Gowling WLG's intellectual property experts discuss initiating proceedings as part of their 'The basics of patent law' series.
The articles cover, respectively: Types of intellectual property protection for inventions and granting procedure; Initiating proceedings; Infringement and related actions; Revocation, non-infringement and clearing the way; Trial, appeal and settlement; Remedies and costs; Assignment and Licensing and the Unified Patent Court and Unitary Patent system.
The articles underpin Gowling WLG's contribution to Chambers' Global Practice Guide on Patent Litigation 2017, for which Gordon Harris and Ailsa Carter wrote the UK chapter.
Choice of court
Substantive legislative intellectual property law applies throughout the UK. The Patents Act 1977 (PA) governs UK patents and, post-grant, UK designations of European patents. Disputes arising under the Patents Act (for example, regarding infringement or validity) may be brought before the (relevant) court (as discussed in this article) or, in some contexts, before the Comptroller-General of Patents, Designs and Trade Marks (the "Comptroller").
The jurisdiction of the Comptroller to hear disputes regarding infringement and/or validity of a patent is discussed briefly in our articles Infringement and related actions and Revocation, non-infringement and clearing the way. The Patents Rules 2007 govern the procedure for hearing by the Comptroller of such disputes.
The UK consists of three distinct jurisdictions, each with its own legal system, courts and procedures: England and Wales, Scotland and Northern Ireland. Allocation of jurisdiction between the courts of the three jurisdictions is governed by the Civil Jurisdiction and Judgments Act 1982. In Scotland, the appropriate court for claims under the Patents Act is the Court of Session; in Northern Ireland it is the High Court in Northern Ireland. (PA s.130)
In practice, the overwhelming majority of intellectual property litigation in the UK takes place in the courts of England and Wales, and it is this jurisdiction which is focussed upon in this article.
In England and Wales, the appropriate court for claims under the Patents Act is the High Court (PA s.130, Senior Courts Act 1981 s.62). Any claim under the Patents Act (for example, for infringement or revocation of a patent) must be started in the Patents Court or the Intellectual Property Enterprise Court (IPEC). Both courts are within the Chancery Division of the High Court of England and Wales.
The IPEC is the appropriate forum for less complex and smaller value claims (up to an approximate value of £1 million - which may, for example, be the 'value' of an injunction). Recoverable monetary relief is capped at £500,000 per case and recoverable costs are capped at £50,000 for the liability stage. The Patents Court is the appropriate forum for more complex and valuable claims. In the Patents Court there is no cap on recoverable monetary relief or costs.
Claims for breach of confidence in respect of technical subject matter should be brought in the High Court's Chancery Division (within which the Patents Court sits), or the IPEC.
Rules governing court litigation in England and Wales
The conduct of civil litigation in England and Wales is governed by the Civil Procedure Rules (CPR). The over-riding objective of the rules is to enable the court to deal with cases justly and at proportionate cost.
A court action is initiated by completing and filing with the court, with the appropriate fee, a completed claim form. The claim form must include details of the claimant(s) and defendant(s), brief details of the claim (i.e. the relief sought) and must indicate the value of the claim and the appropriate court fee. 'Particulars' of the claim, which set out in a brief and succinct way the alleged legal basis for the claimant's claim and the facts relied upon to substantiate liability, must be provided in the claim form, or shortly following, in accordance with the requirements as to content and the deadlines laid down in the CPR. When the filing of the claim form with the court is complete, the court issues a sealed copy (or copies) to the claimant.
The court action is "commenced" when the issued claim form is served, in accordance with the CPR, on the defendant(s). Usually, service is carried out by the claimant's representatives or appointed service agent, and the time when the lawsuit is commenced is therefore largely within the control of the claimant. (In some instances, the permission of the court is required for service of the claim form to be effective, for example, and depending on the country, in respect of defendants located outside the UK).
This basic initiating procedure is applicable for both claims of infringement and claims challenging the validity of a patent. The defendant may make its own request for relief by making a counterclaim. For example, a defendant alleged to infringe a patent may both deny infringement and challenge the validity of the patent in the same proceedings. Where parties initiate separate but related proceedings, they are commonly consolidated by the court and considered as a single action (see, for example, British Gas v VanClere [2015] EWHC 2087 (IPEC)).
