The UPC Agreement introduces Protective letters, a legal instrument, which – although familiar to some legal practitioners – is new in many jurisdictions within the EU.

In our newsletter of November 2017, we described the provisional measures provided by the UPC Agreement,

e.g. injunctions, seizure of infringing goods, orders to preserve evidence, etc. These provisional measures may be processed and enforced ex parte (i.e. without informing the defendant of the application), if the conditions for continuing ex parte are met. In this fourth article in our series on the UPC, we address the so- called Protective letters to counter the risk of being met as the defendant by such provisional measures.

Protective letters will in particular become an important strategic tool to businesses launching new products in patent dominant industries and markets such as the pharmaceutical industry, as the risk of being met with a provisional measure by a third party patent holder is high for such industries and markets.

Protective letters and special features

A Protective letter is in its essence a statement of reasons why an application for provisional measure(s) should be rejected. Hence, lodging a Protective letter is relevant, if you consider it likely that your business will be met with an application for an ex parte provisional measure.

The possibility of filing a Protective letter to the UPC follows from Rule 207 of the UPC Rules of Procedure. Pursuant to this rule, any natural or legal person who considers it likely that in the near future an application for provisional measures will be lodged against him as a defendant, may file a Protective letter.

Where an application for exparte provisional measure(s) is in fact lodged, the Protective letter will be presented to the judge(s) handling the application. The judge(s) will be obligated to consider the Protective letter in determining, if the application can be processed and the case continue without informing the defendant.   In this regard, it is worth noticing that a copy of the Protective letter will be forwarded to the applicant.

Consequently, Protective letters provide potential defendants with the chance of defence in cases where provisional measures are pursued ex parte. Compared to the nature of ex parte decisions, where the defendants’ fundamental right to be heard is basically neglected, Protective letters provide defendants with a right of defence, although limited, in ex parte cases.

Once submitted to and registered in the UPC register, the Protective letter takes unitary effect (i.e. effect in all Member States having ratified the UPC Agreement at the time).           

As the UPC will be able to decide on patent infringement and validity claims in a single case, the Protective letter may include not only a defence for non-infringement but also claims for invalidity of the patent in question.

This is different to some of the current patent systems that are already familiar with Protective letters, such as Germany, where claims for infringement and validity of patents are decided by different courts.

Considerations when preparing a Protective letter

Preparing a suitable Protective letter is not an easy task as a defence needs to be prepared before the attack is launched and known to the defendant. There are many variables to balance and take into account. The fact that the existence of an application for a provisional measure is often only anticipated by the defendant means that the specific details of such an application are unknown. This provides for a significant challenge to overcome when preparing the Protective letter.

Strategically, one should avoid litigating the case in the Protective letter, i.e. arguing the whole case. Otherwise, the defendant runs the risk of leaving the judge(s) with the impression that the defendant has now been heard and that certain facts and statements are left undisputed. This may prompt the judge(s) to be less hesitant to continue ex parte if they disagree with the arguments made in the Protective letter.

To avoid such risks, the Protective letter should not be prepared with the aim of winning the case in one strike. Instead, the overall aim is to draft a Protective letter in a manner that leaves the judge(s) with the impression that the facts and legal arguments of the case are uncertain so that the defendant must be heard to clarify the uncertainties.

The preparation of the Protective letter should also take the presumed counterparty into account. A mistake in this regard would be to prepare a very broad and all- encompassing Protective letter, as you may risk giving too much away and disclose your weak points in the case.