue infringement?

Tool 1: Early Case Assessment

61

Tool 2: Objective Data Metrics

62

Tool 3: Time and Cost of Litigation

63

30 months$4 million

Tool 4: Expected Value Calculation

64

• WRc Combined Win Rate (Validity and Infringement)

A Expected Value of Past Damages

B Expected Value of Future Remedy

C Expected Value of Reimbursed Litigation Costs

• WRv Validity Win Rate

D Expected Value of Lost Licensing Revenues

E Expected Value of Reimbursing Opposing Party Costs

F Costs of Going to Trial

Addressing Key Questions for a Jurisdiction

(England and Wales)

26

26

ENGLAND: TIME AND COST

Infringement and invalidity per party per month (average case)

11 MONTHS

$1M6 MONTHS

Actual average time from filing to decision in 2010: 15 months.

Source: TaylorWessing

65

As a case progresses: • There are peaks and troughs of activity/costs• Parties refine their case assessments• There are windows for settlement

Forum Selection and Timelines

For each jurisdiction consider the four questions:1. Chances2. Time3. Cost 4. Value (EV2 formula or other)

In Europe:

• Germany is common "first strike" location to sue for infringement

• The UK is a common location to challenge validity

• Italy may be a good forum due to market size or location of litigants

66

Early Case Valuation Methodology

1. Early case assessment

2. Consideration of evidence to support the case/improve chances― pre-action procedures― inspection / samples― disclosure (discovery) of documents during proceedings― deposition of witnesses― material from other court proceedings― experts: appointed by parties or the court?

3. Timing considerations that may favour a jurisdiction

4. Case value in each jurisdiction (EV2 or other calculation)

67

Strategies to Develop a

Winning Global Litigation Plan

68

Developing a Winning Global

LitigationStrategy

69

▪ “Global Case Scenario”– Products sold or offered in more than one country

– Patents exists that provide opportunity to litigate in more than one country

– Forum shopping (inter and/or intra-country)

▪ Preliminary Analysis– Strengths and weaknesses of patent

– Scope of potential damages and/or injunction

– Identify experts, interview witnesses, review key documents/evidence

– Confirm legal status (ownership) and/or relationships

– Determine “business value” and objectives

Developing a Winning Global

LitigationStrategy

70

Global Patent Questions

• Identify key patent(s)

• Identify relevant countries and markets

• Evaluate business objectives (speed, costs, remedies, etc.)

Global Injunction Evaluation

• Where are injunctions available?

• Principal countries in order of market priorities

• Identify and select preferred courts

Global Damages Evaluation

• Case valuation (EV2formula or other)

• Review case valuation versus other key questions for each country

• Verify strategy against objectives

Developing an Effective Global StrategyHow long it will take?

12–18 months 36-48 months(varies by district)

10-14 months (varies by district)

16–36 months (varies by district)

How much will it cost?

U.S. $1.35 million U.S. $100,000 U.S. $100,000 medium-valuelitigationU.S. $500,000 high-value litigation

U.S. $4 million

What are my chances of success (patentee v. accused infringer)?

40% (2006-2016) 42% (2006–2016) Dusseldorf 64.5% (inf.)Munich 62%(inf.)Federal Patent Court 50% (nullity)

Overall 55.5%/Contested 22.3% (varies by district)

Available remedies to a patentee?

Profits on lost sales + reasonableroyalty on other infringing sales

Lost profits, reasonable royalty, and in any event infringer’s profits

Reasonable royalty, lost profits, infringer’s profits

Lost profits, reasonable royalty,punitive damages

Developing a Winning Global Strategy

71

Developing an Effective Global StrategyLegal System Common law

UnifiedCivil lawUnified

Civil lawBifurcated

Common lawUnified

Number of first instance patent litigation trial courts (federal district courts)

2 (Patents Court and IPEC) 22 12 infringement,1 validity

94 (+ US International Trade Commission and Court of Federal Claims)

Number of trials required validity/ infring/damages

2 (validity/infringement trial + separate damages hearing

1 3 1

Judge or panel Judge Panel: 1 judge hears case; 3-judge panel

decides

Panel Judge/Jury

Specialized intellectual property (IP) court/judges

Yes Yes/No Yes/No (some de facto) No/No

Loser pays winner’s costs (fees and disbursements)?

