Global Patent Litigation: How and Where to Win

Transcription

1 Global Patent Litigation: How and Where to Win 3 July 2014 The Panel C. Gregory Gramenopoulos USA Finnegan, Henderson, Farabow, Garrett & Dunner, LLP Christopher Thornham UK Taylor Wessing LLP Thomas Bouvet France Véron & Associés, France Roland Küppers Germany Taylor Wessing Partnerschaftsgesellschaft mbb Lena Shen China Beijing Sanyou Intellectual Property Agency Ltd. Shinichi Murata Japan Kaneko & Iwamatsu 2 Véron & Associés 1

2 I. Introduction (15 minutes) 1.1. Global IP Project / Book / Website 1.2. Overview: Global Patent Litigation Landscape 1.3. Significant Trends and Statistics 3 Background Founded in January 2002 Goal: Compile patentee win rates and other objective patent litigation metrics for countries around the world Members: Litigators and attorneys from 30 countries Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Netherlands, Russia, South Korea, Switzerland, Taiwan, United Kingdom, and United States Current Activities Collaboration agreement with Darts IP New Book: Global Patent Litigation: How and Where to Win Annual Report (current trends, data, and global strategies) GIP website ( ) 4 Véron & Associés 2

3 New Global Patent Litigation Book Global Patent Litigation: How and Where to Win 16 of the Global IP Project participants Now available for sale from Bloomberg BNA Books. 5 Why Was the GIP Project Started? German Company Employing Defensive First-strike Strategy In A Medical Device Case Before Win-rate Data Available German Company: Small medical products manufacturer wanted to enter U.S. market. Two litigious U.S. competitors with blocking patents who did not want German Company in U.S. market: big Company A, 50% of market; big Company B, 25% of market. Needed: U.S. and worldwide licenses from Company A; and U.S. license from Company B. U.S. FDA approval was 2 years away Client asked us to file a declaratory judgment action in U.S. After early case assessment, concluded client could not afford to litigate in the U.S. 6 Véron & Associés 3

4 Solution: German Company Employs Defensive First-strike Strategy Solution before win rate data available German company provoked infringement suit in Dusseldorf, patentee 63% win rate (37% chance of success for German company). German company negotiates global license with Company A based on leverage of putting licensor s patents at risk in a foreign (unfamiliar) court. Preferred solution with win rate data Bring declaratory judgment action in London Patents Courts, patentee win rate 12% (88% chance of success for German company). Greater opportunity to leverage better settlement in patentee unfriendly forum. 7 If Objective Win Rate Data Had Been Available Then Would have challenged patent portfolio in London, where patentee win rate is very low and can negotiate better leverage for settlement. Try to knock out competitors patents. London relatively fast, so decision before FDA approval likely. England patentee win rate % 30% 20% 36% 33% Overall patentee win rate : 27% (22/81) Germany patentee win rate % No data 64% 57% 64% Overall patentee win rate in Dusseldorf (infringement) ( ): 66% and Federal Patents Court (average = (22% all claims maintained + ½(32% at least one claim amended) = 38% 8 Véron & Associés 4

5 Significant Trends and Statistics in the Global Patent Litigation Landscape In the U.S., patent litigation is expensive and damages are usually important > Early Case Assessment ( ECA ) is much more rigorous In Rest of World ( ROW ) patent litigation focus is usually on the injunction and damages are usually not as important > In ROW, ECA is typically MUCH less rigorous. In Canada damage awards can be substantial, but are determined in a separate trial. In Europe, damages are often not awarded in court; cases settle after a resolution on merits In Asia, damages are awarded but awards vary between relatively high (Japan, Taiwan, Australia) and relatively very low (China) In BRICS, the law of patent damages is not yet well developed. Global trend toward specialty courts (Unified Patent Court, etc) Global patent litigation focus moving to Asia NPE's going global 9 Top 10 Most Active Countries for Patent Suits (based on total number of cases ) Source: Finnegan Henderson Global Patent Survey Canada: 1088 Toronto/Ottawa/Vancouver 1 court, sits in 3 cities pharma majority of pat lit, equal number of PMNOC cases United States: 37,203 CD Cal. 96 courts England: 895 London 2 courts 48% DJ plaintiffs (06-09) Germany: 12400* Dusseldorf 12 courts France: 3400* Paris 1 court Italy 1600* Milan 12 courts Netherlands: 840* Hague 1 court China: 30,630 1 Beijing 2nd for invention and utility models Zhejiang Hangzhou for design patents and overall 75 courts Australia: 556* Sydney/Canberra/Melbourne 1 court, sits in 3 cities Japan: 2864 Tokyo 2 courts 1 In China, more than 80% of cases were for utility and design patents. Estimate or partially estimated/partially hard. Numbers in some countries (e.g. Italy, Germany, China) represent invention patents, utility model, and/or design patent litigations filed. Note that in Germany s most active court, Dusseldorf each patent at issue is assigned a separate case number. FOR LAST 2 YEARS, TAIWAN, S. KOREA, AND INDIA ENTER THIS TOP 10 LIST, WITH ESTIMATED ANNUAL PATENT INFRINGEMENT LITIGATION FILINGS OF ENGLAND, NETHERLANDS, AND AUSTRALIA DROP OFF. Europe: Most patentee friendly: Germany; Netherlands; France Least patentee friendly: England (over half of plaintiffs in recent years are alleged infringers). Fastest: England, Netherlands Slowest: Italy, France Asia Most patentee friendly: China Least patentee friendly: Japan, Taiwan (new specialty IP court started July 1, 2008; limited data) Fastest: China Slowest: Japan 10 Véron & Associés 5

6 Historical Patentee Win Rates (U/B 4 ) (CI/CO 5 ) (# trials required: V/I/D # of patent litigations filed Approx. number of courts/number sampled/% cases sampled % of cases going to trial (decision on the merits) Win Rate 1 Combined win rate for bifurcated country 1 US (U)(CO)(1) 37,203 96/96/100% 3.7% (43% in US ITC) 2 China (B)(CI)(2) 30,630 2, 3 71/18/ 50% Inf. Cases 36% (890/2467)( ) Val. Chall. 67% 3 Germany (B)(CI)(3) 4 France (U)(CI)(2) ( 225 nullity actions/year in FPC) 12/estimate based on 1 court (Dusseldorf)/ 25% /1(Paris)/100% 34% Inf. Cases 40% 2; Validity challenges at FPC 90% 59% overall ; 25% contested ; PI win rate 31%; 47% in US ITC (28/60) Invention patents 66% (200/302) Design 85% (861/1016) Utility models 72% (355/490) 57% invention patent validity challenge patentee win rate (42% design patents; 46% utility models) 66% infringement win rate ( , 533/811), Dusseldorf only; 38% Fed Pat Ct validity challenge win rate ( ) Pre inj win rate 59% (24/41) 40% (118/295) ( ) 5 Japan (U)(CI)(1) /2/100% 26% 25% (44/176) ( ) 8 England (U)(CO)(2) 895 2/1/95% 16% 22% (17/78) ( ) 1 A win is defined as a case where at least one claim was found valid and infringed in a court of first impression. 2 Indicates number is estimate based on discussions with GIP participants and incomplete data. 3 In China, utility model and design patent cases account for more than 80% of all patent litigation filed. 4 U stands for unified system, where validity and infringement are determined in one forum. B stands for bifurcated system, where validity and infringement are determined in separate fora. resulting in separate validity and infringement win rates. 5 CI stands for civil law jurisdiction, CO stands for common law jurisdiction; note fewer cases to trial in CO jurisdictions. 6 V/I/D stands for validity/infringement/damages..66 x.57 = 38%.66x.38 = 25% 11 Four Key Questions for a Litigant in Any Country 1. How much will it cost? 2. How long will it take? 3. How strong is our case? (what are our chances of success?)(win rates); and 4. What will we get? (case valuation from early case assessment to final outcome) Business managers do not like a random walk through life. (Marshall Phelps) Global IP Project developed 4 tools to answer these 4 questions with objective data using a hypothetical fact scenario. 12 Véron & Associés 6

