The civil justice system in England and Wales underwent a major review in 1999 and the Civil Procedure Rules were introduced in April 1999. All proceedings under the Civil Procedure Rules must be conducted under the overriding objective of enabling the court to deal with cases justly. The courts must promote this objective through active case management and the parties also have a duty to help the court to further it. This principle is given considerable weight in patent litigation, which was one of the areas to pioneer the Civil Procedure Rules changes.
- In the English1 legal system, trials are conducted before a specialist patents judge in the Patents Court or Patents County Court. Appeals are generally heard by a panel that includes a former patents judge.
- The first trial deals only with establishing liability. If the claimant is successful, a separate proceeding starts to determine the amount of financial compensation (‘quantum’) – but these hearings are rarely pursued because cases generally settle once liability is determined.
- Interim relief – including search-and-seize orders to preserve evidence, worldwide asset-freezing orders and interim injunctions – is available in certain urgent cases.
- The parties are generally required to disclose documents, even if they are harmful to their case.
- Pre-action and non-party disclosure are available in certain circumstances.
- All statements of case and witness statements must be verified by a statement of truth. It is a contempt of court for a person to sign a statement of truth without an honest belief that the facts stated in the document are true.
- Facts are usually proved by written evidence and cross-examination, although there are procedures for trial without witnesses appearing in court in suitable cases.
- The losing party usually bears the costs of the action. The successful party can recover about two-thirds of its legal fees.
- Expedited proceedings are possible, but it will usually take around one year for a case to come to trial on liability.
- Border detention by UK customs is another important way of enforcing patent rights in the UK.
Types of Patent Litigation
The principal types of patent proceedings that can be brought in England are:
- patent infringement proceedings for infringement of a granted UK patent or granted European patent with a UK designation (EP(UK));
- stand-alone actions to revoke a granted UK or EP(UK) patent (which can be started by any person);
- stand-alone actions seeking a declaration of non-infringement of a granted UK or EP(UK) patent;
- entitlement proceedings over UK and EP(UK) granted patents, UK applications and any other patent applications claiming priority from a UK patent;
- applications to rectify the Register of Patents; and
- applications to amend a granted patent (which are made to the Patent Office unless there is a pending infringement or revocation action).
In principle, it is possible to bring a claim for infringement of a non-UK patent against a defendant domiciled in England and Wales. In practice, the UK court will almost always decline jurisdiction on the basis that issues of infringement are so intimately associated with the question of validity that the two ought not to be tried separately.
Most English patent litigation starts with a claim for infringement and this is the only type of litigation that will be considered in detail here.
Progressing a Patent infringement case in the English Courts
Actions are begun with a claim form, followed by an exchange of statements of case. The time limits for the exchange of statements of case are laid down in the procedural rules but they can be varied by agreement or by application to the court. All patent infringement cases must be started in the Patents Court (a division of the High Court) or the Patents County Court.
The Patents Court and the Patents County Court have identical jurisdiction and any claim can be brought in either court. The rules and procedures in both are identical. However, the two courts have distinct identities and the Patents County Court is more suited to smaller, lower-value cases. The rules provide the patents judges with sufficient flexibility to ensure that cases are run appropriately.
The statements of case are usually quite brief.
The claimant must cite examples of the infringing acts in its first statement of case and should state which claims of the patent are alleged to be infringed. It is possible to bring claims under multiple patents and claims for matters other than patent infringement in the same action. It is not necessary for the claimant to explain why the acts fall within the scope of the asserted claims.
The defendant’s response usually includes a bare denial of infringement and an assertion that the patent is invalid. The defendant must state the legal grounds relied upon for invalidity (eg anticipation or obviousness) and must cite the relevant prior art, but does not have to explain the relationship between the prior art and the claims. An invalidity defence will be accompanied by a counterclaim to revoke the patent. The claimant usually responds to that counterclaim with a bare denial.
Typical cases will take 12 months to reach trial, although urgent ones can be brought to trial in six months. Much depends on the nature of the dispute and the relevant evidence, as well as on the court’s timetable.
The trial will consider only the question of establishing liability. If the claimant proves its case, a separate procedure will start to determine the amount of financial compensation.
The diagram age illustrates the main elements of a typical action in the Patents Court.
