Spotlight: patent enforcement and invalidity procedures in Spain

All questions

Procedure in patent enforcement and invalidity actions

i Procedural aspectsWhich courts deal with patent cases?

One of the main developments of the past few years has been the dramatic reduction of the number of courts with jurisdiction to deal with patent cases. This trend began in 1993, when the Barcelona Court of Appeal decided that all intellectual property matters would be decided by its Section 15. This resulted in the specialisation of the judges who handled cases assigned to this Section and, as a result, the quality of the judgments increased. The success of Section 15 inspired the creation of commercial courts in 2004. These are first-instance courts with jurisdiction on commercial matters (intellectual property, insurance law, transport law, company law, bankruptcy law, etc). Some years later, the commercial courts in Barcelona decided to dedicate three courts to specialise in patent matters. As a result, only commercial courts numbers 1, 4 and 5 have jurisdiction to deal with patent cases.

Following the example of the Barcelona commercial courts, a small number of commercial courts with jurisdiction to deal with patent cases have been established in other Spanish cities, such as Madrid. Also, the Madrid Court of Appeal established a specific section (Section 28) to decide intellectual property cases, which has also gained great prestige in recent years. The vast majority of cases are filed in Barcelona, where the courts are quicker and more experienced. 'Forum shopping' (choosing the venue) is possible, as the law allows the patent owner to file the action before the courts of any region where the acts of infringement may have caused effects.

Under Spanish law, patent infringement is a criminal offence. However, criminal cases are very rare. This is because Criminal Courts do not have any experience in patent matters; they are extremely slow and the threshold of evidence required is higher than before commercial courts. As a result, the criminal route is only used in exceptionally clear-cut cases or when the facts as set out entail additional criminal offences such as crimes against public health or against consumers. The typical case would be an action filed against a defendant that has marketed a substance to prevent diseases in plants that is patented by a third party, without obtaining the necessary authorisation from the health authorities.

Threat of patent infringement

According to Spanish Courts, a 'threat' of patent infringement may be proved with a variety of indicia. For example, in the case of pharmaceutical products, obtaining a marketing authorisation and price from the regulatory agencies several months ahead of the expiry date of the relevant patent may be considered a 'threat' of patent infringement. The evidence would be further reinforced if the patentee sends a 'warning letter' and the addressee does not undertake to refrain from launching its product into the market all the while the patent remains in force.

Under Spanish law, a 'warning letter' does not normally expose the patent owner to any liability, provided that the content of the warning letter is accurate. In fact, sending a warning letter is mandatory for the purpose of retaining the ability to claim damages against third parties acting in good faith who are neither manufacturers nor importers.

By contrast, in situations where a patent owner has included false statements in the warning letter, the third party affected could have a course of action under the 1991 Act on Unfair Competition.

Infringement proceedings

Spain follows a front-loaded system, which means that the initial complaint must contain all the facts and points of law that the patent owner plans to rely on. Unlike in other jurisdictions, these arguments cannot be supplemented at a later stage. Therefore, a patent owner should not file an infringement action until all preparatory work has been done.

General discovery (i.e., United States-type 'fishing expeditions') is not available in Spain. However, limited disclosure (i.e., the disclosure of specific documents in possession of the other party or a third party) may be ordered by a court, if the applicant identifies the documents to be disclosed and the court considers that the applicant needs the disclosure of such documents for the purpose of proving a relevant fact.

Also, prior to filing a patent infringement action, the patent owner may file an application for Proceedings for the Verification of Facts, an inspection procedure that is very similar to the French saisie-contrafaçon. The main difference is that Spanish courts require a higher threshold of prima facie evidence of infringement before ordering this type of ex parte inspection.

One salient feature of Spanish patent litigation is that experts are key. They are examined and cross-examined at the main hearing. However, in contrast to England, for example, where the interrogatory of an expert may last several days, in Spain it is very unusual for an expert to be questioned for more than two hours (one hour per party). A case normally requires the involvement of one or two experts per party.