7 EV Formula Expected Value (EV) = Win Rate x (A+B+C) Lose Rate x (D+E) F Win Rate = Probability Patentee Will Win A = Expected Value of Past Damages Award B = Expected Value of Future Remedy C = Expected Value of Reimbursed Litigation Costs Lose Rate = Probability Patentee Will Lose D = Expected Value of Lost Licensing Revenues E = Expected Value of Reimbursing Opposing Party Costs F = Costs of Going to Trial EV Formula is intended to provide a flexible framework for assessing the value of a case in any country Global Forum Shopping, part 1: non EU countries (US, CN, JP) 2.1. Executive Summary Main Characteristics of Forum Available offensive and defensive actions Available remedies for a patentee Benefits (and Challenges) of Litigating in Forum 2.2. Key questions in Selecting Forum What are my chances of success (patentee v. accused infringer)? How long it will take? How much will it cost? 14 Véron & Associés 7

8 2. Global Forum Shopping USA (15 minutes) 2.1. Executive Summary Main Characteristics of Forum Available offensive and defensive actions Available remedies for a patentee Benefits (and Challenges) of Litigating in Forum 2.2. Key questions in Selecting Forum What are my chances of success (patentee v. accused infringer)? How long it will take? How much will it cost? 15 Court Structure U.S. Supreme Court Quasi-Judicial Federal Agencies Federal Circuit International Trade Commission Patent Trial and Appeal Board 94 District Courts (at least 1 in each state) Court of Federal Claims 16 Véron & Associés 8

9 Why is the U.S. a Popular Forum? Large Market and Potential Damages Compensatory Damages (reasonable royalty) Enhanced Damages (willful Infringement) Injunctions Available Preliminary (before trial; discretionary) Permanent (after full trial on the merits) Developed Law Federal Circuit (30+ years) Discovery allows the truth to come out 17 Risks of Litigating in the U.S.? Discovery allows the truth to come out Expense Non technically trained judges Juries Constitutional right (either side) U.S. Patent presumption of validity Who will be on jury? 18 Véron & Associés 9

10 Litigation Trends U.S. Patent Suits Have Increased 120% Since 2004 CourtLink (2014) Note: Patent suits still a small fraction (1%) of all civil filings in the U.S. 19 Top 10 Venues for Patent Litigation Represent about 74% of the total filings (4,783 of 6,448) E.D. Tex. remains the most popular S.D.N.Y. 138 N.D. Cal. 396 D. NJ 174 D. Del. 1,336 N.D. Ill. 215 E.D. Va. 166 C.D. Cal. 417 S.D.Cal. 230 E.D. Tex. 1,513 S.D. Fla. 187 CourtLink (2014) 20 Véron & Associés 10

11 E.D. Tex. went from 33 in 2001 to 1513 in 2013 (4585%) ED Tex D Del ND Cal CD Cal Win rates drive ED TX up AIA Drives NPE cases up 21 Typical U.S. Litigation Timeline Trial Complaint Expert Discovery Answer/ Counterclaims Markman Hearing Final Judgment Appeal Pre-Litigation Investigation Fact discovery and motion practice Pre-Trial Motions Post-Judgment Proceedings 22 Véron & Associés 11

12 U.S. Case Example: Time and Costs File complaint Markman hearing (mini-trial where claims construed) Motions for summary judgment Pretrial Conference Jury trial 0 months $100, months $1.5 million 18 months $2 million 24 months $2.5 million 30 months $3 million 23 Time From Filing to Decision on the Merits in the 10 Most Active U.S. District Courts (in Months) Eastern District of Virginia; 19.1 Central District of California; 36 Eastern District of Texas; 31.4 District of Delaware; 33.1 Northern District of California; 36.7 District of New Jersey; 32.9 Southern District of California; 35.6 Southern District of Florida; 30.1 Southern District of New York; 45 Northern District of Illinois; Véron & Associés 12

13 District Court Patent Litigation Filings in 2012 Patentee Trial Win Rate Eastern District of Texas % District of Delaware % Northern District of California % Central District of California % Northern District of Illinois % District of New Jersey % Eastern District of Virginia % Southern District of New York % Southern District of California % Southern District of Florida % 25 II. Global Forum Shopping CHINA (15 minutes) 2.1. Executive Summary Main Characteristics of Forum Available offensive and defensive actions Available remedies for a patentee Benefits (and Challenges) of Litigating in Forum 2.2. Key questions in Selecting Forum What are my chances of success (patentee v. accused infringer)? How long it will take? How much will it cost? 26 Véron & Associés 13

14 The Chinese Litigation System Courts Bifurcated system Two-instance trial system No jury; panel of 3 or 5 judges (in first instance, may include one lay person named as people s juror) Technical expert likely to get involved no specialized patent or IP courts; about 130 courts have jurisdiction over patent infringement cases; special IP tribunals; Forum Shopping possible (11 June, 2014: the government just passed the motion of establishing special IP courts) The Chinese Litigation System Courts Véron & Associés 14

15 distribution of the courts with jurisdiction over patent infringement cases note: red high court blue intermediate court green basic court Jurisdiction for patent infringement litigation cases 1Jurisdiction by court Level normally started from intermediate court; some specially designated basic court may hear certain cases relating to design and utility model patents 2Venue jurisdiction Basic rule: the court at the defendant s place shall have jurisdiction Additional rule: the court at the place where the infringing activities occurs shall have jurisdiction 3Designation jurisdiction The jurisdiction of a court hearing a specific case may be designated by a higher level court or the Supreme Court Véron & Associés 15

16 Offensive Actions 1. Negotiation 2. Cease and desist letter 3. Administrative procedure through local IP office 4. Customs action 5. Court action (1) evidence preservation (2) property preservation (3) preliminary injunction (4) injunction (5) damage no summary judgment action available in China. Defensive Actions 1. Declaratory judgment 2. Patent invalidation request Defense available (1) To request for stay with the ground that invalidation procedure is in the process and there is high likelihood of invalidation; (2) jurisdiction challenge (3) non infringement argument a. exhaution of a patent right b. Prior art or prior design defense c. Prior use defense d. transportation exception e. administrative examination exception (drug, medical devices) f. scientific research exception g. not falling within the protection scope of the patent (4) time limit expired to initiate the lawsuit: 2 years! Véron & Associés 16

17 1. interim injunction: pre trial preliminary injunction & during trial preliminary injunction 2. injunction 3. damage Why so many litigation in China? Large Market (1.4 billion people) Huge number of valid patent (over 3.5 million patents including over million invention patents) Quick: 1st instance, normally within one year; 2nd instance, even quicker stronger weight in negotiation inexpensive: first instance, attorney fee normally US$ 30, ,000 Véron & Associés 17

18 Any disavantages to litigate in China? difficult to collect evidence-no Discovery the formality requirement of evidence is very high and strict low damage difficult to enforce the decision Patent Infringement Litigation Cases for First Instance in China Note: the figures for are an estimate. Véron & Associés 18

19 breakdown of patent infringement litigation in terms of patent types for cases decided during (note: the above data comes from the sample cases we collected for ) 37 breakdown of patent infringement litigation by patent types (concluded in 2012) (concluded in 2011) (note: the above data comes from the sample cases we collected for ) Paris, 3July 2014 Global patent litigation: how and where to win 38 Véron & Associés 19

20 how many patent infringement litigation cases started by foreign plaintiff (note: the above data comes from the sample cases we collected for ) Paris, 3July 2014 Global patent litigation: how and where to win 39 plaintiff win rate for patent infringement litigations in China concluded in 2011 and 2012 respectively (note: the above data comes from the sample cases we collected for ) Paris, 3July 2014 Global patent litigation: how and where to win 40 Véron & Associés 20

21 patentee win rate in the patent infringement litigation first instance cases decided during (note: the above data comes from the sample cases we collected for ) 41 How much time cost for the first instance of a patent infringement litigation in China decided on merits? (note: the above data comes from the sample cases we collected for ) 42 Véron & Associés 21

