Though Europe is sometimes referred to as a singular region, Paul Brown of Hogan Lovells said that the many jurisdictions within vary widely and rights holders need to understand the advantages and disadvantages of litigation in each.
That said, even though patent rights are national, the outcome of disputes in a few key jurisdictions will have an effect on the entire European market.
“If you go to the right jurisdictions and fight it out there, both sides will soon find out which way the wind is blowing,” he explained.
Where do you want your injunction?
One of the fundamental questions in deciding where to sue is whether the patent holder is seeking damages or an injunction. For many rights holders, getting a competitor’s product off the market and enjoying the monopoly provided by a patent is the most important reason for entering litigation.
“In Germany, a plaintiff can get very quick injunctions,” explained Brown. “Motorola knew this, and realised that they can get an injunction there faster than they could in the US [in its patent litigation against Apple].”
Another popular jurisdiction for injunctions is the Netherlands. Though its population is relatively small, it is important due to its role as an entry point for goods entering Europe. The Netherlands is also an increasingly popular forum for preliminary injunctions, Brown explained, because the courts classify IP matters as urgent and will move them through the system quickly.
Another important consideration is whether the patent in question will stand up to invalidation attacks. Brown notes that this is a flip side to Germany for patent holders, since the courts there are generally harsh on validity. The UK has a similar reputation for being hard on tech patents, which makes it a jurisdiction of choice for parties seeking declarations of non-infringement.
Another benefit of the UK for potential defendants is that there is no standing requirement for challenging a patent. This, combined with the high level of influence that a UK judgment has, makes it an ideal jurisdiction for Vince Wang (right) and his company HTC, which often finds itself accused of infringement. The high quality of UK judgments means that courts in other countries take notice, especially in places that have generally less expertise in patent matters.
“If we have a positive outcome in the UK, we can use that judgment to take further action to our advantage,” he said.
The Netherlands, on the other hand, is considered to be softer on validity, which is another reason why some patentees prefer to bring their European case there first.
Damn the Italian torpedoes, full speed ahead!
While patentees often look to Germany and the Netherlands for quick injunctions, potential defendants may choose to go to Italy, with its perhaps outdated reputation for a slow court system, to seek a declaration of non-infringement. Because this action stays proceedings in other parts of Europe, the infringement actions brought by the patentees are delayed possibly for a significant amount of time.
Brown warned that the “Italian torpedo” may not be as effective now because the court system is faster than it used to be. In fact, an increasing number of patent holders are going there for injunctions and have been able to get them relatively quickly.
Know your enemy, and your counsel
Since HTC is often a defendant in its IP litigation cases (the company has been involved in over 110 matters worldwide since 2005), Wang said that it is important to understand the particulars of each plaintiff.
Motivation is one issue. For example, Wang said that a smaller NPE may not just want damages, but a long term licensing agreement as well. This is different from a competing company, whose main goal may be to remove your product from the market.
Wang also said that the litigation history of the plaintiff is important, especially if it’s an NPE. 95% of patent cases faced by HTC were brought by NPEs.
“About 90% of IP cases end in a settlement,” he explained. “From an accounting perspective, the amount is something that you can try to anticipate, but how much is very tricky. For an NPE for example, you can look at their past activity, their settlements and royalty agreements from earlier cases.”
Planning is also needed when selecting counsel. “While a company needs to have control of the budget, when dealing with litigation, you should avoid competition simply by price,” he explained. Other factors, such as the law firm’s responsiveness, as well as its familiarity with the jurisdiction, technology or plaintiff are even more important.
“From a company, you may always think cheaper is better, but you also need to have common sense,” he warned. “If the law firm says they can take you through a US patent trial for $200,000, then that’s not realistic.”
“Cheaper isn’t always better.”