1 Forum Shopping in patent infringement proceedings, A comparison : Germany - United Kingdom -...

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Forum Shopping in patent infringement proceedings, A comparison: Germany - United Kingdom - Netherlands

Dr. Sabine Rojahn

Partner of Taylor Wessing

Korea / 1.09.2006

Forum Shopping in Patent Litigation ProceduresA Comparison: Germany – England – NetherlandsConsidering the “Enforcement Directive” 2004/48

Dr. Sabine Rojahn, MunichGermany

© Taylor Wessing

Korea / 1.09.2006 Forum Shopping in patent litigation procedures© Taylor Wessing

Outline

European patent litigation?

Directive 2004/48 EC on the enforcement of intellectual property rights

Forum shopping in Europe

Proceeding on the merits

Provisional and precautionary measures

Damages

Duration of patent litigation procedure

Legal costs

Links


European patent litigation?

The European Union has no harmonized invalidity and scope of protection practice nor a harmonized civil procedure code

The European Patent Convention (EPC) is an international treaty and no European law

Only the process of granting a patent is harmonized

After the grant the European Patent (EP) is a bundle of national patents

The enforcement of the EP is subject to the national laws

No harmonized national court practices in EP patent infringement cases and nullity actions, because there is no central court governing and guiding such practices


Epilady case

Patent infringed

Yes No

Germany X

Netherlands

X

UK X

Italy X

Austria X

Belgium X

France X

Patent “helical spring”

Defendant’s product “rubber roll”

Apparatus for hair removal

EP 0101656


Harmonization efforts throughout the EU for the entire IP area

Directive 2004/48 EU (L 195/16 of 2 June 2004)

The objective of the Directive is to approximate legislative systems so as to ensure a high, equivalent and homogenous level of protection in the international market.

E.g. minimum standards for Evidence / Measures for preserving evidence Interim injunctions Seizure Damages Costs


Forum shopping in Europe despite harmonization?

The Directives only set minimum standards; differences remain, in particular: Proceedings on the merits Measures for preserving evidence Interim injunctions Damages Duration of patent litigation procedure Legal costs

England, Germany and the Netherlands will be compared since all three countries have important case law on patent infringement


Considerations when starting a lawsuit

Where are important patent courts?

What measures are available for preserving evidence?

What are the requirements to get an interim injunction?

What can patentee get from infringer (damages)?

How long will a lawsuit take?

How much will the lawsuit cost?


Important patent courts in the EU

London

The Hague

Mannheim(infringement)

MunichFederal Patent Court(validity)

Düsseldorf(infringement)

Germany:

validity and infringement judged beforedifferentcourts

England and NL:

validity and infringement judged beforethe samecourt


Proceedings on the merits

England Germany Netherlands

Common law system Civil law system Civil law system

Discovery, but more limited than in US

No discovery No discovery

Cross-examination at trialWitnesses will be heard at the initiative of

the court + “cross examination”Witnesses will be heard at the initiative of

the court + “cross examination”

Extensive trial phase

No extensive trial phase,preparation by comprehensive written

submissions, short hearing on oral arguments

No extensive trial phase, evidence primarily through affidavits submitted with

written briefs, short hearing on oral arguments

Independent experts but appointed by the parties

Court appointed expert, statement of party expert is considered as

statement of party

Party experts and court appointed expert (also EPO members can be

heard as experts)


Measures for preserving evidence

Enforcement Directive Art. 7

Member States shall ensure that, [...] the competent judicial authorities may, on application by a party [...] order prompt and effective provisional measures to preserve relevant evidence in respect of the alleged infringement, subject to the protection of confidential information.


Measures for preserving evidence


Search and seize order (formerly “Anton Piller Order”)

Inspection of alleged infringing product/process in a separate procedure

of taking evidence

Patentee may request the court to order a preliminary hearing of witnesses, a

preliminary expert report, or a preliminary visit to a certain venue

Claimant/his solicitors can inspect the respondent’s premises and/or seize or copy material related to infringement,

even against his will

Court appoints an independent expert; alleged infringer is usually not informed,

has to tolerate inspection

Court can in interim judgment appoint an expert to inspect in assistance of both

parties


Provisional and precautionary measures

Enforcement Directive Art. 9: Member States shall ensure that the judicial authorities

may issue an interlocutory injunction

order the seizure or delivery up of the goods suspected of infringing an intellectual property right


Interim procedures


Oral hearing necessary?

Yes No Yes

What can be achieved?

