Lifecycle of a smart idea - The UPC: An 18-month round-up

Marianne Schaffner: Hello, my name is Marianne Schaffner, I am a UPC representative based in Paris and we welcome you and thank you for registering today and I am delighted to present you this webinar which is based on our experience at the UPC and the findings. Our objective today is to provide you with some trends we have noticed but as well we have designed the webinar to be proactive. For that reason, we will have possibility to participate in one of our breakout sessions which will be moderated by some lawyers of our UPC task force but anyway Alex Brodie, Mathilde Grammont, Alexis Augustin, Hugh Evans, Michael Carter, Seiko Hidaka, Alex Driver and myself so welcome. Celine I am giving you the floor to explain in greater detail the agenda.

Celine Bey: Thank you, Marianne - and hello everyone. Thank you for joining us today. So as Marianne said our webinar today is a little bit different from what you may be used to as we wanted to make it as interactive as possible and to give you the chance to choose the topic that you want to hear about so we gave you the possibility in advance of this webinar to share topics and to share questions that you wanted us to address. So, in about 20 to 25 minutes we will invite you to join one of our breakout rooms. The audience will be then divided into three smaller groups where you will be able to hear and exchange if you want in an informal way on three topics and the three topics are the following.

In the first room you will be able to discuss injunctions at the UPC. So, this topic will include of course preliminary injunctions as we know that it is an important part of the strategy in a patent litigation. This session will be hosted by Alexis Augustin from our Paris office, UPC representative, Seiko Hidaka who is a UK patent lawyer from our London office and myself.

The second breakout room will discuss the attention of evidence before the UPC, that will include of course the fearsome saisie and this session will be led by Alex Brodie who is patent litigator in our London office, Michael Carter who is patent litigator in our Birmingham office and Mathilde Grammont who is French patent lawyer and UPC representative as well.

And last, but not least, in the third breakout room we will have Marianne as well as Hugh Evans and Alex Driver, both patent litigators in our London and Birmingham offices and they will host a session produced on how to best get prepared as a defendant before the UPC.

So, you can already start thinking about which room you would like to joint in about 20-25 minutes. When a pop up will appear on your screen and you will be prompted to join a room so you will have to click on the button of your choice. I have to warn you that once you have chosen a room you cannot change and you cannot go from a room to another, but we will make sure that the slides of the presentation of the different rooms will be made available to you after because they will not be recorded. What will be recorded is the main webinar so the presentation on the statistics and the Q&A but not the breakout room session. And then once the breakout room session will be closed, we all will go back to the main webinar. And then if we have time we hope we will have a Q&A session. If we do not have time of course you will be able to raise any questions to us in writing. We will be happy to answer all of those questions after the webinar. So, I hope everybody will enjoy this session and let us not wait too much before starting with trends and statistics and I give back the floor to Marianne and we will discuss after 18 months of operation can we say that the UPC is a success.

Marianne: Well Celine actually we can say in one sentence that the UPC is really an impressive start. So, we will start with some statistics on the number of which have been tried with the UPC. So I am coming to the UPC official report it a took a number of is 635. We can say that this figure is a bit misleading as the UPC counts every counterclaim for revocation in one patent and the case distinct from the infringement action. That is to say that if you have one infringement action in which two persons are affected then you have two counterclaims.

So now let us have a laser guided look at the statistics. We can see here that from the very beginning we started very immediately with 14 actions in one which is quite impressive. And today actually we have 239 actions which have been filed. We can say that there are 251 counterclaims for revocations which have been filed. As I said the difference between the number of infringement actions and the number of counterclaims for revocations comes from the fact that actually you have some infringement actions which had several patents asserted. It is as well interesting to underline that in 43% of the cases no counterclaim for revocation was filed. How can we explain that right, which is quite high.

As a non-German lawyer, I would say I was very surprised and I think that the likely explanation is that most of the actions, as Celine would explain, were filed before German divisions by German lawyers who are not used to discussing the validity of the patents in their infringement actions in Germany given that bifurcation system. As you know, in Germany, when you file an infringement action before a tribunal this really will not look at the validity of the patent. The validity of the patent falls within the jurisdiction.

Interestingly, before the local division in Paris, actually in 100% of the cases, a counterclaim for revocation was filed. While in Germany the figure is only 40%. So, for me I do believe that some defendants have refrained from filing a complete defence and I think that all here in this group as non-German lawyers we are surprised because in our cases infringement cases we each time file a counterclaim for revocation. So now we have 55 main revocation actions which were filed, and I would say that when you compare that figure, the 55 to the 259, to me it is a high figure as well. This can be as well explained by the fact that the cases were started by Germans again. And we have only four declarations of non-infringement which were filed. It is a very low number but not that surprising because it is not a traditional defence I would say to file and second it can be explained as well given the number of upheld complaints. So, then we have 52 preliminary injunctions which were filed and they are currently 127 applicants which are pending. Celine will provide you with more detail on the outcome of these proceedings later but in summary the rapid and steady growth is a clear indication of the confidence in the UPC and the number of actions continue to increase since the first decisions were issued.

So now let us have a look at another indication of the confidence in the new system is the patents itself. So, I hope it was very interesting to have a look at the request for unitary effect. At the very beginning in 2023, the European Patent Office received many requests for unitary effect in a total of 17%. I remember you that actually the system enters into force only in June. So, in 2023, 17% of the patents granted have a unitary effect. In 2024, we are near 25%, which is very high because one fourth of the patents today have a unitary effect within the EPO.

What is interesting to note as well is that 60% of the unitary patents were requested by owners from the EPO zone and 40% from five countries in the order of proportion, Germany, France, Switzerland, Italy and the UK, 15% from the US and 15% from Asia, and because the 15% in Asia you have China, Japan and Korea.

Another figure which is interesting is that 35% of the unitary patents were request by SMEs. I was very surprised by this number because traditionally the SME used to have with their classic European patent a protection in three or five countries and when it were three countries, it was France, Germany and the UK which is outside the unitary patent system. So now we see that with this new system those SMEs have an access to a broader protection in terms of geography for the first of five actually but that is the average. Main industries interested in the unitary effect are the medical patent, technology and civil engineering.

Now about the opt-out. We can see that actually the number of opt-outs was very important at the very beginning because we had 421,000 opt-outs in place and most industries find they are requested they opt out of their entire patent portfolio without a real strategy. Since actually we have only 150 additional patents which have been opted out. But what I would like to say because when we say 550 is quite a lot but if we think about the number of patents in force we have roughly 1.6 million in force in Europe. Okay so 1.6 million means that in the end 66% of the patents have now been opted out or put it that way only 54% of the patents have been opted out which is not that much, it is another indication of the conflict. And with respect to the withdrawal of opt-out there are only 446 which is very low but when the patentee wanted to enforce the patent actually because when you withdraw you opt-out it is forever. You cannot opt-out again when you have withdrawn your opt-out.

Celine, I will give you the floor to explain in more detail the outcome of the decision.

Celine: Okay, so let us have a look a little bit deeper at the current distribution of the cases and see if we can draw some conclusion from it. Just a reminder before starting on the way the court operates so we have a central division, and we have 13 local divisions. So, the central division the head I would say is in Paris and we have two other sites, one in Milan and one in Munich. And the jurisdictions of the central division all the action and revocation and the declaration for non-infringement as well.

