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How do US, UK and EPO tribunals compare when it comes to patent infringement disputes? Ilya Kazi contrasts tactics and procedures, drawing on lessons from recent cases

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This article compares litigation in the US courts and PTAB, UK High Court, UK Intellectual Property Enterprise Court (IPEC) and EPO opposition and appeal proceedings, based on experiences in recent patent infringement cases. Tactics which work in one place may not work so well, and may even be counter-productive, in another. Key differences in approach, procedure, costs, cost recovery, timescales and tactics are covered, meaning litigants often rely on the expertise and experience of local counsel. One key lesson is that in-house counsel in one country or region might want to consider taking advantage of favourable opportunities in other regions, which they are not familiar with, when it comes to cracking difficult cases.

All the tribunals discussed in this article are capable of hearing a matter concerning patent validity (and all except the EPO can hear patent infringement matters) but the tactical approaches in each are really quite different. If you are experienced in one forum, do not assume that what you know necessarily applies mutatis mutandis!

US court patent infringement trials

In US court proceedings there is a lot of scope for procedural motions and costs are almost always going to be highly significant, typically several million dollars to trial for each side, and rarely recoverable, regardless of the merits. Unfortunately, and most gallingly for a defendant faced with an unmeritorious claim, there is little one party can do to control costs caused by another who is intent on going all in. Moreover, the issue of a jury trial means that a case which, viewed clinically, should perhaps turn on a few subtle complex technical points (if worth litigating at all), may well be litigated on a simplified shadow story and effort will often be spent on establishing who the good guy is.

The surge in popularity of Patent Trial and Appeal Board (PTAB) review procedures in the US in the last few years is testament to the notion that the best way to defend US court patent infringement proceedings is to win a battle somewhere else instead. Although rarely considered (and often not applicable), somewhere else may sometimes be in Europe rather than in the US. I have made use of material from US litigation in EPO proceedings, putting the other side in a difficult position to try and deal with the EPO challenge without undermining their US position. The most satisfying such occasion resulted in a call from a US colleague shortly after spending only a few thousand dollars filing an opposition saying "I don't know what you did, but we just had a call offering to settle everything, including the US litigation (which wasn't going very well after years and millions of dollars) on favourable terms."

Back in US courts, being (overly) aggressive can sometimes achieve results it arguably should not in an ideal world. More importantly, even if trying an aggressive and/or diversionary tactic fails and does not ultimately help a case, unless particularly egregious, it is not often particularly unhelpful and is unlikely to carry serious sanctions particularly in costs, or materially prejudice a case.

Little of this will be news to seasoned US litigators, although they might say that things have mellowed somewhat since the high water mark of early Eastern District of Texas cases. However, for Europeans faced with litigation in the US, cautions which might apply elsewhere do not necessarily apply to US litigation (and this varies somewhat from court to court) so while you should of course question costs and the need to take certain actions, don't necessarily baulk at what US counsel suggests. Conversely, tactics applied in US litigation may not translate well elsewhere.

Reasonable conduct in UK litigation
I recently had a case where a private individual brought a patent infringement case against our (multinational) client. He was unrepresented and his case did not seem to make much sense. We wished to dispose of it at minimum cost. In the US a fairly aggressive response might have been appropriate but the UK courts have a duty to help less well-funded applicants obtain justice (IPEC particularly). We therefore adopted a very gentle approach to the claimant, politely asking him repeatedly to clarify his case and suggesting how he might obtain pro-bono representation. We initially sought an order that he be given time to re-plead.

When it came to a first hearing, the judge, as expected, said he had read the papers and the court needed to be helpful and he was minded to give the claimant more time to re-plead his case even though that might well not help; we as the bigger party would just have to deal with it. My in-house client had asked me to conduct the advocacy myself to minimise expense. When the judge asked if I had anything to add, in a manner which suggested that I should not, I said I would – appearing reasonable to the court does not require agreeing all the time with the judge. After some of the history had been highlighted, the judge said he had been persuaded to strike out the case; when addressed on the subject of costs he commented that our costs had been very reasonable and awarded us £10,000. We also asked him to record explicitly in the order that the claim was totally without merit and he agreed, which will be procedurally helpful if the claimant resurfaces. A more aggressive initial approach would likely have caused the judge to stick to his initial view about giving the claimant a further chance.

Patent litigation in the UK High Court

Turning to the England and Wales High Court, this is closest to US litigation of the fora discussed here, particularly among grown up litigants of reasonable size and standing. Although the High Court does try to steer parties to focus on the real issues and pursuing side issues is unlikely to advance a case, and may incur cost penalties if unfruitful, by and large the Court (this varies between judges) is still generally slow to intervene aggressively and spoil the fun. One possible exception is disclosure (discovery) where the Court is generally not happy to grant wide-ranging expensive fishing discovery with no clear purpose, and another is in pursuing motions on side issues that are not likely to change the outcome.

