International Patent Litigation in UK

The proprietor of a patent may bring proceedings for patent infringement. This includes both the legal and equitable owners of the patent. If the patent is owned by two or more parties, any one of those parties may initiate infringement proceedings without the consent  of the other co-owners. However, the other co-owners must be made parties to the proceedings (and they will not be liable for costs unless they take part in the proceedings).

Exclusive licensees have the right to bring proceedings for patent infringement in respect of any infringements of the patent committed after the date of the licence, and only in relation to infringements that are within the scope of their licence. The patentee must be joined as a defendant, but he will not be liable for costs unless he takes part in the proceedings.

It is possible to join any number of parties as a defendant in the same proceedings. The Court has discretion to add a party to proceedings if it is desirable to do so to resolve the issues.

Yes: if there is an issue involving a supplier / other third party that is connected to the dispute between the existing parties, and if it is desirable to do so, the new party can be added to proceedings. For example, if there are multiple infringers of a single patent (the connection), it is likely the court will consider it desirable to add the defendant and hear the dispute together (because evidence, disclosure, experts etc. may be similar).

The limitation period for patent infringement claims is six years from the date the cause of action began. The cause of action begins from the date the infringing act occurs. Also note that an action for patent infringement can only be started once the patent is granted but damages may be recoverable for infringements occurring between publication of the application and granting.

No, a party has discretion as to which patents it may allege are infringed when starting proceedings. However, in certain circumstances, the UK Court may consider it an abuse of process if a party could have brought their whole claim at one time and did not do so.

Patent litigation for both infringement and invalidity proceedings in England and Wales can be heard in either the Patents Court (which is part of the Business and Property Courts of the High Court) or in the Intellectual Property and Enterprise Court (‘IPEC’). Validity and infringement proceedings will be heard together.

The IPEC is intended to provide a less costly and less complex alternative to litigation in the Patents Court, particularly for small and medium sized organisations. There is a five hundred thousand pounds (£500,000) cap on the maximum amount of damages / account of profits that can be claimed. The trial procedure is streamlined to take just two days. The judge in the IPEC will actively manage the case to ensure the case is dealt with efficiently. The court will not order a party to pay total costs of more than:

• fifty thousand pounds (£50,000) on the final determination of a claim in relation to liability; and
• twenty five thousand pounds (£25,000) on an inquiry as to damages or account of profits.

For more complex patent litigation, or where more substantial damages / account of profits are being claimed, the dispute will be heard in the Patents Court. Invalidity challenges may also be brought before the  UK Intellectual Property Office.

No.

A party can apply to the court (both the Patents Court and the IPEC) for a binding declaration of non-infringement. It is possible to apply for this order without there being a pre-existing dispute.

In accordance with Patents Court guidance, cases in the Patents Court should take a maximum of 12 months to reach first instance trial. However, in reality (and given COVID) cases are taking 12 to 15 months to reach trial. There will be a first hearing (known as the Case Management Conference (“CMC”)) once the initial pleadings have been closed, usually two to four months following issue of the claim.

Cases in the IPEC take approximately nine to 15 months to reach trial. There is evidence to suggest that the average time to trial in the IPEC is decreasing (the aim is for cases to be heard within nine months).

In addition to the IPEC and the Patents Court there is also a Shorter Trial scheme (STS), which allows for quicker and more streamlined resolution of patent claims that can be tried without extensive disclosure, witness or expert evidence. Cases on the STS procedure are managed by docketed judges (who will hear the trial). The trial should take place within about 10 months of issue of proceedings.

Trials in the Patents Court are not limited in length and can take between two days to two to three weeks depending on the complexity of the issues, and in particular the complexity of the technology involved and number of expert witnesses. Following the trial, parties should expect a first instance decision within three months, but this is not fixed.

Under the STS, the maximum length of trial is four days including reading time. The judgment will be handed down within six weeks following the trial.