Moving on to the procedure of patent infringement proceedings, these consist of two distinct stages. In the first, the 'declaratory' stage, which ends with the judgment, and any infringement and validity issues will be determined. As regards damages, according to the new Patents Act, damages will be calculated during the second 'execution' stage. The main milestones of the declaratory stage are set out below, in order of occurrence:

1. complaint;
2. defence and counterclaim;
3. reply to the counterclaim;
4. preliminary hearing; and
5. trial.

The commencement of an action: complaint

Court proceedings for patent infringement and for patent revocation are begun by the filing of a complaint. As mentioned, all the facts and points of law must be set out in the initial complaint. This must also include all documents and expert opinions that the plaintiff plans to use to support its claims. If the plaintiff considers that, for the purpose of deciding the case, it would be advisable for the court to appoint an independent expert, this must also be requested in the initial complaint.

It can thus be seen that the preparation of a complaint is an extensive exercise. Discussions with in-house business staff, together with technical experts and, often, independent experts are usually required.

The statement of defence and counterclaim

Within two months of the service upon the defendant of the complaint, the defendant must submit its statement of defence and, if appropriate, its counterclaim. The statement of defence should respond to the detailed allegations made in the complaint. In patent infringement actions, the statement of defence will often include either:

1. an allegation of the invalidity of the patent in suit, but without the judge having to declare the revocation of the patent (in which case the patent holder will have eight days, counting from the date on which the statement of defence is served, to request the judge to address these allegations as a counterclaim); or
2. a counterclaim seeking the revocation of the patent in suit. The format of the counterclaim will be similar to that of the complaint.

Expert opinions must, in principle, be filed along with the statement of defence (and, where applicable, the counterclaim).

The reply to the counterclaim

If the statement of defence includes a counterclaim, then, within two months of its service upon the plaintiff, the plaintiff must issue a reply to the counterclaim, setting out all the arguments upon which it intends to rely in respect of the validity of the patent in suit.

Expert opinions must, in principle, be filed along with the reply to the counterclaim.

Preliminary hearing

After the defendant has submitted its statement of defence to the complaint, or the plaintiff its reply to the defendant's counterclaim, as the case may be, the judge will call the parties to attend what is termed the 'preliminary hearing' (i.e., directions hearing).

At the preliminary hearing, the judge first encourages the parties to reach an amicable settlement, which is very rarely reached in practice.

If no settlement is reached, the judge then examines any formal defects that might prevent him or her from handing down a judgment on the merits of the case at a later stage, such as the lack of capacity or representation of the parties, res iudicata or lis pendens or other defects regarding the procedure used or the way in which the complaint has been drafted.

After this, the parties are entitled to complement the allegations made in their initial writs and make new allegations in relation to any relevant facts that occurred after the complaint or the statement of defence was filed. If the parties disagree on the facts of the case, which is normally the case, they will be invited to submit evidence.

If that is the case, the parties will then be invited to propose all evidence they wish to use to support their claims and the judge will decide, for each piece of evidence, whether to admit it or not. The admissibility of the evidence proposed by each party is one of the key aspects to be decided at the preliminary hearing.

At the end of the preliminary hearing, the judge sets a date for the trial.

Trial

The purpose of the trial will be to examine the evidence submitted by the parties, including the cross-examination of the parties, witnesses and experts.

Once the evidence has been examined, the parties give their concluding remarks verbally on the disputed facts, as well as their closing arguments on the points of law on which their claims, which cannot be altered at this point, are based.

Judgment

Judgment is normally handed down within two to six months after the trial, depending on the workload of the court.

Provisional enforcement of the judgment

Under Spanish law, it is possible to apply for the provisional enforcement of the judgment, which should be granted automatically by the court unless one of the limited exceptions set out in the Spanish Civil Procedure Act applies. One of these exceptions is a judgment declaring the invalidity of a patent, which cannot be provisionally enforced.

Costs

The basic rule is that the 'loser pays' the legal costs of the winner, unless the judge considers that exceptional circumstances exist and decides otherwise. In its judgment of 28 February 2018, the Barcelona Court of Appeal (Section 15) highlighted that if the judge deviates from the general rule, he or she must explain and justify the reasons.

Duration of main proceedings

First-instance proceedings before the commercial courts usually last between approximately one and one-and-a-half years.

Court of appeal proceedings may last one to two years.