The competence of the central division is established and divided by I would say fields of industry so there is no room here for foreign shopping. Just as a remainder Paris knows of the revocation action against patent covering physics and electricity SPC mainly. The Milan divisions know about I would say mainly the pharma patent and the Munich division has jurisdiction over mechanical engineering, lighting and mainly chemistry so there is no room I would say for foreign shopping before the central division. What we can see immediately on this slide is that so far Paris is leading the way I would say on the number of revocation action before the central division with 42 actions and this is mainly due to the importance of revocation actions against patents in electricity.

With regards to local divisions, what we can say immediately is that yes the difference of the central division the local division there is a little room for foreign shopping, but we will see later that foreign shopping is not really the main work for UPC, but the jurisdiction of this division is that when you start an action for infringement you will go before the place of infringement, or you will go before the seat of the defendant. So, if you are infringement operating in more than one member state for sure you will have the choice to go before the German division, before the Paris one, before Milan, etc.

Just a reminder that today the UPC covers 18 member states. So what we can see immediately on the slide is that so far most far most of the infringement action have been brought before the German local division, 78% with 38% before the Munich division, so as Marianne said a moment ago this is quite a big figure but we don't think that this will stay the same in the future, what we can see here is that this is quite representative of the European patent landscape that we have known so far. Because, for example, in 2023 there has been 500 decisions issued by the German court so not UPC but German national courts, compared to 100 in France and 40 in Italy, so it has always been that Germany has been the first place for patent litigation but it could be explained maybe before the UPC opens because Germany has a system of bifurcation, so you could obtain before a German court a decision quite quickly compared to other jurisdictions where another jurisdiction the judge in charge of validity as well as infringement at the same time. And it's true also that patent judges, German patent judges, I mean are quite experienced judges and this was the jurisdiction well appreciated for patent litigation so we can see that for one year the claimant replicated a little bit what we knew before for the European patents but we think that should not go on like this and that there should be a kind of a rebalancing in the future, for two main reasons.

The first one is that as you know, I mean, UPC is one single jurisdiction, it means that there is the same rules of procedure apply everywhere. We have the same, I would say, quality of judges, very experienced judges in patent in Paris, in Milan and in Germany. We have technical judges as well everywhere and so we think that in terms of proceedings in term of, so there is in terms of proceedings and quality of the judges there is no, I mean, interest of going there rather than there and the second reason important is the duration of the proceeding. And you can see on the slide that due to the workload of the German local division they have started to have difficulties to issue decisions in I would say a proper timeframe, so what is a proper timeframe? In the UPC rules, I mean the court was set with the objective of issuing a decision on the merit on infringement within 12 months, so this is quite ambitious. But this is what really happened at the beginning, and we can see that 12 months is the duration average of the decision before the Paris division, but today in Germany the last decision were issued after almost 18 months. So, for sure this is due to the workload and we think that it will maybe be also a reason for the claimant maybe to go to a division with less, a lower workload I would say for this reason.

A few words on the saisie on this slide as well, the saisie is a very powerful tool, it is a means of evidence and we can see that the saisie have started to be granted by the UPC. We can see that it has started to be granted more before the Paris division than before other division, that is mainly because and we think historically the saisie is the means that we know in French patent law, it is known also to Italian law. But France is really, has always been at the head of the saisie and so this is why I think we see that there are maybe more saisie granted in France than elsewhere. If this is a topic of interest to you, you will be able to join the breakout room on evidence later that will address the saisie.

A few other statistics to end, Marianne maybe you can go to the next slide. Thank you, so a few other figures to go deeper into what Marianne said with regard to the decisions. So far 54 decisions were handed down by the unified patent court, 25 preliminary injunctions, 17 infringement decisions and seven decisions on revocation actions.

The first teaching that we can see here is that if we can say that UPC is adopting quite a pro-patent approach. This is also a very measured position because you can see on the person page that most of the preliminary injunction applications have been granted with 56%, so it's not a huge, well it is quite measured. It is comparable to what we see in, before national courts. And again, if you are interested in this topic, you can join later the breakout room on injunction.

We can see from this slide that most infringement actions have succeeded with 59% of the actions, so almost 60% so this is why we can say after one year and a half that the UPC is quite patent-friendly and finally patents have been developed as granted or valid in an amended form for 57%, so quite, as I said, a measured position from the UPC.

The next slide is a focus on costs, and I will leave the floor to Marianne, we have been meaning to ask us about a comparison between national courts and UPC with regard to costs.

Marianne: Thank you, Celine. So now the fees. Actually, as we say the main aspect of the UPC - and we are covering this topic about the costs to respond to a question we had received ahead of the webinar.

I would say as original rule we can anticipate that the costs for a UPC case should be relatively similar to the cost of the national courts on the Continent, excluding the UK. Sorry my UK colleagues, but with the disclosure we are having to consider them so we cannot compare. But given the timeline what we should have in mind is that the expenses would be compressed because this is the length of the procedure before the UPC, and or as well, we have to keep in mind that you can say that it should be similar to what you know currently, before the national costs, you would have to support additional cost as well. Indeed, UPC proceedings are mainly dividend in two stages, the first stage may be related to infringement and validity, the second stage may be related to assessment of damage and then you will have, and a hearing just to discuss all the damages.

So that is my introduction. Then I would say that the main difference between UPC and the national court system, except Germany, is that there are some courses, you have fixed fees before the UPC, for instance for an infringement it will be €11,000. If you file a counterclaim for a revocation it is going to be the same price and in an infringement case you will have to pay additional court fees which are determined taking an account the value of the litigation, so it is from zero up to €325,000, so you have a very nice table which has been prepared by UPC you can refer to, so these court fees are quite similar to what exists in Germany.

With respect to attorney fees, they are completely free as is the case everywhere, except again in Germany. Because in Germany, in addition to the court fees, you have the regulated attorney fees. But in addition to the regulated attorney fees, law firms are entitled to apply their free-fees actually to compensate the fact that the value rate of the fees before the German court is lower than their standard hourly rate - so that is the difference - which in the end has a consequence of the recovery of the legal costs.

Before the UPC that's going to be up to €2 million, in Germany it is going to be the court fees plus the attorney fees but on the regulated fees, while in France, Italy and the UK, it is going to be at the court's discretion. For Italy and France, for instance, it is going to be between €150k and €500 sorry, per party. In the UK, you have a specific on the cost. And in the Netherlands, since the recent years actually now their attorney fees, legal costs have been actually capped to €40k.

So now that is what I wanted to say about the cost. You have notes, it is now time for our breakout sessions.

As said by Celine, a pop-up will appear on your screen asking you to join the room. Please click on that button and select the breakout session you would like to join, so I remain with you, that is going to be seizure, preliminary injunction or defendant, get prepared and if you do not have the pop-up, actually you have on the bottom of your task bar, on your Zoom task bar on your screen, you can click on breakout sessions and you can select the session that you want to reach. So, we welcome you all in our breakout sessions and some of you are going to join the defendant which is going to be mine.

BREAKOUT ONE: START OF TRANSCRIPT

Celine: Welcome to this breakout room session on injunctions. Thank you for joining us. I am pleased to host this session together with my colleagues Seiko and Alexis. We have prepared a few slides on this topic which is quite an important topic for patent litigation strategy of course this is the most important remedy that the patent owner seeks in infringement action.

We know that there are quite some differences between jurisdictions on the automatic or optional nature of permanent injunctions, so we start with this question - and we start to see how it is before the UPC. So, before the UPC I would say that the key words, important key words, are balance of interests, flexibility and enforceability when we speak about permanent injunction.

First of all, let us see what other conditions to obtain a permanent injunction. The Court must find the patent valid of course, the Court must also find the patent infringed and the first permission that is quite interesting is that the Court will look at the balance of interest before granting the injunction so that means that the injunction is not automatic and will get back to this.