22 Cost for litigation: 1. the court fee; 2. disbursement; 3. attorney s fees. Damages Claimed (in RMB) Court fee (in RMB) X 10, ,000 <X 100, %*X 100,000 <X 200,000 2%*X 200,000 <X 500, %*X 500,000 <X 1,000,000 1%*X 1,000,000 <X 2,000, %*X 2,000,000 <X 5,000, %*X 5,000,000 <X 10,000, %*X 10,000,000 <X 20,000, %*X X > 20,000, %*X example: damage claim RMB 10,000, %*99,000+2%*100, %*300,000+1%*500, %*1,000, %*3,000, %*5,000,000 =RMB 82, II. Global Forum Shopping JAPAN (15 minutes) 2.1. Executive Summary Main Characteristics of Forum Available offensive and defensive actions Available remedies for a patentee Benefits (and Challenges) of Litigating in Forum 2.2. Key questions in Selecting Forum What are my chances of success (patentee v. accused infringer)? How long it will take? How much will it cost? 44 Véron & Associés 22

23 Main Characteristics of Japanese Patent Litigation Civil law Unified Infringement and validity issues are heard in the same forum Trial courts Tokyo & Osaka District Courts Damages heard in main trial 45 Main Characteristics of Japanese Patent Litigation 46 Véron & Associés 23

24 Main Characteristics of Japanese Patent Litigation Specialized IP court/judges Tokyo & Osaka District Courts have specialized divisions for intellectual property rights Appeal from district courts and JPO is to IP High Court Staffed with technical experts 47 Main Characteristics of Japanese Patent Litigation Supreme Court IP High Court JPO District Court (2: Tokyo and Osaka) 48 Véron & Associés 24

25 Main Characteristics of Japanese Patent Litigation Venue - Tokyo District Court has exclusive jurisdiction over patent litigation in Eastern Japan - Osaka District Court has exclusive jurisdiction over patent litigation in Western Japan -A patentee may file a patent infringement action in either district court where: 1. defendant s principal office is located; 2. defendant s infringing activity occurred (the defendant s sales office or plant is located); 3. plaintiff s principal office is located, if damages are demanded. -If there are several defendants, the suit may be brought wherever jurisdiction can be obtained over one of the defendants. 49 Settlement Judges generally take an active role in suggesting the possibility or the terms of a settlement at any stage between filing and the final judgment The judges usually have an opportunity to talk with each party individually, and they sometimes disclose their feelings about the issues in the case It seems that the cases favorable for patentees are more likely to be settled because the losing party would like to avoid rendition of judgment. 50 Véron & Associés 25

26 Two Phases of Discussions At the first phase, parties focus on discussions about infringement issues and invalidity issues, and at the second phase, parties focus on discussions about damages issues The court, before finishing the first phase, decides whether hearings for calculating the amount of damages should be held This practice could encourage the parties, especially the losing party to proceed settlement of the case. Also this could avoid unnecessary discussions about damages issues and contribute to efficient and speedy resolution of patent disputes 51 Technical Presentation Hearing Parties make technical presentations about important issues related to infringement and invalidity. This hearing could help the court to clarify the issues and confirm their understanding about technical issues and discussions. This is an important opportunity for the parties to show that their arguments are technically correct and reasonable. 52 Véron & Associés 26

27 Double Tracking An alleged infringer may be able to use the double tracking route to challenge the validity of a patent in the JPO through an invalidation trial The accused infringer can not argue that the later invalidation provides grounds for the retrial The parties would appeal the district court decision and the JPO decision and, since the IP High Court hears appeals from both the courts and from the JPO, the IP High Court would handle both cases and resolve any inconsistency 53 Available Offensive & Defensive Actions Patentee A patentee may file a patent infringement litigation to exclude others from manufacturing, using, assigning, importing, exporting, or offering for assignment of the product covered by the patent in Japan, and, if the invention is a process, the right to exclude others from using the process, or using, assigning, importing, exporting, or offering for assignment of the product manufactured by the process A patentee may file a preliminary injunction 54 Véron & Associés 27

28 Available Offensive & Defensive Actions Accused infringer The accused infringer may assert invalidity as a defense in an infringement suit The accused infringer may bring an action as plaintiff asking the court to declare the nonexistence of a patentee s right to relief (injunctive or monetary) on grounds of non infringement and invalidity The accused infringer may bring an administrative validity challenge at the JPO. Although a court can hold that a patent is invalid as between parties in a litigation, only the JPO can invalidate a patent in an absolute sense( double tracking ) 55 Available Remedies for a Patentee Injunctions A judge will grant permanent injunctive relief once patent infringement is found, unless there are exceptional circumstances so that injunction would be an abuse of the right of the patentee An example of an exceptional circumstance is that, if the accused device is a very small part of a product, the judge may not grant permanent injunctive relief on the whole product 56 Véron & Associés 28

29 Available Remedies for a Patentee Damages (1)Lost profit based on the number of infringing product (2) Lost profit presumed by infringer s profits (3) Licensed Royalties 57 Available Remedies for a Patentee Attorneys fees A patentee may demand compensation of reasonable attorneys fees as part of damages The amount is a discretionary determination by the court 58 Véron & Associés 29

30 Available Remedies for a Patentee Compensation of costs The court may have a losing party bear court costs, but the court cost does not include attorney s fees 61 and 64 of the Code of Civil Procedure 59 First Instance Patent Litigation Filings and Decisions Total filings: 1265 Total decisions: 260 % going through to final decision: 21% Filings Decisions Véron & Associés 30

31 Tokyo and Osaka District Courts Final Decisions on the Merits Decisions Osaka; 31% 79/259 Tokyo; 69% 180/ What Are My Chances of Success? Patentee Win Rate ( ) 35% 32% 30% 25% 20% 16/50 9/36 25% 8/37 22% 18% 4/15 27% 10/44 23% 17/62 27% 15% 10% 10% 7/38 4/39 5% 0% : 23% (75/321) 62 Véron & Associés 31

32 40% 35% 30% 25% 20% 15% 10% 5% 0% 12% 0% What Are My Chances of Success? Tokyo and Osaka District Courts Patentee Win Rate ( ) 37% 20% 28% 18% : 24% (53/218) 25% 15% : 21% (22/103) 22% 9% 27% 25% 30% 17% 29% 26% Tokyo Osaka 63 Judgment or Settlement? 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 34% 35% 38% 37% 40% 41% 46% 50% 46% 44% 44% 37% 43% 44% 38% 31% Source: Hoso Jiho Settlement Judgment Others All IP cases 64 Véron & Associés 32

33 Results of Invalidation Trials at JPO (Invention Patents) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% withdrawed held valid held invalid 65 How Long It Will Take? Month District courts 7.0 Tokyo High Court and IP High Court Year Source: Intellectual Property High Court 66 Véron & Associés 33

34 How Much Will It Cost? Sample Time and Costs of Japanese Patent Litigation 1st -8th hearings 9th -11th hearings File (including validity (computation of complaint and infringement ) damages) Decision 0 mos. 11 mos. 15 mos. 16 mos K 100K - 200K 150K - 250K 67 Benefits of Litigating in Japan Time Infringement Court (Dist. Ct. :15 months, IP High Ct.: 7 months) JPO (6 months for patent invalidation trial) Market size Relatively low cost Specialized judges The result could be fairly predictable Injunction If a patent is held valid and infringed, injunction is automatically allowed 68 Véron & Associés 34

35 III. Global Forum Shopping, part 2: EU countries (UK, DE, FR) 3.1. Executive Summary (5 minutes each) Main Characteristics of Forum Available offensive and defensive actions Available remedies for a patentee 3.2. Key data regarding patent litigation in the forum (10 minutes each) How many cases initiated and decided (first instance and appeal)? Fields of technology Who are the claimant? What are the chances of success (patentee v. accused infringer)? How long does it take? How much does it cost? 69 III. Global Forum Shopping UK (15 minutes) 3.1. Executive Summary (5 minutes each) Main Characteristics of Forum Available offensive and defensive actions Available remedies for a patentee 3.2. Key data regarding patent litigation in the forum (10 minutes each) How many cases initiated and decided (first instance and appeal)? Fields of technology Who are the claimant? What are the chances of success (patentee v. accused infringer)? How long does it take? How much does it cost? 70 Véron & Associés 35