In practice, time extensions are common (but not if they affect the trial date). Most patent cases involve several applications to the court before the trial – for instance, to compel the other party to comply with the timetable, or in relation to directions for experiments and disclosure and to compel responses to requests for documents, information or admissions.
There is now a ‘streamlined procedure’ with limited disclosure, short trials and no cross-examination, which can be agreed or imposed by the court in appropriate cases.
Interium relief in urgent cases
Various types of interim injunctions are available, including orders freezing the defendant’s assets (freezing injunctions) and orders granting the claimant’s representatives the power to search for and seize documents and other items without prior warning (search-and-seize orders). Interim injunctions prohibiting alleged infringing activity can be granted very quickly and even without notice to the other party in certain cases. The court can also grant an injunction in aid of foreign proceedings or preventing foreign proceedings. While some European jurisdictions have had to introduce such interim relief measures following implementation of the IP Enforcement Directive 2004/48, these measures were already available in the UK.
Measures for preserving evidence (search orders)
A search order (formerly known as an ‘Anton Piller order’) requires a defendant to allow a claimant’s representatives to enter his premises and to search for, copy and remove documents. It is a useful way of preserving relevant evidence about the alleged infringement that the claimant believes the defendant may destroy.
In the application to the court, which is made ex parte, the claimant must show:
- a very strong prima facie case;
- clear evidence that the defendant is in possession of property that will establish his liability;
- evidence of a real possibility that the defendant may destroy the material before an application can be made; and
- evidence that the claimant will be seriously damaged if the defendant destroys the material.
A freezing order (formerly known as a ‘Mareva order’) is an important way of preserving the assets of the defendant. It is useful where there are concerns that the defendant is likely to remove his assets from the jurisdiction to avoid paying damages. It is generally available only for assets within the jurisdiction of the court. All types of assets can be frozen. The application is made ex parte and the claimant must have a cause of action and a good arguable case, and there must be evidence demonstrating a risk of dissipation.
This is disclosure of specified documents or classes of documents against a prospective defendant before proceedings have been issued. The court may, according to its discretion, order pre-action disclosure of documents where the following conditions are satisfied:
- the documents are in the control of a person who is likely to become a party to the proceedings;
- if proceedings had started, the documents would have fallen within the ambit of standard disclosure; and
- pre-action disclosure is desirable to dispose fairly of the proceedings, to assist the resolution of the dispute without proceedings or to save costs.
Ex parte injunction
In urgent cases, courts may issue an ex parte injunction against an alleged infringer to prevent any imminent infringement or to forbid the continuation of an infringement. An application for such an injunction can be made by a requesting party that has presented reasonably available evidence to support the claim that its patent has been infringed or is about to be infringed and has established the required urgency. However, ex parte interim injunctions are rarely granted in patent cases in the UK because the courts will generally consider that the defendant should be given a few weeks to submit written evidence in defence and to appear at a short hearing before the court before an order is made.
Inter partes preliminary relief proceedings
An interim injunction may be granted following a short hearing attended by all parties and on the basis of written evidence (but not oral testimony from witnesses or experts) if the claimant can establish:
- a serious issue to be tried; and
- on balance, taking into account the respective damage to the parties if the interim injunction is incorrectly granted or incorrectly refused, it is appropriate to grant the injunction.
Interim injunctions are comparatively rare in patent cases because in most cases the court will take the view that court proceedings are quick enough to avoid serious harm and the claimant will receive adequate financial compensation for damage in the interim if it proves its case at trial. Recently, however, there have been some cases in which interim injunctions have been granted to prevent the launch of generic pharmaceuticals.
The claimant will usually be liable for any damage caused by an interim injunction if the court finds for the defendant at trial. A claimant who seeks an injunction will almost always have to give an undertaking to the court to meet such damage. In pharmaceutical cases, there has been a suggestion that the claimant may also need to give an undertaking to the National Health Service (NHS) to reimburse moneys lost due to a preliminary injunction wrongly imposed against a generic drug manufacturer.
Under the court’s general case management powers, it can of its own volition order that a particular issue should be tried as a preliminary issue. Similarly either party may apply for an issue to be tried as a preliminary issue. This is increasingly frequent when it leads to more effective case management, cost savings or, possibly, the determination of the case. The court may also encourage the parties to examine alternative dispute resolution options before the case proceeds.