The IPEC endeavours to ensure that trials do not last longer than two days; indeed, many trials in the IPEC are heard in a single day. The judge ensures the case can be heard in this limited time by active case management, early identification of the issues and limited evidence and witnesses. Following the trial, parties should expect a first instance decision within 10 weeks, but this is not fixed.

Yes, there are specialist patent judges in the both the Patents Court and the IPEC. The judges have many years’ experience in patent litigation as barristers before joining the judiciary. They often also have a scientific academic background.

A party may apply to the courts to stay proceedings pending the outcome of the EPO opposition. The Court has discretion whether to make the order; however, in practice, it is rare for the Court to grant such a stay. The Court has provided general guidance on the Patents Court’s discretion to stay legal proceedings on the ground that there are parallel proceedings pending in the EPO concerning the validity of the patent in suit. This guidance includes:

• the discretion should be exercised to achieve the balance of justice between the parties having regard to all the relevant circumstances of the particular case. It is for the party resisting the grant of the stay to show why it should not be granted;
• although neither the EPC nor the 1977 Act contains express provisions relating to automatic or discretionary stay of proceedings in national courts, they provide the context and condition the exercise of the discretion.
• the possibility of concurrent proceedings contesting the validity of a patent granted by the EPO is inherent in the system established by the EPC;
• if there are no other factors, a stay of the national proceedings is the default option. There is no purpose in pursuing two sets of proceedings simply because the Convention allows for it;
• the Court must consider the extent to which 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 to confer. Thus, 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 weighty factor in favour of the granting of a stay. It may, however, be possible to mitigate the effect of this factor by the offer of suitable undertakings to repay;
• the Patents Court judge is entitled to refuse a stay of the national proceedings where the evidence is that some commercial certainty would be achieved at a considerably earlier date in the case of the UK proceedings than in the EPO;
• it is permissible to take account of the fact that resolution of the national proceedings may, by deciding some important issues, promote settlement;

Yes, actions for revocation of patent rights in England and Wales may be heard in one of three specialist jurisdictions (1) the Patents Court, (2) the Intellectual Property Enterprise Court (IPEC); and (3) the UK Intellectual Property Office (UKIPO). There is no requirement for an infringement action to be asserted (although it would be usual for a party to counterclaim for infringement if a revocation action is started).atent Litigation in U

In certain circumstances, the UKIPO may be a preferable jurisdiction for a revocation action than the Patents Court or the Intellectual Property Enterprise Court. It is also possible for any party to request a written opinion on novelty and inventive step from the UKIPO. Such a preliminary opinion is non-binding, but it is open to public inspection on the UKIPO website.

The proprietor of standard essential patents (SEPs) can seek the determination of the FRAND licence from the UK Court, but such a determination will only take place after at least one SEP has been found valid and essential / infringed. This means that one or more technical trials will precede any FRAND trial.

The UK court has also recently considered whether an implementer can bring a defensive action to seek determination of a global FRAND licence (without an existing action ongoing). Although the implementer was unsuccessful, based on the specifics of their pleaded case (see Vestel v Access Advance ([2021] EWCA Civ 440), it appears from the Court of Appeal’s reasoning that, in future cases, it may be open to implementers to bring defensive FRAND cases in the UK.

There is no specific definition of compulsory licensing under the UK law. However, section 48 of The Patents Act 1977 provides that any person may apply for a licence at any time after the expiry of three years from the date of the granting of a patent. A licence can be sought for any product that is not in the field of “semiconductor technology” but there are strict requirements that must be met. See this article that provides details  of the legal grounds and negotiation requirements (Compulsory licensing law and regulation in England and Wales | CMS). Such actions for compulsory licences are rarely made in the UK.

