Gordon Harris: Good day to all our guests today wherever you may be in the world. My name is Gordon Harris from the Gowling WLG global IP leadership team and I am delighted to welcome you to the sixth webinar in our series, the Lifecycle of a Smart Idea. Up to now we have been looking at establishing the intellectual property rights base whether it is patents, trade secrets, copyright or whatever. Last time we looked at enforcing trade secrets rights in the wake of a blatant theft. If you would like to catch up on any of the earlier webinars in the series they are all now available on demand at our website or at our dedicated IP platform goxl.gowlingwlg.com. This time we return to the world of patents and start to look at the strategy and tactics as the game begins. This is the first of twin webinars, first reflecting the perspective of the patent owner and the second next week looking at these early stages through the eyes of the defendant. We are going to do all this against the backdrop of a scenario based on a globally patented invention attracting envious interest and inevitable imitation. To illustrate the issues, we will be calling in at our offices around the world to hear from experts with enormous experience in national and multi-national patent litigation.
So let me introduce our panel to you. First up, let us start in Calgary with Patrick Smith. Patrick is the leader of the Calgary office's intellectual property group and a registered patent agent. He provides strategic patent and lifecycle advice to clients in the oil and gas, pharmaceutical, agriculture, bio-tech, and chemical industries. Over the last 20 plus years he has appeared as counsel in more than 100 reported decisions relating to patents, trademarks and copyright in the Ontario Court, Federal Court and Supreme Court of Canada.
Alex Brodie is in our London office. Alex is head of our UK patent practice and code-sharer of our global firm's TEC sector. Her practice is focused on multi-national patent infringement and licencing disputes usually in the set FRAND arena. She has secured a number of firsts in litigating patents on behalf of her clients such as the first immediately enforceable injunction in a standard essential patent case post trial and the first finding of a essentiality in the UK Courts. Time feedback describes her as a great strategist and tactician and as well as extremely bright, highly knowledgeable and a pleasure to work with. Well we will all be the judge of that.
Over to Paris then where Clémence Lapotre is waiting to us. Clémence is specialised in intellectual property and information technology work. Her expertise notably includes patents, trademarks and software work. She has built a considerable experience in litigation including in complex and multi-jurisdiction disputes as well as in the enforcement, management and licencing of IP rights, search, clearance, risk assessment, opposition proceedings and settlement as well as of course licence agreements.
Moving on then to Munich, we will meet Jonathan Konietz. He advised on intellectual property law with a strong focus on patent litigation. His wide range of experience includes patent disputes in various technical fields particularly tele-communications, mechanics and electrical and medical engineering. Through his work on numerous high profile standard essential patent FRAND cases, he has also developed in depth expertise in patent related antitrust law and cross border licensing negotiations.
Now Jamie is currently based in London but has actually been in China for the last four years. He led our Guangzhou office and has extensive experience of all aspects of the court system in mainland China and he understands the complexities and cultural challenges very well with very significant experience enforcing and protecting intellectual property rights in both global court disputes and international arbitrations both institutional and ad hoc, advising clients in the aviation, automotive, medical devises, consumer electronics and telecoms sectors.
Last but by no means least, Alexander Christophoroff is waiting for us in Moscow. He has been a partner in the Moscow office for ten years. His practice includes litigation and appeals on the entire IP spectrum and unfair competition as well as trademark prosecution. His numerous court cases set many precedents including in the highest Courts of Russian, the Supreme Court and the former Supreme Commercial Court. He says that in the last century, he was General Counsel of the Russian Patent Office and I wonder what he is planning to do in the next century.
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Gordon: So let me set the scene for today and today I am in an interesting and different position. I am the client. I am the managing director of Tidecore. Tidecore is a company involved in sustainable energy creation and storage has developed a revolutionary new method of storing electricity under water using tidal flow, buoyancy and predicable currents. The potential is global so realising the technology would be clearly visible in use, we opted for a global patenting programme majoring on coastal countries and big energy users. The countries covered include Canada, the USA, Russia, China and Europe. As a hedge against possible complications following Brexit we did not designate the UK in the European patent application but took out a separate UK patent. Now obviously as we all know this was probably a mistake, it is not strictly necessary because as we now realise the EPC is not a piece of EU law but we are where we are. Our technology involves using resistance to water flow and the buoyancy of large airfield containers to first generate and then store electricity. The mechanical construction required to do this is always located to land and cannot function in deep water. Although there are similarities between the patented technology and known tidal imaginary generation technology, we the patentees, have persuaded patent offices around the world that there is enough originality in our technique to warrant the grant of a patent although it took some years of office actions and a lot of money. The Court patent is under opposition in the European Patent Office. It was amended after the first round of the process before the opposition division which it survived as amended and there is a pending appeal to the technical board of appeal. The technology was an instant and highly profitable success and there has been substantial demand for investment. There has also been substantial interest in imitating our process. What a surprise? We have identified infringement all over the world and are actively considering the possibility of commencing proceedings in North America, Europe, Russia and China as well as Brazil and Australia. We are concerned by the erosion of the uniqueness of our invention and we are keen to make a strong stand in at least one or two jurisdictions, possibly seeking immediate injunctive relief. Each of our infringers is unique and they are not part of a group company. To assist in the process of deciding where might be the best place to start proceedings to gain the most immediate impact the Tidecore board have asked me to identify a global strategy pinpointing the benefits and possible problems involved in starting litigation in each of the jurisdictions where we have found infringements. Now knowing that Gowling WLG has strong global covering across many of the countries I am interested in, I have asked them to give me a global view and I have gone to two lawyers there that I know well, Alex Brodie in London and Patrick Smith in Calgary and asked them to take the lead both in respect of their own global offices and also firms in other countries where Gowling WLG do not have offices. So let me allow them to introduce the topics and talk for me and I will be looking forward to receiving their advice a little later on. Patrick, I think you are going to kick us off or is it Alex? Perhaps Alex is going to kick is off.