Yes Yes Yes No

Annual patent infringement litigation filings

140–150 ~120 ~900 infringementactions

~4300

Percentage of cases to trial

14% 33% >50% 3–4%

Developing a Winning Global Strategy

72

Forum-Shopping in Europe

Based Upon 5 Objective Factors

Best European court of first instance in which to initiate patent litigation as patentee:

Germany (good chance of winning infringement and, if win, costs paid by other side)

Best European court of first instance in which to initiate patent litigation as alleged infringer:

England (expensive, but good chance of winning and invalidated opponent’s patent)

1. High patentee win rateGermany/infringement

Netherlands

2. Fastest time to trialNetherlands, England ,

Germany

3. Low Cost(Germany, if win;

Netherlands)

4. Unlikely case will be stayed for validity

challenge(England, Germany,

Netherlands)

5. Preliminaryinjunction data

Germany 59% (24/41); Netherlands 40%

(15/37) Germany

1. Low patentee win rate

2. Slow time to trial

(France (≈3 years))

3. High cost(Germany, if lose;

England)

4. Likely case will be stayed for validity challenge (Italy)

England

5. Preliminaryinjunction data

(France, 20% (2/10);

73

Additional Factors

• Home Court Advantage

Litigating in a home jurisdiction can provide advantages, including

familiarity with courts and counsel, access to evidence and

witnesses, and name recognition/impact on local market

• Market Size

Litigation leverage is proportional to the size of the market and sales

of infringing goods; the larger the market, the larger the leverage

• Country of Manufacture, Exportation, or Importation

Litigating where the product is made, exported, or imported can also

provide leverage; a win in such jurisdictions can impact global

supply/sales chains

74

Additional Factors

• Enforceability

A litigation “win” is only meaningful if reliable enforcement

measures exist in a jurisdiction; the level of the opponent’s

contacts/investment in the forum can influence the ability to

enforce a judgement

• Available Remedies

The remedies available in a jurisdiction should align with the

needed remedies and goals for a strategy; what is available and

likely to be granted in a jurisdiction are equally important

75

▪ No res judicata effect of litigation outcome

in one country on litigation outcome in another

country (limited collateral estoppel).

▪ But, outcome of first litigation can provide

leverage and influence settlement of disputes

globally/in other jurisdictions.

o Investigate win rates and other metrics to

confirm strategy

o Parallel “first strikes” can be implemented

globally as a hedge

76

First Strike Strategy

Inter and Intra-Country Strategies

• Sue Simultaneously

Sue opponent in multiple jurisdictions simultaneously; can add

pressure and open opportunities/tactical advantages

• Sue Multiple Defendants

Sue multiple entities simultaneously; can include related

entities or business partners (distributors, importers,

exporters, and manufacturers); also adds pressure and opens

opportunities/tactical advantages

77

Inter and Intra-Country Strategies (cont’)

• Leverage Evidence in Different Jurisdictions

Evaluate law and ability to use evidence from one jurisdiction

(or forum) in another jurisdiction (or forum); this tactic can be

effectively employed as an inter or intra-country strategy

• Leverage Rulings in Different Jurisdictions

While no res judicata, such rulings may influence outcome in

other jurisdiction (or forum); party admissions related to those

rulings may also be submitted as evidence

78

35 U.S.C. 1782

― Section 1782 provides U.S. district courts the ability to grant discovery

requests for use in foreign proceedings:

[T]he district court of the district in which a person resides or is found

may order him to give his testimony or statement or to produce a

document or other thing for use in a proceeding in a foreign or

international tribunal . . . [and] [t]he order may be made . . . upon the

application of any interested person.

― U.S. district courts have broad discretion in considering and

deciding whether to grant Section 1782 requests.

79

Discovery in the U.S.

for use in Foreign Proceedings

Factors for granting a Section 1782 request:

1. Whether “the person from whom discovery is sought is a participant in

the foreign proceeding.”

2. The “nature of the foreign tribunal [and] the character of the

proceedings underway abroad.”

3. Whether the request “conceals an attempt to circumvent foreign

proof-gathering restrictions or other policies of a foreign country or

the United States.”

4. Whether the discovery requests should be scaled back to avoid undue

burden.

Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 264-65 (2004)

80

Discovery in the U.S.

for use in Foreign Proceedings

Avv. Vincenzo JandoliFRANZOSI DAL NEGRO SETTI

E-mail: jandoli@franzosi.com

HEARING OF DISCUSSION BASED ON THE COURT EXPERT OPINION

WHETHER TO GRANT INJUNCTION AND SEIZURE

Application For Injunction And Seizure (Italy)

IF GRANTED ONLY INJUNCTION AND NOT OTHER

MEASURES THE LITIGATION MAY STOP. OTHERWISE YOU

CARRY ON WITH THE FULL SCALE LITIGATION TO CLAIM

DAMAGES (WITHIN 1 MONTHS)

