PATENT INFRINGEMENT LITIGATION : A COMPARATIVE LOOK...

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PATENT INFRINGEMENT LITIGATION : A COMPARATIVE LOOK AT JURISDICTIONS IN EUROPE

(UK, Germany, France)

IP Training for national judgesWarsaw – April 20, 2007

Emmanuel Gougé

Avocat à la Cour de Paris – Solicitor in England and Wales

Cabinet EGAvocats174, boulevard Malesherbes

75017 Paris - France (+33)1.48.88.80.80.

[email protected]

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Introduction

How to harmonize patent litigation in Europe? Procedural patent law remains very heterogeneous between the different Member States.

These differences give rise to forum shopping : 90% of current patent litigation in the Community takes place before the Courts of 4 Member States (Germany, France, the UK, and the Netherlands).

The Commission's proposals for a Community patent with an integrated jurisdictional system have been on the table since 2000 and reached an important milestone with the adoption of the Council's common political approach in March 2003 But since that date, the Community patent project has been bloked.

That is why the DG Internal Market launched, on 16 February 2006, a new public consultation on the Community Patent.

Communication of the Commission, April 3, 2007 : it is urgent to provide a simple, cost-effective and high quality one-stop-shop patent system in Europe, both for examination and grant as well as post-grant procedures, including litigation. Key objective : creation of the Community patent. Creation of a European Patent Court composed of both legally and technical qualified judges. The multinational character of jurisdiction should be reflected in its composition and

common rules of procedure.

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CONTENTSI. Pre-trial considerations

II. Jurisdiction

III. Interlocutory injunctions

IV. The trial

V. Pan-European aspects of patent infringement litigation

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I. PRE-TRIAL CONSIDERATIONS1. Who can sue for patent infringement?

2. On what ground can a person bring an action for infringement?

3. Who can be sued for patent infringement?

4. How to obtain evidence ?

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Directive 2004/48/EC - Article 4: « Member States shall recognise as persons entitled to seek application of the

measures, procedures and remedies referred to in this chapter:

(a) the holders of intellectual property rights, in accordance with the provisions of the applicable law;

(b) all other persons authorised to use those rights, in particular licensees, in so far as permitted by and in accordance with the provisions of the applicable law;

(c) intellectual property collective rights-management bodies which are regularly recognised as having a right to represent holders of intellectual property rights, in so far as permitted by and in accordance with the provisions of the applicable law;

I.1. Who can sue for patent infringement?

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I.1. Who can sue for patent infringement – Comparative view

The patent owner (UK, Germany, France)

The exclusive licensee In the UK : the exclusive licence shall be registered and the owner shall be joined as

the party. In Germany : it is not necessary that the license be registered. In France : the license shall be registered and the exclusive licensee may, unless

otherwise stipulated in the licensing agreement, institute infringement proceedings if, after notice, the patent owner does no institute such proceedings himself.

The non-exclusive licensee In the UK : does not have the right to call on the patent owner to sue on their behalf if

the patentee declines to do so. In Germany : only if the patent holder has empowered him to sue and if he has own

economic interest to sue for patent infringement. In France : cannot sue but can take part in the infringement proceedings instituted by

the patent owner so as to obtain compensation.

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A national patent Granted nationally Enforceable only on the territory for which the patent

protection has been granted.

A European patent Application filed with the European Patent Office but

patents granted nationally Enforceable in the countries where a patent has been

delivered following the EP application.

I.2. On what ground can a person may bring a patent infringement action?

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I.3. Who can be sued for patent infringement?

Any person who has commited an infringing act

A manufacturer

A distributor

An importer

A user

A holder

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Directive 2004/48/EC - Article 6:

« 1.Member States shall ensure that, on application by a party which has presented reasonably available evidence sufficient to support its claims, and has, in substantiating those claims, specified evidence which lies in the control of the opposing party, the competent judicial authorities may order that such evidence be presented by the opposing party, subject to the protection of confidential information. For the purposes of this paragraph, Member States may provide that a reasonable sample of a substantial number of copies of a work or any other protected object be considered by the competent judicial authorities to constitute reasonable evidence.