Alex: Thank you Gordon. So, a really interesting problem that Tidecore has got on its hands and there are a lot of options available to it but that is not really the point is it? A lot of options is all very well but you have got to identify your goal, you have got to know what you want to achieve and how important it is. So we will be looking at how we can narrow down and deliver what Tidecore need for their business goals, but we have also got to bear in mind what is the potential problem in the background haven't we because Gordon told us that they have got appending technical board appeal decision coming and this could, at its worst, knock out the patent entirely in continental Europe, it will leave the English patent alone because they went for a separate patent right but depending on the nature of the attack and the decision it could affect the validity and how we approach the rest of the patents in the portfolio. That is one to bear in mind for later.
OK so Gordon told us that they want to sue, they want to sue everyone everywhere but is that really the right decision. It is time consuming and cost consuming. However, let us take a look at Gordon's options. So the four things I would like to mention n infringement. First one, maximum impact so each of the infringers on the same day crucially in each of their local countries, maximum cost, maximum time but huge show of strength will rattle the industry at large so highly efficient in shock and awe, also highly efficient in emptying one's pockets. Surgical impact might be better. Hit the most high profile or the most voluminous infringer in the friendliest jurisdiction and sue them hard. Engage effective PR and let the remaining infringers start to worry. If you can secure an early victory through an interim relief procedure or a quick jurisdiction, use that early victory to drive settlement so you secure an anchor tenant with maximum PR. Now at that point you approach the rest of the market from the position of strength.
Third thing, mixture, because this is so spread out globally it might be that to create maximum impact you need the surgical approach but then there may be two or three jurisdiction to ensure globally that your strength has been felt and you are not being written off as just a UK company or just a European concern so it might be you need to go on more than one continent.
Then the fourth thing, nothing to do with IP rights, additional attacks. Think creatively. Is there any other way you can unseat your infringers? Are they breaching environmental regulations, do they have relevant permits for access to the coats to do construction there? Can you get them in any other way so you come at them sideways rather than also hitting them for patent infringement. So that is litigation options. Gordon told us they are blood thirty and they want to sue but we should also just challenge that with the client and say that is all very well but what about the money? You said you did not want a pot of gold but if there is one, do you really want to throw it away so should we be taking a look at encouraging the client to think about their possibility of licencing their infringers and turning them from a problem into a revenue stream so should we putting in place a non-disclosure agreement to open up licencing discussion should we be considering inviting them to arbitration. There is going to be a big topic of arbitration addressed in one of our forthcoming via an international arbitration team so I will not mention it here but what I will say it is hugely effective in multi-jurisdictional patent disputes. So those are all just the strategies to bear in mind. Sue them hard, licence, come at them sideways but Patrick it is all very well having lots of good idea, but how do we just go around like getting hold of this and implementing it in a practical way for the client?
Patrick: So before we jump into the individual countries we look at what can we do primarily. I think it is important to consider three big topics that any client should face when they are looking at international litigation and I have broken these down into three categories. One is getting ready for the litigation, what steps should be done before you actually start the litigation. The second one is implementing and coordinating the strategy and that is very important because as we will see any admission that happens in one country will be rolled out and will be used against the clients in every country and the third thing is very important as well which is client budgeting and client reporting. How does that take place and I tis important to get the agreement up front so when we tackle each of these three areas first. So first thing is getting ready for litigation so the first thing we look at is look at the client's entire patent portfolio it could patents or patent applications because it could be that mistakes are part of the claims inadvertently they made their way in there. So every patent the client has should be reviewed to see if it is in the best form for litigation. There are steps depending on the national law that a plate, there may be steps for amending patents or patent applications that is the first thing.