Yes, a party may seek to invoke the FRAND defence in patent infringement proceedings where this is available (i.e., where the patent(s) being asserted is a SEP and the declaration of essentiality was given to a standard setting organization (SSO) that requires the patent owner to licence the patent on FRAND (or RAND) terms). The consequence of raising a FRAND defence  is that the alleged infringer will have to undertake to accept a FRAND licence as determined by the UK court in lieu of an injunction. Following the recent decision in Apple v Optis in the UK, an implementer will need to undertake to accept the court determined licence following a finding of validity / infringement / essentiality, i.e., in advance of knowing what rate the UK Court will determine this FRAND.

The UK court will determine global FRAND rates using a comparable licence and a top-down (aggregate royalty burden) cross check approach. The UK Court may also recognise and incorporate local rate determinations from foreign courts.

Parties are entitled to instruct expert witnesses to provide evidence to support their case. Permission to call an expert or put in an expert report must be obtained from the Court (at the Case Management Conference (CMC)). Parties making such an application must provide an estimate of costs for the proposed expert evidence and identify the field and issues the expert is to address.

The expert evidence may include: the meaning of scientific / technical terms of art used in the patent or cited prior art; the state of the art and the common general knowledge (CGK) of the technical field as at the patent’s priority date; the technical differences between the claimed invention and the alleged infringement; and the technical differences between the cited prior art and the claimed invention as covered by the patents asserted claims. The expert does not construe the claims or assess issues of validity / infringement as such as these are matters for the judge. There is no Court appointed expert, but the experts appointed by the parties owe a duty to help the Court on matters within their expertise. This obligation to the Court overrides any obligation to the party who instructed them.

Written expert reports setting out their evidence in chief are normally exchanged around three months before trial. The experts will then appear at the trial to verify their statements on oath and be cross-examined by the other party on their content.

Although, note that in the IPEC cross-examination of witnesses is strictly controlled and is only allowed with permission from the judge.

The Court also has the power to direct that expert evidence is given concurrently (known as ‘hot-tubbing’). This procedure allows for experts to be in the witness box at the same time to allow the judge to ask questions to each expert in turn.

Yes, the Court historically made an order for ‘standard disclosure’ whereby a party must disclose any documents (in its control):

• that it will rely on;
• that will adversely affect its case;
• that will adversely affect another’s case; or — that will support another’s case.

However, new disclosure rules were introduced in England & Wales with effect from January 2019 (the “Disclosure Pilot Scheme”). Under the Disclosure Pilot Scheme, there is no longer an assumption that standard disclosure will apply. Instead, the judge has a “menu” of more limited disclosure options, for example disclosure on an issueby-issue basis, disclosure for documents to be relied on, specific document disclosure. The scheme was originally a two-year scheme, but it has been extended.

There are specific additional rules for patent infringe ment cases. Documents relating to validity of the patent need only be disclosed if they are dated within the two years before or two years after the earliest priority date of the patent. In addition, a defendant may provide a product and process description (‘PPD’) setting out the relevant features of the alleged infringing product / process instead of providing standard disclosure of documents. The alleged infringer should take steps to ensure that this description is accurate and comprehensive (otherwise there may be costs consequences).

In addition to disclosure of documents during proceedings, it is possible for parties to request preaction disclosure. This is appropriate where:

• the applicant and the respondent are likely to be parties to subsequent proceedings;
• the Court is satisfied that the document would be a disclosable document at trial and in addition;
• the pre-action disclosure is desirable to dispose fairly of the anticipated proceedings, assist the dispute to be resolved without proceedings; or save costs.

It may also be possible to obtain disclosure from a nonparty in certain circumstances.

Also note that a party cannot rely on any document it fails to disclose unless the court grants permission.

A claimant can seek a search and / or seizure order for a defendant’s premises in respect of infringing goods, but this is rare in practice and difficult to obtain from the Court.

Decisions of both the Patents Court and the IPEC may be appealed to the Court of Appeal. There is no right of appeal from any final decision of the Patents Court or the IPEC, however, permission to appeal is normally granted by the lower court in patent actions. An appeal must be applied for within 21 days of the date of the decision of the lower court. If the appeal is refused by the first instance court, the appealing party has the right to apply to the Court of Appeal directly for permission. Similarly, there is no right to appeal to the Supreme Court from a decision of the Court of Appeal.