2.Under the same conditions, in the case of an infringement committed on a commercial scale Member States shall take such measures as are necessary to enable the competent judicial authorities to order, where appropriate, on application by a party, the communication of banking, financial or commercial documents under the control of the opposing party, subject to the protection of confidential information. »

I.4. How to obtain evidence ?

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Directive 2004/48/EC - Article 7: « Member States shall ensure that, even before the commencement of

proceedings on the merits of the case, the competent judicial authorities may, on application by a party who has presented reasonably available evidence to support his/her claims that his/her intellectual property right has been infringed or is about to be infringed, order prompt and effective provisional measures to preserve relevant evidence in respect of the alleged infringement, subject to the protection of confidential information. Such measures may include the detailed description, with or without the taking of samples, or the physical seizure of the infringing goods, and, in appropriate cases, the materials and implements used in the production and/or distribution of these goods and the documents relating thereto. Those measures shall be taken, if necessary without the other party having been heard, in particular where any delay is likely to cause irreparable harm to the rightholder or where there is a demonstrable risk of evidence being destroyed. »


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In the UK :

Pre-trial disclosure

Identification of relevant documents.

Exchange of lists of such documents in the possession of each party.

Disclosure requires a party to disclose all the documents on which he relies.

A description of the allegedly infringing product / process may be used to fulfil the defendant’s disclosure obligations.

Disclosure relating to the validity of the patent is limited to the documents created within the two years before or after the priority date.

A party may not rely on documents which have not been disclosed to or made available


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In the UK: Anton Piller order

It is a court order which provides for the right to search premises and seize evidence without prior warning.

Aim : to prevent from the destruction of incriminating evidence.

3 conditions:

There is an extremely strong prima facie case against the respondent;

The damage, potential or actual, must be very serious for the applicant;

There must be clear evidence that the respondents have in their possession incriminating documents or things and that there is a real possibility that they may destroy such material before an inter partes application can be made.

It can be combined with a ‘Mareva injunction’ : it is a court order which freezes assets so that a defendant to an action cannot dissipate their assets from beyond the


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In Germany:

Principle : each party has to obtain the proof he needs himself

Pre-trial discovery is not permitted in Germany.

Written documents, drawings, pictures and samples of the attaked device are the most important means of evidence in infringement proceedings.

Witnesses and experts are not commonly used in German patent proceedings.


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In Germany:

The « independant procedure of taking evidence »

Recently, the Düsseldorf District Court developed a procedure to allow inspection of potentially infringing goods before or during trial so called the « independent procedure of taking evidence ».

The patent holder may request the Court from ordering an independent procedure of taking evidence.

The court then orders an expert to investigate the potentially infringing device.

Then, the court issues an interim injunction to ensure that the alleged infringer does not interfere with the expert inspection.

Moreover the court usually makes orders to protect the alleged infringer’s confidential information : for such purpose the expert is ordered to report firstly to the court, and the patentee’s attorneys (who can assist to the inspection) must keep the results of investigation in confidence unless the court decides to release theses results.


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In France:

Principle : the proof of patent infringement can be brought by all means

Pre-trial discovery does not exist in France.

The evidence generally consists of documents and affidavits.

Documents emanating from the parties whithout objective elements to corroborate them are regarded by the judges as little convincing.

Courts rarely appoint experts except for the valuation of the damages.


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In France :

Infringement seizure (saisie-contrefaçon) – article L.615-5 of the French IPC

The patent owner or the exclusive licensee may request from the President of the Court of First Instance an order authorising the search and seizure of samples of allegedly infringing products.

Infringement seizure proceedings are not contradictory : however, the defendant may petition to obtain the withdrawal of the seizure if he has reason for that.

The bailiff can be assisted by a skilled person (patent agent).

The bailiff is bound by the scope of the order (otherwise, invalidation of the seizure).