36 Main Characteristics Of Forum Common law Specialist IP courts and judges Infringement/validity tried together Disclosure and party appointed experts Fact & expert witnesses cross examined at trial Decision reserved after trial Detailed written judgment. Relatively quick to trial and appeal Costs (loser pays) 71 Court Structure 72 Véron & Associés 36

37 Patent cases started per year Actions commenced Source: Annual Judicial and Court Statistics. No data available 2012 & Independent counts for 2011 & 2012 : Actions commenced: 160 & 170 Patents in dispute : 227 & 221 Total "German Equivalent" cases & Infringement/validity trial decisions each year Patents Court decisions IPEC decisions Véron & Associés 37

38 Chemical 3.1% Decisions by Technology : Software/ electronics 4.7% Telecoms 14.7% Other 1.6% Pharmaceutical/ biotechnology 29.5% Medical devices 16.3% Mechanical 30.2% Note: Nearly half of all case were life sciences The proportion of mechanical cases is growing as more mechanical patents are litigated in the IPEC. 75 Win rate by technology Total decisions Patentee win Overall patentee win rate of 27% (35 out of 129 decisions where infringement/validity in dispute in period ) 76 Véron & Associés 38

39 Chances of Success at trial? 90% 80% 76.9% 70% 60% 50% 40% 53.5% Overall plaintiff win rate Plaintiff is patentee 30% 29.7% Plaintiff is not patentee 20% 10% 69/129 19/64 50/65 0% 77 Chances of Success on Appeal? Total appeals Decisions reversed Véron & Associés 39

40 Time and Cost a High Court Case Note: High activity/cost at trial & appeal hearings "loser pays" costs exposure 79 Time and Cost IPEC case IPEC for simpler/smaller cases Ought to be possible to get to trial in 6 12 months Trial hearing 1 2 days Max damages award 500,000 Max costs recoverable 50,000 (based on scale fees) Own costs may be higher. Appeals to Court of Appeal 80 Véron & Associés 40

41 III. Global Forum Shopping GERMANY (15 minutes) 3.1. Executive Summary (5 minutes) Main Characteristics of Forum Available offensive and defensive actions Available remedies for a patentee 3.2. Key data regarding patent litigation in the forum (10 minutes) How many cases initiated and decided (first instance and appeal)? Fields of technology Who are the claimant? What are the chances of success (patentee v. accused infringer)? How long does it take? How much does it cost? 81 Patent Litigation in Germany Court system > Bifurcated system ( Trennungsprinzip ) Düsseldorf District Court (infringement): 66% patentee win rate > 12 specialized courts for patent infringement disputes (Forum Shopping) > About patent-related civil cases started in Germany per year: > Düsseldorf approx. 500 > Mannheim approx. 250 > Munich approx. 150 > Federal Patent Court: approx. 250 nullity actions started per year Federal Patent Court (nullity) 38% patentee win rate 82 Véron & Associés 41

42 Patent Litigation in Germany Workload of the System > Patent-related civil cases started in Germany > Selected courts DC Düsseldorf DC Mannheim DC Munich 83 Patent Litigation in Germany Workload of the System 1st Instance (Düsseldorf District Court) from filing until oral hearing Civil Chamber ( Zivilkammer ) 4a & 4b Civil Chamber 4c since 10/ months 8 10 months 2nd Instance (Düsseldorf Court of Appeal) 2nd Patent Senate since 1/ months acceleration to be expected 84 Véron & Associés 42

43 Patent Litigation in Germany Workload of the System > Patent infringement proceedings > Duration 1st Instance 2nd Instance Düsseldorf 8-12 months months Mannheim (Karlsruhe) 8-10 months months Munich 8-10 months months Federal Court of Justice (appeal on points of law) months 85 Infringement Proceedings on the Merits Statistics DC Düsseldorf > Patent infringement decisions (incl. interim proceedings) > Success rate for patentee : 66% (533 of 811 decisions) 278 Injunction granted Injunction not granted Véron & Associés 43

44 Infringement Proceedings Statistics DC Düsseldorf > Patent litigation ( ) by technology in % Mechanics Electronics 8.9 Pharma Chemistry Medical devices Biotech * Source: published decisions 87 Infringement Proceedings Statistics Düsseldorf Court of Appeal > Patent infringement appeal decisions (incl. interim proceedings) > Success rate for patentee : 59% (148 of 252 decisions) Injunction granted/maintained Injunction not granted/not maintained 88 Véron & Associés 44

45 Infringement Proceedings Statistics Düsseldorf Court of Appeal > Patent litigation ( ) by technology in % Mechanics 11.1 Electronics Pharma Chemistry Medical dev. Biotech 89 Patent Litigation in Germany Workload of the System > Nullity proceedings started and terminated at the Federal Patent Court New Proceedings Action proc. terminated 90 Véron & Associés 45

46 Patent Litigation in Germany Workload of the System > Duration of nullity proceedings at the Federal Patent Court Duration in months 91 Nullity Proceedings Statistics Federal Patent Court > 1st Instance patent nullity actions ( ; actions filed) > Success rate for patentee: 38%* (211.5 of 560 decisions) 121 Nullified 258 At least one claim amended/ partially nullified Maintained 181 *acc. to Global IP methodology: win = maintained + ½ win (amended/partially nullified) 92 Véron & Associés 46

47 III. Global Forum Shopping France (15 minutes) 3.1. Executive Summary (5 minutes) Main Characteristics of Forum Available offensive and defensive actions Available remedies for a patentee Main characteristics of Forum French Courts structure Around 20 patent cases decided a year Average of 80 decisions a year 2 panels ( sections ) of 3 judges 6 IP specialist judges The Tribunal de Grande Instance de Paris has exclusive jurisdiction for patent cases Average of 180 decisions a year 4 panels ( sections ) of 3 judges 12 IP specialist judges 94 Véron & Associés 47

48 Infringement and invalidity are decided by the same court Unified system > one judgment decides on: Patent construction Patent validity Patent infringement The judgment also decides on: Injunction which is of right (usually enforceable pending appeal) Damages or damage enquiry + account on damages (also enforceable pending appeal) Any other remedies requested Publication of the decision Recall and destruction of products Contribution to the costs of the winning party 95 Offensive and defensive actions Offensive actions: Cease and desist letters (never compulsory) Action for patent infringement Preliminary injunctions Customs actions (New Act of 11 March 2014) Defensive actions: Patent revocation proceedings (new statutes of limitation of 5 years?) Opposition procedure for European patents only (no opposition for French patents) Action for a declaration of non infringement (compulsory prelitigation phase) Declaration of essentiality for Standard Essential Patents 96 Véron & Associés 48

49 Duration of patent proceedings 97 Average costs of the first instance Simple matter: Average matter: Difficult matter: Véron & Associés 49

50 III. Global Forum Shopping 3.2. Key data regarding patent litigation in the forum (10 minutes each) How many cases initiated and decided (first instance and appeal)? Fields of technology Who are the claimant? What are the chances of success (patentee v. accused infringer)? How long does it take? How much does it cost? : analysis of 4001 decisions Total Average TGI Paris CA Paris Cour de cassation Total Véron & Associés 50

51 TGI Paris Nature of cases ( ) 101 TGI Paris Nature (FR/EP) of patents invoked ( ) European patents became the majority in Véron & Associés 51

52 TGI Paris Nationality of parties ( ) 103 TGI Paris Validity and infringement FR/EP ( ) 104 Véron & Associés 52

53 TGI Paris Validity and infringement FR/EP ( ) 105 TGI Paris Validity and infringement European patents ( v ) Véron & Associés 53

54 TGI Paris Patent litigation by industry including patentee win rate ( ) 107 First instance decision is often decisive Cour d Appel of Paris Judgments affirmed / reversed Partially affirmed 34% Reversed 16% Affirmed 50% Cour de Cassation Decision quashed / appeal rejected 108 Véron & Associés 54

55 Cour d Appel of Paris Validity and infringement ( ) 109 Cour d Appel of Paris Validity and infringement ( ) Véron & Associés 55