NOT GRANTED

FIXATION OF HEARING INTER PARTES (EX PARTE VERY

RARE) TO DISCUSS WHETHER TO GRANT OR NOT THE

INJUNCTION AND SEIZURE; NORMALY FEW DAYS BEFORE

THE HEARING COUNTERPART FILES THE DEFENCE

POSSIBLE APPEAL: DURATION

AROUND 2 MONTHS UNLESS NEW

TRIAL ACTIVITIES ARE ADMITTED

(VERY RARE)

AT THE HEARING

TECHNICAL EXPERTISE (DURATION AROUND 3/4 MONTHS EASY

CASE, NOT EASY ALSO AROUND 8 MONTHS) APPOINTMENT OF

COURT EXPERT FOR AN OPINION ON VALIDITY OF THE PATENT

AND INFRINGMENT

(~7 DAYS)

GRANT OR NOT THE INJUNCTION

AROUND

7 DAYS

81

Avv. Vincenzo JandoliFRANZOSI DAL NEGRO SETTI

E-mail: jandoli@franzosi.com

ACCESS EX PARTE AT PREMISES OF COUNTERPART WITH BAILIFF AND

COURT EXPERT

HEARING OF DISCUSSION INTER PARTES (THE COUNTERPART WILL FILE THEIR DEFENCE AND

WILL TAKE PART TO THE HEARING) WHETHER TO CONFIRM OR NOT DESCRIPTION AND –IF

REQUESTED- GRANT SEIZURE OR INJUNCTION (ABOUT INJUNCTION AND SEZIURE A

REASONABLE SCENARIO ARE POSSIBLE STEPS OF THE PREVIOUS SLIDE)

AROUND

2/3

DAYS

EXAMINATION AND DECISION TO GRANT DESCRIPTION EX PARTE

IN FEW DAYS

CONFIRM THE DESCRIPTION AND GIVE TERM TO

START THE FULL SCALE LITIGATION (WITHIN

AROUND 1 MONTHS)

NOT CONFIRM

FIXATION OF HEARING INTER PARTES TO DISCUSS

WHETHER TO GRANT OR NOT THE DESCRIPTION - NOT

PUBLIC DECISION (COUNTERPART MAY NOT BE

AWARE) PATENTEE CAN GIVE UP

GRANT

Access inter

partes

NOT

GRANT

POSSIBLE APPEAL: DURATION

AROUND 2 MONTHS UNLESS NEW

TRIAL ACTIVITIES ARE ADMITTED

(VERY RARE)

Application For Decription and Seizure or Injunction (Italy)

IN FEW DAYS

82

Avv. Vincenzo JandoliFRANZOSI DAL NEGRO SETTI

E-mail: jandoli@franzosi.com

The Judicial Description (Art. 128 IP Code)

▪ WHO: IT MAY BE REQUESTED AND OBTAINED EX PARTE BY THE PATENTEE OR

LICENSOR.

▪ WHERE (JURISDICTION): PLACE OF DEFENDANT OR WHERE THE INFRINGING

EVENTS TOOK PLACE. IF MORE THAN ONE, PLAINTIFF CAN CHOOSE AND

EXECUTE MORE DESCRIPTIONS EVEN SIMULTANEOUSLY.

▪ HOW: CARRIED OUT BY A BAILIFF WITH A TECHNICAL INDEPENDENT EXPERT

APPOINTED BY THE COURT (BUT WITH POSSIBLE INTERVENTION OF PATENTEE

LEGAL AND PATENT ATTORNEY COUNSELS ).

▪ WHAT: EX-OFFICIO DISCOVERY AIMED AT COLLECTING TECHNICAL (FORMULA,

DRAWINGS, ANALYSES ETC.) ACCOUNTING AND COMMERCIAL EVIDENCES

(ORDERS, INVOICES, TRANSPORTATION DOCS, CORRESPONDENCE, ETC).

83

Avv. Vincenzo JandoliFRANZOSI DAL NEGRO SETTI

E-mail: jandoli@franzosi.com

The Judicial Description (Art. 128 IP Code)

▪ WHO: IT MAY BE REQUESTED AND OBTAINED EX PARTE BY THE PATENTEE ORLICENSOR.

▪ WHERE (JURISDICTION): PLACE OF DEFENDANT OR WHERE THE INFRINGINGEVENTS TOOK PLACE. IF MORE THAN ONE, PLAINTIFF CAN CHOOSE AND EXECUTEMORE DESCRIPTIONS EVEN SIMULTANEOUSLY.

▪ HOW: CARRIED OUT BY A BAILIFF WITH A TECHNICAL INDEPENDENT EXPERTAPPOINTED BY THE COURT (BUT WITH POSSIBLE INTERVENTION OF PATENTEE LEGALAND PATENT ATTORNEY COUNSELS ).