The patent owner must imperatively file the action on the merits within 15 days from the date of the seizure.


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II. JURISDICTION1. First Instance

2. Review : Appeal and Supreme Court

3. International issues : the ‘Torpedo’ action

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II.1. First Instance

Specialised jurisdictions:

In the UK The Patents Court Patents county courts (PCC) The UK Patent Office

In Germany 12 district courts About 50% of all patent infringement cases are heard in front of the

Düsseldorf District Court

In France 7 Tribunaux de Grande Instance (civil courts of first instance) Most of the patent litigation is heard by the 3rd Chamber of the Paris Court of

first Instance

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Territorial jurisdiction - EC Regulation 44/2001 :

Where the defendant is domiciled (article 2)

In case of plurality of defendants, where one of the defendants is domiciled (article 6.1.)

The place where the harmful event ocurred (article 5.3.)


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Example:

A French patent owner

can sue

A German alleged infringer

before

A Polish Court (where the alleged infringing act ocurred)

on the basis of

His European patent (which designated Poland)


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In the UK Patents Court for the decisions of the Comptroller Court of Appeal for the decision of the PCC Court of Appeal for the decisions of the Patents Court And, further, the House of Lords on a point of law (rare in practice).

In Germany Respective Regional Courts of Appeal : review both the facts and the law The Federal Supreme Court : however, the appelant needs either the Court of Appeal’s

or the Federal Court’s leave. This ultimate appeal is limited to the review of point of law.

In France Court of Appeal : reviews both the facts and the law The Cour de Cassation : only on the basis of violation of law since the French Supreme

Court does not rule on the facts of the case.

II.2. Review : appeal and supreme court

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Brussels Regulation 44/2001 on Jurisdiction and the Recognition and Enforcement of Judgements in Civil and Commercial Matters

« Article 27 (ex article 21 Brussels Convention 1968)

1. Where proceedings involving the same cause of action and between the same parties are brought in the courts of different Member States, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established.

2. Where the jurisdiction of the court first seised is established, any court other than the court first seised shall decline jurisdiction in favour of that court.

Article 28 (ex article 22 Brussels Convention 1968)

1. Where related actions are pending in the courts of different Member States, any court other than the court first seised may stay its proceedings.

2. Where these actions are pending at first instance, any court other than the court first seised may also, on the application of one of the parties, decline jurisdiction if the court first seised has jurisdiction over the actions in question and its law permits the consolidation thereof.

3. For the purposes of this Article, actions are deemed to be related where they are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings. »

II.3. International jurisdiction issues : the‘Torpedo’ action

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‘Torpedo’ strategy

Generally, the patentee would prefer to bring a European infringement case before a court which are known at various degrees for their swift and efficient infringement proceedings (and particularly German, English and French Courts).

Conversely, on the basis of articles 27 and 28, an alleged infringer who fears he will be sued for infringement can take advantage by bringing a torpedo action before one of the slower legal systems, such as the Belgian and Italian courts, and applying for a declaration of non-infringement.

A torpedo action is an action for declaration of non-infringement of a patent – or an action for patent invalidation – which is

initiated by a company having reason to believe that it will be shortly sued for infringement of this patent.


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ECJ December 9, 2003, aff. C-116/02, Gasser v. Misat:

« Article 21 of the Brussels Convention must be interpreted as meaning that a court second seised whose jurisdiction has been claimed under an agreement conferring jurisdiction must nevertheless stay proceedings until the court first seised has declared that it has no jurisdiction.

