Caitlin Heard and Gareth Morgan highlight recent cases involving patent disputes to put the case forward for the UK as a key centre for patent litigation
Reflecting on the past 12 months of patent litigation, it is apparent that the tools available to litigants are changing. There is an increasing shift away from the traditional war of attrition that has come to be the norm in multijurisdictional patent disputes, towards more focused and targeted claims, as courts in Europe are increasingly willing to consider international issues and give judgments that have extra-territorial effect.
The Netherlands has been leading the charge in this regard for many years, with its willingness to grant pan-EU injunctive relief. However, we would argue that the UK courts are, in their own way, catching up. Perhaps this is to be expected – UK judges are generally progressive and patent litigation is increasingly fought on the global stage. It therefore should not be entirely unexpected that the UK courts are responding to the changing commercial environment with creative ways to help resolve global disputes in a more cost-effective manner. It is also reassuring amidst the uncertainty around Brexit and the UK’s continued involvement in the Unified Patent Court (which in itself is looking increasingly uncertain), that UK judges are sending a clear message to the world that the UK courts are still a force to be reckoned with and very much open for business.
By way of example, over the past 12 months, UK judges have sought to give extra-territorial effect to their judgments in the following ways:
- The Court of Appeal has ruled that the UK courts have jurisdiction to settle the fair, reasonable and non-discriminatory (FRAND) terms of cross-border standard essential patent (SEP) portfolio licences, with the threat of an injunction in the UK if the implementer does not take the licence (Unwired Planet v Huawei and again in Conversant v Huawei (High Court)).
- The Court of Appeal has confirmed that the UK courts will, in principle, grant an Arrow declaration (a declaration that the defendant’s product/process was obvious at the priority date of the patent) in order to allow European-wide commercial certainty (Glaxo v Vectura).
- The High Court has indicated its willingness to grant anti-suit injunctions to prevent litigation commenced outside of the UK that would interfere with the UK court’s ability to settle the terms of a global patent licence (Conversant v Huawei).
- The High Court has confirmed its ability to determine cross-border patent cases in the right circumstances, allowing for a decision of non-infringement of other European designations of a UK patent (Eli Lilly v Genentech).
Each of these cases, which relate to standard essential patent litigation and ‘clearing the way’ for pharmaceutical companies, build on previous decisions and have allowed for determination of a multijurisdictional dispute in a single jurisdiction.
With the US falling out of favour somewhat due to its recent tendency towards invalidation of computer-implemented invention patents (the ‘Alice’ or section 101 rejection) and TC Heartland v Kraft Foods making it more difficult to seize jurisdiction in the Eastern District of Texas, parties are starting to look elsewhere to resolve multijurisdictional disputes. In Europe, Germany and the Netherlands (the traditional playgrounds of the patentee) remain attractive, but we suggest that the UK deserves a place on that list.
The UK courts still have an image problem. The UK is sometimes dismissed by patentees as being a comparatively slow and expensive jurisdiction in which to litigate. However, this is an outdated view. The court is no longer as slow as it once was. Quite the contrary in fact – the Shorter Trial Scheme aims for cases to reach trial within ten months of issue of proceedings, and the Patents Court stated practice is to endeavour, where possible, to bring cases on for trial within 12 months of issue. Indeed, over the past year, the UK court has shown willing to list cases on certain dates in order to have a finding on validity and infringement before the German courts consider the issue on an equivalent patent (Takeda v F Hoffmann-La Roche).
Admittedly, patent litigation in the UK is expensive compared with other patentee-friendly jurisdictions such as the Netherlands and Germany, but with courts willing to compel companies to enter into global patent licences for the relatively modest sum of £1m-2m to achieve a finding of validity and essentiality, you certainly get a lot of ‘bang for your buck’. Indeed, for those patents for which the UK court has made a finding of validity and essentiality to a standard, a successful patentee on one piece of litigation could leverage this decision to force all implementers to take a global licence, or risk a relatively quick and cheap injunction in the UK. Suddenly the million-pound investment to achieve a finding of validity and essentiality on a UK SEP becomes a low price to pay for the ability to compel all implementers in the UK to enter into a global portfolio licence. In addition, the UK is one of the few jurisdictions that operates a ‘loser pays’ fee-shifting system. As a result, while costs recovery is not absolute, a successful patentee can expect to recover a substantial proportion of its legal spend.
The UK is also no longer the ‘patent graveyard’ it was once regarded as. The UK’s new and developing doctrine of equivalents adds a powerful tool to the patentee’s arsenal, resulting in findings of infringement that would not once have been made. For example, in Regen v Estar, His Honour Judge Hacon (sitting as a High Court Judge) found that the ultimately invalid patent would have been infringed pursuant to the doctrine of equivalents, but not ‘classic’ infringement. Interestingly, in equivalent (no pun intended) German proceedings, the patent was found not to be infringed under this doctrine. Could it be the case that the UK is becoming more pro-patentee than even Germany? The very recent decision in TQ Delta v Zyxel certainly adds weight to this view – with the UK court granting an injunction on a SEP that will expire in a few months against an implementer that had ‘gamed the system’.
Looking forward, we expect to see the next round of FRAND wars help to cement the UK as the jurisdiction of choice for SEP disputes. With each decision, the UK’s already highly technically qualified judiciary gains an extra foothold in securing the best expertise in the world to be able to decide on these disputes. We anticipate further refinement of the UK’s doctrine of equivalents and a possible surge in litigation as patentees take advantage of this softening of the test of infringement. We may also see defendants increasingly relying on Arrow declarations to defend allegations of infringement due to the uncertainty around how the doctrine of equivalents will develop.
Caitlin Heard and Gareth Morgan, CMS.