The second thing is getting ready for documents so the client is going to have a trove of documents that we are going to have to go in there and first identify, collect, sort, that is very important so what we will do is we will conduct witness interviews with potential witnesses at the client. Our firm has invested in IT and we can go in and scrape documents, electronic documents and we will be able to put them in a central repository of documents that will have electronic access to lawyers working for a client in whatever jurisdiction they will have and as part of that process we will code them based on the issue, based on author, based on date and once we get familiarity that can be rolled out to all the jurisdictions we will be able to help individual jurisdictions rather than having to learn all these documents again the firm will be in a position to know what those documents are and how to use them in various jurisdictions. Now the disclosure requirements in different jurisdictions are different and it is part of a full disclosure jurisdiction and there is a definition of relevance. So what has to be produced in Canada will be different to Moscow or London, we might see a little bit of [unclear 00:14:28] and as part of this, one is going to be to potentially identify witnesses of the clients company but also when you are dealing with fields of technology that are relevantly narrow in scope. There may be a limited number of experts and patentees have the great advantage here because they know litigation is coming whereas the defendants do not and if there is only a limited number of experts, now is the time to retain them before your opposition can. So that is just another thing that should be considered.
Now the next topic that we look at is implementing and coordinating strategy and that could be done with the Gowling WLG's professionals who are retained in individual countries and we have also been a great network of working with elite lawyers in other jurisdictions where we do not have offices but what has got to happen is there has got to be a team approach because if you have got somebody in a country that is not playing with the rest and makes admissions then the defendants are going to know about those admissions and they will be rolled out in every other jurisdiction so ensuring that there is a consistent message is crucially important. That is the first thing and the second thing is it could be that we are going to have success early. That is what we want. We want to develop some momentum so that we can keep going and if we have got that success then hopefully it will continue but there could be inevitable setbacks. Litigation is risky. You never know what is going to happen once you go into a court room and so what happens if you are hit with a setback? Are you going to have an explanation about why that happened on one jurisdiction? It could be a difference in ordinance, it could be a difference in procedure, it could be a difference in national law but you want to develop one of those explanations so that you can over that setback in other jurisdiction.
The other thing in this category is choosing when and where to assert at. We are going to talk about individual countries but if it is very difficult to get an interim injunction in one jurisdiction and your goal is to get that early knock out that you talked about well there may be some other jurisdiction should be favoured over that one jurisdiction.
The final thing is in terms of budgeting and client reporting depending on the resources that the client has just keeping track of multi-national litigation could be complex and so were not able to help with that if the client wishes so we could have either one or a few points of contact so that we can provide an oversight in reporting to meet the client. And finally budgeting, budgeting is really, really important so where a firm has invested in software that allows us to monitor and analyse the budgetary expenses on particular files but it is important to reach an agreement with the client about how much things are going to cost and what happens if there is unforeseen circumstances arising in a particular jurisdiction. So that is just an overview of things to consider so now Gordon if I ask you in terms of the goal, what is the goal of Tidecore in terms of going forward?
Gordon: Well the board's initial view is that it wants to make a statement to the market. We will not sit by and watch our technology stolen. We are not looking for a pot of gold at the end of the litigation rainbow, our objective is to deter others from copying and encroaching on our market. That said, Tidecore is prepared to consider licencing the technology in a controlled way but from a position of strength and hopefully monopoly and with trusted partners, not necessarily those who have been trying to infringe us. The turnover and profit in our business means that we are willing to contemplate maximum impact but only if we are assured that we have a good chance of maximum success so I hope that helps give you a steer as to how the company wants to take this forward in the light of what you have just been talking about. Alex…
Alex: Thank you Gordon. That is really helpful so we are going to sue them and we need to create, as you said, maximum impact as fast as possible and then come at things from the position of strength so I think there are three things we need to identify in the jurisdictions that are open to you Gordon. One, what options are there for interim relief? So something quick that is going to hurt them. Number 2 is what is it about that jurisdiction that could deliver a really good outcome for Tidecore in due course at trial, and 3 are there any bugbears that we should just be aware of when considering that jurisdiction because there is no one jurisdiction that is 100% claimant friendly or 100% defendant friendly unfortunately. So looking at the jurisdictions available to you, we do have two of the jurisdictions that are typically considered to be more tricky or more difficult to engage with than others, China and Russia so what I think we should do is start there because they could be great for you given the amount of coastline involved and the fact that your products are all along the coast and that is where your patent is being infringed. So I introduce Jamie to speak about three items in relation to China.
Jamie: Thanks Alex and hello Gordon and thanks that was very, very helpful. So I am going to start with Alex's second question if that is OK which is what would I see as the real benefit of going to China for Tidecore and I think the prize for Tidecore in China is the ability to obtain a final injunction and a final injunction at a relatively cheap cost in order to try to stop large scale infringing manufacturers flooding both the internal market which of course is huge and but also the rest of the world market via exports. Now I do appreciate the second point may be less relevant for Tidecore because we do not know of any connection between different jurisdictions it is worth bearing in mind. So that is the prize and I want to touch on three points in relation to that just so you are clear the current position of litigation in China at the moment. The first point to make is that there are now specialist IP courts in China. It has always been seen as [unclear 00:21.06] jurisdiction but actually these IP courts have hugely improved the prospects of foreign claimants [unclear 00:21:!3]. Surprisingly, China is actually quite a claimant friendly jurisdiction to litigate.
