On 21 November 2013, the Court of Appeal handed down its decision in IPCom GmbH & Co KG v (1) HTC Europe Co Limited & Ors [2013] EWCA Civ 1496, rejecting HTC's attempt to stay UK patent revocation and infringement proceedings, pending the outcome of opposition proceedings before the European Patent Office ("EPO") regarding the patent in suit. In doing so the Court of Appeal reviewed and re-formulated the guidelines set out by Mummery LJ in Glaxo Group Ltd v Genentech Inc [2008] EWCA Civ 23 (the "Glaxo Guidelines") (see our previous Newsflash here). 

Legal Background

A European Patent can be challenged through two routes: national revocation proceedings or opposition before the EPO. A decision by the UK courts has national effect, whereas a decision by the EPO has effect across all countries in which the patent is in force.

In Glaxo v Genentech the Court of Appeal set out guidelines as to when the court should stay patent proceedings pending the outcome of the opposition process. The Court of Appeal suggested that the length of the stay of proceedings, if granted, was the most significant factor in the decision given the usual length of opposition proceedings. The Glaxo Guidelines appeared to favour not granting stays.

In Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46 the Supreme Court questioned whether the Glaxo Guidelines were appropriate and invited the Court of Appeal to revisit them with a view to giving proper effect to the concurrent jurisdiction of national courts and the EPO and to avoid inconsistent decisions. 

Revised Glaxo Guidelines

In the Court of Appeal the leading judgment was delivered by Lord Justice Floyd.  The overriding principle remains unchanged: the court's discretion is very wide and the test is to find where the balance of justice lies having regard to all the facts of the case.

The main change is that under the revised guidelines, the default position is that a stay of national proceedings should be granted and it is for the party opposing a stay to demonstrate why it should not be granted. 

Under the Glaxo Guidelines the primary factor considered by the court in exercising its discretion was the length of the delay in the EPO compared to national proceedings.

The revised guidelines consider delay as one of several relevant factors. These include the benefit to the parties of providing commercial certainty, the benefit to the public of an early decision of the extent of the monopoly, the role of national proceedings in resolving issues between the parties and promoting settlement and the risk of wasted costs. It is likely that wasted costs will hold less weight than the other factors.  Floyd LJ stated expressly that the court will consider these factors at a high level of generality and the application hearing must not become a mini-trial.

The Court of Appeal explained that the phrase "duplication of proceedings" in the Glaxo Guidelines should be avoided. EPO opposition only relates to revocation whereas national courts have exclusive jurisdiction over infringement. Therefore, it is only in the circumstances where the national court finds the patent valid and infringed and the EPO later revokes the patent, that refusal to award a stay may result in injustice between the parties. 

New guideline 7 provides that if refusal of a stay will irrevocably deprive a party of any part of the benefit which the concurrent jurisdiction of the EPO and the national court is intended, then this will militate against awarding a stay.  Provision of suitable undertakings to repay damages awarded if the patent is subsequently revoked may overcome this objection.

Business Impact

The revised Glaxo Guidelines provide that a stay of national proceedings is the default position. However, when all other factors are taken into account, it seems that unless the patent has been before the EPO for a significant time with a final TBA decision anticipated shortly or unless a claimant refuses to provide suitable undertaking to repay damages awarded in respect of a subsequently revoked patent, the court is still unlikely to grant a stay.