56 4. Procedural and substantive issues (US, CN, JP, UK, DE, FR) 4.1. Interim injunctions 4.2. Proving your case Gathering of evidence Role of experts 4.3. Damages calculation and damage assessment proceedings Procedural and substantive issues USA (10 minutes) 4.1. Interim injunctions 4.2. Proving your case Gathering of evidence Role of experts 4.3. Damages calculation and damage assessment proceedings 112 Véron & Associés 56

57 Differing Legal Systems Common Law (stares decisis) Civil Law (statutory) 113 Discovery Complaint Trial Answer Markman Hearing Final Judgment Appeal Pre-Litigation Investigation Discovery Post-Judgment Proceedings Pre-Trial Motions 114 Véron & Associés 57

58 Discovery Fed. R. Civ. P. 26(b)(1) Discovery Scope and Limits Parties may obtain discovery regarding any matter, not privileged, that is relevant to the claim or defense of any party... Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence. 115 Discovery Tools Initial disclosures Interrogatories Requests for documents and things Requests for admissions Fact depositions Expert reports and depositions 116 Véron & Associés 58

59 Claim Construction In the U.S., the judge decides what the claims mean. Typically, the parties submit proposed constructions and briefing, prior to Markman hearing. The jury decides if the claims, as interpreted by the judge, are valid over the prior art and infringed by the accused product or method. 117 Summary Judgment No genuine issues of material fact in dispute Moving party entitled to judgment as a matter of law Avoids trial before judge or jury or reduces issues for trial Possible to seek partial summary judgment 118 Véron & Associés 59

60 Trial: Focus on Decision Maker Judge and jury are not technically trained Avoid technical and legal jargon Present case themes and demonstratives Highlight supporting evidence Witness and expert testimony 119 Roles of Expert Witnesses 1. Testify that the patent is valid/invalid. 2. Testify that the patent is infringed/not infringed. 3. Testify on the proper measure of damages. In the U.S., patent cases are often a battle of the experts. 120 Véron & Associés 60

61 Available Remedies Monetary Relief - 35 U.S.C Compensatory Damages Lost Profits versus Reasonable Royalty - Enhanced Damages Willful Infringement Injunctions - 35 U.S.C Preliminary (before trial and at court s discretion) - Permanent (after full trial on the merits; not automatic when valid patent found infringed) Supreme Court s ebay v. MercExchange decision (2006) 121 Reasonable Royalty Georgia Pacific, 318 F. Supp (S.D.N.Y. 1970) 15 evidentiary factors outlined, including: royalties actually received by patentee rates paid for other comparable patents the nature of the patented invention opinion testimony of qualified experts Hypothetical Negotiation license between a prudent patentee and a prudent licensee 122 Véron & Associés 61

62 Enhanced Damages Court may increase damages up to three times Decision to increase is discretionary with district court Increase is based on egregiousness of infringer s conduct (willful infringement) In exceptional cases attorney fees may also be awarded to the prevailing party (see 35 U.S.C. 285) See Octane and Highmark decisions (U.S. 2014). 123 Exceptional Case Standard Met When Prosecuting patent attorneys and the inventors failed to investigate and disclose to the PTO details of invalidating on sale activity. Patentee withheld from the PTO evidence of its prior sales activities of device that could have invalidated the patent under 102(b) and brought suit on the patent despite its knowledge of the sales. Patentee initiated suit with unconfirmed data to support infringement while refusing to produce test reports which would substantiate charges and concealed documents that later proved test data was tainted and unreliable. 124 Véron & Associés 62

63 4. Procedural and substantive issues CHINA (10 minutes) 4.1. Interim injunctions 4.2. Proving your case Gathering of evidence Role of experts 4.3. Damages calculation and damage assessment proceedings 125 (1) before litigation (2) during litigation Conditions: Proving an effective patent right Proving an infringement activity (high likelihood of winning) Showing that the loss will be difficult to repair if the infringing activities are not stopped in time Bond for the request Theoratically: possible Practically: very difficult and getting rarer Véron & Associés 63

64 basic rule: who claims, who proves! formality requirement strict: evidence formed out of China required notarization and legalization; foreign language required to be translated into Chinese documentary evidence and physical objects weigh more than witness statement; however, experts' opinions invited by the court are normally well respected Evidence Preservation Procedure available evidence preservation request may be submitted with the court with the conditions that: 1. the evidence may possibly disappear; or 2. it may be difficult to collect the evidence later on Four methods to determine damage, in sequence: (1) according to the actual loss of the patentee, (2) according to the income of the infringer, (3) according to times of reasonable royalties, and (4) by the amount varying from 10,000 Yuan to 1 million Yuan RMB Damage claimed is the basis to calculate the court fee. Examples: For 1 million as damage, the court fee is about RMB; For 10 million as damage, the court fee is about RMB. Véron & Associés 64

65 highest damage case: Chint v. Schneider (2006) 温 民 三 初 字 第 135 号 damage granted in first instance: RMB million (about US$ 56 million) patent concerned: utility model patent Damage granted for over 90% of the cases is within US$ 0 100k (within the statutary damage range). 129 highest damage granted in different provinces during (unit: K, US$) 130 Véron & Associés 65

66 average damage granted in different provinces during (unit: K, US$) Procedural and substantive issues JAPAN (10 minutes) 4.1. Interim injunctions 4.2. Proving your case Gathering of evidence Role of experts 4.3. Damages calculation and damage assessment proceedings 132 Véron & Associés 66

67 Interim Injunctions Popular tool in patent infringement litigation in Japan The procedure for an injunction is similar to the main suit except for the absence of any examination of witnesses or any deliberation concerning the amount of damages A patentee can stop infringement immediately after the preliminary injunction order In a main suit, a patentee cannot execute the decision if the defendant appeals to the high court and a suspension of execution is granted 133 Interim Injunctions Requirements for a provisional injunction (1) Infringement (2) Necessity of temporary relief 134 Véron & Associés 67

68 Proving Your Case Gathering of Evidence In Japanese patent litigation, most evidence is documentary, and oral examination of experts is rarely conducted There are no thorough discovery procedures in Japan 135 Gathering Evidence Proving Your Case Gathering of Evidence (1) Denial of the Allegation With Reason When the defendant denies the plaintiff s description of the accused product or process, the defendant must clarify the relevant product or process in a concrete manner 136 Véron & Associés 68

69 Gathering Evidence Proving Your Case Gathering of Evidence (2) Orders to Produce Documents At the request of a party, the court may order the opposing party to produce documents necessary to prove infringement or to assess damages caused by the infringement, provided that the opposing party does not have a legitimate reason for refusing to produce them 137 Proving Your Case Gathering of Evidence Protecting Confidential Information (1) Restriction of Public Inspection or Copying of Documents Submitted to the Court Should the record include any trade secrets, the court may limit the persons who have access to the documents containing trade secrets This provision, however, does not restrict persons who are parties in the case from access to the documents 138 Véron & Associés 69

70 Proving Your Case Gathering of Evidence Protecting Confidential Information (2) Protective Order If trade secrets possessed by a party are included in the briefs or evidence and it is necessary to restrict the use or disclosure of the trade secrets to avoid interference with the party s business based on the trade secrets, the court may, upon a request by the party who possesses trade secrets, order that the parties, attorneys, or assistants shall neither use the trade secrets for any purpose other than those for the proceedings of the litigation nor disclose the trade secret to any person other than those who receive the order 139 Proving Your Case Role of Experts In patent infringement litigation in Japan, examination of an expert in the courtroom is rarely conducted, and instead, each party produces a written expert opinion If the court orders preparation of an expert opinion on the proof of damages caused by the infringement, the other party must provide the expert with the necessary information to enable the expert to give an opinion 140 Véron & Associés 70

71 Damage Calculation Damage Calculation (1) Lost profit based on the number of infringing product determined by multiplying the number of infringing products sold by the profit per unit the plaintiff would have earned without the infringing activities within a limit not exceeding the potential production capacity of the patentee If, however, circumstances prevented the patentee from selling part or all of the infringing products, a sum equivalent to the amount subject to that circumstance will be deducted does not require a patentee to practice the patented invention in Japan 141 Damage Calculation Damage Calculation (2) Lost profit presumed by infringer s profits presumed to be equal to the profits gained by the infringer through the infringement does not require a patentee to practice the patented invention in Japan (3) Licensed Royalties A patentee may demand compensation for damages in the amount the patentee would have been entitled to receive under a license for the working of the patented invention 142 Véron & Associés 71