My second point is one about neutrality and you hear a lot about that when talking about litigation. The courts are getting better these days frankly but one thing we would need to think about carefully right up front is the choice of jurisdiction in China. It is fundamental for Tidecore to get into the right jurisdiction within China. For example getting a strategy together to try and avoid the defendant [unclear 00:21:52].
My third point is in relation to costs and timing. I said one of the benefits was that it was relatively cheap in China. Well for a single patent case, you are like to go from filing to final first instance decision in less than £100,000 and it could be considerably less than that ending on the technology and timing wise, you are talking nine to 12 months from filing to a first instance decision and now you are only going to get one day in court but for that cost and given the size of China, there is an attraction to China if we can find the right manufacturer.
Turning now to Tidecore's interest in interim relief, and in particular in relation to an interim injunction. I think the first point to note is China probably is not your jurisdiction. That is what you are after as a sort of short sharp shock. It is in theory and in law possible to get an interim injunction in China and in fact our colleagues in China has done that in relation to design patents but the reality is particularly for an invention patent it is extremely rare but there are other interim relief remedies that you could think about so for example it is possible to make applications for evidence and asset preservation orders and you can do that fairly early on in proceedings and the benefit of that is that an evidence preservation order is successful that can seriously disrupt a defendant's business going forward so one to consider.
So now to the final points, what are the bugbears or challenges in China and of course in a jurisdiction such as China there are challenges. I am going to pick up on two. The first one is in relation to obtaining infringing evidence. The way that the court system works in china you do require notarised evidence and if you are going after a manufacturer which may require you to obtain that evidence from a factory that would certainly require the need to instruct an investigator and it is fundamental we are there to help you with that to ensure that private investigator is robust and plays by the rules but the fact that you do have to get into a factory potentially and you have to get the notary in, that is challenging, it can be time consuming and there is certainly no guarantee at the start of the proceedings that that will be successful so you need to factor that into your overall strategy and finally and I know Tidecore and Gordon you have explained, the pot of gold is not the end result but do remember that damages in China remain low and the prospect of recovering your legal costs is also very low. Litigation in China is not about compensation. If I circle back to what I said right up front, really the goal and annual prize is obtaining that final injunction at a relatively cost effective manner in a very, very substantial market. So that sums up a quick, a quick wrap up of China.
Alex: Thanks Jamie. That is really helpful. Alexander, do you want to do the same for Russia.
Alexander: Well to some extent so in this respect actually it is much like China with Jamie greatly explained. It is a very good jurisdiction for litigating infringement just certain situations. So first, the market in Russia is also a giant one so if you are interested in the Russian market then you definitely should go litigating in Russia. Yes and if you are just choosing where to start the litigation in Russia is fast and very cheap so the trial takes like six to nine months maybe so it is even faster than in China and respectively cheaper since the faster is the trial, less lawyers work it involves etc. but the contrast is that first you should have all evidence at hand as there is no discovering in Russia you can rely on the judge to collect evidence so there is not even evidence preservation orders. You should not expect this so the judge can only request the defendant or a third party provider specific documents not more than that and [unclear 00:26:54] relief is almost not available in Russia so you cannot expect that for the high amount of damages like is in China so the most available price you can get is the injunction which gives you the market.
For this specific case the most important factor is that as I understand a patent is not definitely [unclear 00:27:28] so it is questionable. To fight with the easiest of questionable evidence is probably not very appropriate to choose Russia as a jurisdiction so we can have the appropriate system so any [unclear 00:27:47] are tried in the procedure in the patent office and this is why it is strict and what amendments it allows. So it is good if you have just to drop one claim for example and keep the other claims or the way independent claim, to drop an independent claim and replace it with a dependent claim yes. If for example you want to combine features from a few independent claims this may be already a problem so if this patent is questionable I would commence starting with Russia here but otherwise it is still one of the first choices.
Alex: Thank you Alexander. So Gordon two really interesting insights there so nothing going on the interim relief not good for a damages path but really attractive from a final injection quite speedily, you know, caveats around patent amendments and also around disclosure evidence but some really good options there. So could I bring us closer to your home and into Europe, Clémence can you just explain to us what you would do in France?
Clémence: Yes thank you Alex. France has become [unclear 00:29:03] as a patent jurisdiction which makes it very attractive for Tidecore but in order to ascertain whether France is a convenient form in our case I think that three main topics should be assessed. How Tidecore can obtain evidence in France where there is no discovery procedures as the proceedings on the merits will be convicted and can obtain measures and how quickly.
