A guide to patent litigation

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1 A guide to patent litigation Spain Freshfields Freshfields Bruckhaus Bruckhaus Deringer Deringer llp llp A guide to patent litigation in Spain a

2 Spanish patent proceedings provide options and tools for patent owners to protect their rights, in line with other major European jurisdictions. This guide provides an overview of patent proceedings and the options available to litigants in Spain. We hope you find it useful when you review your patent litigation strategy. Sergio Miralles Counsel

3 Contents Chapter 1 Executive summary Chapter 2 The Spanish patent litigation system Chapter 3 Court process and procedure p2 p3 p7 Freshfields Bruckhaus Deringer llp A guide to patent litigation in Spain 1

4 Chapter 1 Executive summary Patent proceedings in Spain the main features Patent proceedings in Spain are similar to those of other major jurisdictions. There are specialist courts, time frames for proceedings, the possibility of interim relief and preliminary disclosure, among other similarities. The list below highlights some of the main features. Judicial duty The party that starts civil or administrative proceedings must pay a judicial duty capped at 10,000 based on the amount claimed. Pace of proceedings On average, a first instance judgment will be issued within months of the start of proceedings. Specialist courts Trials take place before courts that specialise in commercial matters (Juzgados de lo Mercantil). The commercial courts of Barcelona have chosen three of their 10 courts where all patent cases will be held. These judges and their teams are patent specialists. Some appeal courts, for example Barcelona and Madrid, have focused one of their chambers on patents and on other intellectual property rights for several years now. Note: the courts of the cities of Madrid and Barcelona handle most of Spanish patent proceedings because most defendants have their company seats in one of those cities. Interim relief Interim relief is a key procedural phase in most patent litigation proceedings. Ex parte interim relief is available when solid urgency grounds support it. Disclosure The parties, in principle, need only disclose those documents they rely on. Written evidence and cross-examination Facts are usually proved by written evidence and cross-examination. Expert reports and the cross-examination of experts usually provide the most important evidence. Remedies Generally, the remedies available to the patent holder have been strengthened by implementing Directive 2004/48/EC on the enforcement of intellectual property rights. Parallel EPO proceedings Parallel European Patent Office (EPO) proceedings do not generally result in a stay of proceedings before the Spanish courts. Costs The losing party usually bears the costs of the action, including the judicial duty, expert fees and legal fees (bar associations regulate the latter). However, counsels legal fees that are to be recovered are likely to represent only about one-third of the fees incurred. 2 Freshfields Bruckhaus Deringer llp A guide to patent litigation in Spain

5 Chapter 2 The Spanish patent litigation system Legal system The Spanish legal system is a civil law system. It has the following principal features: it is based on written law and precedent. Lower courts are bound by earlier decisions of the Supreme Court; and separate courts deal with criminal matters. The principles that govern jurisdiction are matters of public policy to which the parties must conform unless the law specifically provides otherwise. One such exception is arbitration. Where Spanish courts have jurisdiction, the specific Spanish court that has authority to hear the case depends on a set of rules known as forii. Under these rules, courts where the defendant lives normally have jurisdiction to hear a given claim. There are, of course, exceptions to the forii rules, such as the special rules that apply in patent claims. The courts with jurisdiction to hear patent claims are set out below. First instance courts Commercial courts (Juzgados de lo Mercantil). First instance courts of this type have had exclusive rights to hear patent infringement actions, as well as other intellectual property proceedings, since 1 September The commercial courts of Barcelona have chosen three of their 10 courts where all patent cases will be held. These judges and their teams are patent specialists. For now, this is the only case of specialisation at first instance level, but other commercial courts in Spain are likely to follow this trend. First-level appeal courts Appellate courts ( Audiencia Provincial). Courts of this type hear appeals against judgments of first instance courts. Barcelona and Madrid have intellectual property-specialised appeal chambers. High courts of justice of the different Spanish regions (Tribunal Superior de Justicia). These courts hear administrative appeals against resolutions of the Spanish Patent and Trademark Office (SPTO) in prosecution matters. Courts of cassation The first chamber of the Supreme Court (Tribunal Supremo) deals with civil claims of infringement and revocation actions. This chamber hears second-level appeals and makes sure the first instance and appellate courts apply the law correctly. It hears appeals for the review of final judgments in limited circumstances laid down by law. These appeals may only be brought in respect of a limited number of substantive and/or procedural errors laid down by law. The third chamber of the Supreme Court (Tribunal Supremo) hears appeals in administrative proceedings on patent matters. Jurisdiction and interaction with other proceedings The institution of opposition proceedings before the EPO does not generally result in the stay of patent proceedings before the Spanish courts EU Regulation 1215/2012 (recast of Regulation 44/2001) and the Brussels and Lugano conventions on the enforcement and acknowledgement of judgments apply in Spain. These are the main effects: generally, proceedings must be brought where the defendant lives. Therefore, Spanish-based individuals and companies must be sued in Spain, although there are exceptions to this rule; Freshfields Bruckhaus Deringer llp A guide to patent litigation in Spain 3