72 Damage Calculation Damages are heard as part of the main trial in Japanese patent infringement litigation, although the deliberation about damages usually follows the liability (infringement and validity) phase 143 Damage Calculation Pachinko (slot machine) patent case (2002) 7.4 billion yen (US$74 million) 2009: 860 million yen (US$8.6 million) 2010: 1.79 billion yen (US$17.9 million) 2011: 147 million yen (US$ 1.47 million) 2012: 166 million yen (US$1.66 million) 2013: 336 million yen (US$3.36 million) 144 Véron & Associés 72

73 4. Procedural and substantive issues UK (10 minutes) 4.1. Interim injunctions 4.2. Proving your case Gathering of evidence Role of experts 4.3. Damages calculation and damage assessment proceedings 145 Interim Injunctions 146 Véron & Associés 73

74 Proving Your Case at Trial Appeal Review for errors in law, not a re trial Very difficult to introduce new evidence 147 Damages Calculation & Assessment Procedure Financial compensation decided separately after trial Defendant provides information to enable patentee to elect for An Account of the Defendant's profits (rare); or Damages Damages enquiry proceeds like a trial Heads of Damages Patentee's lost profits on products that would have been sold but for the infringing sales (and claims regarding convoyed goods/services too) May claim for loss due to price erosion Reasonable royalty claims where no "lost sale" can be shown Time/cost can be comparable to infringement/validity case 148 Véron & Associés 74

75 4. Procedural and substantive issues GERMANY (10 minutes) 4.1. Interim injunctions 4.2. Proving your case Gathering of evidence Role of experts 4.3. Damages calculation and damage assessment proceedings 149 Infringement Proceedings on the Merits Remedies > Permanent injunction > Damages (amount to be determined in follow-up action) > Commercial information about supply, distribution and profit > Recall from trade channels > Destruction > Cost reimbursement to winning party (limited to statutory fees) 150 Véron & Associés 75

76 Infringement Proceedings on the Merits Calculation and Assessment of Damages > Options to calculate damages suffered from patent infringement: patentee`s lost profit, Sec. 139 II 1 PatG, Secs. 249, 252 BGB infringer s profit, Sec. 139 II 2 PatG or license analogy, Sec. 139 II 3 PatG > Patentee can choose most favourable calculation method > Limited compensation until publication of grant, Sec. 33 I PatG > Amount of compensation/damages to be assessed in separate court action claiming for payment from infringer (if not settled) 151 Infringement Proceedings on the Merits Fact Gathering (1) > Evidence > No pre-trial discovery > Very limited disclosure obligations of defendant > How to prove the case (means of evidence): Documents / products / test reports Witnesses (to be heard after court evidence order) Experts: Private experts (considered to be party statements) Court experts (to be appointed by court evidence order) 152 Véron & Associés 76

77 Infringement Proceedings on the Merits Fact Gathering (2) > Pre-trial inspection order > Requirements Ultima ratio Sufficient likelihood of infringement > Procedure Application for inspection to be submitted with infringement court Ex-parte court order Court appointed expert is instructed to inspect infringing device Confidentiality is maintained Court decides later whether expert report is disclosed to patentee 153 Bifurcated System of Patent Litigation in Germany Infringement proceedings District Court Nullity action Defendant files Nullity action Federal Patent Court Judgment Possible stay Judgment Appeal Higher Regional Court Appeal on points of law Federal Court of Justice Appeal Patent revoked Patent limited Patent upheld 154 Véron & Associés 77

78 Infringement Proceedings on the Merits Provisional enforcement of injunction Infringement procedure Injunction Nullity procedure Duration in months Infringement Proceedings on the Merits Stay > Injunction trap (since parallel nullity proceedings are slower!) > Crucial question: to stay or not to stay infringement proceedings > Standard: high probability of revocation in parallel invalidity proceedings > Present best prior art documents, in particular for lack of novelty > Burden of proof: defendant > Stay-rate at infringement courts: approx. 10% > Protection against wrongful enforcement: security amount 156 Véron & Associés 78

79 Interim Measures Possible Requests > Preliminary injunction > Information > on manufacturers, suppliers and (commercial) customers > additional information from third parties acting on commercial scale can be claimed in case of obvious infringement or if infringer has been sued > Seizure(s) Infringing goods to secure claim for destruction e.g. danger that infringing goods will be brought outside Germany Arrest in rem to secure monetary claims e.g. cost reimbursement against defendant from foreign country which has no enforcement agreement with Germany 157 Preliminary Injunctions Requirements > Clear patent infringement > Secured patent validity > Düsseldorf Court of Appeal: Usually, the asserted patent should have been confirmed in contradictory proceedings Exceptionally, in generic cases the bar is lower because the balance of convenience is usually in favour of the innovator Very exceptionally, patent was nullified in first instance by a clearly wrong decision (expected to be overturned) > Urgency > Bond to be provided by patentee for enforcement 158 Véron & Associés 79

80 Preliminary Injunctions Statistics DC Düsseldorf > PI proceedings (not including ex parte decisions) > Success rate for patentee : 55% (79 of 145 decisions) 66 PI granted 79 PI not granted 159 Preliminary Injunctions Statistics DC Düsseldorf > PI proceedings ( ) by technology in % Mechanics 6.3 Electronics Pharma Chemistry Medical dev. Biotech 160 Véron & Associés 80

81 Preliminary Injunctions Statistics Düsseldorf Court of Appeal > PI proceedings > Success rate : 36% (16 of 44 decisions) PI proceedings (appeal) Injunction granted/maintained 161 Preliminary Injunctions Statistics Düsseldorf Court of Appeal > PI proceedings ( ) by technology in % Mechanics Pharma Chemistry Medical dev. Biotech 162 Véron & Associés 81

82 4. Procedural and substantive issues France (10 minutes) 4.1. Interim injunctions 4.2. Proving your case Gathering of evidence Role of experts 4.3. Damages calculation and damage assessment proceedings 163 Preliminary injunction Preliminary injunctions available: decided by the presiding judge (or judge in charge of case management) quite difficult to obtain (patent validity and infringement must be clear and strong) rarely granted ex parte (urgency not sufficient to justify ex parte) Duration of preliminary injunction procedure: 1 to 4 months for ordinary matters a few days in case of urgency (pharma matters or for trade show) Trends: No formal clear the way doctrine for generic companies launching a product at risk A balance of convenience approach is made by the court Preliminary injunction unlikely to be granted for standard essential patent 164 Véron & Associés 82

83 Preliminary injunction TGI Paris Proving your case Evidence diagram 166 Véron & Associés 83

84 The saisie contrefaçon in short Very powerful tool Upon authorization granted ex parte, a bailiff (a public officer) assisted by experts chosen by the claimant (patent attorneys) may enter any premises where evidence of infringement might be found: to perform the investigations authorized in the court order; to draft a report handed over to the claimant and later exhibited to the Court No prima facie evidence is necessary Even against third parties (e.g. regulatory authorities) Evidence gathered in France can be used in parallel litigation 167 The saisie contrefaçon: search order to preserve evidence The most efficient way to gather evidence of infringement: used in 80% of infringement actions more than 600 saisies are authorized each year by the Court of Paris (in all IP matters) inexpensive: between $20,000 and $70, Véron & Associés 84

85 Damages Damage enquiry very frequent Lost Profits: Calculated on the total infringing sales (including the entire market value and the springboard effect) Based on turnover that the plaintiff would have made on the additional products (incremental profit margin) Price erosions and other losses Lost royalties: Calculated on the total infringing sales (including the entire market value and the springboard effect) Based on the infringer s turnover Increased royalty rate (50% to 100% mark up) Profit of the infringer NB: Statutes of limitation for damages is now 5 years 169 TGI Paris ( ) Average amount of damages: 260, Véron & Associés 85