Where the claimant can realistically say that there is no serious prospect of any defence succeeding, summary judgment is available. A summary judgment hearing can take place within six weeks of commencement of the action. Because infringement and validity are complex issues, it is unusual for a patent infringement case to be taken to summary judgment. It can be appropriate, however, where the case has in effect been heard already – for instance, when the manufacturer has already lost a case and the defendant is a distributor of the same product.
Detention of infringing goods by UK customers
One important way of enforcing patent rights in England and Wales is to enlist the assistance of the UK customs authorities to prevent products that infringe intellectual property rights from entering the European Union. Under EU law (Regulation (EC) 1383/2003 of 22 July 2003 (the EC regulation)), IP rights-holders can require national customs authorities to seize and detain goods on their entry into the EU if they suspect those goods infringe their IP rights. The Goods Infringing Intellectual Property Rights (Customs) Regulations 2004 (SI 2004/1473) amend the existing UK legislation to reflect the provisions of the EC regulation.
The key features of the EC regulation, as implemented in the UK, are as follows.
- A patent owner can prevent the importation into and exportation from the UK of infringing products. Notification and detention procedures exist to enable the customs authorities to assist the patent owner in stopping infringing products entering the UK.
- One application form may be used to alert all national customs offices in the EU to monitor for infringing goods for one year.
- Action by the customs authorities involves suspending the release of goods and temporarily detaining those goods, as well as notifying the patent owner.
- The detention procedure will give the patent owner the opportunity to initiate infringement proceedings. In appropriate cases, the patent owner could seek an order preventing distribution of the detained goods pending trial.
- Subject to stringent controls on the use of information derived from the border detention, the system might be used to monitor the market and to obtain evidence of infringement for use in later proceedings.
Limitation periods are set by statute. The basic limitation period is calculated from the date that the cause of the action accrued and proceedings must begin within six years of that date. Normally, the claimant can therefore look for damages for all infringing acts occurring in the six years before proceedings start.
Limitation periods may be extended in certain circumstances – for example, where the defendant has deliberately concealed facts about the case.
Disclosure is an important part of English patent litigation procedure. At the case management conference, the court will normally make an order for disclosure. The order is usually for ‘standard disclosure’, whereby a party is obliged to disclose to the other side all documents on which it relies and all documents that could adversely affect its or another party’s case or support another party’s case. There is no oral disclosure or general deposition procedure. Special court rules limit the scope of disclosure in patent litigation. For instance, disclosure on validity can be limited to documents dating from two years either side of the earliest claimed priority date in the patent. Disclosure on technical infringement issues need not be given if the defendant provides a product description setting out the relevant details of the alleged infringing product or process.
Disclosure has to be given only in relation to points at issue. It is therefore common for parties to make admissions where possible before giving disclosure. For instance, defendants will usually admit that they committed the acts as alleged (for instance, selling a product), while denying that the product is an infringement. Before disclosure, it is therefore normal for each party to request admissions and further information from the other party. A party is under a duty to make a reasonable search for documents when giving standard disclosure. It is also required to make a disclosure statement in its list of documents, setting out the extent of the search made to locate the documents that it is required to disclose. The disclosure statement certifies that the defendant understands the duty to disclose documents and that, to the best of its knowledge, it has carried out that duty.
In a large case, complying with the disclosure obligation can be timeconsuming and expensive. A solicitor has a duty to the court to ensure disclosure of a client’s relevant documents. Even documents that may be harmful to a party’s case must be disclosed.
Documents that are privileged do not have to be disclosed. These include most communications with lawyers and certain documents brought into existence for the primary purpose of anticipated litigation. A confidential document is not necessarily privileged and will usually have to be disclosed. Following receipt of the other party’s disclosure documents, a party may request (and seek court orders for) further specific disclosure.
Documents produced on disclosure may not be used for any purpose other than the current litigation unless and until they have entered the public domain. This rule also covers the product description and any admissions made in the case.
There is now a presumption that documents that are put before the court for the purpose of being read in evidence have entered the public domain. The court can also make an order for pre-action disclosure (discussed above) or non-party disclosure (that is, disclosure against a person who is not a party to the proceedings).