6 Chapter 2 The Spanish patent litigation system one important exception is that a defendant can be sued for patent infringement in the jurisdiction where the event occurred. This rule can be used to sue a non-spanish company for infringement in Spain of a Spanish patent or a European patent with a Spanish designation (EP(ES)); and once a judgment has been obtained in Spain, it should be readily enforceable in EU countries (Regulation 1215/2012) and in countries that have signed up to the Brussels and Lugano conventions. In principle, prosecuting patent proceedings before non-spanish courts concerning the same or similar patents will not result in a stay of the patent litigation in Spain. Equally, opposing proceedings before the EPO does not generally result in the stay of patent proceedings before the Spanish courts. Rights of audience Law graduates who wish to become lawyers (abogados) must join the appropriate regional Spanish Bar association as practising members. The abogado will prepare and file the written statements as well as the oral pleadings on behalf of his client. In-house lawyers may also have rights of audience, even though it is not common that they plead in court patent cases. Patent attorneys do not have rights of audience unless they are members of the appropriate Spanish Bar association. Formal court documents must be served through a court agent (procurador) who has the client s power of attorney to do so. Types of patent litigation The main types of patent proceedings that can be brought in Spain are: patent infringement proceedings for infringement of a Spanish patent or an EP(ES); stand-alone actions to revoke a Spanish patent or an EP(ES), which anyone can start; stand-alone actions seeking a declaration of non-infringement of a Spanish patent or an EP(ES); entitlement proceedings over a Spanish patent or an EP(ES), either granted or pending; and opposition proceedings before the SPTO and subsequent appeals before administrative courts. In principle, it is possible to bring a claim for infringement of a non-spanish patent against a defendant who lives in Spain for acts conducted in the country where the patent is valid. However, such claims are rare in Spanish courts. The most frequent type of proceedings are those concerning infringement, so this is the type of litigation that will be addressed in this guide. Pursuing a patent infringement case in the Spanish courts The statement of claim (demanda) must include all documents that support the claimant s case; filing supporting documents or evidence at a later stage is rare The current Spanish code of civil procedure (Ley de Enjuiciamiento Civil) came into force on 8 January There are now two main types of civil proceedings: juicio verbal and juicio ordinario. The juicio ordinario, a more lengthy and formal procedure, is followed in patent infringement proceedings. 4 Freshfields Bruckhaus Deringer llp A guide to patent litigation in Spain