English procedural law recognises the underlying public interest that there should be finality in litigation, in the interests of the parties and the public as a whole. Where an issue could and should have been raised in earlier proceedings, a later action in respect of that issue may be considered an abuse of process (Johnson v Gore Wood [2000] UKHL 65; Dexter v Vlieland-Boddy [2003] EWCA Civ 14). If a party to litigation is aware of a claim related to proceedings on foot which it might wish to bring in the future, it should raise the matter with the court to ensure the proper use of court time and the efficient and economical conduct of litigation (Aldi v WSP [2007] EWCA Civ 1260).
The mechanisms for seeking provisional relief are, except in extremely urgent cases, usually interim procedures, initiated by one party to an existing case making an application to the court for the relevant relief. For example, in the usual course, an application for an interim injunction is filed with the court and served on the respondent after the claim form is served, although it is possible for the claimant to file the application for interim relief with the claim form, to receive issued copies of both at the same time and to serve both upon the defendant together. Since the claim form is a brief, relatively formulaic document, and service can usually be completed by the claimant, it is only in unusually urgent cases that the court will consider requests for provisional relief before the claim has been commenced.
For discussion of the procedural rules governing the conduct of litigation after the initial stages and the structure of the trial, please see our article on Procedure, trial, appeal and settlement.
Pre-action requirements
Pursuant to the CPR Pre-Action Protocol, generally, before commencing proceedings, the court will expect the parties to have exchanged sufficient information to understand each other's position, make decisions about how to proceed, try to settle the issues without proceedings, consider a form of alternative dispute resolution to assist with settlement, support the efficient management of those proceedings and reduce the costs of resolving the dispute.
However, the Chancery Division will not expect these requirements to be complied with where, inter alia, telling the other party would defeat the purpose of the application or the urgency of the application is such that it is not practical to comply (Chancery Guide).
In the context of any pre-action communication (whether litigation is contemplated or not), parties should also be aware of the provisions of the Patents Act, s.70, according to which a claim for unjustified threats of proceedings may arise. Proprietors, licensees and entities connected with them in any way should ensure that communications are considered and phrased accordingly.
Interim injunctions
Provisional injunctive relief may, in the usual course, be sought by way of application made in respect of an existing claim for infringement. An interim hearing is set for the hearing of the application in accordance with the principles established in the jurisprudence (American Cyanamid v Ethicon [1975] AC 396 and subsequent case law). In accordance with the CJEU's rulings on the interpretation of EU Directive 2004/48 on the enforcement of intellectual property rights (the IP Enforcement Directive), the proportionality of the relief sought is a relevant factor.
The court first considers whether there is a serious question to be tried in that a viable cause of action exists. This is a threshold requirement and usually the likelihood of success at trial is not considered.
Provided that the applicant succeeds in establishing a serious issue to be tried, the court will consider the adequacy of damages in place of interim injunctive relief. If damages would adequately compensate the applicant, then interim injunctive relief will not be awarded. The adequacy of damages from the respondent's perspective is considered also i.e. whether damages pursuant to a cross-undertaking given by the applicant would be adequate compensation in the event that an interim injunction was granted but the respondent ultimately succeeded in defending the underlying claim.
If the court considers that damages would not amount to adequate compensation for either party, it will then consider where the balance of justice lies in deciding whether to grant interim injunctive relief. Essentially the issue is whether protecting the applicant's interests by granting an interim injunction without a full consideration of the underlying claim is the better course despite the prejudice that would be caused to the respondent. The assessment is conducted on the basis of the facts and evidence before the court. Factors such as the dynamics of the market for the products or services in dispute, the financial position of the parties, the conduct of the parties and the overriding public interest can be relevant.
The regulatory environment and market dynamics in the pharmaceutical field have led to interim injunctive relief being awarded more than in respect of other sectors. However, for inventions residing in a second or subsequent therapeutic use, concerns not to hinder the market for non-patented indications can tip the balance against awarding injunctive relief (Warner-Lambert v Actavis [2015] EWCA Civ 556).
