Patent Litigation in Europe: The U.K. Returns as a Forum of Choice
In the cosmopolitan world of patent litigation, patentees have become increasingly discerning about the choice of jurisdiction in which to bring a patent case. Over the last decade, the considerable advantages of bringing patent litigation in the U.K. have been obscured by the perception that the English system is expensive and potentially “patent-unfriendly.” However, recent reforms and developments in the English legal system, and improving prospects for patentees, have rejuvenated the U.K. system as a forum for patent disputes.
There have always been benefits in litigating patent issues in the U.K. The U.K. is renowned for providing a thorough investigation of the issues. Disclosure, the U.K.’s version of documentary discovery, ensures that all the facts and issues are before the court and that the patentee will have the information it needs to prove infringement. There is provision for proving facts by experiment. The parties appoint experts to provide evidence as to the views of the skilled person, ensuring that technical views consistent with the parties’ own will be considered by the court. There is detailed oral cross-examination of the experts, allowing the court to determine the true position. This procedure is much closer in nature to U.S. proceedings than proceedings in continental Europe.
The attractions extend beyond just the procedure itself. Cases are heard by specialist judges, who have detailed knowledge of patent issues and often of technical issues. The judges provide reasoned judgments that are well respected by other European courts. Finally, for most non-Europeans, the use of the English language for the proceedings is preferable to litigating in one of the continental European languages.
Yet despite these obvious attractions, a number of patentees have been reluctant to litigate in the U.K. in recent years because of perceived disadvantages. First, the detailed procedure is, by its nature, more expensive and takes longer than a simple procedure. While the cost (and duration) is justifiable for cases that are technically complex or important, the procedure was regarded as disproportionate for straightforward or less important disputes. Second, some patentees were discouraged from litigating in the U.K. by rumors that the jurisdiction had become patent-unfriendly.
English Courts Uphold More Patents
The English courts’ reputation over the last decade as being patent-unfriendly was based primarily on statistical analyses of judgments in England. The nadir was the period 2000 to 2002. During these three years, the English courts upheld only 35 percent of the patents they considered. This was clearly an unattractive prospect for a patentee considering litigating in Europe, but because the vast majority of cases in the U.K. settle before trial with the patent remaining in force, the reality was not nearly as bad as the headlines regarding the statistics implied. Nevertheless, there was a view that during this period the patent judges were sometimes setting the threshold for inventive step (a patentability requirement present in most European patent laws corresponding to the nonobviousness requirement of U.S. patent law) at too high a level.
However, prospects are now looking considerably brighter for patentees. The patent judges (including three who were appointed during 2003 and who have impressed practitioners) appear to be getting the threshold for inventive step right―certainly there has been little complaint about their judgments over the last two and a half years. This improvement has been reflected in the statistics. The English courts over the last two years have upheld a far higher proportion of patents. A detailed analysis shows that in 2003, 50 percent of patents considered by the English courts were upheld, and in 2004 almost two-thirds of the patents considered were upheld. When pretrial settlements are taken into account, this bodes well for patentees. It appears that the reputation for being patent-unfriendly is now a matter of history.
Cutting the Costs of Litigating in the U.K.
As mentioned previously, the U.K., by carrying out a detailed and thorough investigation of the issues, has traditionally been an expensive place to litigate. The thorough procedure, despite its cost, is appreciated when clients have a complex or high-value dispute. However, it had become accepted that this procedure is inappropriate for simple or low-value disputes or when the parties have limited financial resources―in such circumstances, it was often just not financially feasible to litigate in England.
In response to this, in April 2003 the patents courts in England introduced an alternative procedure, known as the streamlined procedure, for cases where the standard procedure is not appropriate. The court on application of one or both parties will decide whether the streamlined procedure should apply instead of the standard procedure. To determine this, the court will consider proportionality, the complexity and value of the case, and the financial resources of the parties involved.
The streamlined procedure, as its name suggests, is a streamlined version of the standard procedure. The basic position is that there will be no disclosure or experiments and that all evidence will be in writing. It is important to note, however, that the court can vary the procedure at its discretion; for example, it can allow disclosure on a particular topic if it regards it as appropriate. Accordingly, the benefits of the standard procedure are still available to litigants, albeit in a more focused form. Streamlined proceedings are intended to reach trial within six months, and the trial is expected to last no more than one day. For this reason, the procedure is much more similar to Continental proceedings than the standard procedure, although few Continental proceedings reach a trial in this time. As would be expected, the streamlined procedure costs considerably less than the standard procedure and allows cases to be litigated in the English courts that previously were financially unjustifiable.
While the introduction of the streamlined procedure has had a profound effect on costs of litigation in England, the standard procedure itself has also been adapted to strip away unnecessary costs. As with all litigation in England, the introduction of the Woolf reforms in 1999 has resulted in the judges’ being much more active in case management. This has ensured that cases proceed faster, which helps avoid costs associated with protracted proceedings and delaying tactics.
A number of measures specific to patent cases have been introduced. The most significant of these is the introduction of product descriptions – the defendant now has the option of serving a description of its product (or process) instead of providing disclosure relevant to the product (or process). In practice, a product description is now served in most cases. In addition, documents relating to the validity of a patent need be disclosed only if they were created within two years of the priority date. This substantially reduces the scope (and therefore cost) of disclosure, but will still cover most documents that are truly relevant to the invention. If the parties believe that pertinent documents were created more than two years from the priority date, they still have the right to request that these be disclosed. Finally, when commercial success has been raised as a defense to an allegation of obviousness, documents relevant to the commercial success need not be disclosed, provided a schedule is served setting out details of the commercial success. These measures, together with the more active case management, mean that even with the standard procedure, costs are more controlled with much unnecessary expense stripped away.
As is apparent from the previous section, the recent changes to the procedure for patent cases have resulted in faster proceedings as well as reduced costs. It is with the standard procedure that the judges’ more active role in case management has had the most significant effect. Most patent cases will now reach trial within 12 to 15 months. If an appeal is permitted, it will take a further 15 months. However, appeals are permitted only when there is a real prospect of success, and while previously almost all cases were allowed to proceed to appeal, today it is not uncommon for permission to be denied. This obviously can result in the parties’ getting a definitive answer at an earlier stage.
When the court orders that the streamlined procedure should be used, the trial should be heard within six to nine months. Whether the standard or streamlined procedure is being used, these time frames have made the U.K. one of the fastest jurisdictions in Europe.
Recent developments have meant that the U.K. now offers a flexible approach to litigation. For complicated high-value cases, the standard procedure remains, which provides the benefits of disclosure, expert witnesses, and cross-examination for a thorough investigation of the issues. For straightforward cases, a cheaper, quicker route now exists, much more similar to litigation on the Continent. Decisions are obtained quickly, and the perceived anti-patentee approach to obviousness now appears to be a thing of the past.
Alastair J. McCulloch
Alastair, a partner in the London Office, is an intellectual property lawyer, advising on patents, trademarks, copyrights, designs, and confidential information. His practice is focused on litigating technical matters, especially high-technology patents. He has conducted cases in the fields of electronics and computer systems, chemicals, pharmaceuticals, physics, and mechanics. As well as practicing in cases before the English courts, he is experienced in cases before the European Patent Office. Many of his cases have been international in nature, and he has extensive experience in multijurisdictional disputes, having coordinated with parallel proceedings in the U.S., Germany, France, Italy, the Netherlands, Belgium, Hong Kong, and Australia.