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Unified Patent Court, Patents Court or IPEC: where to litigate?

The key differences between the UPC and the UK’s national courts give rise to important strategic considerations in deciding whether to opt out and where to litigate.

We recently discussed the ability of patent owners to opt out of the Unified Patent Court regime for their European patents and instead choose to litigate in the national courts.  One of the potential advantages of doing so would be to avoid exposing a patent to a single invalidity challenge in the UPC which would have effect in all UPC contracting states.

A decision to opt out is not irrevocable, unless the patent has been the subject of litigation in national courts.  At the point of deciding to enforce against a potential infringer, the owner might choose to opt back in to the UPC regime, so that the decision covers infringement in multiple jurisdictions.

However, there are other differences between the UPC and the English and Welsh courts that should be considered when either issuing proceedings or deciding to opt out or in.  One such consideration is expense: as we noted in a previous blog post, the issue fee for an action in the UPC will range from €11,000 to €325,000 depending on the value of the claim.  In the Patents Court the issue fee is currently a maximum of £10,480.

There are also notable procedural differences, some of which are summarised in the table below with respect to infringement proceedings at first instance:

Patents Court

IPEC

UPC (Local/Regional)

Judges

1, with technically complex cases reserved to certain judges

1

Multinational Panel of 3 legally qualified (options for 1 or an additional technically qualified judge)

Validity Counterclaims

Typically dealt with together.  Two thirds of cases result in revocation

Typically dealt with together

Option for dealing with together, stay or bifurcation – sending to Central Division

Trial length

5 days +

1-2 days

1 day

Time to trial

12 months

12 months

12 months

Whilst the time to trial is intended to be a maximum of one year in each court, there are a number of notable differences:

Split proceedings

Many infringement actions in the English Patents Court are met with a counterclaim stating the invalidity of the patent.  In the Patents Court both types of proceedings are typically dealt with together.  National courts in some other Member States require that invalidity counterclaims are dealt with separately to infringement proceedings.  This is particularly the case in Germany, where the Federal Patent Court in Munich (Bundespatentgericht) has exclusive jurisdiction in invalidity proceedings, but does not deal with infringement.

It will be open to the UPC’s Court of First Instance to choose to retain both elements of the dispute; to “bifurcate” and send the invalidity issues to the Central Division for parallel determination; or to stay the infringement proceedings until the invalidity issues are dealt with at the Central Division.

Panels of judges

The default approach in the UPC’s Local and Regional Divisions is a multinational panel of three legally-qualified judges, but there is also the possibility of single judges or even an additional technically-qualified judge.  In the English Patents Court at first instance a single judge hears proceedings, with technically complex cases reserved to particular judges.

There has been an underlying concern about the recruitment of enough suitably experienced judges.  Worries that UPC judges’ salaries would be considerably less than that for judges in the UK national courts, and might therefore deter the best British applicants, have not been borne out.  However, practitioners will be keeping a close eye on the first decisions that come out of the UPC in 2017 for consistency and robustness, and will advise their clients accordingly.

Oral hearings

One of the most striking differences between the Patents Court and the UPC is the importance and length of the oral hearing itself.  The UPC at first instance intends to complete oral hearings within a single day, relying more significantly on paper submissions.

This marks a real difference from the Patents Court, where significant cases can be expected to last a week or longer.  Even the Intellectual Property Enterprise Court guide provides for an oral hearing of up to two days.

One advantage of shorter oral hearings may be to keep costs down: barrister’s brief fees for long hearings are one of the reasons that costs can be so high in the Patents Court relative to other national courts.

However, there may also be some effect on results. The English Patents Court is currently seen as taking the most involved analysis of the validity of patents amongst European Patent Convention states, which some attribute to the rigorous examination of the issues at an oral hearing.  In the absence of lengthy oral hearings, patentees may find that they get an easier ride in the UPC as the statistical risk of revocation may be reduced.

WAB comment

It is difficult to make firm strategic recommendations on the relative merits of patentees using the UPC or national courts until the UPC is actually up and running.  However, the approach reflected in the UPC’s rules of procedure are in some cases much more similar to the German or Dutch national courts than the English.

The wider differences between the UPC and the English Patents Court mean that there is more scope for strategic decision making in choosing between those options.  It may prove to be more attractive to patentees to litigate in the UPC in London than the Patents Court, or even the German courts, which many patentees had previously favoured.

See all of our articles about the UPC here.  If you have any queries about these issues, please contact our patent litigation specialists Victoria Wright and Nicholas Mitchell.

Disclaimer: This article is produced for and on behalf of White & Black Limited, which is a limited liability company registered in England and Wales with registered number 06436665. It is authorised and regulated by the Solicitors Regulation Authority. The contents of this article should be viewed as opinion and general guidance, and should not be treated as legal advice.

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