Evidence, Witnesses and Experts
It is rare that patent infringement cases turn on the question of where the burden of proof lies. In principle, though, the burden of proof is generally on the claimant to prove infringement and on the defendant to prove invalidity. The standard of proof is generally to the balance of probabilities. Patent litigation relies very heavily on expert reports and on the performance of the expert under cross-examination.
Expert evidence can be given only with the court’s permission and the directions set at the case management conference will determine how many experts can be called. The court can also limit which types of expert can be called and the issues the expert can address. Although the court has the power to direct that evidence on an issue be given by one expert only, jointly for both parties, this is not a power used in patent cases.
Although an expert witness is retained and paid by one party, the expert witness has a duty to the court to be impartial and independent. The expert has to disclose his instructions (although usually not in great detail). It is reasonably common for a party to instruct an expert adviser to assist with preparing the case. These instructions will generally be privileged. However, if this expert subsequently becomes the expert witness, privilege can be lost in those instructions in some circumstances.
The court can order meetings between experts to identify the areas on which they agree and disagree. These agreements are not binding unless the parties agree that they should be. Such meetings are uncommon.
There is no ‘property’ in a witness, so it is permissible to approach an expert or other witness who has already been approached by the other side. If a witness statement has already been exchanged for a witness, however, doubts may be cast on his credibility if he is prepared to change his evidence.
Questions of foreign law are regularly dealt with in English courts, with expert evidence from foreign lawyers being treated as evidence of fact.
The court can appoint a scientific adviser to sit with the judge, but this is very rarely done.
Costs usually follow the event, so that the losing party will bear the costs of most of the litigation.
A successful party will recover a proportion of its legal costs from the losing party. This usually works out at about half to two-thirds of its total legal costs.
If the parties are unable to agree the costs to be paid by the losing party, they may have their costs assessed by a costs judge. This assessment procedure may take several months and involves a ‘mini-trial’. The successful party may also claim its costs for the assessment procedure.
The successful party is entitled to interest on its legal costs at the judgment debt rate (currently 8 per cent per annum) from the date of the order awarding costs until payment. The court also has discretion to order interest on the successful party’s costs from the date of payment of each bill paid by the winning party to the date of the costs order.
As a result of regulations introduced on 29 April 2006, a patent assignee or licensee who fails to register the assignment or licence within six months will be unable to recover his costs if he unsuccessfully sues over infringing activities that occur before registration.
Historically, lawyers’ fees could not be made dependent on the outcome of a case. The rules are now becoming more relaxed and ‘no win, no fee’ arrangements are permitted in certain circumstances. They are rare in patent cases.
When cases go to trial in the English system, each side will usually incur total costs in the region of €1.5m. Costs in small cases can be much lower. Costs under €0.75m are low and costs will go over €3m only in very large and complex cases.
However, the vast majority of English patent cases settle well before trial and the majority of costs are incurred at trial and in the run-up to it. Many cases settle at the stage of disclosure or at the exchange of expert reports.
A losing defendant will normally be ordered ‘not to infringe’. Breach of this order is a contempt of court for which the penalty includes imprisonment and confiscation of assets. Losing defendants are therefore usually very cautious about conducting any activity that could be interpreted as a patent infringement. The injunction (and indeed all other remedies) will generally apply to all infringing products, not just those specifically examined in the liability hearing. It is effective in England from the date of the order, without the need for the claimant to register or otherwise take steps to enforce it. The order remains in place for the life of the patent and normally covers activities carried out through directors, agents or otherwise. Although it is not clear whether other group companies are necessarily affected, in general an entire group of companies will obey an injunction granted against one subsidiary. The injunction is not usually stayed pending appeal.
Losing defendants are also usually ordered to deliver to the claimant, or destroy, their infringing stocks.
The defendant will also have to provide some basic financial data on infringements, such as how many products have been sold and the price and profit margins applicable. Once the claimant has that information, it chooses between an inquiry as to damages and an account of profits. Until relatively recently, a patent assignee or licensee who failed to register the assignment or licence within six months would be penalised if he sued for infringement, in that he would be prevented from obtaining damages or an account of profits for infringing activities before registration. However, regulations introduced on 29 April 2006 removed this penalty. This liberalisation was a result of the EU’s IP Enforcement Directive (2004/48); the directive had no other major implications for patent litigation in England and Wales.
