The Unified Patent Court: litigation strategies

When the Unified Patent Court (UPC) becomes operational in 2017, it will provide a powerful single tool for achieving what many patentees and exclusive licensees currently have to do in a piecemeal fashion: enforcing patent rights across (most of) the EU.  The system will operate alongside the current jurisdiction of the national courts, so that parties to a dispute will have to make an active decision which system to choose.  In order to get the most from the UPC, patentees or licensees will need a clearly defined litigation strategy for enforcing their rights.

What are you trying to achieve?

As in any litigation, the strategy in the UPC needs to start from the business rather than the legal process.  A good strategy includes the definition of what constitutes a successful outcome, and that is a function of the overriding business issues which have led to the dispute or potential dispute in the first place.   With a system governing access to technology for 25 of the Member States of the European Union, the range of potential outcomes is more complex than any equivalent dispute in a single jurisdiction.

The chances of succeeding in a claim will clearly have an impact when considering options such as which entity should bring a claim, against whom, where, and relating to which patent.  However, commercial considerations may dictate that it would instead be preferable for the action to proceed between different parties, in a different location, or relating to a different patent.

Those commercial considerations, as well as the nature of the relevant division(s) and the procedures they will apply may also influence whether or not a litigation strategy should involve bringing more than one UPC action.

What are the overarching issues to bear in mind when developing a UPC litigation strategy?

Size of the claim: given the 400 million population of the territories covered by the UPC, the potential value of claims will be very substantial.  That in turn will affect the court fees and the recoverable attorneys’ fees. And the public relations impact of a win or loss in the UPC will be much greater than the impact of a decision in any one out of the 25 Member States.

Is this a one-off litigation, or one of many?   If this is one of many, will the process or outcome of this action affect other litigation? This may affect timing (with UPC actions intended to be concluded within a year from filing of the claim), venue(s) and lead to the conclusion that more care needs to be taken in handling the process than would be justified on the basis of the European angle alone.

Is it really necessary to litigate?  ADR in the form of mediation and arbitration has gained traction in IP disputes in recent years, particularly (but not exclusively) where the dispute arises from a licensing or joint research agreement.  The UPC system includes centres for mediation and arbitration of patent disputes, in addition to the Court itself.

Although little attention has focussed on these aspects so far, the Rules of the Court do provide for the judge-rapporteur to include ADR as an issue for the interim (directions/ timetable) hearing.  It may alternatively be worth exploring the possibility of ADR before invoking the Court itself – although the rules for the UPC Mediation Centre do not appear to allow for this, so another mediation or arbitration mechanism would have to be agreed.

The ADR provisions of the UPC Agreement carry the limitation that, in line with other forms of arbitration, settlements through the ADR centres cannot revoke or limit patents.  On the upside, however, settlements agreed at the ADR centres are enforceable through the same mechanisms available for enforcement of the Court’s decisions.

What evidence do we need to gather through the court procedures? If, as the rules permit, the court approaches evidence more on the lines of civil law courts, focussing on documents and argument rather than witness testimony, this is likely to lead to both quicker and cheaper justice albeit of a somewhat more summary nature.  Requests for witness evidence, or to cross-examine, may simply not be accepted if the Court considers they will not add sufficient value to outweigh the impact on a 1-2 day trial.  So strategies which assume obtaining evidence through court processes may not work in every Division.

With those overarching strategic issues in mind, what are the options available for actions in the UPC, and what are the benefits, risks and costs associated with those options?

Choice of defendant, choice of patent and choice of procedure

Actions may be brought in the UPC by either the patentee or an exclusive licensee, each of whom may have a range of options available to them when it comes to bringing an action (in addition to choice of forum, which we discuss separately below), including:

• which defendant(s) to sue;
• which patent(s) to invoke in the action;
• which evidential and other procedural options to seek as the action progresses; and
• whether to seek any interim relief, such as an injunction or order for seizure.

For more detail on the options available and factors to take into consideration when pursuing an action in the UPC, see our related article here.

Choice of forum

As a multi-national court, taking in a number of jurisdictions with quite different national regimes, the choice of forum is perhaps the biggest single consideration when it comes to commencing an action in the UPC.  A patentee or exclusive licensee may have a choice of a number of different national divisions, regional divisions or the central division. Factors such as language and procedural approach may favour commencing an action in one division, which may in turn influence some of the factors discussed above such as which defendant(s) to sue.  For more information on the choice of divisions available and the factors involved in the choice of forum, see our related article here.

Conclusions

Potential court users need to approach the nascent UPC as a genuinely new venue, free of preconceptions as to what will or will not be allowed.  The vicissitudes of litigation often mean that an overall strategy has to be modified as the process unrolls. The UPC may be far less sympathetic to significant changes of strategy than more traditional Anglo-Saxon systems. The procedure envisages a one year timetable from claim to trial, of which at least four months will be taken up with the initial written briefings.  Thereafter, the judge-rapporteur takes ownership of the proceedings at an interim hearing which is intended to fix the process and timetable through to the oral hearing.  This may not in practice (if the ambitious schedule is indeed held to) allow for significant changes to the arguments or evidence initially planned.  Further, the brevity of trials will not allow much scope for uncovering evidence through examination of witnesses.

Over time, the Court of Appeal will impose greater clarity as to both procedural and substantial law issues.  But for at least an initial period, every request made must be treated as the first such application, ever.

These uncertainties will need to be taken into account when developing a litigation strategy involving the UPC.  Indeed, the single greatest risk for litigants in the UPC at present is the uncertainty as to the calibre and approach of the yet-to-be-appointed judges, either at first instance or at appeal.  Patent holders need to decide whether, in the face of this uncertainty, to opt European patents and applications out of the UPC system altogether.