28/02/2013
It finally looks like the Unitary Patent Package is on the way. Although the International agreement forming the Unified Patent Court has not yet been ratified, the latest draft of the agreement has been approved and signed by the European Council. So what does the agreement tell us about where infringement cases will be heard, and what factors will influence litigants when deciding where to bring their cases?
As will be seen in the following discussion, in many cases there will be a choice of forum, and it is likely that the patentee and defendant will have different views on where the case should be heard. Will this encourage lengthy arguments on procedural matters before the substance of the case is even discussed? If so, could the new system turn out to be more complex and expensive than national proceedings under the current system?
The Court Structure
The first instance court is split into a Central Division and Local/Regional Divisions which will be set up on request by member states. The Central Division is further divided into three subject-matter dependent sections in London (Chemistry, Metallurgy and Human Necessities), Munich (Mechanical Engineering and Defence) and Paris (Physics). The division of subject matter will be based on the IPC classification of the patent in question.
Which Court Will Be Competent?
As we have seen in our previous notes on this subject, the question of which court will be competent to hear a particular case, or even a particular aspect of a given case, is not entirely straightforward.
Generally, for infringement actions, the competent court will be the Local/Regional Division in which the infringement has taken place, or the Local/Regional Division where the defendant has its principle place of business.
One imagines that in our European (allegedly) single market, many cases of infringement will involve infringing acts in a large number of member states. Accordingly, in the majority of cases the patentee will have the choice of commencing infringement actions before one of several Local/Regional Divisions.
There is some flexibility in how cases are handled before the local/regional divisions. The Local/Regional Divisions have the power to pass cases to the Central Division, for example if they feel they lack the relevant technical expertise. Alternatively, the parties can come to an agreement to proceed before any Local/Regional Division or the Central Division.
To Bifurcate, Or Not To Bifurcate? That Is The Question
Where an infringement action has been brought, and the defendant wishes to bring a counterclaim for revocation (which one imagines will happen in the majority of cases), the counterclaim must be made before the court that in handling the infringement action. More often than not this will be before the local/regional division.
Where infringement and a counterclaim for revocation have been brought, the Local/Regional Divisions have wide ranging discretion on how to handle the case. They can:
- simply hear both actions in the same hearing (as happens at present in the UK);
- send the revocation case to the Central Division, and either hear the infringement case themselves, or stay the infringement case until the Central Division has made its decision (similar to the bifurcation that happen at present in Germany); or
- send both cases to the Central Division.
It therefore remains to be seen whether particular Local/Regional divisions will in general prefer a particular route, or whether they will make a decision on a case by case basis. It might be expected that the German Local Division will favour bifurcating the cases, as the German judges are generally familiar with such an approach, whilst the UK Local Division might prefer to retain control over both the infringement and revocation proceedings.
What is clear, however, is that how cases are handled will have a huge impact on litigants, who will therefore eagerly await guidance from the Local/Regional Divisions. Of course, the choice of the court in which to bring infringement proceedings will be down to the patentee, whilst the defendant will have little input.
Whether or not the patentee wishes to proceed in a pro-bifurcation country may vary from case to case. One might imagine that patentees would favour bifurcation, where they can argue strong cases of infringement even for patents of questionable validity, and possibly obtain injunctions before the outcome of the revocation trial is known. However, on the flip side patentees may not want to expose themselves to the possibility of cross-undertakings in damages in the event that an infringed patent is found to be invalid. The patentee may also prefer the perceived legal certainty that comes with a single infringement/revocation proceedings. Ultimately, it may be that patentees from jurisdictions that have traditionally bifurcated will continue to favour bifurcation, whilst patentees from UK, for example, will continue to find the bifurcated system difficult to understand.
Certainly, patentees will have to carefully weight up the pros and cons of bifurcation before deciding where to bring proceedings.
Where Are The Best Judges?
Cases before Local/Regional Divisions will ordinarily be heard by a panel of three judges. One or two of the judges (depending on how many patent cases per year are heard in the particular member state) will come from the member state in which the Division is based; the third judge will be supplied from a central pool of judges, and must be of different nationality to the other judges. In technically complex cases, a fourth judge having technical expertise may be appointed to the panel. Cases before the Central Division will generally be heard by a multinational panel of three judges, all of whom will be selected from the central pool of judges; at least one of the panel of judges will be technically qualified.
Accordingly, another factor for litigants to consider will be where they perceive judges are “best” for their particular case. What constitutes a desirable panel of judges is difficult to quantify, but in general litigants will want a panel of judges with extensive experience handling patent cases, who are likely to provide reasonable legal certainty in their decisions. Litigants may favour Local Divisions in jurisdictions that have historically handled the most patent cases, and are generally seen as a safe pair of hands – especially Germany, the UK, and the Netherlands. Local judges from these countries are likely to be specialist patent judges, whereas other jurisdictions may appoint judges who are used to handling cases from many branches of law.
In addition, whilst the aim of the system is for panels to apply the law uniformly, and efforts will surely be made to ensure communication between judges from all member states, it would nevertheless be unsurprising if panels from certain countries were to develop a reputation for being pro- or anti-patentee. As soon as such a reputation occurs, patentees will of course aim to bring actions before those member states, whilst defendants will seek to move their cases before the Central Division.
The Language Of Proceedings
A final factor that will surely influence litigants decision on choice of Division will be the language in which the court will hear the case. Local/Regional Divisions will generally hear cases in their local language, whilst the Central Division will hear cases in the language in which the patent was granted.
Patentees may well favour bringing actions in a Local Division that speaks their language, or one that speaks a language that the defendant does not speak. Although simultaneous translations will be provided at no cost, it is always an advantage to be able to fluently speak the language of proceedings, as direct communication is always likely to be preferable to communication via an interpreter.
Finally, the fact that the Central Division will hear cases in the language of proceedings means that the choice of language of filing becomes even more critical. One must consider the language in which you want to litigate at the very start of the patent prosecution process.
Conclusion
The above are just a few of the factors that will need to be considered where there is a choice of forum. These are merely those that spring to mind from a first reading of the Unified Patent Court Agreement. One imagines that many more factors will be identified as various quirks and lacunas of the new Court system work themselves out.
In the majority of cases, the patentee and defendant will want the case to be heard in different Divisions. It therefore seems likely that a significant amount of time will be spent arguing over where the case should be heard before any substantive parts of the case are considered. When this is coupled to the complexity of the system, litigants may find that what is supposed to be a simplified, streamlined system, is actually no more user-friendly that the current system of national courts.
This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking before any action in reliance on it.