So let me start with the evidence issue and in France like many other European countries the burden of proof is on the claimant and patent infringement can be proven by any means and take up for instance can call upon private investigation services. But the most effective measure in France with procedure I would like to emphasise three points, patent take up applying for it, what kind of evidence can be gathered and the traps that should be avoided. So as far as application process take up can request the Court ex party to have your authorisation to have a belief that combined by delivered experts most of the cases patent attorneys are IT experts with the assistance of police officials if needed and the premises of the alleged infringer or any third party involved in the infringement and during that procedure the belief can be described to take pictures of the infringing products and processes used but also collect any relevant documents demonstrating the extent of the infringement and the prejudice suffered by Tidecore. It includes information relating to the sale network or the [unclear 00:31:11] sold for instance and it can be very useful to these types of things in particular because evidence gathered in the Court in procedure in Court may be used to support further action abroad provided that the seizure order has been loyally obtained of course and remain proportional. However we have to keep in mind that a seizure is an intrusive procedure and therefore it is how you regulate it and in this respect special care must be taken to preserve the [unclear 00:31:51] confidential information of trade secrets of the seized party who will not for sure as takes to change the validity of the measure on this ground if we go too far.
So in this respect the implementation of the confidentiality clause limiting access to sensitive documentation to patent attorney's lawyers and judges and therefore excluding the parties can be a very smart way to prevent a seizure from being invalidated for this reason. I would like to point that seizure is highly dependent on the filing of action on the merit within the time limits provided by law and failing that the seizure will be void and take off will be prevented from using the evidence gathered. So this is why my second point will be dedicated to the action on the merits focusing on timeframe. In France the validity ends infringement of the patent assessed within the same proceedings. It can speed up the process since the decision on the infringement will not be stayed if the validity of the patent is challenged by the defendant. However nevertheless there will be several sets of arguments, submission and evidence exchanged between the parties before the case is ready for trial.
In and out case the action should not be delayed pending the outcome of your position before you can [unclear 00:33:31] which is a good point because the stay of the proceedings is only pronounced by French courts when it is in the interest of the proper administration. So the Court's will assess whether the European patents can uphold a title in it's current form or an amended form if the stay is a delaying tactic that can have prejudice consequences for the patent, we know that well.
So in the present case given that patents has survived for instance proceedings that would chance that no suspension will be run to by a French court. However in any event given the nature of our patent case I think that a Court may not be able to obtain in France a decision under merit within 16 months of the seizure. So as a result Tidecore may want to seek quick and ethical measures using the interim proceeding route and in France interim proceedings may be applied either before or after the action on the merits. We have less either before or after the action on the merits. We have less of any urgency requirements so a judge will simply conduct a preliminary assessment of the patent but it achieves second whether the infringement is established with a certain degree of certainty and failed to consider if there is a significant risk of prejudice for the patentee because they are branching into interim measures such as injunction to see the act of the grant of money and what is very interesting for you with parent country when it comes to interim measures is that it can be requested in one member state and ordered to have effect all across the EU. In France obtaining interim measures usually takes three months which may seem longer as a matter of fact compared to other jurisdiction in Europe such as Germany and in this respect I will give the floor to my colleague Jon from our German office.
Jonathan: Thanks Clémence so why I consider Germany in the case at hand, well it's an important market in Europe and it's at least that is what people tell me, how to respect a jurisdiction also so a decision, you know might have an impact here and this is of course particularly true for a patent. So for the purpose of this initial discussion I will just focus on type of interest and a quick decision to send a strong message early on during the overall litigation approach because Germany is effectively a good place for this.
So in the next couple of minutes I will give you some key aspects about the German infringement proceedings on the merits and preliminary injections and both could give us a provisionally enforceable injunction. Now in Germany a first instance infringement judgement can be available in less than a year because we have a bifurcated patent litigation system which means that the federal patent Court will deal with the validity of the patent and specialised patent chambers of the normal civil Courts will with infringement so the infringement Court can issue a Judgment while the fate of the patent is still in question, but before we get too enthusiastic about this to be fair there are of course things that can slow down the infringement proceedings also in Germany so in particular we need to keep in mind that the infringement Court can state the infringement proceedings pending at first in the validity judgment or at least preliminary opinion by the federal patent Court but only if it thinks there is a high likelihood that the patent and suit will not survive.
Courts are rather hesitant to stay the infringement proceedings because it would basically undermine the system but it can definitely be an issue in particular if the defendant gets a strong prior it was not considered in the prosecution process. Now the second thing is taking of evidence if we get to a point in the proceedings where the Court needs to appoint a technical expert then this will significantly delay the case which brings me to the next point preliminary injunctions. They are available in Germany and can be obtained within a few months or weeks or in very urgent cases even when I say preliminary injunctions are available I do not mean available in theory or on paper but German Courts are absolutely willing and ready to grant preliminary injunctions and I have experienced this many times but nevertheless the hurdle is high and there is a risk we need to be aware of. So in order to obtain a preliminary injunction when it comes to infringement we need to have more or less a clear cut case so no complex technical issues should be at hand where a judge would be comfortable to render a decision quite quickly but would think that we need expert evidence etc. So we need to be prepared and feel comfortable with our infringement story and it should be well documented and we could also use screenshots operating instruction photos everyday etc. but we need to have this sort of stuff to have a chance of success here.
