Although the United States may still occupy a leading position when companies are deciding where to enforce their patent rights worldwide, patentees who hold patent rights in multiple countries have started opening up different fronts in intellectual property battles by launching infringement actions in Europe as well. Here are ten things that companies considering engaging in patent litigation outside of the United States should consider before taking action.
Realize that you will not be making your case in front of a jury.
Generally speaking, the United States system of trial by jury is not used in patent litigation in other countries. In fact, many lawyers from outside the United States view jury trials in patent cases as an oddity. This means that, rather than considering the likely composition of a jury pool, companies initiating litigation may seek to learn more about the leanings and preferences of the judges or other officials who will decide the case. In the United Kingdom, for example, cases can be filed in either the Patents Court or the Intellectual Property Enterprise Court (formerly the Patents County Court). In other countries, such as Germany, there are different regional courts (known as Landgerichts) in which infringement suits may be filed, and the particular location can be taken into account in determining a suitable forum. There is also conventional wisdom, which may be borne out by statistics, that certain jurisdictions are more receptive to certain kinds of arguments. For example, some practitioners have suggested that United Kingdom tribunals are more likely than others to hold patents invalid. Such information should be carefully considered when deciding where to bring a case.
Consider where bringing an action will provide the greatest potential return on your investment.
Although certain jurisdictions may, in the abstract, be more receptive to certain kinds of arguments or claims than others, the specific facts of your case matter. Even if a particular jurisdiction has a reputation for favoring the kinds of arguments that you would like to make, that will not do much good if your opponent does not do any business in the country, or has no assets in the country. Think about what kind of ultimate relief you would like to get from a favorable judgment; and when doing so, don’t forget to consider possibilities such as whether you might be able to take action against infringing goods that are being sent through the country in transit to another country.
Anticipate that you may need to have your case fully fleshed out before a complaint is filed.
Under the notice pleading regime followed in the United States federal courts, so long as a plausible case can be made out based on public information, a plaintiff is entitled to move forward with a complaint into discovery that may provide a further basis for the allegations. Although Rule 11 of the Federal Rules of Civil Procedure requires that certain thresholds be met before a complaint may be filed, a case can still go forward with some factual matters pleaded only on information and belief. By contrast, under a legal system in which fact-based pleading is required, an infringement case may need to be nearly entirely established on paper before it can be filed.
You will not be guaranteed (or subjected to) American-style discovery.
The manner in which litigation proceeds will differ from jurisdiction to jurisdiction. However, it is generally the case that (perhaps as a result of the different level of specificity for pleadings required in different jurisdictions) the sort of wide-ranging discovery that is permitted in United States courts is generally not allowed in European courts. This can be beneficial when considering the costs that litigation will impose; less discovery will generally mean that the case will be less expensive overall. However, it can also mean that patents based on components or methods that aren’t immediately discernable from publicly available materials can be more difficult to enforce.
The procedures available to make your case may differ from country to country.
One powerful tool available in jurisdictions such as France and Italy is the seizure of evidence that may tend to show the infringement of a patent. Seizure proceedings are carried out under the auspices of the justice system, and the information gained through them may be used to litigate not only in the jurisdiction where it has been carried out, but in other jurisdictions as well. Accordingly, it may be useful to begin an enforcement campaign in a jurisdiction in which it is possible to obtain some evidence regarding the targeted products or practices before moving on to attempt to enforce rights in other jurisdictions. Of course, where the physical assets of the accused infringer are located is of some importance in that calculation; it will not do much good to apply for the seizure of evidence in France if the relevant plant is found only in Germany.
The powers of the courts may differ from country to country.
Court systems in other countries do not always handle all issues in a single case in the way that United States courts do. Thus, in Germany, one court will be competent to hear infringement actions to determine whether a patent is being infringed. At the same time, a second and separate court would have jurisdiction over an action claiming that the patent is invalid (a “nullity action”). When the case in the infringement court proceeds more quickly than the nullity action (a common scenario), it can create an uncomfortable situation for an accused infringer and increase the leverage of the patent holder. Although having the two proceed at different speeds may strengthen the hand of the patentee, in cases in which the nullity action appears particularly strong, the infringement court may stay its judgment pending a determination on the nullity action.
You should realize that injunctions still exist.
Prior to the Supreme Court’s decision in eBay Inc. v. Mercexchange, L.L.C., 547 U.S. 388 (2006), the general rule in the United States was that an injunction against further infringement would nearly always follow a finding that a valid patent had been infringed. After the eBay decision, it has not been nearly so easy to obtain injunctions in United States courts. In Europe, however, injunctions are still very much the standard remedy for patent infringement. In fact, injunctive relief is so central in some systems that issues of damages are not even taken up until after the finding of infringement that allows an injunction to issue. Bear in mind, however, that a party receiving an injunction may be required to pay damages for any harm caused to the business of the alleged infringer if the injunction turns out to have been improperly granted.
Understand that the economics of litigation may be different from those in the United States.
Other jurisdictions have embraced fee-shifting (or “loser pays”) rules to a much greater extent that United States courts, meaning that a loss could bring a greater cost than just a failure to prevent your rival from using allegedly infringing products. An unsuccessful litigant may also be liable for the attorneys’ fees of their opponent. In some jurisdictions, the amount of those fees are set by law as opposed to being based on actual expenditures, so a litigant may not recover all of its actual costs. The costs of running the court system may be dealt with differently as well. In the United States, the costs of filing a lawsuit in federal court are generally fixed. However, in some other countries, the plaintiff will pay a varying filing fee depending upon the amount claimed to be at stake in the litigation.
Be aware of differing competition laws.
Standard-essential patents have received a great deal of attention lately. For example, the United States Trade Representative, exercising powers delegated by the President, recently vetoed an exclusion order issued by the United States International Trade Commission that would have prevented certain Apple products from being imported into the United States. One of the main reasons given for the veto was that the patent found to be infringed had been declared by Samsung to be essential to an industry standard. Accordingly, the import ban was not permitted to go into effect, though Samsung was said still to be permitted to seek a remedy for infringement of the patent in the federal courts. Similar rulings or policies may exist in other jurisdictions, rendering the assertion of standard-essential patents more complex than ordinary patents. Moreover, in Europe, investigations have been opened into the possible anticompetitive effect of the assertion of standard-essential patents. So suing for infringement of such patents may not only end up in denial of injunctive relief, but also result in potential liability for the abuse of a dominant position. Accordingly, both the background rules and the nature of the patents-in-suit should be considered before moving forward with a case in any given jurisdiction.
Be sure to coordinate closely across jurisdictions.
Whenever patents based on the same specification are asserted in separate jurisdictions, litigation opponents are certain to keep a close watch on positions taken in one forum versus those taken in another. As a result, any arguments that seem to be contradictory, or can be made to appear to be contradictory, will likely be used to undermine the credibility of those advocating for you in each of the various jurisdictions. It may be the case that differences in the controlling local law are to blame for different positions, arguments, or results on counterpart patents asserted in different courts. However, it is important to recognize these differences and how they may be perceived so that a considered decision can be made about whether any inconsistencies are worth the potential cost, or are in fact really necessary. Keeping these points in mind can improve your chances of avoiding the pitfalls that may accompany multinational litigation.