Article 21 of the Brussels Convention must be interpreted as meaning that it cannot be derogated from where, in general, the duration of proceedings before the courts of the Contracting State in which the court first seised is established is excessively long. »


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III. INTERLOCUTORY INJUNCTIONS

1. Purpose of interlocutory injunctions

2. Conditions of interlocutory injunctions

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Problem : it takes a long time for the main patent infringement action to come to trial

Solution : the patent owner may request the court to order temporarily the defendant to stop the alleged infringing acts

III.1. Purpose of interlocutory injunctions

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Directive 2004/48/EC - Article 9:

« Member States shall ensure that the judicial authorities may, at the request of the applicant:

(a) issue against the alleged infringer an interlocutory injunction

intended to prevent any imminent infringement of an intellectual property right, or to forbid, on a provisional basis and subject, where appropriate, to a recurring penalty payment where provided for by national law, the continuation of the alleged infringements of that right, or to make such continuation subject to the lodging of guarantees intended to ensure the compensation of the rightholder; an interlocutory injunction may also be issued, under the same conditions, against an intermediary whose services are being used by a third party to infringe an intellectual property right; injunctions against intermediaries whose services are used by a third party to infringe a copyright or a related right are covered by Directive 2001/29/EC [...] »

III.1. Purpose of interlocutory injunctions

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In Germany:

It must be a clear-cut case of infringement.

The patent shall be without reasonable doubt.

It is not necessary per se to start main proceedings following the grant of a preliminary injunction.

However, the defendant can apply to the court to set a deadline for the patent owner to start main infringement proceedings.

In the UK:

There must be a serious question to be tried.

It is necessary to start main proceedings before or simultaneously with seeking interim injunction.

In France:

Preliminary filing of a law suit on the merits of the case

Initiated shortly after the knowledge of the infriging acts by the patent holder

The main infringement action must appears serious.

III.2.Conditions of interlocutory injunctions – comparative view

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Case study:

The facts:

The English subsidiary on a Chinese group markets circuit-breakers (manufactured in China) in the UK.

French distributors import from the UK the said circuit-breakers so as to market them in France.

A French firm, which is the owner of a French patent covering circuit-breakers, starts infringement proceedings against both the English subsidiary and the French distributors.

One year later, the claimant applies for an interim injonction before the French Court so as to order to the English subsidiary to stop temporarily importing and marketing the alleged infringing devices in France, until the decision on the merits.

Issues:

Short time : between the knowledge of the facts and (1) introduction of the action on the merits and /or (2) the introduction of the interim injunction proceedings?

III.2.Conditions of interlocutory injunctions – comparative view

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IV. THE TRIAL1. What defences can claim the alleged

infringer?

2. What final remedies may be granted?

3. Practical aspects : duration, costs

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IV.1. What defences can claim an alleged infringer?

Invalidity of the patent Infringement and invalidity are dealt together in France and in the UK Infringement and invalidity are dealt within two separate proceedings

in Germany Consequence : nullity cannot be used as a defence in infringement proceedings (only possibility of staying proceedings)

Exhaustion of rights

Prior user rights

Denials of the material facts of infringement

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Directive 2004/48/EC – articles 10 to 16 :

Article 10 : Corrective measures

Article 11 : Injunctions

Article 12 : Alternative measures

Article 13 : Damages

Article 14 : Legal costs

Article 15 : Publication of judicial decisions

IV.2. What final remedies may be granted?

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Common remedies:

Final injunction to cease the infringing acts In France : it is generally accompanied by an astreinte (daily penalty)

Destruction of confiscation of the infringing devices or means intented for commiting the infringement In Germany : this remedy is excluded if the goods can be made non-

infringing without destruction or if its destruciton is unreasonable.

Financial remedies

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Specific remedies : comparative view

Specific remedies in the UK:

Declaration that a particular activity amounts to infringement (related to pas infringement); A declaration that the patent is valid : a Certificate of Contested Validity may be issued and if

vailidity is contested by another third party, the latter will face cost pernalties if the patent is again upheld as valid.

Specific remedies in Germany: Rendering of information about the distribution chain of the infringing product; Rendering of information about and accounting for turnover and profits made with the infringing

products; Rendering of sales documentation and documentation concerning banking activities and finances; Rendering of information by third parties about the distribution chain of the infringing products

including information about the amount and paid prices; Publication of the decision.

Specific remedies in France: Publication of the judgement; Order of the provisional enforcement of the judgement notwithstanding the appeal.