The second thing is the validity of the patent must be sufficiently secured which usually requires that at least a positive first instance decision in opposition or another proceedings are available which I understand is the case here and third we need to have a matter of urgency which means the applicant must substantiate to have done the best to enforce the rights as quickly as possible after becoming aware of the infringement and as a rule of thumb the applicants should not wait longer than a month to react after becoming aware of the act of infringement.
So what is the risk of the PI, should the PI prove to have been unfounded later then the applicant must compensate the upon and for all energies suffered as a result of the enforcement of the preliminary injunction.
So to sum up there are a couple of things we need to further explore with title but if the goal is to get a quick decision somewhere we should definitely consider Germany.
Alex: Thanks Jonathan so Gordon so far we have been hearing that in France we can go quickly and secure some evidence in infringement and use it elsewhere to bolster a good case somewhere else and that seems a really interesting idea. In Germany potential prelim but I think a really good idea is the quick infringement decision with persuasive judgment.
I wanted to talk to you briefly about UK but I appreciate you are quite knowledgeable about this jurisdiction already. A couple of things to mention pre-action, preliminary injunctions yes available probably not in this case unless we are aware that something is about to launch something and we can stop them coming onto the market but if they are already on the market, already infringing we are even more likely to go to trial unless we can say that damages won't be an adequate remedy for us so in terms of preliminary report measures I doubt that is going to be the one for us but something we might want to bear in mind is the pre-action application disclosure if there are information documents that we need.
The benefits of the UK is it's a big jurisdiction in terms of you will get a fully articulated case here. You will hear expert evidence, your patent will be tested, the infringement will be tested, the disclosure will be then and you will get a big judgment that is properly explained and tends to be quite persuasive in other jurisdictions. It will take a bit longer, you are talking 12 to 15 months in the first instance at the moment and it can be significantly more costly in action as say Germany or Russia but that means it's also significantly more costly if you are a defendant, they are going to have to take you seriously, this is no joke for them so if you want to drag someone through the Court and cause pain it is a good jurisdiction to be doing it in.
In terms of the EPO UK Court are really unlikely to stay it's proceedings depending the TBA decision unless it is about to come out on Monday or something like that OK.
So turning to North America where I appreciate you have also go issues Gordon, so, Patrick.
Patrick: Yes, so I will target what both Canada and the US, and if I do it at the same time, then it provides a good comparison of the two. So first both of these jurisdictions are full discovery. The procedures are different but you are going to get a lot of documents and a lot of information from the defendants in each of the jurisdictions.
One of the things though is that… in terms of the procedure… in the United States, a judge will construe the patent and typically juries will decide whether there is an infringement or validity, which is a pretty interesting scenario giving that you are fighting about technology in the United States, yet you have got a jury of people who are not technically orientated who are going to make those decisions. In Canada you are going to get a judge alone, that is the first thing.
Now the second thing is, where are you going to sue within the new jurisdictions and let me just set a contrast of the two jurisdictions. In Canada, most IP litigation is in the Federal Court and the Federal Court sits right across the country. So if you get a lawyer in Canada, whether they are in Montreal or Vancouver or Calgary or Toronto or Ottawa, they are going to be litigating in the same Court. And any Federal Court basically has electronic means, video conferencing to help make the country that is geographically bigger, making it smaller so people can litigate in the same Court.
In the United States what they have done is they have broken the country into circuits and within those circuits there are districts and you have got to sue in a place that has a connection to the defendant. So there is more opportunities for form shopping in the United States and there is different success rates for patentees depending on where you choose to litigate. So where within the United States you choose to litigate is an important consideration.
Now the next thing I want to ask about here… talk about is the availability of interim injunction. In the Federal Court in Canada it is virtually impossible to get an interim injunction in a patent matter where the defendant is solvent. That is just simply the reality. Very few have been issued in the last 25 years. In the United States it is much easier and, as we are going to see, much more expensive as well.
So what is the cost? So I am going to use US dollars so that we can have a better comparison. In Canada a budget for a [unclear 00:45:32.7] action probably $1 million dollars, that is what you are looking at. In the United States, I think $5-$10 million dollars would be probably a more realistic budget against each defendant that you are going to go after. If you are going for an interim injunction, I would not be surprised for somebody to quote you $2 million dollars. So the budgeting part that we talked about earlier, how important that is, that is a very, very important consideration in terms of considering strategy. We will come back to that.
And then in terms of the availability of damages, it is similar in both places, either damages or the kind of profits that are available in both places. But it is going to be placed upon the incremental value of the invention as oppose to all the profits that are being made by a defendant and so there is going to be some financial considerations in both jurisdictions, but a monetary remedy is available in both places.
So that is the… so that is basically an overview of Canada and the United States in terms of the litigation processing. Alex?
Alex: Thank you Patrick. So Patrick, I think you were going to summarise this point and obviously you will note that we need to speak to, I think, Brazil and Australia Gordon mentioned.
Gordon: Yes I would like to hear about Brazil and Australia definitely, thanks.