Permission must be obtained from the Supreme Court itself. In practice it is very rare for a patent case to be appealed to the Supreme Court.

An appeal may be brought if the decision of the lower court was wrong (i.e., if there has been an error of law, an error of fact or an error in the exercise of the Court’s discretion) factual issues are not reconsidered in the appeal and further evidence is only permitted in limited circumstances. As such, the Court of Appeal will be reluctant to interfere with the findings of the lower court. 

An appeal to the Supreme Court is only permitted if there is a significant point of law or policy that needs  to be decided.

On average it takes between 12 to 18 months for the first appeal, and another 12 months for a second appeal (if available).

Depending on the circumstances, a first instance decision may be stayed pending appeal. It has become the practice to give to the patentee the chance of either giving a cross-undertaking as to damages to obtain an injunction or, if not given, granting a stay pending appeal.

Infringement and validity are dealt with together as part of the same proceedings / trial. The typical cost of these combined proceedings is between nine hundred thousand pounds (£900,000) to one million five hundred thousand pounds (£1,500,000) for the Patents Court and considerably lower for the IPEC. This of course depends for example on the number of patents / claims in dispute, the number and type of validity attacks and the number of witnesses / experts required to give evidence. In highly complex cases (for example those involving SEPs /FRAND determinations) the cost may be substantially higher still.

Actions in the Patents Court also require the parties to prepare and exchange costs budgets (except where the value of the claim is certified to be ten million pounds (£10,000,000) or more). The idea is that the costs budgets give the parties and the court visibility of the likely costs to be incurred, whilst providing the court with the ability to manage / limit costs to ensure proportionality.

The cost of an appeal to the Court of Appeal can also vary significantly. Average costs are in the region of one hundred thousand pounds (£100,000) to two hundred thousand pounds (£200,000).

The general rule is that costs follow the event and, therefore, the overall winner should expect to recover their costs of the action. However, the Patents Court adopts an issue-based approach meaning that the Court may discount the cost of those issues on which the winner lost. A party in whose favour a costs order is made would normally expect to recover approximately 60–70% of their actual legal costs (although this is often higher where costs budgets have been employed).

In the IPEC, the total costs recoverable by a successful party are capped at fifty thousand pounds (£50,000) for the final determination of a claim in relation to liability, and at twenty five thousand pounds (£25,000) for enquiries as to damages or accounts of profits, and there is a limit of five hundred thousand pounds (£500,000) on the amount of damages / account of profits that can be recovered.

The main forms of ADR are mediation and arbitration. All forms of ADR are becoming more common either as an alternative to or to complement litigation.

The Patents Court and the IPEC will seek to encourage parties to use ADR to settle disputes at any stage of the proceedings. The courts are required under the Civil Procedure Rules to actively manage cases, which includes the obligation to encourage parties to use ADR where appropriate. However, the courts cannot compel parties to use ADR. Refusing to engage in ADR can have costs consequences.

The courts have power to order a stay of proceedings so that the parties can consider ADR.

The remedies available in patent infringement cases are: an injunction;

• damages or an account of the profits derived from the infringement;
• an order for surrender or destruction of the infringing product; and / or
• a declaration that the patent is valid and has been infringed.

No automatic injunction is available; the remedy is always discretionary. For further details on injunctions, see further below.

A successful claimant can elect between damages or an account of profits. Courts award damages to restore the successful party to the position they would have been in but for the infringement (and they are not punitive in nature).

When awarding damages, the courts will make their assessment taking into account the negative economic consequence, including any lost profits the claimant has suffered and any unfair profits made by the defendant, and elements other than economic factors, including the moral prejudice caused to the claimant.