Timing. The UPC agreement provides that decisions on the merit should be handed down within 12 months. So, far after 18 months of operation we can see that today there is an average of 13 months to get from the start of the proceedings to the injunction. An average of 13 months so that is quite close to the 12 months. We have discussed before that it also depends on the jurisdictions and before the German look at division due to their workload. It is a little bit longer now around 17/18 months to get to the injunction.

Targets. Injunction generally target the infringer but as it is in other national European jurisdictions before the UPC you can also obtain permanent injunction against any intermediaries.

Enforcement. Direct enforcement that is important. Decision on the merit on infringement are generally directly impossible from their date of service so that means that if there is an appeal before the Court of Appeal there is no suspensive affect.

However, there are some rules and some possibility to obtain suspension of the enforceability of the permanent injunction in case of decision that could be manifestly error and we have had recent decision from the Unique Local Division on 13 September 2024, in Philips v Belkin case we have a court order a permanent injunction against Belkin but also against its directors so natural person. The Court consider that the directors could be qualified as intermediaries themselves so Belkin filed an appeal and filed an application to obtain the suspension of this injunction against the directors and the Court of Appeal granted the suspension so pending their decision because they consider that the interpretation made by the First Instance Court were manifestly erroneous and that natural person in those type of circumstances could not be qualified as intermediaries.

Let us have a look at two other notions we discussed before, optional and flexibility. As we said the Court must look at the balance of interest before granting an injunction so that means that these injunctions are not automatic, and it is up to the Court to decide in practice to date. So far there have been ten decisions on the merits which have acknowledged validity of the patent and infringement and on all those decisions the permanent injunction was granted so we do not have to date any decision, any example of where an injunction has not been granted on the basis of the balance of interest so we will have to wait a little bit more to obtain or to see those types of decision and the rationale for the decision.

Flexibility. Flexibility is also important before the UPC when we discuss injunction and that is quite particular. We do not see that under French law and French case law for example. We have seen so far, some decisions from the UPC where injunction was granted but it was adapted to their circumstances of the case.

For example, there was a decision handed down in a case and was Life Sciences v Meril in November 2024. Local Division Munich and this case related to medical devices and the Local Division in Munich decided that the injunction should not extend to the devices that have already been scheduled for implantation in persons. So the Division really decided to run the injunction but to limit the consequences of this injunction in order not to prejudice the patient in this case. Next slide please.

Let us now have a look at the preliminary injunction. We know that there is main tool in patent litigation strategy preliminary injunction because sometimes when you have won your preliminary injunction it is almost like you have won the case, it is very easy for sure or to settle afterwards when you have won a preliminary injunction and the contrary it is also very risky of course to apply for preliminary injunction because if you lose it the Court refuse to grant the preliminary injunction it will depend on the reason why but of course if the Court has doubts on the validity of the patent that is not a good sign for the case on the merit.

One other condition to apply for a preliminary injunction the patent must be valid prima facie the patent must be infringed prima facie, and I think that Alexis will go back in a moment on this notion. The third condition that is very important before the UPC is urgency and the fourth condition. As always, the Court will take into account the balance of interests.

When to apply for preliminary injunction like in many jurisdictions before the UPC? The Claimant can apply before the proceedings on the merits, where commenced or during the proceedings on the merits. The purpose of preliminary injunction is to put an end to prejudice that results from infringement, and to prevent the prejudice to start so that means that you can apply. A Claimant can apply for preliminary injunction when the infringement is only imminent and has not started yet.

On this notion of imminence of infringement, the UPC has issued already some decisions, and we can say that it is the position of the UPC is more or less the same as the position that we know in France in the UK, or in Germany.

Some examples on the pharma sector the Dusseldorf Local Division issued the decision in the Novartis v Genetic case on 6 September 2024. The Division decided that having obtained marketing authorisation is not enough to prove imminent infringement, but applying for a price negotiation, or reimbursement sample presented to clients, communication on the specific timeline for the launch to market all of these can be considered as evidence of imminent infringement. As I said, we are here more or less aligned with what we know with national jurisdictions.

A few words on timing the average timing before the UPC to obtain a preliminary injunction is three months but there is a big difference between the longer and the shorter procedure. The shorter procedure is one day so it is good to know that if there is an urgency, a very important urgency that a Claimant can obtain a preliminary injunction very quickly.

We have a recent decision from the Milan Local Division dated 5 November 2024. In Cardo Systems v Shenzhen Asmax case, the application for the PI was lodged the day before the opening of the trade fair where infringing goods were supposed to be presented. So the Milan Division agreed to look at the application ex parte so without the Defendant being called to the proceedings so without the Defendant being able to file a defence and the preliminary injunction was issued in one day very quickly, so that is very good to know when you suspect imminent infringement on a trade fair, that is quite efficient.

That is interesting as well to see that before the UPC the Court granted quite a lot of ex parte preliminary injunction like the one we have just discussed. It is around 40% of the preliminary injunctions that have been granted so far so it is quite important.

In France, for example, we can obtain, a Claimant can obtain a preliminary injunction ex parte but it is very uncommon. It is very rare that the Court will not call the Defendant to appeal and to be able to file a defence before issuing the preliminary injunction. It can be done quite quickly in a few days in France as well, but it is very rare that it can be done ex parte before the UPC. As I have said it has become quite common, so this is something to keep in mind as well.

A few last words on preliminary injunction and on the condition of urgency. I think that Alexis will discuss this a little bit deeper in a moment, but urgency is so far from what we can see from case law the main condition on which the judges decide or not to grant preliminary injunction. We do not have, so far, a decision that put into the question validity of the patent or infringement but really the decision it shows so far the preliminary injunction has showed so far were based more on the notion of urgency so that is a very important notion to keep in mind.

So here is the picture for injunction before the UPC and what we are going to do now on the next slide it is a kind of compilation between the UPC and the national case law.

Alexis Augustin: Thank you, Celine. So the purpose of this slide is as. line said to present condition for PIs to be mentioned before the UPC as well as a brief comparison with the rules applying in some European countries. So as mentioned before the first and single conditions for PIs to be granted are prima facie by validity infringement. Interestingly Article 60, paragraph 4 of the UPCA provide that the Courts may require the applicant for PIs to provide any evidence in order to satisfy itself with a sufficient degree of certainty that the patent is valid and infringed or about to infringed.

The first condition here that it is interesting that Article 60 uses the wording 'may' which seems to indicate that prima facie validity infringement assessment is not actually automatic. However, until now in practice the UPC has systematically assessed prima facie validity and infringement before ruling on the PI application.

The second condition relates to the notion of sufficiency of real certainty and the Court of Appeal specified that it means that it is more likely than not the patent is already infringed.

The third condition for PIs being granted is a balance of interest. It resourced from Article 60, paragraph 2 of the UPC. But also, from the preamble of the UPCA, which provide that in the general way the UPC ensures a fair balance between the interests of flight holders and all the parties and takes into account the need for proportionality and facility. This condition is a sole one shared by all the legal system compared within this table and in this is maybe the most important one considering of the importance to find the right balance until the decision on the merits will be handed down.

Based on the balance of interest the UPC can dismiss an application for PIs but also limit the scope. In this respect Dusseldorf Local Division specified in the Valeo v Wagner that restrictions must be limited to the minimum necessary to take sufficient account of the alleged infringement interests. In this case the Court has considered that the cause for technical and unitary reasons the validity infringement could not be easily replaced. A global injunction will have forced BMW to which a Defendant provides this component to seize the pollution of all the vehicle using magnetic energy. So, the Courts concluded that a global injunction will have had excessive consequences for its infringer and its clients and therefore ordered a tailored injunction so that would still fulfil their current obligations to BMW.