86 TGI Paris ( ) The greatest damages awarded Date Parties Total damages 14/01/2009 Agilent Technology Deutschand GmbH, Hewlett-Packard GmbH / Waters Corporation, Waters SAS /10/2009 Legrand, Legrand SNC / Alternative Elec /06/2010 Technogenia / Martec anciennement Soneco, Ateliers Joseph Mary, Bernard Mary Industries B.M.I ancie /09/2007 Philips Electronics / Manufacturing Advanced Media Europe /05/2003 Dentsply Research & Development Corporation / Electro Medical Systems /09/2013 Bobst / Heidelberg Postpress Deutschland /10/2008 L'Air Liquide/ Yara France /09/2009 Hager Security anciennement Atral / Cedom, Leroy Merlin France /11/2004 Schneider Electric Industries / Wenzhou Fly-Dragon Electric /11/2012 Santos / Robot-Coupe /09/2007 SEB / De Longhi /03/2006 Citec Environnement / K.A. France, Ssi Schaeffer /03/2010 Brandt Industries / Whirlpool France /01/2009 Treves / Visteon Systèmes Intérieurs /07/2002 Sedac-Mecobel / J.P. Gruhier SA, Styling /12/2013 Anthogyr / Apol (costs under Art. 700 CPC not taken into account advance payments excluded settlement agreement excluded) 171 TGI Paris ( ) The largest advance payments awarded Date Parties Advance payments 09/02/2007 Ethypharm / Laboratoires Fournier /06/2012 ECA / BAE SYSTEMS /03/2009 Micsystemes / Ouizille, Bourbouloux, Financiere Libertel 16, Acentic /06/2004 Technogenia / Martec, Ateliers Joseph Mary, Bmi (Martec), Actciale, Françis Barrat /04/2009 Instrumentation Laboratory / Diagnostica Stago /11/2013 Manitou / Haulotte /03/2009 Novartis AG / Johnson & Johnson Vision Care, Johnson & Johnson Medical, Ethicon /09/2012 Time Sport International / Decathlon, D-H-G Knauer /06/2007 Rotanotice / M.Y. Healthcare France /06/2011 Koninklijke Philips Electronics / TX Western, CDVD /05/2010 Valeo Vision, Valeo Servise / Aniel, Autodistribution, Commerce Rechange Automobiles Cora /10/2001 Citec Environnement / K.A France, SSI Schaeffer (Yutz), SSI Schaeffer (Lognes) /12/2012 Alkermes Pharma Ireland venant aux droits de Elan Pharma International / Ethypharm /10/2001 Sara Lee De N.V., Sara Lee De France / La Johnson Francaise /03/2000 Glaxo Operation UK Ltd / Laboratoire Flavelab /10/2004 SEB / De Longhi Véron & Associés 86

87 TGI Paris ( ) Costs: the largest amounts awarded to the patentee Date Parties Article /04/2009 Instrumentation Laboratory Spa / Diagnostica Stago /01/2011 Electrolux Home Products France, Electrolux Italia / BSH Bosch und Siemens Hausgerate /06/2010 Technogenia / Martec, Ateliers Joseph Mary, BMI (auparavant dénommée Martec), Actciale, Françis Barrat /06/2004 Technogenia / Martec, Ateliers Joseph Mary, BMI (auparavant dénommée Martec), Actciale, Françis Barrat /06/2012 ECA / BAE Systems /09/2009 Hager Security Anciennement Atral / Cedom, Leroy Merlin France /10/2008 L'air Liquide (Pour l'étude et l'exploitation des procédés Georges Claude) / Yara France /03/2008 Hesco Bastion / Link Middle East, Sogea Reunion /11/2012 France telecom, TDF, Philips Electronic, Institut für Rundfunktechnik, Audio MPEG, / TCT Mobile Europe, Orange Vallee /11/2013 Manitou / Haulotte /10/2013 Origin Technologies Limited / Performance Products Limited, 2K Distribution /02/2013 Philips / ID Com /03/2006 Citec Environnement / K.A. France, SSI Sschaeffer /03/2008 Polymer Group / Scamark, Cooperative d Approvisionnement de l Ile de France, Kapa Reynolds, US Nonwovens /04/2010 Dietrich Engineering Consultants / Technilab /12/2011 Saint Gobain Isover G+H / Knauf Insulation TGI Paris ( ) Costs: the largest amounts awarded to the defendant Date Parties Art. 700 defendants 01/07/2009 Otis Elevator / Schindler (RG 06/18186) /10/2009 Compagnie Industrielle des Lasers Cilas / Malvern Instruments /01/2009 Newdeal / Wright Medical Europe Manufacturing, Wright Medical Technology /11/2011 J.C. Bamford, JCB / CNH France, Manitou /01/2009 Abbott Ireland, Abbott France / Evysio Medical Devices /07/2009 Otis Elevator / Schindler (RG 07/07376) /01/2005 Luk Lamellen und Kupplungsbau GmbH / Valeo /10/2009 Lely Enterprise / Delaval International, Delaval /03/2009 Trikon Technologies / Alcatel Vaccum Technology France /04/2011 KCI Licensing, Laboratoire KCI / Smith et Nephew /03/2007 Mitsubishi Electric Corporation, Melco Mobile Communications Europe / CP8 Technologies /03/2012 Valeo Wischersysteme / ADM /05/2010 Institut Pasteur / Siemens Healthcare Diagnostics /03/2013 Rhodia Opérations, Symrise / SAF ISIS /02/2013 CSP Technologies, Capitol / Airsec /05/2009 Paul Boye Technologies / Sioen Industries Véron & Associés 87

88 5. Strategic considerations (US, CN, JP, UK, DE, FR) 5.1. Hot topics in the forum 5.2. Strategic considerations Strategic considerations USA (5 minutes) 5.1. Hot topics in the forum 5.2. Strategic considerations 176 Véron & Associés 88

89 AIA: New U.S. Post Grant Trials Inter Partes Review (IPR) (Available Sept. 16, 2012; All patents; Petitioner has not filed invalidity action; Petition filed within one year after service of infringement complaint) Post Grant Review (PGR) (Only FITF patents issued after March 16, 2013; Petitioner has not filed invalidity action; Petition filed within nine months of grant) Transitional Covered Business Method Patent Post Grant Review (CBM) (Available Sept. 16, ; All covered business method patents; Petitioner must be sued or charged with infringement) 177 U.S. Post Grant Statistics Number of Petitions (as of May 22, 2014) CBM; 177 IPR; % of the IPR petitions relate to electrical/ computer technology Source: Véron & Associés 89

90 AIA Proceedings & District Court Stays Standard Three Factor Test (IPRs) New Four Factor Test (CBMs) 1. Whether discovery is complete and trial date is set 2. Whether stay will unduly prejudice non moving party 1. Whether discovery is complete and trial date is set 2. Whether stay will unduly prejudice non moving party 3. Whether stay will simplify the issues 3. Whether stay will simplify the issues 4. Whether stay will reduce the burden of litigation AIA Legislative Record Sen. Schumer: Fourth Factor places a very heavy thumb on the scale in favor of a stay being granted 179 Stays in Favor of Post Grant Proceeding Success rates (as of Feb 2014): Stays pending reexam: ~60% (same three factor test) Stays pending IPR: ~62% Stays pending CBM: ~94% (17 granted; 1 denied) Source: LegalMetric Véron & Associés 90

91 NPEs Non Practicing Entities (NPEs), also known as patent trolls, have been criticized for taking advantage of broadly written patents and filing questionable lawsuits. The debate on how to address the litigation tactics employed by some NPEs continues in the U.S., both in the courts and in Congress. 181 NPEs: Changing Landscape America Invents Act Sept 2011 New post grant procedures (PGR, CBM, IPR) at the USPTO for challenging the validity of patents Stricter joinder requirements aimed at reducing multi defendant patent suits Proposed Patent Troll Legislation Require disclosure of real party in interest Permit greater discretion in awarding attorney fees Expand the USPTO s transitional business methods program (CBMs) State Anti Troll Laws Vermont recently passed bill to address bad faith assertions of patent infringement. Such assertions treated as violation of state consumer protection laws. 182 Véron & Associés 91