7 Juicio ordinario proceedings are started by serving a statement of claim (demanda), which sets out the facts and legal grounds to support the claim and attaches all the documents that support the claimant s case (eg technical reports by expert witnesses). Expert witnesses may be announced and brought in later but, generally, filing new supporting documents or evidence later is exceptional. Patent litigation proceedings are started before the commercial courts (Juzgados de lo Mercantil) of the province where the defendant lives (as a general rule) or where the infringement took place. If the infringement took place in various provinces, the claimant can choose any of them. Most patent litigation proceedings are handled by the Madrid and Barcelona commercial courts. As soon as the court declares that an action is admissible (usually within three to four weeks) it will serve the statement of claim on the defendant. The claimant must cite examples of the infringing acts in its first statement of case and state which claims of the patent have allegedly been infringed. The defendant must file its defence and counterclaim, if any, within 20 business days of the statement of claim being served, a term that in complex proceedings proves to be very short. The defendant s response usually includes a bare denial of infringement and a counterclaim to revoke the patent on the grounds that it is invalid. In practice, a typical case will last between 10 and 14 months, but much depends on the nature of the dispute and the relevant evidence, as well as the court s workload. Spain is a multilingual country, and cases may be presented in any of the official languages (Spanish, Catalan, Basque and Galician). Parties can, however, always use Spanish and require proceedings and documents to be translated into Spanish. Regarding foreign documents, any document not written in Spanish (eg English, French, German or Italian) to be filed in the legal proceedings must be accompanied by a Spanish translation. This table summarises the juicio ordinario procedure. Freshfields Bruckhaus Deringer llp A guide to patent litigation in Spain 5

8 Chapter 2 The Spanish patent litigation system Typical litigation procedure Statement of claim Statement of defence and counterclaim Statement of reply Preliminary hearing Trial: evidence and final oral pleadings/ conclusions Judgment Appeal Appeal before the Supreme Court The claim must be served by a procurador. It must include all the supporting documents and evidence. Expert reports may be filed and served to the counterparty five business days before the preliminary hearing (audiencia previa), provided that they have been announced in the claim. The defence must be filed within 20 business days of service of the claim. However, the defendant may file a challenge to the jurisdiction of the court (declinatoria) within 10 business days of service of the claim. Time limits cannot be extended. This challenge suspends the 20-day period to file the statement of defence (and counterclaim). This procedural step only applies when the defendant has brought a counterclaim against the claimant. The claimant would then have 20 business days following service of the counterclaim to file a reply. In practice, the preliminary hearing (audiencia previa) generally takes place within four to six months of service of the claim. Its purpose is to see if the parties can reach an amicable agreement, resolve certain procedural challenges raised by the defendant, if any, raise complementary allegations, if any, determine the precise questions (facts and law) under dispute and propose the means of evidence that the parties intend to use at the trial stage. The trial has two objectives: to hear the evidence admitted by the court (eg cross- examination of experts) and to present the closing oral arguments. In some cases, the court may authorise additional and final means of evidence before issuing the judgment. The court s judgment should be issued within 20 days of the trial. In practice it takes longer. Appeals must be lodged within 20 business days from notification of the first instance judgment. New evidence may only be attached in limited circumstances (eg expert reports may not be re-submitted). Extraordinary appeals (casación) may be brought within five days of notification of the decision to be appealed on a limited number of substantive or procedural grounds laid down by law. Relevant grounds in patent litigation include when there are conflicting judgments on the matter, or when the matter involves regulations that have been in force for fewer than five years. Any Spanish or foreign entity must pay a duty each time it initiates civil or administrative proceedings or lodges an appeal or extraordinary appeal (casación). Costs The losing party usually bears the costs of the action. The successful party will recover part of its legal fees (roughly one-third of the total costs). If the parties do not agree on the costs to be paid, the final amount will be decided by the secretary court following a report issued by the Bar Association. 6 Freshfields Bruckhaus Deringer llp A guide to patent litigation in Spain