The fourth and last conditions is urgency which as you see from the slide is not a condition for PI being granted by French Courts. Pursuant to this condition the Applicant is expected to be diligent in seeking a remedy against the infringer and so to bring an application for PIs within a reasonable delay from the moment the infringement began or from the time the Applicant became aware of it.

It is only 19 months from that the UPC opened but it is fair to say that the concept of reasonable delay has already been subject to very interesting decisions in that Ortovox v Mammut Sports the Dusseldorf Local Division has ruled that one month from the commencement of the infringement is reasonable. On the opposite in Ericsson v AsusTek Lisbon Local Division has ruled that waiting eight months from the commencement of the validity infringement to lodge an application for preliminary injunction is not diligent and therefore does not satisfy the condition of urgency.

Between one and eight months the situation is still a bit unclear. Waiting two and three months from the commencement of infringement to file the application has been considered as reasonable but each time there was very specific circumstances for example in the Handheld Products case the Munich Local Division took into account the fact that the patents was not published when the infringement commenced.

Similarly, the Dusseldorf Local Division took into consideration that your policy needs to be ordered and distanced before a PI application could eventually be filed.

As of today, it is fair to say that one delay longer and one more will be considered as reasonable without specific circumstances remain to be seen. Therefore it can only advise if PIs are wanted to wait as little as possible before lodging an application.

Now I would like to provide you with so. stats, some indicators based on them. The main information here is that if the sixth person of the application for preliminary injunction is lodged before the UPC have been granted this makes the UPC quite patent friendly when compared to National Courts.

For example, over the last ten years in-house only 45% of PI applications filed have been granted. In the UK it is a bit better with 45% and Germany gets 50% but in Germany PIs are generally applied when the patent has already been considered valid on the merits or are in a position which considerably limits their offer PI application fight.

The other aspect of this stat is that 44% of PI applications are dismissed and when looking at the reason for that it appears that lack of urgency or balance of interest are the first round of dismissal with final decision representing 45% of the decision dismissing a PI application. Prima facie with full decisions representing 46% of the decision dismissing the PI application.

The first decision based on this figure is that if you have a strong patent starting UPC action with a PI application should be very seriously considered because if like National Courts the UPC happens to massively confirm on the merits its decision win on a prima facie rating infringement obtaining PIs will be an effective way of gaining a position of strengths very fast.

At this stage no decision on the merits has never been handed down in a case where PIs had been granted but it seems reasonable to say that we expect UPC to rule lies in the National Courts in this respect.

For the same reason a decision dismissing a PI can bury a case on the merits so it will be wise not to apply for PI with a patent which validity infringement is not very strong. In any case one considering requesting a PI should take a decision with no delay in order to satisfy with a condition of urgency.

The single teaching that defending against a PI application by claiming that the patent lacks innovative steps is a bad idea. Indeed, when an application for a vacation is lodged in an infringement action lack of innovative step is the main rule of a vacation because when it succeeds the patent is railroad for business in about 60% of instances. However, at this stage no PI application has yet been dismissed for lack of innovative steps.

Does it mean that prima facie cannot be proved by its own lack of innovative steps honestly we do not know that for sure yet but when defending for a PI application it is highly recommendable not to ground defence on obviousness but to prefer either on the ground of invalidity or maybe more importantly arguing the lack of urgency and lack of balance of interests as much as possible.

Seiko Hidaka: So, there are a few bits about preliminary injunctions which might not be core these have been covered by Alexis and Celine but nevertheless there are miscellaneous points I think worth highlighting.

The first is security which is available just in case the preliminary injunction transpire to be wrongly decided. Now of course these are the summary processes, and the Courts cannot actually assess the validity and infringement fully and so there is every possibility that the injunctions transpire have been wrong and if that had occurred the Defendants would have incurred loss and securities there to ensure that they recover for those losses. I also think that that ensures that the Claimants are serious about making an application for a preliminary injunction because it means that they will have to stump up the cash that the significant security in case the event the injunction was not justified after all.

The availability of security is generally a matter of course if the preliminary injunction is given on an ex parte basis it does happen, Celine says it is rare, but it does happen, but even so there are circumstances where you might be able to argue that security should not be granted so really before the UPC things are decided very much on a case-by-case basis.

The level of security is also important. Although I think the UPC decisions are not very detailed about how the level of security has been calculated and I think that is contrasting to the UK where every single decision is really very well-reasoned and justified but it does seem to be that the level of security is pegged to the stake amounting stake and if the Defendant is not represented i.e. it is on an ex parte basis they can always make an application to Court to up that security at a later date.

So, as I was saying, security is given on a case-by-case basis and a really good example I think of how the Court balances the interests of the parties I think can be gleamed from the case Valeo and Wagner briefly mentioned by Alexis earlier. In that case Wagner a car parts manufacturer was alleged to be selling infringing gearboxes to BMW. Now of course these cars are very expensive items and if those gearboxes were restrained from being in use or being in supply then BMW would not have a car to sell.

Very difficult for car companies to change gearboxes because these would have had to have gone through some long and arduous sort of regulatory clearance and so what Wagner said was that the level of security required to cover their losses would be in the region of €2 billion.

Now unsurprisingly Valeo couldn’t afford to provide security of that level and so what the Court said was: "Okay, Valeo patent is most likely valid and infringed and its monopoly needs to be protected. The Defendant has also its own interest to make sure that it can recover for its losses." And so what the Court did was to allow Wagner to fulfil its orders on the books and then instead reduce the security down from €2 billion to €½ million so it is really about trying to balance the interests of both parties and of course I am sure Wagner would request Valeo to institute the main action to decide whether indeed the patent was valid and infringed.

Some other interesting points that have emerged in the past 18 months there has been a case where the Defendant was requested to confine its offence to three best arguments just because you know preliminary injunctions are summary procedures and this decision has been highly criticised because preliminary injunctions can really present serious disruption to a Defendant's business it could actually cost the Defendant's business and so many people feel that the Defendant ought to have been able to make a full case against the preliminary injunction applications and I think the last point would be an interesting to also highlight of costs - yes costs!

You can get costs for failed you know you can get your costs back if the Claimants fail to obtain a preliminary injunction and also the Claimants can get its costs back potentially if it is successful. PIs says the preliminary injunction says this is quite interesting because it is possible to do both. So that there has been a case where a Claimant seized goods from a Defendant, quickly checked whether there has been an infringement, showed the Court that there has been an infringement and promptly asked for a preliminary injunction which the Court granted so preliminary injunctions can be done in sort of sequence with a seize as well.

So, to finish I would like to give you a few words regarding protective letters and how to properly use for the UPC. Protective letters are like pleadings possibly supported by evidence for before the commencement of proceedings by a person considering it likely that an application for PIs may be lodged.

They can charge infringement arguments expected to be relied on by the presumed Applicant and assert invalidity arguments on the patent. Once fined protective letters cannot be seen on the CMS before an application for PI is filed or whether one fresh application based on the patent within the protective letter is lodged the letter is forwarded to the panel and to the Applicant for PIs.

Some strategy consideration. The pros of protective letters are quite evident. They are easily filed and maybe a good way to prevent ex parte PIs.

Regarding the costs the main mistake from all you would be to have used protective letters. So, keeping in mind that protective letters are not a firewall against ex parte PIs.

For example, in the case myStromer v Revolt Zycling, the Dusseldorf Local Division has ordered ex parte PIs while protective letter had been filed. Even worse in the Dusseldorf Local Division has granted PIs without hearing the Defendant considering that its arguments were known from its response to the letter sent by supplement and that this argument were not convincing.