▪ WHAT: EX-OFFICIO DISCOVERY AIMED AT COLLECTING TECHNICAL (FORMULA,DRAWINGS, ANALYSES ETC.) ACCOUNTING AND COMMERCIAL EVIDENCES (ORDERS,INVOICES, TRANSPORTATION DOCS, CORRESPONDENCE, ETC).

84

Avv. Vincenzo JandoliFRANZOSI DAL NEGRO SETTI

E-mail: jandoli@franzosi.com

Cross-Border Effect of the Description

DESCRIPTION CAN BE USED IN OTHER JURISDICTIONS

EXAMPLE #1: DESCRIPTION CARRIED OUT IN ITALY HAS BEEN USED TOCORROBORATE A PRELIMINARY INJUNCTION FILED IN SPAIN ON THE SAMECONTESTED MACHINE BUT VERSUS OTHER PARTY (DISTRIBUTOR); OR IN A FULLSCALE LITIGATION IN TURKEY

EXAMPLE #2: DESCRIPTION GRANTED BY THE JUDGE OF VENICE EXECUTED INGERMANY VERSUS GERMAN COMPANY. COURT OF VENICE 20TH FEBRUARY 2018AND GENOA 2ND MAY 2005.

85

Avv. Vincenzo JandoliFRANZOSI DAL NEGRO SETTI

E-mail: jandoli@franzosi.com

Cross-Border Effect of the DescriptionDESCRIPTION GRANTED EX PARTE AGAINST

ITALIAN COMPANY

BY DECREE OF 12TH MARCH

2019 REGARDING A MACHINE

FOR WELDING PROFILED

ELEMENTS IN PLASTIC

MATERIAL

GERMAN COMPANY

BY DECREE OF 20TH

FEBRUARY 2018

REGARDING A PLANT FOR

CONTINUOUS PRODUCTION OF

STEEL BARS

ITALIAN JUDGE’S ASSESSMENT

OF THE EVIDENCE ACQUIRED

DURING THE GERMAN

DESCRIPTION FOR GRANTING

THE INJUNCTION BY ORDER OF

18TH JUNE 2018

DESCRIPTION EXECUTED IN

GERMANY ON 20TH MARCH

2018

DESCRIPTION EXECUTED ON

14TH MARCH 2019

IT IS ALLOWED USE OF THE

EVIDENCE ACQUIRED DURING THE

DESCRIPTION UNLESS UNDER

CONFIDENTIALITY

(COURT OF MILAN 6.07.2017 –

21.01.2016; COURT OF TURIN

21.10.2019 - 13.06.2012)

USE OF THE EVIDENCE ACQUIRED

DURING THE ITALIAN DESCRIPTION

IN FOREIGN LITIGATION

Re: 1 Re: 2

86

Michael Crichton, Partner, Gowling WLG

As a go-to intellectual property legal adviser for

many clients, Michael frequently provides strategic

counselling and opinions regarding patent

infringement, patent validity and related issues. In

addition, as a registered patent agent for over a

decade, Michael's practice includes patent drafting,

prosecution and portfolio management.

+1 613 786 0248

michael.crichton@gowlingwlg.com

Your Presenters

C. Gregory Gramenopoulos, Partner, Finnegan

Greg has more than two decades of experience

assisting clients in the electrical and computer

technology fields. He is an accomplished patent

litigator and strategic IP advisor, handling complex

and high-stakes patent matters both in and outside

of the courtroom. Greg has been recognized for his

work by Legal500 U.S., IAM Patent 1000, and other

top legal guides.

+1 202 408 4263

gramenoc@finnegan.com

Vincenzo Jandoli, Partner, Avvocati Associati Franzosi Dal Negro Setti

Vincenzo specializes in different areas of consulting

activity (giving assistance to Italian companies

abroad-thanks to a good and relevant network of

colleagues worldwide created by working in team-

and to foreign companies in Italy) and of litigation:

+ 39 02 859091

jandoli@franzosi.com

Roland Kűppers, Partner, Taylor Wessing

Roland is an IP specialist, representing national and

international companies in patent infringement

proceedings and coordinating cross-border litigation.

In collaboration with patent attorneys and corporate

patent departments, he advises on patent nullity,

opposition and utility model cancellation

proceedings.

+49 211 8387 297

r.kueppers@taylorwessing.com

Your Presenters

Chris Thornham, Partner, Taylor Wessing

Chris is an award-winning lawyer specializing in

patents and technical disputes. He works with

clients across the life sciences, engineering, and

telecoms sectors. He advises clients on freedom to

operate, product launch, patent litgiation, and

licensing strategies including FRAND license

disputes.

+44 20 7300 4817

c.thornham@taylorwessing.com