9 Chapter 3 Court process and procedure Interim relief Most patent infringement proceedings include a request for preliminary relief, which plays a key role in the outcome of many proceedings Following express petition of the claimant, the court may grant interim relief measures (medidas cautelares), including injunctions before the start of proceedings with or without hearing the defendant (ex parte), provided the legal action begins within 20 business days of the injunction being granted. Failure to do so will cause the relevant injunction to lapse. Preliminary interim relief measures feature in most patent infringement proceedings. Interim relief is usually requested in the statement of claim, but a party may also apply to the court for relief before final judgment or during the appeal stage. Generally, the defendant will be represented in injunction proceedings. However, if there is justified urgency or if the hearing could affect the effectiveness of the injunction, the judge can order the injunction without hearing the defendant. Nevertheless, such ex parte injunctions in patent infringement proceedings are exceptional. Exploitation is deemed genuine when there is enough to supply the national market. Exploitation by licensees of the patent holder is also relevant in this regard. The claimant may seek, among other measures, an injunction to stop the defendant from further acts of infringement or to seize the infringing products or means used in the infringement. The applicant will be required to lodge a bond as security to cover any loss or damage that may be caused to the other party because of such interim relief being granted. When the interim relief restricts the commercial or industrial activities of the defendant, as will normally be the case, the defendant may ask the judge to substitute the measures with a bond (contracautela) for the amount determined by the court. The judge will decide whether or not to grant this request. This chart summarises the interim relief process. The claimant must show the court evidence that the patent has been subject to genuine exploitation in a World Trade Organization country within four years of the date of its filing or within three years of the publication of its granting, whichever comes later. Freshfields Bruckhaus Deringer llp A guide to patent litigation in Spain 7

10 Chapter 3 Court process and procedure The Spanish precautionary measures process The claimant files an application (the Application) for precautionary measures without hearing the defendant in advance of making the order Court rejects the Application Court admits the Application but agrees to hear the defendant in advance of making the order Court admits the Application in full Court summons the parties to a hearing Court admit the precautionary measures Court rejects the precautionary measure Application is served on the defendant Decision is served on the defendant Appeal Appeal hearing takes place Court decides on the precautionary measures Appeals against decisions agreeing to precautionary measures do not have suspensive effects. Appeals against decisions agreeing to precautionary measures do not have suspensive effects. defendant files opposition in 20 working days Court summons the parties to a hearing hearing takes place Court decides on the precautionary measures defendant, in a separate writ, asks for the substitution of the precautionary measures for bail Claimant, in the five following working days, answers the request to substitute the precautionary measures for bail hearing takes place Court decides on substitution 8 Freshfields Bruckhaus Deringer llp A guide to patent litigation in Spain

11 Limitation periods The 1986 Patent Act sets limitation periods. The limitation period for patent infringement proceedings is five years from the date when they could first be initiated. The claimant can seek damages for all infringing acts in the five years before proceedings start. Limitation periods may be suspended in certain circumstances, for example, when a formal cease and desist letter is delivered by burofax or through a notary public to the future defendant. Disclosure The parties are not required to disclose all relevant documents in their possession. They only have to disclose those that support their own allegations. However, either party may request that the other discloses specific documents that are relevant and necessary for the effectiveness of the proceedings. The Patent Act includes specific disclosure obligations for the defendant so that damages can be quantified. Evidence The Civil Procedure Act (LEC) now stipulates specific actions and submissions before the start of the action to obtain the relevant information and/or evidence (diligencias preliminares). It follows the implementation of Directive 2004/48/EC on the enforcement of intellectual property rights by Act 19/2006. And it includes the disclosure of commercial, bank and/or customs documents and the cross-examination of the alleged infringer(s). It also provides for the possibility, at this earlier stage or even later, during the proceedings up to the trial, of formulating in advance and/or preserving items of evidence (medidas de anticipación y aseguramiento de la prueba) (eg a description of infringing goods) where there is the risk of dissipation and/or destruction of that evidence. The claimant is required to post a bond. In addition to the actions foreseen in the Spanish civil procedure code, some of which are specific to intellectual property litigation, the Spanish Patent Act also sets out how to obtain from the court preliminary orders for the recovery of evidence (diligencias de comprobación de hechos) before filing the claim. These preliminary orders aim to determine relevant facts before eventually filing an infringement action. Granting these orders, depending on the facts of the case, will be subject to showing both the prospect of a patent infringement and the fact that the order is the only possible way to get evidence of the infringement (eg in a process patent case). Judges, with the help of the expert witnesses, will issue a certificate after visiting the defendant s premises, without prior notice, in cases where they believe an infringement has occurred. This certificate will be used as a supporting document or evidence when drafting the statement of claim for the patent infringement action, as well as when requesting interim relief. Experience shows that courts consider the contents of such certificates of great evidential value. Once an infringer s premises has been inspected and the certificate issued, the main patent infringement action must be brought within 20 business days of the date the certificate is served. Freshfields Bruckhaus Deringer llp A guide to patent litigation in Spain 9