In this case invalidity and infringement were not within a protective letter but it is likely that the Courts would have ruled exactly the same way based on the protective letter. So, conclusion of that is that protective letters should only be filed where strong arguments can be opposed because if not protective letters are likely to just burn arguments that if prepared presented on the merits could have worked.

This was our last piece of advice regarding injunctions we thank you all for your attention and invite you to contact us if you have any questions.

END OF TRANSCRIPT

BREAKOUT TWO: START OF TRANSCRIPT

Alex Brodie: Hello everybody and thank you for joining us on this session looking at obtaining evidence for use in the UPC actions and in particular what we are looking at here is a really powerful pre-action measure that is available to you called a Seizure Order, or a Saisie Order.

Those of you who are from France, Belgium or Italy will already be familiar with this concept but for the rest of us this is a new and powerful or if you are a Defendant extremely worrying development.

I am joined today by some excellent speakers from our global Intellectual Property Team but just first I am Alex Brodie, I am a Patent Litigation Partner and based in our London office and I also co-chair our global tech sector. Michael?

Michael Carter: Hi everyone, I am Michael Carter I am a Partner based in our Birmingham office, and also, Head of Automotive IP in the UK.

Alex: And Mathilde?

Mathilde Grammont: Hi everyone, I'm Mathilde I am UPC representative, and I am Senior Associate in the Paris office. I am a patent litigator and a UPC litigator as well.

Alex: Thank you so much so without further ado Michael over to you?

Michael: Thanks Alex. So, I wanted to start with looking at why the means to obtain evidence and seizures in particular are so important in the context of UPC proceedings.

Firstly, as Alex mentioned, there is a considerable shock value involved against Defendants in the Seizure Order in particular. But also, evidence measures of its procedurally important in ensuring that the case is in the right shape and proceeds in a timely fashion.

Many of you who are familiar with common law jurisdictions will be aware that there is usually a clear distinction between the pleadings or facts relied on and the evidence needed to prove those facts which will come later via disclosure, witness statements or experiments in the like. But in the UPC the case must be fully articulated by providing the evidence relied on where available at an early stage.

The procedure is very frontloaded and as you would expect the burden in proof is on the Claimant. This means that both the arguments and the evidence should ideally be set out as fully as possible when filing the case. And frontloading of evidence makes sense in the context of the timelines that the UPC is holding itself to where the goal is for a determination within 12 months. As a result, the procedure encourages and indeed envisages parties having evidence filed early and there are limited opportunities to amend or supplement later.

Now there are a number of ways to obtain further evidence to substantiate your claim during the proceedings and these are set out in the agreement and the rules. But today we are going to focus primarily on seizures because that tends to be the most common and one of the most shocking approaches that can be taken.

Now, two important preliminary points, firstly when we are talking about seizure we are not just talking about seizure of physical materials. It also covers computer records and allows the questioning of individuals.

Secondly, it is available before and during proceedings and it is available on both an inter-partes and an ex parte basis. Although as we will see for understandable reasons it is most common for it to be deployed ex parte. Handing over to Mathilde, who will discuss some of the specifics.

Mathilde: Thank you, Michael. So saisie is a very powerful tool and if you look more closely at the way saisie has been used so far, we should look at some figures first. So far UPC ordered 11 saisies. Most of them were ordered by Local Divisions based in countries which already know saisie - meaning France, Italy and Belgium - but interestingly some Local Divisions based outside of those countries in Germany, Denmark and the Nordic Baltic Division also ordered saisie, although those countries do not know saisie in domestic law.

Two orders for inspection have also been granted as a reminder order for inspection and order to preserve evidence are different, in the way that for inspection, you just go to the premises but you do not take anything, you just have a report which is drawn up. Why? For the order to preserve evidence, the saisie, you actually gather evidence, you collect it, and you can take it with you. So, although saisie and orders for inspection have been ordered before any proceedings so that then you were based on where the infringement was actually taking place in application of the rule of jurisdiction between the various Local Divisions.

How does it work in practice? Well, the Applicant will actually file an application requesting the saisie with reasonably available evidence showing that its patent has been infringed or is being infringed or is about to be infringed. In this application the requests, when the Judge requested will also be set, as well as the location where the expert should go to conduct the saisie.

If the principal is inter-partes as mentioned by Michael, the Applicant can request it to be ordered on an ex parte basis meaning that the Defendant will not be heard by the Division. It is more powerful because there is a surprise affect because you go unannounced there so if we look at figures again, nine saisies were ordered ex parte out of those 11 Saisie Orders. To order the saisie ex parte the Court will look at the emergency of course as well as the risk of destruction of the evidence or the risk to the access will not be possible afterwards and will outweigh that with the interest of the seized party.

So, if we look at some strategic use cases. Many saisies, and most of them were actually ordered to be performed on Trade Fairs. A very interesting case is the OrthoApnea case here where the Defendant is based in Spain. If he would have stayed in Spain, his life would have been easier because basically there was no valid patent in Spain. He goes to his trade fair in Belgium. Too bad there is a patent, which is valid in Belgium and there is a saisie in Belgium against him and it is ordered ex parte, so a bailiff just shows up and he cannot do anything.

A very interesting one as well is the fact that it illustrates that the UPC is very reactive on trade shows saisie, because on the data detection case the order was handed down on the exact same day the application was filed. The saisie took place the day after which was the final day of the fair, so it is very interesting because it shows that one is never safe first and that the UPC is extremely reactive when it comes to saisie.

Other examples of where a saisie can take place it can take place in premises so it can be the infringers, the suppliers, the client, and in those cases, it can happen simultaneously as well in two different locations or even more.

Interestingly, the evidence submitted to show that the patent was infringed were coming from outside UPC territories, so you have to be very mindful of what you are doing worldwide because all the elements that you publish or that you use worldwide can be used against you as an evidence to request a saisie by a patentee.

So, in view of those examples, as an applicant there are some practical steps that you can take. Alex is going to present those steps to you.

Alex: Thanks Mathilde. So, if you are an applicant, you are a patentee and you want to take full advantage of this very startling measure what you need to do? Well, as Mathilde says, you need to put your case in absolute detail before the courts. You need to be identifying where, what you want to go and get, you need to identify who is going to be part of that team so if you want your external lawyers to be part of that team you need to have asked for them. You also need to provide this information on a full and frank basis, which means that not only do you have to explain for your own purposes why this is so urgent, so necessary, but you also need to the tell the court all the arguments that the other side would put had they been given the opportunity to come before the court.

Now obviously if you are going inter-partes that will not be necessary but typically this is going to be an ex parte application so you need to be telling the court what the other side would have want the court to have heard. You are also potentially going to have to provide security that is going to compensate your target if you cause any damage during the seizure or if the order is later overturned.

An important point to note is that the clock is ticking to commence proceedings so when you apply for this, and it is granted, if you execute it, you are then on a deadline to issue your main proceedings. So, I think that you need to be as the phase goes 'all in' on suing somebody before you start asking for these orders.

And then lastly on this point, is choice of expert. The court will appoint the expert, the court has a list of experts who will go and commit the seizure for you, but obviously they are not going to have an expert in absolutely every technical field and you might have some very clear ideas on who the best people are. So, there is nothing to stop you suggesting a list of names to the court when you make your application in order to be helpful, but you should know that you do not get to choose. So, Michael, if I manage to get this order and I am coming towards your trade show, or your premises how are you going to stop me?