However, a very important difference from the US is that generally costs follow the event and the Court may award costs on an issue-by-issue basis. This has a dramatic effect on the appetite of parties to settle or to pursue speculative claims as trying it on may land you with a bill for not only your costs but those of the other side. Costs vary considerably with complexity but a moderately complex patent trial is unlikely to be completed for less than about £1 million ($1.33 million), often double that.

Moreover, while the High Court might well let you go ahead and pursue a side point that has a small chance of success, if that gets nowhere and you lose on it, the other side is likely to be awarded the costs of that exercise. Now, losing costs of a few tens of thousands may not deter one from pursuing a minor point with a small chance of influencing the outcome favourably on a big case such as a pharmaceutical dispute with damages in question of the order of tens or hundreds of millions or more. However, on a medium-sized case where costs are of the same order as the amount at stake, a few adverse costs judgments on side issues may turn what would otherwise have been a victory into a pyrrhic victory. And, even on a big case, a discerning client is likely to ask you to remind them exactly why you ran a point that they never thought was very good and has just cost them a couple of hundred thousand on fees (yours and the other side's) and does not seem to have made the judge any more sympathetic to their case. That is by no means intended to say that one should pare a case down to the minimum and be afraid of running reasonable points.

Intellectual Property Enterprise Court

The UK Intellectual Property Enterprise Court (IPEC) was designed to provide a forum for smaller companies to settle IP disputes quickly and cheaply. Damages are limited to £500,000 (unless parties agree to lift the cap) and cost recovery is capped at £50,000 which means if one loses one does not need fear a large bill from the other side (in addition to any damages, if found infringing). Actual costs are however likely to be at least double the cap, quite possibly several times more so as cost recovery for a successful claimant is limited. Trials are limited to two days and there are rarely intermediate hearings other than a case management conference – applications on side issues are not encouraged and may be dealt with without a hearing or at the start of trial unless exceptional.

Because of the capped costs, fixed trial length and case management, cases normally follow a predictable (at least as to procedure) timetable and often go to trial. Particularly for a revocation action as a potential defendant facing a possible infringement claim with a reasonable defence, this can be a convenient forum, and likewise for a patentee with a case where the nature of the infringement is reasonably clear.

It is important however both to select cases which can be properly tried in a two-day hearing and to make sure that the case is handled so that your winning points will come out in that two-day window. If you need cross-examination of multiple witnesses or anything other than trivial disclosure, this may not be the best forum.

Lessons from Meter-Tech

In the Meter-Tech v British Gas case, decided by the High Court in September 2016, British Gas's position at the outset was that the broad and unclear patent was hopelessly invalid and validity was relatively simple whereas infringement would be complicated. Acting for British Gas, we argued that the claimant's case was really concerned with future infringement. Moreover we correctly predicted that Meter-Tech would struggle to clarify their case, and indeed during trial we had an adjournment during which they were contemplating amending their infringement case for a fifth time.

A key difference from the US was that we did not have a clear novelty attack nor a good non-infringement argument but we were nonetheless confident (correctly) that the patent would be found obvious – it would be very brave in the US to go to trial in such circumstances! We had pre-emptively applied for revocation and we suggested pragmatically at the initial case management hearing that, unusually, validity should be tried quickly and separately in IPEC. If we won on that, the matter would be over without wasted expense for either side. Conversely, if we lost on that, realistically there would in practice likely be a commercial settlement discussion. The other side, as we had expected from their early approach, vigorously resisted this suggestion.

We did not particularly expect our pragmatic but unconventional proposal to be ordered in the face of opposition. In fact, we were quite happy to take the case in the High Court as we expected to be successful and would be able to recover much more of our costs (IPEC has costs capped to a limited amount). Moreover it helped our case significantly to have both validity and infringement considered together as it allowed a number of squeezes to be run on construction. The judge, Daniel Alexander QC, ultimately found a broad construction and we did not prevail on the non-infringement constructions. Nonetheless, Alexander recognised that essentially our non-infringement case was inherently tied up with construction.

When it came to costs the other side suggested that we should only recover under 5% of our costs as we lost on infringement and on experimental use. We were in fact awarded 75% of our costs for the entire trial (and we had obtained security for a major portion of this in advance).

Thus, in terms of overall outcome, adopting a reasonable approach, rather than trying to outspend the claimant (which could easily have been a tactic), ultimately served the client best. In short, the country's largest utility faced with a patent infringement lawsuit alleged to be worth hundreds of millions with no clear non-infringement defence and no anticipatory prior art but only a defence that a decade-old patent was obvious ended up with the patent revoked at a net cost of only a few hundred thousand pounds, with a trial over within a year. I defy any of my colleagues in the US to say that would happen in the US!

Another key point of difference between UK and US litigation is we have reasonably technically savvy judges rather than a jury. Moreover, experts and expert reports are very important and, unlike US proceedings it is not so important to make a simplistic presentation for the jury. In the US, lawyers may help an expert to come to conclusions which support the case being made, and find an expert who will present a desired case well and be well-received by a jury. In the UK it is more important to get a credible expert who believes the case he is making and as a result will stand up to cross-examination, or questions from the judge, rather than one who is willing to make the case the lawyers would like.