Supreme Court proceedings may last three to six years. However, many cases come to an end at the second-instance level, because the Supreme Court is reluctant to hear appeals in patent cases.

Court of first instance	1–1.5 years	Aggregate
Court of appeal	1–2 years	2–3.5 years
Supreme Court	3–6 years	5–9.5 years

ii Preliminary reliefIntroduction

According to Spanish law, the patent holder whose rights are being infringed, or might be infringed imminently, can apply for the interim injunctions necessary to secure the future enforcement of the favourable judgment to be obtained in the main proceedings.

According to the Spanish Civil Procedure Act, interim injunctions must be applied for, in normal circumstances, when the main claim is filed. Applications filed before the main action will only be accepted if the applicant proves reasons of urgency or necessity. On the other hand, applications filed after the main claim will only be accepted when such application is based on facts or circumstances that justify the request at such time.

The interim injunctions proceedings progress independently of the main proceedings, with their own self-contained procedure. The application for an interim injunction is normally made inter partes, namely, with notice to the other party. However, when the applicant proves special reasons of urgency or that hearing the other party might frustrate the purpose of the interim injunction, the court is entitled to order such interim injunctions within the following five days, without hearing the defendant, who is then entitled to file an opposition against the interim injunctions ordered. For example, on 17 July 2019, the Barcelona Patent Court ordered a preliminary injunction ex parte because the defendant had already announced the launch of its product into the market.

The court order containing the interim injunction, if granted, may order the defendant to do the following, inter alia:

1. to cease any act that infringes the applicant's patent rights, or prohibit it, where there are reasonable signs that it is about to begin immediately;
2. to seize infringing items;
3. to deposit a bond, guaranteeing payment of the damage already caused to the patent holder; and
4. to record appropriate notices at the Patent Office to alert third parties of the existence of legal proceedings.

Requirements for obtaining interim injunctions

The requirements for obtaining an interim injunction, the fulfilment of which must be demonstrated by the applicant, are as follows.

1. Fumus boni iuris (prima facie evidence of infringement): the applicant must have strong prima facie evidence supporting its application. Normally, this is proved by obtaining expert opinions that set out the reasons that lead an expert in the field to conclude that the defendant's product falls within the scope of the allegedly infringed patent.
2. Periculum in mora (danger in the delay): the applicant must show that circumstances could occur during the main action that, unless an interim injunction is ordered, could prevent a favourable judgment or at least jeopardise the enforcement thereof. Abundant case law and legal doctrine have declared that in specific cases of patent infringement, a danger in the delay derives from the mere continuity of the infringing acts that are hoped to be avoided. In other words, this requirement is normally met where there is a well-founded risk that the conduct will be repeated and will persist while the main proceedings are being heard.
3. The posting of a bond in order to compensate the defendant for any damages that the interim injunction might cause, and specifying the amount of such bond. This amount will vary depending on the circumstances of the case. To date, in patent cases, an amount of approximately €1 million per defendant is normally considered sufficient by the Spanish courts, although higher amounts are requested in some cases.

Amendment of the patent

The patent owner is entitled to amend or limit its patent during court proceedings (as a main or auxiliary request), filing the set or sets of claims and their justification along with its statement of defence, reply to the revocation counterclaim or reply to the revocation plea. In cases where the patent holder has brought an infringement action, it must justify (and, where applicable, prove) how the amendments affect such action.

The court will give the other party leave to make allegations about the requested amendment or limitation, so that it can maintain or modify its requests in light of the same. The two-month period allowed for this will begin as from the date of receipt of the request.

Notwithstanding the above, when the patent is amended outside of the court proceedings while such proceedings are under way, the holder can request that the patent thus amended be considered as the basis for the proceedings. In such cases, the court will grant the other parties the possibility to make allegations.

Once the request for an amendment or limitation has been filed, the court will inform the Spanish Patent and Trademark Office so that the request is recorded in the form of a caveat or preventive registration. Once there is a final decision about the patent amendment, the Office will be notified ex officio so that it is reflected in the registry and, where applicable, the patent is modified.

An alternative route for amending a patent after it has been granted is filing an application before the SPTO. One of the highlights of the past year is that the SPTO has accepted this type of administrative amendments not only in the case of Spanish patents but also in the case of European patents.