Michael: Well, subject to one possibility that I will touch upon at the end, I do not think that I can, and also as a defendant, I do not have the luxury of time, but what I can do is I can take practical pro-active steps to ensure that I can make a quick and affective response to any order that may be made. And the key component of this is a policy and process document that can be referred to in the event of a seizure being affected. This document is likely to be similar to the sort of dawn raid policy document for competition raids that you may already have within your businesses.

We have got experience of putting these in place for clients, giving training to reinforce them and carrying out mock dawn raids to check the resilience of these policies. That is something which should be done for the UPC as well.

Now what should go into that document? Well, firstly it should set out what to do in the event of a seizure being affected. It should describe the process and responsibilities and do's and don'ts. For example, it should recognise that you cannot stop the court appointed expert coming in and from conducting the seizure, but it should ensure that the order is checked and that only the relevant people are in accordance with the order are in attendance. It should provide guidance to allow those on the frontline of your business to deal with the order calmly and ensure that they do not panic.

For example, does your receptionist know to show the team to a waiting room to give you time to call your lawyers?

Secondly, and really importantly, whose responsibility is it to call the lawyers, and do they know their details and who else within the business needs to be informed.

And thirdly it should set out guidance on how to monitor whether the order is being affected properly. The defendant has an opportunity to challenge the validity of the order particularly where it has been ordered on an ex parte basis.

Now this policy and process document will need to cover a range of different situations. For example, the process at a trade show will be different to the seizure at a factory. But in both cases, it should teach how to minimise the disruption and ensure that you and your employees appear co-operative without providing undue assistance.

The policy document should then be supported by training of relevant personnel this will make sure your staff are aware of how to act when a seizure is taking place and how to respond importantly to any questions they are asked. Perhaps similar in a way to deposition prep that some of our US colleagues will be aware of.

Thirdly, confidentiality is key. Making sure that documents have been marked according to confidentiality or trade secret policies is important because it is possible to keep confidential information out of the hands of the applicant itself. But that is much easier to do if the relevant markings have been applied in accordance with your policies in the first place.

Finally, I mentioned at the outset that there is no way of a saisie, but this is subject to one point, and it is filing a protective letter. Now, there is no guarantee that a protective letter will be successful, but it can be an efficient way of ensuring that the arguments that you may want to make are properly considered by the court on any ex parte application for provisional measures.

Now I am going to handover to Mathilde.

Mathilde: Thank you, Michael. So, we said that there is no disclosure before the UPC this means that apart from seizure there are other limited means available for evidence to be gathered or to be available. For instance, where there is a request to produce documents and there is the right for information which relates to supply chain information, financial and accounting information. We already have several examples where those provisions have been used before the UPC, but the most important point you have in mind when using them is the timing because those tools are used during proceedings rather than before commencing proceedings and we have seen a progressive switch regarding the right for information which is now used before the decision on the merits is even handed down. This enables you to speed up the proceedings when you are a claimant because you will be able to accelerate the request to determine damages.

UPC proceedings work a bit like UK proceedings. It means that there is a first decision on infringement and the second decision on the determination of damages. This is not that important for a defendant, but what is important for defendant regarding timing is the fact that during proceedings you can request documents to be produced which would show that the claimant is actually lacking standing. It has been used in some cases and it is really interesting for the defendant because in one request basically the entire proceedings could appear to be completely inadmissible.

In a very interesting example - it was during the proceedings by the claimant itself, who was trying to circumvent a confidentiality, which was set in some licencing agreement. So, in this example, Panasonic was actually trying to get a judicial decision because it was the only way for Panasonic to actually be able to produce evidence, which was showing that it had offered frank conditions in its licencing agreement. So, basically what Panasonic did is that it went to its licensees requesting to be authorised to produce those licensing documents. The licensees refused and Panasonic had no other choice to go to the court asking to be ordered to produce so nothing could be actually reproached to Panasonic. The court considered it was proportionate and justified so Panasonic was ordered to produce those licensing agreements. The only thing is that Panasonic had to redact those documents because it could only rely on the data which were not redacted.

Confidentiality as we see is also a big issue in those situations. The UPC is generally very mindful of that that is why it provides for redaction of some documents, but the ordered party can still file a separate request for the access to the document to be even more restricted and procedure regarding the data requested is also key because the broader you are when you request some information the more risk you have not to obtain it because it would be considered not proportionate by the court.

So, although those tools are less powerful than a saisie, they are very convenient to obtain even additional information either when you are a Defendant because you could be in a situation where you do not have any other choice than using those tools but there are also other limited means available. And Alex is going to discuss that. Alex over to you.

Alex: Thanks Mathilde. So, other possible evidence gathering means - but this is all post commencement of proceedings - so you are already committed here. You can get, can adduce witness or expert statements as you would expect. You can ask the court to order experiments and the court itself can appoint experts. But as Mathilde said this is all very limited and in particular you have got to realise that once you have pressed go the Court is trying to get you to a trial date within 12 months. For the amount of time, you have got for assessing a case in front of you, making an application and getting extra orders and then actually producing evidence or producing experiments it is extremely tight.

Now the rules of procedure do allow for cross-examination of experts at trial is generally considered unlikely and it has been very, very rare to date, because a trial is only going to last a maximum of two to three days. You do not have a great deal of time.

But last week in the Abbott and Dexcom case, all four experts were fully cross-examined at trial and the UPC Court noted that this had been an extremely helpful exercise. So, whether this norm of lack of cross-examination is going to continue has currently got a great big question mark next to it.

So, thank you so much for listening to us on this.

END OF TRANSCRIPT

TRANSCRIPT OF UPC PREPARATION AS A DEFENDANT

BREAKOUT #3: START OF TRANSCRIPT

Marianne Schaffner: Hello, my name is Marianne Schaffner I am a UPC Executive based in Paris and have experience in litigation in different jurisdictions in Europe, France, Belgium, Netherlands, Germany and Italy.

We are going to present you a presentation about how to get prepared for a UPC as a Defendant with Alex Driver.

Alex Driver: Alex Driver, thank you very much Marianne.

I am Alex I am a Principal Associate in the IP Team in London focusing primarily on potential patent matters. You will see that Huw Evans is listed there on the slides and was involved in the live recording of the webinar. Unfortunately, Huw is not able to join us today, but Marianne and I should be able to cover off the topics that we discussed in this webinar.

We wanted to start by just setting the scene really as to what we were going to discuss and there were a few outcomes from today that we wanted people to note.

As a defendant in a UPC case you do not have much time so what you have to do very quickly is obviously prepare your defence and to the extent it is going to be a counterclaim for an application you need to do that within a very small amount of time. So, three months if you are facing an infringement action.

What that means in practice is that you have to be prepared. And we will be discussing today different ways in which defendants can get prepared before any action is even commenced.

We will have a look at saisie. Marianne will do a deep dive into the procedure and the consequence of saisie and how defendants can protect themselves and also protective letters are a key tool in a defendant's arsenal in the UPC cases. We will also, I wanted to note that people can conduct their competitive patterns when there are services available to their reach to see what is going on, and we will also discuss things around optouts and the effectiveness of optouts.

We wanted to start with a scenario, and it will be one that is familiar to most. Most people would have also seen colour coded maps of Europe when they are having any sort of UPC webinar, or presentation, or discussion. So, the scenario we will look at is set out here but actor X manufacturing in France and selling across various countries in Europe, including other UPC countries like Germany and Italy. Competitor Y was recently granted a European patent validated in all of those countries - and we here envisaged two scenarios - either it has opted out or it has not opted out of the jurisdiction of the UPC. So, it is a fairly simple scenario.