Where the court considers the balance of convenience to favour the grant of interim injunctive relief, its award will be conditional upon the applicant giving a cross-undertaking in damages. In the event the injuncted party later seeks recovery pursuant to a cross-undertaking, the award can be expected to be fair but liberal (AstraZeneca v Krka [2015] EWCA Civ 484).
A party or potential party to litigation can reduce the prospects of interim injunctive relief being awarded against it by acting in accordance with the spirit of the substantive law and the procedural code. Where such a party is aware of the potential for a claim of patent infringement, it can take steps to 'clear the way' with respect to that patent, by initiating correspondence, providing transparency and/or undertakings with respect to its intended actions and, potentially, starting a claim for a declaration of non-infringement and/or for revocation of the patent. The court expects litigants to disputes to behave responsibly, so as to enable disputes to be resolved in an orderly manner. See, for example, Warner-Lambert v Teva [2011] EWHC 1691 (Pat), Merck Sharp Dohme v Teva [2013] EWHC 1958 (Pat), Warner-Lambert v Sandoz [2015] EWHC 2919 (Pat), [2015] EWHC 2924 (Pat), [2015] EWHC 3153 (Pat).
Where an application for interim injunctive relief is made, the court may, rather than considering the application, order a fast procedural timetable for the hearing of the underlying claim. For example, in Napp v Dr Reddy's [2016] EWHC 1517 (Pat); [2016] EWCA Civ 1053, the underlying claim was heard and determined in a full first instance judgment less than four and a half months after the litigation was commenced, with the appeal decision returned within six months of the claim commencing.
Mechanisms for obtaining evidence and information
In appropriate circumstances, the court will award any of the following measures:
- Disclosure. This is commonly available in the usual course of litigation but may or may not be awarded in any particular case, depending upon the relevant circumstances. Where disclosure is awarded, it is usual, in respect of validity, to be limited to a window of two years either side the earliest claimed priority date; and in respect of infringement it may usually be given in the form of a product or process description. For more on disclosure, please see our article on Procedure, trial, appeal and settlement.
- 'Anton Piller' order. This is a search and seizure order pursuant to which the successful applicant's representatives may enter and search the premises of the respondent and seize documents or articles considered to be material. To be awarded, there must be a grave danger that vital evidence will otherwise be destroyed, disposed of or otherwise put beyond use.
- 'Norwich Pharmacal' relief. This is an order that a person provide information on others involved in the supply of infringing goods (or goods which it is seriously arguable are infringing), made on the basis that a person, whether innocent or not, who has been caught up in wrongdoing is under a duty to assist those who have been injured by that act.
- Mandatory interim injunctive relief more generally. The nature of available mechanisms continues to evolve with developments in technology and the developing jurisprudence in respect of the IP Enforcement Directive. For example, the IP Enforcement Directive requires the availability of measures for preserving evidence (Article 7) and a 'right of information' (Article 8).
Representation
Broadly speaking, in litigation in the IPEC, parties may be represented, including at court hearings, by a solicitor, a patent attorney with an appropriate advocacy qualification, a barrister (who is usually instructed by a solicitor or patent attorney), a combination of these representatives, or by themselves (IPEC Guide).
In the Patents Court, the rules regarding rights of audience at court hearings are more restrictive (CPR section 13). Barristers have rights of audience. Solicitors have rights of audience in some interim proceedings, but at trial only if they have completed an additional advocacy qualification. Patent attorneys may obtain rights of audience by completing an additional advocacy qualification.
If a litigant is a corporate entity, it may be represented by an authorised employee, but for representation at trial by such a person the court's permission is required (CPR 39.6).
Limitation
In intellectual property claims, limitation issues are governed by the Limitation Act 1980, which provides that actions founded in tort shall not be brought after the expiration of six years from the date on which the cause of action accrued.
Alternative dispute resolution
Alternative dispute resolution (ADR) methods include arbitration and mediation. Alternative dispute resolution is encouraged by the courts and the CPR but its role in any dispute generally has no statutory basis in the UK. It is therefore for the parties to agree to adopt an alternative dispute resolution method, the outcome of which may, or may not (depending on the method) be binding upon them.
Arbitrations with their seat in England and Wales or Northern Ireland are governed by the Arbitration Act 1996.