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IV.3. Practical aspects

Duration of proceedings Interlocutory injunctions

UK : depends upon the circumstances – within days, weeks or up to 2 months

France : from 1 month to 3 months Germany : within a few days, sometimes within

a few hours

First Instance UK : around 1 year France : from 18 months to 2 years Germany : about 1 year

Appeal: UK : 1 year before the Court of Appeal – 1 or 2

years before the House of Lords France : from 18 months to 2 years Germany : between 15 and 18 months

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IV.3. Practical aspects

In UK: Depends on the complexity of the case

and the number of patents involved Estimates costs : from €150.000 to

1.5m. at first instance and from 150.000 to 1m. at second instance

In Germany: Court’s fees and statutory lawyer’s fees

depends on the « value in dispute » Ex : the court’s fees at a value in dispute

of €500.000 amount to 9.000 and the lawyer’s fees about to €7.500

In France: between € 80.000 – 150.000 Mainly consist of attorney’s, patent

agent’s, expert’s and translator’s fees

Costs of proceedings

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V. PAN-EUROPEAN ASPECTS OF PATENT INFRINGEMENT LITIGATION

1. Cross-border injunctions

2. International recognition and enforcement

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Overview

Difficulties : patent litigation often implies parties located in different Member States.

How to stop infringement acts abroad?

Regulation 44/2001 – article 31: « Provisional, including protective, measures

Application may be made to the courts of a Member State for such provisional, including protective, measures as may be available under the law of that State, even if, under this Regulation, the courts of another Member State have jurisdiction as to the substance of the matter. »

V.1. Cross-border injunction

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Are national court willing to grant cross border injunctions?

In the UK: In practice, as soon as the validity of the foreign patent is in question, they refus to grant such

injunctions Coin Controls v. Suzo, 1997 : « the court cannot decline jurisdiction on the basis of mere

suspicions as to what defence may be run. But once the defendant raises validity the court must hand the proceedings over to the courts having exclusive jurisdiction over that issue.[ . . .] infringement and validity of an intellectual property right [. . .] are so closely interrelated that they should be treated for jurisdictional purposes as one and the same issue.”

In Germany: The German Courts mostly refused to grant cross-border injunctions, if the validity of the patent in

suit is in issue (article 22 Regulation 44/2001) Gat v. Luk, ECJ July 13, 2006, C-4/03 : Article 16(4) of the Convention of 27 September 1968

[...] is to be interpreted as meaning that the rule of exclusive jurisdiction laid down therein concerns all proceedings relating to the registration or validity of a patent, irrespective of whether the issue is raised by way of an action or a plea in objection. »

In France: Little case law but French Courts seem to be not reluctant to grant such cross-border injunctions Paris Court of Appeal, October 18, 1996 : ruled a software infringement which had taken place in

Spain even though no infringement had taken place in France. Paris Court of Appeal, January 28, 1994 : enforce foreign injunctions relating to patents.

V.1. Cross-border injunction

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V.2. International enforcement and recognition

Inside the European Union:

the Council Regulation n°44/2001 (replacing Brussels Convention 1968)

The Lugano Convention 1988

Outside the EU:

Multilateral conventions regulating recognition and enforcement of foreign judgements are rare and often inefficient (ex : The Hague Convention 1971 never entered into force).

Until now, enforcement and recognition are only regulated by bilateral conventions and international private law.

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Prospective : the Hague Convention on choice of court agreement

Adopted by the Plenary Session on June 30, 2005 and open for signature (no ratification to date)

Scope: international commercial agreements, including IP issues.

Key provisions:

The chosen court may not decline to jurisdiction on the ground that dispute should be decided by a court of another state (other than the chosen court) (article 5).

Any other court before which proceedings are brought must refuse to hear them, even if they have jurisdiction under their national law (article 6).

The judgement of the chosen court must be recognised and enforced in other Contracting States (article 8).

IV.2. International enforcement and recognition

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