The question is what can, or should, actor X be doing to mitigate the risk of an injunction in its key territories. Marianne will take us through some of the options but if we have missed anything then I am sure somebody will let us know by email.

Marianne: What might I tell X obviously they are several options available to actor X. First of all, there is the option of filing in a position provided that the patent has been granting them less, eight or nine months say, to start the opposition. You can as well, if the nine months have lapsed, actually start, either national or vocation if the patent has been opted out. Or you can also file before national court a DNI of an infringement, if the patent has not been opted out. Actually, you can start a UPC case of either before the national court as well before the UPC. And this will allow you to get a revocation of the patent for the entire countries which the patent has been validated. So, with the appropriate EPU opposition you will have 39 countries covered by the revocation, while with an UPC you will cover the patents where they have been validated.

It is important before deciding on whether you are going to start a national or a UPC case to check the optouts. And Alex is going to cover that. It is not because a patent has been opted out that necessarily the UPC would not have jurisdiction over any action. You should be prepared for a saisie if you are under some stress threats. And I will cover that. Or you can file a protective letter, and I will cover that just after. We wanted to know how many people have actually filed a protective letter and they are very limited number, while it is important as you will in any case given the timing is very short, you will have to prepare your technical arguments anyway on validity and infringement.

So, the protective letters. What are the protective letters? What is a protective letter? A protective letter is a brief that is filed at the Registry of the UPC. It is provided by rule 207 of the Rules of the UPC and the protective letter aims to provide the UPC with invalidity and non-infringement arguments, as well as evidence before an ex parte measure be requested by the patentee. It is really a pre-emptive defence which ensures that the court will consider your argument before granting a preliminary injunction. Should it be actually assisted by an ex parte application?

Where it is very important to know, it is very important actually to mention that the protective letter is confidential, the patent holder is not aware of the existence of this protective letter until application of preliminary injunction is filed and the court will put actually the protective letter on the table. What is important to know is that it is not because you will have filed a protective letter with invalidity arguments and non-infringement arguments that in the end you will be completely protected and that no injunction shall be granted. Okay, it is not completely bulletproof.

The UPC retains discretion on whether or not it will grant the ex parte measure in light of the protective letter. The UPC will decide on whether or not it will hear the Defendant and if there is an application on an ex parte basis. So, and this is what has been decided by the Division of Dusseldorf in a decision in June 2023, where actually the conversation has noted that the defendant has not filed any invalidity arguments in the protective letter, so meaning that it was an indication for the court that maybe the patent was strong and had no weaknesses pointed out - at least by the defendant. In the end it was held that the non-infringement argument was not convincing and granted the injunction.

So, it is important really to work on your protective letter and not to forget that actually invalidity arguments be present, because it can be taken into account by the court in the end. At the same time, you can say, okay while I am going to file a protective letter at the same time. Actually, it is interesting to note that the Local Division again of Dusseldorf in a decision of last December, has criticised a defendant which had received a letter who was aware of the risk of an action.

The Court said: "Okay you should have filed a protective letter." In failing to do that actually means that the preliminary injunction should be granted because there were no arguments put on the table by the defendant. So here really the Court says: "Okay, you have missed the opportunity to strengthen your defence in response to what the patentee was alleging." So that is why it is important to file the protective letter because actually, okay, as I said it does not guarantee that actually you will have inter parties' hearing that you are going to be heard as a defendant.

It is not either 100% PI-proof. However, it gives you the opportunity to present your arguments if do not just so and that want actually can prove that you are under threat. It can be a quick seize and pointed out by UPC and if in the end there is no PI which is on a prior ex parte basis, but it applied on inter-parties' basis. You will have saved time because you will have all your arguments and if error, if you will have all your arguments on validating the infringement really. Because, as either would say it is very short, you have only a few months to get prepared your defence on the records. So that it is what I wanted to say about protective letters.

Alex: Okay, thanks, thanks very much Marianne. Thanks very much Marianne. It is clear from that discussion that the protective letter is a key defensive tool in the UPC.

Another one is the ability to request access to optouts. There has been a lot of talk about the public availability of documents on the CMS registry such as pleadings, but the registry also has other documents which be interesting in one of the scenarios we have seen. So that is where a Defendant is concerned about the potential patent infringements being brought against them and an optout has been filed.

So, the question is whether that optout has been validly or invalidly filed and particularly this relates to Article 10 of the UPC Agreement and rule 37.1 of the Rules governing the Registry - not to be confused with the Rules of Procedure. Those rules allow any UPC representative to access documents relating to an optout and therefore checking its validity. A wrongly filed optout for example in the name of the wrong proprietor could mean that the possibility of filing a revocation action DNI action is opened up before the UPC.

Importantly, it is for opponents to test the validity of an optout because the registry does not check as a matter of course that is not surprising, that is not unsurprising given there have been well over half a million optouts in European patents. And it is inevitable there have been some issues.

For example, in Toyota Motor Europe and Neo Wireless, a neo-US entity had assigned the German designation of its IP to one of its German subsidiaries. The optout was filed by that neo-USA entity and not by the German subsidiary. And so, the courts have appealed decided that the optout was not valid. In other words, you have to have all the relevant proprietors file the optout. So why does it matter that the potential infringement could start proceedings before being sued themselves? Well, timing may be important. For example, if there is a parallel EPL position and you do not want to stay the UPC proceedings pending the result of that opposition. But it also means that the case will end up in one of the central division seats specialised in hearing revocation actions in the relevant technology - and that maybe considered to be a benefit. Now, I will pass on to Marianne who will talk about saisie.

Marianne: Thank you, Alex. So saisies, as a defendant, when you are aware that there is a risk of an action because you received saisies' letter, or because you are about to launch a project. There is another risk as a defendant as to why is it saisie? The saisie actually is a way of collecting evidence of someone who can detain evidence of infringement. This means that the patentee, or the patent holder, or the licence. the access to the licence can obtain from the court the right to expose to our premises and collect evidence. And this means what is the evidence you can collect. Actually, is just a description of a process or just a description of a product. You can have physical seizure of products, and you can have to communicate as some do and that is to say 'okay'. Also, any kind of books, plans and to one describing actually the product really in relation to the infringement. So, and the objective is to really to determine on whether or not the patent is infringed.

Before the UPC, actually the court will appoint an expert who is often a patent attorney and an eminent patent attorney from the applicant for the saisie. He will be assisted, and they enforce actually the decision. There is no possibility to oppose to the performance of the saisie but there are some actually action that can be taken and especially you have to keep in mind that the saisie can be granted on ex parte basis. When there is urgency so for instance there is a trade fair that actually there are only a few days where the product is going to be exposed, or there is a risk of evidence being discharged. So, what can you do Alex as a definite?

Alex: It is not possible to foreshadow grant of a saisie, so there is no equivalent to the protective letter, but it is really important to have everyone ready for a saisie. And I think probably it is important here to stress the small details so for example if you think you may be subject to a saisie, you need a welcome protocol.

What happens when those bailiffs enter the door or even before they have entered the door or the security gate? Are those security gates' members trained, do they know what they are supposed to do, who they are supposed to ring and then are they supposed to send people onto reception or should be held back at the security gate?

Now, ultimately those bailiffs probably will end up at the receptionist at some point and so that individual - those individuals - also need to understand what their role is, who they need to call and what is going to happen next and really take control of the situation?

Another key step would be ensuring that the relevant in-house and external counsel are contacted urgently. And there should be a protocol for who is contacted and in what order and how - and then understanding of how quickly they can get to the premises.