Patrick: So we have… obviously a firm like ours has close ties to elite lawyers and jurisdictions where we do not have offices and that is not the case here. So what we will do, we will reach out to our colleagues and provide you a similar overview of the process in each of those jurisdictions, along with a ball park cost of what that is going to be. So accordingly, here is what Alex and I would like to do.
So first of all we want to take our time and review your patent rights just to make sure that they are in the form that we want them to be in before litigation, that is the first thing. And at the same time, what we want to do is, we want to come in to your offices and interview the key people; the inventors and other people knowledgeable about the development of the invention in the commercialisation and marketing of the invention. They can be potential witnesses and they are also going to help us identify potential sources of documents.
And we would like to bring our IT when the time is right. We will bring our IT people in and we will help scrape the documents electronically from your databases. We will put them in a litigation repository, electronic repository of documents and we are going to go through some coding to basically sort through, summarise those documents in terms of a way that makes it searchable. That is going to be utilised… that can be utilised by employers, every employer in the world. So that is the first thing.
The other thing is… some of the numbers are very large in terms of a litigation budget. So what we would like to do is to give you a full range of possibilities of what things are going to cost in each jurisdiction because I think that is an important decision or discussion you are going to have to have with your board. Now, obviously, from what you have heard today getting initial success is really important in a word… we have got the consensus view that the best place to obtain an interim injunction is going to be in Germany and so what we would like to do is start getting ready to bring that action in Germany as well. Alex, did you have anything else to add?
Alex: No, I think that was a great summary. Gordon, did you have any questions for anyone?
Gordon: Well I have got some questions for a few people. I would just like to sort of pick up my own thoughts generally overall on what I have just heard first. I mean… it seems to me as though all the jurisdictions we have just discussed have got, to some extent, their own advantages.
I really like the speed to final injunction, the speed to trial that I am hearing about from China and Russia and I like the costs in China and Russia as well as… you know they both sound imminently affordable. I am not sure, in my particular case, that either China or Russia is the optimal place to start because I am not sure a judgment gained there will have the impact around the world that I would like. I think if there was mass infringement in one or two venues then that might be really excellent but you know… for these purposes I prefer to think of maybe something that will have a little more impact.
I really like the sound of the Saisie in France. I like the idea of getting this evidence that I can then use elsewhere because I know that the disclosure rules in the UK, where I am resident, and I have had a lot of experience in the US, I know there are limitations on what you can do with disclosure documents from the… arising in either of those countries. So it is really great to hear that disclosure documents in France might be useable elsewhere and that alone, actually makes me wonder whether, in addition to anything else we decide, maybe I might say "well I would quite like you to kick off in France so that we can get a lot of stuff together".
Obviously, you know, I am paying you for your advice, and Germany is, of course, very well known as an interim injunction jurisdiction and I have been on the wrong end of that previously. So, you know, I understand exactly what can happen and what can be achieved there. In terms of sort of huge global clout then I do not really think you can beat the UK for a judgment. I think that the quality and the thoroughness of the litigation procedure in the UK and, if I may say so, the fact that it is not dependant on a jury. That you just have an extremely skilled Tribunal; you have highly specialist counsel; you have highly specialist, normally scientifically qualified judges… you know I have… place a lot of faith by that.
So it is fascinating to hear what I have heard. I will take your advice subject to, I think, my… possibly saying "well I want to go in France as well" because I like the idea of the Saisie, I like the idea of the evidence that I might gain which might give me a lot of leverage in other parts of the world. So that is terrific and thank you very much indeed.
A couple of specific questions. I have heard of things called "utility models" in both Germany and China, could I hear from Jonathan and Jamie on the subject of utility models?
Jonathan: Sure yes, I will just go first (laughs).
Jamie: And then I will follow on (laughter).
Jonathan: So, yes, that is actually a good point. I mean utility model protection is something that can be an interesting strategy in addition to patent litigation in particular. Now, what that is… it is basically a full IP right relating to an invention and the interesting thing about utility models is that it can even relate to the very same invention of a pending patent application and so we could then basically branch off utility model and just register it within a couple of weeks.
So that would give us a right to start an attack based on invention actually that, in terms of patenting, is still in the process of the application. So this is a, or can be a, great strategy in order to stay or get ahead of competitors, potential infringers. Now, especially if there is a tendency of imitation, so we should definitely take a closer look and do a portfolio and see whether there are any interesting pending applications relating to that technology and consider that.
Gordon: Thanks very much. Jamie, what is the China position on this?
Jamie: Okay well not too much to add actually from what Jonathan said, because in China utility models team pretty similar to that which has just been described and indeed it is a well‑known prosecution methodology that if you want to get quick protection, often you will file both utility model and an invention patent on the same day.
The utility model, in China, has a benefit that it does not need to be substantively examined and therefore you can usually get protection within six to nine months. Whereas with an invention patent, in China, you are probably talking two to three years. So as long as it is a structural invention, as oppose to a process, which [unclear 00:54:44.1] models in China do not cover, then it is a really useful strategy to consider and one that is… has many advantages, so it is certainly something to talk about.