Interim injunction,but rare because of -arguments re balance of convenience-cross-undertaking in damages

Preliminary injunction, right to be informed,

seizure,no damages

Preliminary injunction, information source and size of

infringement, destruction of infringing products, no damages

Likelihood of success? ReasonableLittle, only when infringement is

obviousVery effective

where no nullity is raised

How long does it take to get a ct. decision?

Usually immediateNo oral hearing: 1-3 daysoral hearing: 1-2 weeks

2-4 weeks after hearing


Damages

Enforcement Directive Art. 13 Consideration of all appropriate aspects, such as

negative economic consequences, including lost profits

any unfair profits made by the infringer

or as alternative

royalties or fees which would have been due if the infringer had requested authorization to use the intellectual property right in question

Art. 9 (2) If it is likely that the recovery of damages is endangered, a

seizure of the property may be ordered.


Damages


Lost profits

Yes, requirements to prove causality between infringement

and patentee’s lost profits relatively low

In principle yes, but court applies strict requirements for the proof of causality

Yes, requirements to prove causality between infringement

and patentee’s lost profits relatively low

Reasonable royaltyYes, no double or triple

damagesYes, no double or triple

damages

Yes, no double or triple damages

Defendant’s profitsYes, but very rare, defendant can deduct overhead costs

Very common sinceFed Sup Court decided in 2000 that overhead costs

are not deductible

Yes, but defendant can deduct overhead costs


Application of the “Overhead Costs” ruling

Overview of decisions passed after the Overhead Costs ruling

Court Decision Infringed property right

Infringer’s profits

Damages % of damages in turnover

LG Düsseldorf

Schütt-vorrichtung

Patent 1.7 million 0.7 million 41 %

LG Düsseldorf

Klemmring Patent ca. 370,000.00 170,000.00 46 %

LG Munich Rasenwabe Patent 9 million 2.1 million 23 %

OLG Frankfurt

Vier-Streifen-Kennzeichnung

Trademark 220,000.00 26,000.00 (20 % of profits)

12 %

LG Munich Fussballschal Copyright 44,000.00 24,000.00 (80 % of profits + contribution margin)

55 %


Duration of patent litigation procedure

1st and 2nd Instance

0

10 20

30 40

50

Mon

ths

MaxMin

* KG: Kort Geding(similar to interim proc)


Legal costs

Enforcement Directive Art. 14

Member States shall ensure that reasonable and proportionate legal costs and other expenses incurred by the successful party shall, as a general rule, be borne by the unsuccessful party, unless equity does not allow this.


Costs of patent litigation


Approximate costs of patent infringement

litigation (1st instance, on the

merits)?

750,000 – 2 Mio € 50,000-500,000 €60,000-250,000 €, often

additional translation costs

Who pays the litigation?Loser pays 65 – 80% of other side’s costs

Loser pays it all(acc. to RVG)

Each party bears its own costs. Loser must pay the court costs

(marginal)

What are the litigation costs based upon?

Hourly rates plus disbursements of attorneys

Statutory fees based on value of the matter, usually

250,000-10 Mio €Lawyers generally charge by

hourly rates

Hourly rates plus disbursements of attorneys; court costs are fixed by the

court


Links

I. PATENT OFFICES1. European Patent Office (EPO) http://www.epo.org a) Decisions of the EPO http://legal.european-patent-office.org/dg3/search_dg3_d.htm b) Case Law of the EPO http://www.european-patent-office.org/legal/case_law/d/index.htm c) European Academy (EPO) http://www.european-patent-office.org/news/pressrel/2004_06_30_d.htm 2. German Patent and Trademark Office http://www.dpma.de 3. US – Patent and Trademark Office (US PTO) http://www.uspto.gov 4. (HABM) http://www.oami.eu.int

II. COURTS1. European Court of Justice (ECJ) http://www.curia.eu.int 2. Boards of Appeal (EPO) http://legal.european-patent-office.org/dg3/search_dg3_d.htm 3. Federal Supreme Court http://www.bundesgerichtshof.de 4. Federal Patent Court http://www.bpatg.de 5. US – Supreme Court http://www.sumpremecourtus.gov/ 6. US – Court of Appeal for the Federal Circuit (CAFC) http://www.fedcir.gov/

III. EUROPEAN UNION1. European Union (EU) http://europa.eu.int/index_de.htm 2. Official Journal of the European Union http://europa.eu.int/eur-lex/de/archive/index.html 3. European Parliament http://www.europarl.eu.int/home/default_de.htm


Any questions?

Dr. Sabine [email protected]

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