There may be questions around tactics which could be used. So, for example should the bailiff be kept at reception because they might get slightly frustrated and particularly you might not want them sort of standing in the open area. or should they be taken to a separate room to allow them to have a space perhaps presented with a tea or coffee or something like that?

I think one important thing that really does need to be emphasised, and Marianne you have mentioned this to me previously, is to identify one person who is in charge of all communications with the applicant of the saisie, and potentially even have those recorded in writing. And I think Marianne, you have also made it clear to me, that one person might need to have a back-up so in case they get drawn into a particular area, but really ensuring that there is chain of command and everybody understands what their role is in that situation - if that should happen.

I think we will just move on to some points and separate points around timing.

Marianne: Thank you, Alex. Yes timing. As you may know before UPC everything is about time. Actually, the UPC Rules introduced a frontloaded procedural system. What does it mean? It means that the parties have to elaborate the arguments and evidence in line with their first statement of claim, or of defence. So, as a defendant, actually you have to move very quickly.

You receive the complaint, statement of claim. As soon as you have accepted the service of the statement of claim then the clock starts running. First of all, there is one month that for you if you want to find some preliminary objection about the jurisdiction of the court, the jurisdiction of the Local Division because you can challenge the venue where the case has been filed, so everything has to be done in one month. Okay, but then you have three months from the acceptance of the service of the statement of claim to prepare and file your statement of defence, which will comprise infringement defence and as well invalidity defence even though we have seen that before the German divisions often knowing validity arguments are filed. But in the end, it may have an impact on infringement. So, then you can see there is a question on whether or not you can request if you want that the validity be heard before and by the division, rather than by the Local Division before which the action for infringement has been filed.

For the moment it has not been very successful because there is no request which has been granted yet.

So, then you have to assess the value of the claim to determine what can be the fees. If you were to enjoy the discount fee as SME, you have to prepare all documents that will prove that you can actually enjoy from the discounted Court fees - and obviously you have to look. As we said, just before any case is whether or not the optout has been filed properly and is valid.

You have really to watch the patent of your competitors because you can notice that one of your competitors is going to restore the optout, which mean if that if there is a risk to optout there is a high risk that a case before the UPC starts, and you have to think about the translation of all the documents and that you have everything in the language of the procedure being recalled. In most cases now, they are ran in English and then okay if you are a claimant there is question on whether or not the form just go into invest actually in your litigation and as a patentee you have to actually think about the entrance and find a funder as well.

There is something else which you have to think about and I would say before any case I started is to have your best firm, best law firm, who is going to be ready to assist you as soon as you receive a statement of claim given this very short time and so you should not receive the statement of claim and start thinking about who am I going to hire? For you to be ready in case there is a case to have your consult selected, Alex what is your recommendation?

Alex: Absolutely that is clearly of importance. And one thing you and I have discussed Marianne before is potentially even having two sets of Counsel ready because if for example there is a conflict issue that arises having someone, having another person who you can call who, is already familiar with the technology potentially the patents could save a number of weeks, or even months. Because as we know sometimes those issues can roll on over a long period.

And the final point we have there is really just in relation to PIs when all of this can happen really, really, quickly. PIs can be obtained very quickly and as we know the UPC is willing and does need to look at the validity and infringement in a PI situation, so that technical analysis could have to be done within days - if it hasn't been done in preparation.

And that takes us to the end of our session. Of course, we welcome any questions by email, do let us know if there is anything that has arisen in the course of this discussion or just if you have any other general questions about the UPC we would be pleased to advise.

Thank you very much.

Marianne: Thank you.

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CONCLUSION AND RETURN TO MAIN SESSION

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Huw Evans: Yes, we are back in the main session. I was just going to pick up some points on our session Marianne which came out, which is what, you know, how to be ready if you have a case against you and the main things that we picked up on was really is there is, well the problem is as a defendant you have got to be able to react very quickly so to the extent you can plan ahead, plan ahead, to the extent you do not really know when the threat is coming along make sure you have got what you think might be your defence team in place as early as possible and maybe sort of reserving some law firms ready for yourselves because you do not want to get tied up in conflicts.

But of course, it is not just about the speed of providing your defence, you have also got to think about things like saisies and how you would be ready for those. You might want to think about finding protective letters and we had a good discussion on that and we also said of course that also we have been focusing here on if you are the potential defendant doing infringement action it also works out as well if you are actually the defendant to a potential revocation action as well, so you know, think about what you need to be doing to be ready for that, so it is, to the extent you can prepare you should prepare, more so than what you are probably used to in normal national actions.

So, I think Alex I think in your session you were going to pick up a few points that came out of yours?

Alex Brodie: Alex Brodie?

Huw Evans: Yes.

Alex B: So I was fortunate enough to get the really interesting once which was on saisies with Michael and Mathilde, and I think where we got to on that is if you're a claimant why on earth would not you because you can cause maximum havoc, great pressure and hopefully get some useful information. But you are going to fast track your way towards a negotiation and if you are a defendant it became really apparent and Mathilde and Michael gave some really useful how to's and practical steps on this about get yourself ready training people, have a policy, make sure everyone knows what they are doing, make sure they know not to slam the door in the face of the expert, but to quietly them into a waiting room where they can cool their heels whilst you read the order and phone your lawyers and have, also just put your people on their toes in terms of some dawn raids and warning everybody when they pitch up at a tradeshow that this could happen to them and how to move everybody off the very public tradeshow stand, to a quiet corner to then deal with it, to make sure your reputation is kept intact.

So, Mathilde and Michael had some really useful practical tips there but that was one, so like why on earth wouldn't you go and get ready.

Yes I think what I will add there actually is one thing I have observed by reading a few UPC decisions is that the UPC is quite good at looking at the facts and trying to sort of preserve everyone's interests and where you got a seizure of a stand in a tradeshow the order actually says it needs to be done before the doors open to the public so there are these measures that the defendant can ask for so that minimal disruption is made and, you know, you can sort of try and preserve your reputation as far as possible, so there are lots of things, practical considerations that you might put forward to the court and if they think it is a good thing to do they would order that.

Celine: Yes, very briefly because I think now we are going to run out of time. Yes on preliminary injunctions, so we discussed of course there is strategic I would say mean that it represents because yes it is a very big impact if you are granted a preliminary injunction up front but it can help you of course settle the case without having to go until the end of the procedure on the merit but it can also be very risky if you do not get the injunction, so yes to be used really carefully and to be, the arguments on which you base it to be chosen very carefully and we have seen that so far. The UPC mainly grant its decision on urgency rather than validity so they look at the validity of the patent before issuing the preliminary injunction but they do not go that deep like for example a French judge would do.

Alex Brodie: Yes and I would also say actually for the UPC which is quite different from the UK way of looking at whether to order a preliminary injunction, which is that in the UK really it is all about trying to prevent the risk of harm to the claimant that is caused by the infringement, it is all about the harm, so that is why they do not, the court in the UK, do not really look into the validity and infringement. The UPC perspective is and the continental board's perspective is a little bit different, and they do tend to look into infringement and validity as well, so I think there is sort of like a cultural difference between the court systems.

Huw Evans: Okay I think we are out of time. Obviously, we could go on for a lot more if we did have more time, but I was just going to say thank you to everyone for joining. As Celine and Marianne said at the start, if anyone has any burning questions that they would like to ask please just email them in, contact us or whatever, you probably have our details and we would be very happy to answer them as well.

Marianne: Yes, like I said you can find, you will have a link to watch the webinar again, the recorded part and thank you very much to everyone for joining us today and we hope to see you all soon for another, I think, topic, other topics on the UPC.

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