Inquiries and accounts are separate procedures. They usually involve disclosure by the defendant of the scale of activities and relevant management accounts and will often involve expert accountancy evidence aimed at proving the level of damages or profits. If the defendant proves that the patent is invalid, an order is made revoking it, but this is suspended while any appeals are pursued.
Enforcement proceedings can be taken once the judgment has been served on the defendant. There are various enforcement methods and it is necessary to consider what assets the defendant has and where they are located to determine which method is the most appropriate. Interest accrues on outstanding judgments.
The English legal system is a common law system. It has the following principal features.
- It is based on precedent. The lower courts are bound by earlier decisions of the higher courts.
- The Patents Court is part of the High Court in London and has unlimited jurisdiction to deal with civil claims. It has a worldwide reputation for speed, efficiency and the quality and technical competence of its judges. Many of its cases involve foreign parties who have no connection with England.
- The Court of Appeal (comprising a panel of three judges) hears appeals from the Patents Court. All appeals require permission from the High Court or from the Court of Appeal itself. In principle, this will be granted only where there is a real prospect of success or there is some other compelling reason – for example, a point of public interest. In practice, however, the Patents Court will normally give leave to appeal and will almost always do so if it orders a patent to be revoked. Lodging an appeal does not automatically stay execution of the first instance judgment.
- The House of Lords (normally comprising a panel of five judges) is the court of final appeal. Parties must obtain leave to appeal to the House of Lords from either the Court of Appeal or the House of Lords itself. Leave is usually granted only if a point of general public interest arises.
- London is also an important seat for international arbitration. The Arbitration Act 1996 confirmed its status as a premier location for arbitrations by simplifying procedures and limiting the ability of parties to appeal to the courts.
Rights of Audience
The legal profession in England and Wales is made up of solicitors and barristers (specialist advocates).
It is still common in patent litigation for solicitors to work with barristers, who conduct the oral hearings in a case and assist in preparing the documents for use in court. In some cases, solicitors work with patent agents. The decision on whether to use patent agents is generally made on a case-by-case basis.
Solicitors have automatic rights of audience in the Patents County Court. They may qualify as solicitor-advocates and then receive rights in the Patents Court, Court of Appeal and House of Lords. In-house lawyers also have rights of audience.
Patent agents have automatic rights of audience in the Patents County Court and may obtain a patent litigator’s certificate entitling them to rights of audience in relation to intellectual property cases in the Patents Court, Court of Appeal and House of Lords.
Jurisdiction and interaction with other proceedings
EU Regulation 44/2001 (the regulation) and the Brussels and Lugano conventions on the enforcement and recognition of judgments are applicable in England and Wales. This has had three main effects.
- Although there is a general rule that proceedings must be brought in the defendant’s domicile, there is also a rule that validity of a patent can only be determined in the place that the patent is registered. The English court views patent infringement as inextricably linked to validity if validity is put in issue and therefore will normally refuse to accept jurisdiction over claims for infringement of a foreign patent if there is, or is likely to be, a counterclaim for invalidity.
- Another important exception to the general rule is that a defendant can be sued for patent infringement in the jurisdiction where the harmful event occurred. This is the usual ground relied upon when suing a non- English company in the Patents Court for infringement in England of a UK patent.
- Once a judgment has been obtained in England it is in principle readily enforceable in those countries where the regulation and the Brussels and Lugano conventions apply.
The English courts will not stay patent litigation because of cases in other non-UK courts concerning similar patents. In many cases arising out of licence disputes, the parties litigate on the licence questions outside the UK and on the alleged patent infringement in the Patents Court. In these cases, the court will normally run the action through to trial and judgment and consider what order to make if the patent is found to be valid and (save for the licence) infringed.
Complex issues arise where patent litigation is run in parallel with a European Patent Office (EPO) opposition. The patent’s claims can be amended in the opposition or the entire EP may be revoked. In these circumstances, the Patents Court’s general rule is that infringement cases should be stayed pending the end of the opposition. However, EPO oppositions can take many years to complete. To avoid the injustice that delay would cause, the court deviates from the general rule in many cases and allows the case to run to a UK trial on a normal timetable.