Gordon: Thanks very much. Another topic I would just like to ask a question on before we sum up at the end is this… you know I have been involved in patent litigation, I have a lot of experience in the field and I know the value of expert evidence, so I know how decisive and how influential expert evidence can be. Of course, I am very conscious that in the UK, in Canada and the USA the use of independent experts is common. I know that in Germany it is not, that there tends to be a Court appointed expert and I know that experts are not a big deal in China and Russia either.
But bearing in mind the soft spot that I have developed, during the course of this discussion, for the Paris, Clémence can you tell me, what is the position on the use of expert evidence in France?
Clémence: Oh yes. Before French Court our expert reports are… are not only authorised but also recommended. The fact is that even though patent cases are handled by specialised judges they have no technical background. So it is very important for us to explain the invention and make the infringement transparent for the judges. In this respect, we have e.g. the expert report option. It can be Court operated experts that are the authority of being registered with French Courts, but it can also be private experts reports which, we know, are very useful.
And French judges will have no objection to rely on foreign expert reports for instance, as long as the [unclear 00:56:41.6] expert is qualified in the field of the invention and as long as report is translated into French. So I think this is an authorised and recommended piece of evidence.
Gordon: Thanks very much indeed.
Patrick: Can I ask you in terms of a retainer, what… can you just explain the process of an upfront retainer for a large litigation file like this?
Alex: Yes, I mean Patrick, as you know, as a firm we do not operate any set policy on upfront retainers, it all depends on the case in front of us. So you know if there is an immediate and very significant outlay of cash, then we will often ask the client for the money for that, but we do not tend to ask for money on account for fees. And by "an immediate payment" I am thinking of something like you know hiring a team of private investigators to travel to the coast in whichever country to obtain evidence of infringement or having to retain a testing house to commit you know litigation level tests on something before we commence litigation.
Gordon: Let me tell you, as the client, what I do not want is surprises. I know patent litigation is expensive and I am coming into this knowing where I am going. I want you to be upfront with me about your estimates around the world. I then want regular billing, I do not want big surprises, I want to be billed on a regular basis so that I can see how you are doing against those budgets and if there is something that happens along the way that derails the budget, for whatever reason, I want to know about it immediately. And those are the core things and I know, that as a firm, that is what you do. So that is why I am here, having this conversation.
Last question from me is about appeals. You know, am I going to get unseated by appeals here? Am I going to get delayed? You know, if I have been successful at first instance, what happens to my judgment if I am appealed? Any particular comment from anywhere on that? I will just hear from one country.
Alex: Yes, Jonathan do you want to take that one?
Jonathan: Yes, sure I can do that. So of course the appeal will delay the final infringement decision for example. But the positive thing to think about here and I think the true chance is that an injunction would be provisionally enforceable usually. What that means, we need to pay a security payment covering potential damages. It can be relatively high.
One case, I think, you… a lot of people may know is Qualcomm v Apple where, I think, last year shortly before Christmas a lot of iPhone models needed to be taken off the German market. And that was because they made an insecurity payment and in this case, based on a first instance judgment, we can still enforce the injunction for the time being, which can, for a certain timeframe, increase the pressure enormously and put us ahead.
Gordon: Okay, thanks.
Alex: Thanks Jonathan.
Gordon: Well thank you. Thank you to my international panel. Thank you for your advice, thank you for your considered views, which are extremely valuable. I think I will just step out of role now back into my usual persona.
Thank you to everyone who has attended this event today, we really appreciate your interest and hope we have been able to give you some real insight into the options available at the outset of litigation.
My take away message from all of this is it is all about preparation and co‑ordination. Doing the groundwork, interviewing the witnesses, pulling things together early can save you a lot of time, trouble and money later on. So getting the preparation right is key and on co‑ordination, many of the pitfalls in multi‑national litigation come about through people flying solo and not behaving as a team.
The key to success is to ensure that everyone knows what is happening and someone is at the centre of this pulling the strings, overseeing the communications and ensuring that what looks like sensible submissions in one country do not have disastrous effects elsewhere. It takes teamwork and it takes a real focus on what the client wants to achieve and then ensuring that the litigation team works closely to deliver those goals through a co‑ordinated strategy.
And that means that it is not all about just one firm. That when you are working with a team of firms, because not everybody has an office in every country in the world obviously, that you do not work with people you know, you trust, that you can talk to and communicate with freely as part of an enlarged single team.
Right, next week, we are going to be looking at exactly the same set of events and facts but from the other side of the fence. We are going to be looking at the defendant's view. In the meantime, a recording of today's event will be appearing on our website and that goexcel.gowlingwlg.com very shortly if you would like to watch again or share with your colleagues. And I know that this is holiday season so if you have got anyone who is away at the moment and might like to see this when they get back then you can point them in that direction.
Thank you once again for your kind attention today. We look forward to seeing you again and the broadcast will close automatically in a few moments. Thanks very much indeed.