Gowling WLG's intellectual property experts discuss litigation procedure, trial, appeal and settlement, as part of their 'The basics of patent law' series.
This article is part of a series called 'The basics of patent law', covering: Types of intellectual property protection for inventions and granting procedure; Initiating proceedings; Infringement and related actions; Revocation actions, non-infringement and clearing the way; Procedure, trial, appeal and settlement; Remedies and costs; Assignment and licensing; and the Unified Patent Court and Unitary Patent system.
The articles underpin Gowling WLG's contribution to Chambers' Global Practice Guide on Patent Litigation 2017, for which Gordon Harris and Ailsa Carter wrote the UK chapter.
Court procedure and trial structure
The conduct of civil litigation in England and Wales is governed by the Civil Procedure Rules (CPR). The CPR covers all stages of litigation from pre-action correspondence to the award and payment of a final costs order (although proceedings in the UK Supreme Court are governed by the Rules of the Supreme Court).
Some parts of the CPR apply to particular types of dispute only. For example, in respect of disputes regarding patents, Part 63 supplements and amends many of the general rules. In addition, for some of the general rules of procedure, their specific application in respect of patent disputes has been developed by the case law of the Patents Court and the Intellectual Property Enterprise Court (IPEC). (For discussion of choice of courts in patent proceedings, please see our article on Initiating proceedings).
The legal system in England and Wales is traditionally geared to the hearing of disputes in a single substantive oral trial, although multi-patent disputes may be heard as a series of single patent trials, and it is also usual for a trial to be 'split' into liability and quantum stages. Usually, procedural stages regarding quantum only begin after a finding of liability has been reached.
At an early stage in the litigation, case management directions are set (if not agreed) defining the applicable pre-trial procedural stages and deadlines for the parties, in view of the nature of the dispute. For the liability stage, these commonly begin with the completion of the exchange of statements of case and may include, for example, directions regarding any of the following:
- security for legal costs
- disclosure (and inspection)
- product or process description (an alternative to disclosure)
- notice of models
- technical primer
- written fact evidence in chief
- written expert evidence in chief
- pre-trial review
- trial bundles
- the hearing of the trial, and
In the event of a dispute between the parties regarding procedure or interim relief, upon the application of a party, the court may set an interim procedure for resolving the dispute. This may occur, for example, if one party seeks an interim injunction, or if a dispute arises as to a party's compliance with the directions set by the court.
The procedure employed in the IPEC tends to be more streamlined than that employed in the Patents Court (or the Chancery Division of the High Court more generally). For example:
- the court will manage out aspects of a case which are considered weak;
- there is modification to the conventional separation of legal pleas, assertion of fact and evidence;
- the number of permitted witnesses and experts is generally fewer; and
- the trial is limited to two days in length.
In the Patents Court (and Chancery Division more generally), an evaluation of an optional Shorter Trial Scheme (STS) is taking place, available for claims commenced before 1 October 2018. The STS is intended to provide a 'streamlined procedure' leading to judgment within a year of proceedings being issued. There is overlap with the types of modification to High Court procedure that are commonly seen in the IPEC procedure; however the caps on monetary relief and recovery of costs applicable in the IPEC do not apply to cases in the STS.
The trial of a claim under the Patents Act or for breach of confidence is heard and determined at first instance by a judge.
In England and Wales, judges are appointed from among the most senior advocates in the relevant field. The judges in the Patents Court and IPEC are specialists in intellectual property matters, although some have more technical experience than others. Cases in the Patents Court are allocated a level of technical complexity (levels 1-5), and the most complex cases are then listed by the court for trial by a more technically experienced judge. Occasionally a technical teach-in for the judge, from an expert in the relevant field, will be ordered. More commonly, the parties are ordered to prepare an agreed 'primer' on the (undisputed) background technology. Almost always, the parties rely on the evidence of expert witnesses in respect of the technical points in dispute. Pursuant to the CPR, the duty of the experts is to the Court, even when they are instructed by only one party to the litigation (which is usual). In English patent proceedings the evidence of the experts is usually key to the outcome at trial. In other words, the party whose expert evidence the judge prefers will often win the case.
At the hearing of the trial, the usual structure is that the claimant makes an opening statement, the parties cross-examine the witnesses (both the fact witnesses and the experts) relied upon by each other, and then each party makes a closing statement. The judge considers and rules upon the factual and technical points of dispute in view of the evidence (including cross-examination); and upon the legal points of dispute in view of the written and oral submissions of the parties' advocates.
The time to trial has tended to depend upon the conduct of the parties, the complexity of the case and the diary of the court. A case may be expected to reach first instance trial on liability within 4-15 months, with the reasoned judgment following the completion of the hearing. A second instance decision may be returned within approximately 2-20 months of the first instance decision. The fastest procedures tend to occur in cases where the patentee has sought interim injunctive relief but the court considers that the better course is to order a fast procedure.
Procedural mechanisms are available for preserving confidentiality in documents and material made available to the other party (and the court) in the course of litigation.
Mechanisms to obtain evidence and information
In appropriate circumstances, the court will award any of a number of measures for obtaining and/or preserving evidence, including search and seizure, provision of information and disclosure, as discussed briefly in our article on Initiating proceedings.