12 Chapter 3 Court process and procedure The claimant must prove the facts on which it relies, and the defendant must prove the facts that impair, impede or annul the legal effectiveness of the facts the claimant alleges. Regarding process patents for the production of new products, the Spanish Patent Act presumes that a product or substance of the same characteristics as the one obtained by the process patent infringes the patent (a provision similar to article 34 of GATT TRIPS). Among other means of evidence, the parties may ask the court to appoint an expert, order disclosure of specific relevant documents from the other party or third parties, order an on-site inspection and seek witness testimony. Witnesses are usually approached at the outset of a matter. At trial, the judge will examine the witnesses, and the parties may also ask them questions. A party may contact witnesses who have already been approached by the other side, but in practice this is rare. The parties usually appoint their own expert(s) to prepare a report. The expert is usually examined on the contents of his report by the parties and the judge may also ask him questions. An expert s report is usually prepared early in the proceedings and, generally, should be served with the statement of claim or defence. The parties may agree to apply for a courtappointed expert (eg to prepare a report on a production site located in a foreign country), sharing the costs involved. Otherwise, the party that asked the court to appoint the expert must pay the costs. Parties must prove a point of foreign law if they feel it is relevant (eg through a legal report drawn up by a reputed jurist or academic of the country in question). Remedies The regulation of damages in patent claims provides claimants with a solid remedy, with various alternatives; however, the patent holder must furnish solid evidence for the quantification of damages The claimant may request, among other things, that the defendant ceases the infringement, that the goods and means to produce the infringing goods are seized, any necessary measure to avoid the continued infringement and the right to publicise the relevant judgment. In addition, the claimant can ask the court for damages. Damages include the actual losses and the lost profits the claimant suffers. In patent infringement claims, damages will be calculated on: the negative economic consequences, including the profits the claimant expected if the infringement had not taken place and the profits the defendant obtained through the patent infringement; or a reasonable royalty basis (ie hypothetical licence). The claimant must choose one of the two criteria. If he chooses the negative economic consequences, he must specify whether these are the lost profits or the profits made by the infringer since the courts do not generally accept both cumulatively. The claimant can also claim moral damages for the devaluation of its invention in the market, if proved, caused by the defendant s use of the patent. 10 Freshfields Bruckhaus Deringer llp A guide to patent litigation in Spain

13 Generally, the remedies available to the patent holder have been strengthened by implementing Directive 2004/48/EC on the enforcement of intellectual property rights, including the availability of injunctions against intermediaries whose services are used by the patent infringer. The EU Customs Detention Regulation (Council Regulation (EC) No. 1383/2003) has been applied in Spain to date mainly against goods suspected of infringing trade marks and designs. But it should be noted that patent holders can use this tool to protect their patent rights. Enforcement In general, enforcement proceedings can be started once the judgment has been served on the losing party. The successful party may request enforcement of the judgment given in the first instance, except in specific cases laid down by law, even though the other party has appealed it, without having to lodge a bond. Enforcement of judgments that have been appealed is seldom granted if it involves non-monetary awards like an injunction. Freshfields Bruckhaus Deringer llp A guide to patent litigation in Spain 11

14

15 Freshfields Bruckhaus Deringer llp is a limited liability partnership registered in England and Wales with registered number OC It is authorised and regulated by the Solicitors Regulation Authority. For regulatory information please refer to Any reference to a partner means a member, or a consultant or employee with equivalent standing and qualifications, of Freshfields Bruckhaus Deringer llp or any of its affiliated firms or entities. This material is for general information only and is not intended to provide legal advice. Freshfields Bruckhaus Deringer llp,, 35333

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