Parties rarely seek to recover an account of the defendant’s profit made as a result of the infringing activity as the sums awarded are usually less than damages.

Damages can be claimed from the date the infringing act began (although bear in mind there is a six year limitation period). Also note that simple interest is recoverable on all sums payable.

As mentioned above, for cases in the IPEC there is a cap of five hundred thousand pounds (£500,000) on the level of damages / account of profits that can be awarded.

The courts have discretion whether to order an enquiry into damages, although it usually chooses to make such an order. Whilst the court has the power to order the defendant to give full disclosure in relation to its profits/ sales etc, the court usually controls the enquiry and limits the disclosure required. The enquiry will usually involve a substantial trial.

Whilst there is no specific provision granting additional remedies in cases where the defendant was a deliberate or wilful infringer, the court should consider ‘moral prejudice’ caused to the claimant when determining the amount of damages to award (see above).

Yes, a court can order an unsuccessful defendant to “deliver up” infringing goods to the claimant, or alternatively destroy them. This remedy is commonly sought. There is no time limit (other than the general limitation rules).

Yes, preliminary (interim) injunctions are a discretionary remedy that the courts (both the Patents Court and the IPEC) may award. A party may apply where they believe there is either actual patent infringement or a threat of patent infringement. This is particularly common in claims against generic pharmaceutical companies. The court will often order that the trial be expedited instead of granting an order for an interim injunction. A court will only make an order for an interim injunction if it is satisfied that:

• there is a serious question to be tried;
• damages would not be an adequate remedy; and
• the balance of convenience lies in granting the injunction.

The courts have interpreted a ‘serious question to be tried’ to mean that there is a claim with substance that is not merely frivolous. There must be a real prospect of succeeding in a final permanent injunction.

When considering whether damages are adequate, in pharmaceutical cases involving generics the significant financial implications of the generic’s entry into the market has often led the court to the conclusion that damages would not be adequate and have awarded the injunction sought. Although this position has shifted in recent years.

Yes, ex parte (without notice) injunctions are available in cases of urgency, e.g., where there is a real concern that the defendant will dispose of evidence. However, this is rare in patent cases.

It is possible for without notice injunctions to be obtained within a very short period (under 24 hours). With notice injunctions will usually be heard and decided within two to four weeks in patent cases.

It is possible to apply for permission to appeal a decision to grant an interim injunction. Generally, the Court of Appeal is reluctant to reverse a decision on interim injunctions unless there is an error of law.

The appeal does not suspend the effect of the injunction unless there are persuasive grounds to the contrary.

If an injunction is granted, the applicant will be required (in most cases) to make a cross-undertaking in damages (so that the respondent is compensated if it later becomes clear that the injunction should not have been ordered).

Yes. The interim injunction will remain in effect until the decision in the main trial. The court has discretion whether to order a final injunction.

Where validity is not in issue, the Court may allow proceedings for infringement of foreign counterparts of a UK European patent or may grant declarations of noninfringement in respect of the foreign counterparts of a UK European patent. However, it is rare for a case not to also involve a counterclaim for validity and under those circumstances there will be no cross-border relief in relation to a European patent as the other countries designated have exclusive jurisdiction over validity.

ASIs are generally available in the context of SEP and FRAND licence disputes. As to whether an injunction is granted is very fact-sensitive and the general principles have not been set out in any reported judgment in a SEP case (although we are aware of at least one being granted recently).

However, an anti-ASI (i.e., a suit seeking to preemptively block enforcement of an ASI) has been granted in a SEP case recently. In this case, the Court considered two principal factors were:

• that the order would not interfere with the substantive proceedings elsewhere; and
• that not granting an anti-ASI would have been vexatious and oppressive, in that it would have deprived a party entirely of its right to litigate infringement and validity of its UK patent.

Because England is a relatively popular forum for determining FRAND disputes, ASIs are sometimes sought in foreign courts against English suits. 

The courts will usually recognise these.