A party discloses a document by stating that it exists. The party to whom disclosure is made is then entitled to inspect the document, except where it is no longer in the disclosing party's control or where the disclosing party has a right or duty to withhold inspection of it, for example because it is privileged. Confidentiality does not confer a right to withhold inspection, but the court may order disclosure of confidential documents on appropriate terms, for example to specified members of a 'confidentiality club'. The existence of a confidentiality club will reduce the likelihood that redaction of documents will be allowed (Aqua Global Solutions v. Fiserv  EWHC 1627 (Ch)).
In 2016, in Positec v Husqvarna  EWHC 1061 (Pat), the Patents Court ruled that, following changes to the Civil Procedure Rules, there is no longer a prima facie rule that standard disclosure be given. Absent a "smoking gun" or a more sophisticated type of argument (such as the patentee relying upon commercial success or the reaction of others to the invention), the Patents Court will be disinclined to give standard disclosure (or any disclosure) in a straightforward obviousness dispute.
Standard disclosure, where it is given, generally requires a party to disclose only the documents on which he or she relies and the documents that adversely affect his or her own case, adversely affect another party's case or support another party's case. In patent cases however, standard disclosure is usually more limited than this: provision of a product or process description by the alleged infringer usually enables standard disclosure to be dispensed with in relation to infringement; regarding validity, standard disclosure is usually constrained to a term two years either side of the earliest claimed priority date. In every case, it is the court that orders the scope of any disclosure.
Where disclosure is ordered, it usually takes place in the course of the proceedings before the exchange of written evidence, but it can be ordered at any time in appropriate circumstances, including before litigation has commenced. Following a finding of infringement or breach of confidence in a case in which a claim for damages or account of profits is made, the court will usually order, at the successful party's election, disclosure relating to the defendant's sales, in order to assist the making of an informed choice.
An appeal from a decision (interlocutory or final) of the Comptroller (i.e. proceedings in the UK Intellectual Property Office) lies, as of right, to the Patents Court (PA s.97).
Interim decisions of the IPEC are appealable to the Patents Court. Final decisions of the IPEC, and interlocutory and final decisions of the Patents Court, are appealable to the Court of Appeal, but the permission of the first instance court, or the Court of Appeal, is necessary. Permission is given if the court considers that the appeal has a real prospect of success or if there is some other compelling reason why it should be heard. Generally, new evidence is not admissible at the appeal stage.
Decisions of the Court of Appeal relating to important issues of legal principle are appealable to the Supreme Court; again, the permission of the Court of Appeal or the Supreme Court is necessary.
Settlement of litigation
Beyond the Pre-Action Protocol (discussed in our article on Initiating proceedings), there is no mandatory or formal mechanism for settling litigation. The parties are free to settle their dispute at any time, but should be alert to compliance with all aspects of the law, for example anti-trust law.
If settlement is reached after the substantive trial hearing but before the judgment is handed down, judgment will not usually be handed down. However, the court may do so should it consider the circumstances such as to warrant it, for example where the case raises a point which it is in the public interest to ventilate in a judgment (Barclays v Nylon  EWCA Civ 826; see for example Electromagnetic Geoservices v Petroleum Geo-Services  EWHC 881 (Pat)). On settlement it is usual, but not mandatory, for the proceedings to be stayed rather than dismissed, on the basis that if the settlement agreement is breached the proceedings can be revived.
Concurrent proceedings and stay
After the grant of a European patent, the possibility of concurrent proceedings in the EPO and the UK court contesting the validity of the UK designation of a European patent is inherent in the system established by the European Patent Convention (EPC). However, national courts exercise exclusive jurisdiction on infringement issues.
The Court of Appeal has indicated that if there are no other factors, where concurrent proceedings arise a stay of the national proceedings is the "default" option, there being no purpose in pursuing two sets of proceedings simply because the EPC allows for it (IPCom v HTC  EWCA Civ 1496). It is for the party resisting the grant of the stay to show why it should not be granted, but ultimately it is a question of where the balance of justice lies.
For example, if allowing the national court to proceed might allow the patentee to obtain monetary compensation which is not repayable if the patent is subsequently revoked, this would be a factor in favour of the grant of a stay. It may, however, be possible to mitigate the effect of this factor by the offer of a suitable undertaking to repay. If commercial certainty would be achieved in the UK at a considerably earlier date in the case of the UK proceedings than in the EPO, as will often be the case when a defendant initiates opposition proceedings at the EPO following receipt of an infringement claim in the UK, this would be a factor against the grant of a stay; the relative timings of the two sets of proceedings will be relevant.
In practice, the nature of any undertakings offered by the party resisting the stay may be decisive in the court's decision as to where the balance lies. For example, in Actavis v Pharmacia  EWHC 2265 (Pat),  EWHC 2661 (Pat), proceedings in which Actavis was seeking the revocation of Pharmacia's patent, undertakings eventually offered by Pharmacia tipped the balance in favour of a stay of the UK proceedings. The undertakings included that, during the life of the patent, Pharmacia would: (i) not seek an injunction at all; and (ii) only seek damages of 1% of net sales in the UK. In contrast, in Eli Lilly v Janssen  EWHC 313 (Pat) (a case in which Lilly sought revocation of Janssen's patent), the undertakings offered by Janssen were not sufficient to overcome Lilly's need for commercial certainty. Neither the duration nor the level of any royalty payment was defined, which made it difficult for Lilly to decide when to begin the process of seeking a marketing authorisation for its product.
Next in our 'The basics of patent law' series, we will be discussing remedies and costs.