We interviewed a number of experts and picked one who seemed knowledgeable and had integrity. The fact that he rejected some points I had suggested and made some points I did not fully agree with was a positive rather than a negative factor – when it came to cross-examination, it was apparent that he was an honest and highly knowledgeable individual and his views were genuinely held and accordingly had authority. As to how to present things, even in a significant trial (which in this case lasted over a week), the judge has comparatively limited time to assimilate all the information. We worked closely and interactively with our two barristers, a QC and an experienced junior and one of them remarked that, after he and I had battled over the points and their strengths and weaknesses and possible counter-arguments, presenting them to the judge would be a walk in the park. Thus, although UK practice is to have barristers as specialist trial advocates, involving them from an early stage helps end up with a more solid case at trial.

From my EPO experience and instincts, where points are taken serially, I had told our QC that his brief was simple: to win on each and every point. His response was that we needed to use the trial time to be absolutely certain to win on our key point of obviousness and if that meant we did not have time to devote in the trial to explaining some of our less critical issues, so be it. In the EPO there is a lot of written procedure and the papers are studied in advance and formal points can often be very important. In the court, it is not a bad assumption that the judge has only given a cursory study to the papers and some subtleties will inevitably be lost. Within a court timetable, there is only so much one can be confident the judge will appreciate. On subtle, finely balanced side points, if in doubt the court may take the simpler safer option. Equally, and this applies generally, the tribunal may not see the same points to be as compelling as you do. A well-respected QC once reportedly said "My Lord, I have three points, one very good one, one arguable, and one poor one." The judge said: "Well let's cut to the chase then and tell me your best point." He said "My Lord, I had no intention of telling you which was which".

EPO opposition and appeal proceedings

In the EPO, validity is the only matter up for debate; infringement is for national courts. This simplifies and focuses matters. A patent might be revoked for as little as $50,000 (or maybe even less) from opposition filing through to hearing, which can be a useful tool in overall litigation where orders of magnitude more are being spent in related US litigation.

Conduct and side issues are not important, facts and law are paramount. Costs are not awarded except in exceptional cases and generally speaking both parties are represented by professional representatives who may be of varying experience but are on broadly the same footing. The tribunal is technically trained and familiar with the law and experienced in the procedure, which varies little from case to case.

It is still important to work out what your best, simplest case is and make sure that is clear. However, formal technical points, particularly added matter, can be very usefully used by an opponent, or a problem for a patentee. There are no penalties for raising a minor objection, other than using up the time, patience and goodwill of the tribunal, but judgement should be exercised in how far to pursue a point that is not being well-received, particularly since hearings other than on major multi-party cases are normally scheduled for a single day only and should be disposed of in that day unless adjourning and continuing is really justified.

While time and the tribunal's patience should be used sparingly, one should not give up in the face of adversity. I have had a case where the chairman of a Board indicated his exasperation with me for being the only opponent to raise a complex objection which seemed like a quibble, but I persisted. Once more, the division adjourned and after a while came back to announce they agreed with me and ultimately revoked the patent for that reason.

As well as knowing your specific case, it is important to be familiar with the procedure, both as it is written down (guidelines and rules change fairly regularly and new cases change principles) and as individual Opposition Divisions and Boards of Appeal apply it – within the rules the practice varies from Board to Board. One needs to know what objections can be raised when, how and when amendments and arguments and possibly new evidence can be filed, and what the Opposition Division or Board of Appeal expects to see and hear and in what order. That is not to say that the procedure is rigid – on the contrary, Divisions and Boards have discretion over a number of matters (and in some cases that is tightly constrained) but it is important to know what is open to discretion, what is not, and which principles apply to exercise of that discretion. However, in my opinion one should neither try to game the procedure oneself nor expect that another party who does so will necessarily be penalised.

Whereas in the UK High Court and IPEC and in the US the judge generally hears the evidence and will go away and may re-read the papers and then decide, possibly months later, in the EPO an Oral Decision is given on each point as the hearing progresses in real time. This can be very efficient and helpful, but it does mean that one needs to be prepared to react dynamically to each stage and one may not have clear reasons for each interim point. It is also important to know what decisions might be taken at each point and I have seen patentees get caught out with their patent being revoked with no requests remaining. If, as can happen, a surprising decision is given, nothing is to be gained by arguing with the tribunal after the fact but it may be helpful to seek clarification to the extent the decision impacts on other matters.

Your best, simplest case

There is a very simple overall message: it helps in all cases to know what your best, simplest case is. But how, when and even if it might be best to argue points along the way varies considerably from tribunal to tribunal. There is not always a clear right answer, but there can be some reasonably clear wrong ones. Many in-house readers may have a good idea what their basic starting case is for a given dispute, but should not be surprised if an outside specialist recommends a strategy in a less familiar tribunal which does not seem intuitive.

Kazi_Ilya Ilya Kazi

© Ilya Kazi 2017. The author is a senior partner of Mathys and Squire in London. A patent attorney and UK Higher Courts litigator, he represented British Gas in the patent infringement action discussed in this article


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