92 Attorneys Fees for Exceptional Cases Octane Fitness, LLC v. Icon Health & Fitness, Inc., 134 S.Ct (U.S. 2014) and Highmark Inc. v. Allcare Health Management System, Inc., 134 S.Ct (U.S. 2014) 35 U.S.C. 285: The court in exceptional cases may award reasonable attorney fees to the prevailing party. Determination whether case is exceptional within discretion of district court. An appellate court should apply an abuse of discretion standard to an exceptional case determination, not de novo standard applied to questions of law Strategic considerations CHINA (5 minutes) 5.1. Hot topics in the forum 5.2. Strategic considerations 184 Véron & Associés 92

93 developments To establish the IP courts (the Plan was passed by the government on June 6, 2014 and some cities such as Beijing and Shanghai have already submitted the application to establish an IP court) Regulations to Stop the Abuse of IP Rights Which Restricts or Eliminates the Competition (draft published on June 11, 2014) Another time of amendment to the Chinese Patent Law (proposal) which focuses on strenghthening the protection of patent rights and making is easier to enforce a patent right Pioneer Mechanism: Guiding Cases System by the Supreme Court Strategy in Enforcement Clear the purpose of the lawsuit; Check stability of the patent right Conduct background nvestigiation on the opponent; Use evidence preservation procedure; Make clear claim comparison chart in proving infringement; Ask for higher damage within statutory range if no evidence to prove damage; Consider of using utility model and design patents. Véron & Associés 93

94 patent invalidation rate for validity cases during decided by Patent Reexaminaiton Board Strategy in Defense File invalidation request timely (Keep searching prior art during the proceeding if no strong evidence is found at the beginning); Challenge jurisdiction of the litigation case to prolong the procedure and to make more time for preparation; Challenge authenticity of evidence provided by the patentee when possible; Seek possible settlement with fighting. Véron & Associés 94

95 5. Strategic considerations JAPAN (5 minutes) 5.1. Hot topics in the forum 5.2. Strategic considerations 189 Strategic Considerations File a patent infringement litigation and get a favorable decision in about one year with the preparation for invalidity defense If a patent is held valid and infringed, injunction is automatically allowed. Winner can execute decision immediately if preliminary injunction is filed. Recent case laws have eased the requirements for seeking lost profit damages. Recent pro patentee trend in determining the validity of patents File a DJ action as active defense strategy 190 Véron & Associés 95

96 Strategic Considerations Get a favorable settlement Judges disclose their thoughts on infringement and validity before judgment. Parties can estimate risk and negotiate through courts. Judges fill a role as a mediator. Could avoid double track problem Strategic considerations UK (5 minutes) 5.1. Hot topics in the forum 5.2. Strategic considerations 192 Véron & Associés 96

97 Industry specific strategy considerations Life Sciences Medicines: generics "clearing the way" prior to launch Medical devices: regulatory approval in EU quicker than US so patent disputes can arise earlier Telecoms Standards & Interoperability UK/German co ordinated litigation Declarations of non essentiality Determination whether licence terms are FRAND Strategic considerations GERMANY (5 minutes) 5.1. Hot topics in the forum 5.2. Strategic considerations 194 Véron & Associés 97

98 5. Strategic considerations France (5 minutes) 5.1. Hot topics in the forum 5.2. Strategic considerations 195 France : pros and cons Pros: Specialist patent judges, reasonably patent friendly Reasoned opinions Saisie contrefaçon makes gathering evidence of infringement fast, easy and inexpensive Detailed calculation of damages Continental costs Cons: 18 to 24 months for first instance decision Preliminary injunctions difficult to obtain 196 Véron & Associés 98

99 Hot topics Post grant amendment Invalidity arguments: sufficiency and added matter Standard essential patents: Availability of injunctions Definition of FRAND license terms Statutes of limitation for patent revocation actions 197 Speakers Thank you! C. Gregory Gramenopoulos USA Finnegan, Henderson, Farabow, Garrett & Dunner, LLP Christopher Thornham UK Taylor Wessing LLP Thomas Bouvet France Véron & Associés, France Roland Küppers Germany Taylor Wessing Lena Shen China Beijing Sanyou Intellectual Property Agency Ltd. you.com Shinichi Murata Japan Kaneko & Iwamatsu Véron & Associés 99

100 199 Lena SHEN Attorney-at Law/Trademark Attorney Partner Beijing Sanyou Intellectual Property Agency Ltd. Ms. Lena Shen received education in both China and UK and is qualified as an attorney-at-law in China. She is a partner of Beijing Sanyou Intellectual Property Agency Ltd, which is a top 10 Chinese IP law firm. She started her career in IP in Her main practice is in IP enforcement and trademark prosecution. Ms. Shen has involved a number of patent and trademark litigations and other enforcement actions for various clients. Meanwhile, she is of rich experience in handling cases of trademark registration, review, opposition, cancellation, etc. Véron & Associés 100

101 Shinichi Murata Attorney at law (admitted in Japan and New York) Kaneko & Iwamatsu 12th Fl. Daido Seimei Kasumigaseki Bldg Kasumigaseki, Chiyoda ku, Tokyo Japan Tel: /Fax: [email protected] URL: Shinichi Murata is a partner at Kaneko & Iwamatsu, a Japanese law firm especially concentrating its practice in technical litigation, including intellectual property litigation and commercial litigation, in Tokyo. Mr. Murata has extensive experience on a wide range of intellectual property matters, including Intellectual property litigation, trial for invalidation of patents and trial for cancellation of Japan Patent Offices' decisions, Infringement/validity opinion work, drafting and negotiating licensing of IP rights, and drafting joint development agreements. Mr. Murata especially has a lot of experience in patent litigations over various technologies including telecommunication technology, pharmaceuticals, chemicals, electrical, semiconductor, etc. Mr. Murata worked with Finnegan, Henderson, Farabow, Garrett & Dunner at their offices in Washington, DC ( ). Mr. Murata received bachelor of laws degree from the Tokyo University (1992), a diploma of completion of Legal Training from the Legal Training and Research Institute of the Supreme Court of Japan (1995), and LL.M. in Intellectual Property Law from the George Washington University (2001). 201 Roland Küppers, LL.M. Partner, Düsseldorf Litigation & Dispute Resolution Patents Roland Küppers is member of the Practice Area Patents and represents national and international companies in issues related to technical property rights. He specialises in patent litigation. In co operation with patent attorneys and inhouse patent departments he works on the nullification of patents and the cancellation of utility models. He has gained technical experience from his work for companies in a wide range of industrial sectors, including information technology, electronic engineering, semiconductors, chemicals, medical devices, automotive and mechanical engineering. Roland advises on patent and know how licenses (Technology Transfer) and on R&D contracts. He further acts in unfair competition matters having technical impact. Roland studied law at the Universities of Bonn and Münster (Germany). He obtained a Master of Laws (LL.M.) in intellectual property from the University of Bristol (England). During his training he gained practical experience in the legal departments of Henkel KGaA in Düsseldorf and BP plc in London. In 2003 he was admitted to the bar and started to work for an IP boutique in Düsseldorf. He joined Taylor Wessing as a partner in Roland is a member of the Düsseldorf Bar Association, the German Association for Intellectual Property and Copyright Law (GRUR), the German Association of Intellectual Property Experts (VPP), the German British Jurists Association (DBJV) and the European Patent Lawyers Association (EPLAW). Apart from German as his native language, he is fluent in English. Contact details T: +49 (0) E: [email protected] 202 Véron & Associés 101

102 Christopher Thornham Partner, London Patents Technology/Media/Telecoms Life Sciences Chris is a partner in the Patents Group at Taylor Wessing in London. Chris helps clients across the full range of technologies from the Life Sciences to IT/telecommunications, advising on freedom to operate, product launch, patent litigation and licensing strategies. Chris seeks to find commercial solutions for his clients outside of court, but has also acted in over 25 English patent trials and appeals. He helps clients win their infringement/validity disputes and navigate through the remedies and relief available, including interim and final injunctions, financial compensation claims, destruction of infringing products, modification of products; court declarations, publicity orders and costs awards. Chris also works with colleagues, clients, patent attorneys and other lawyers to support and co ordinate multi jurisdictional patent advice and litigation. Chris graduated from Cambridge University with a degree in Natural Sciences (studying physics, mathematics, chemistry and physiology and specialising in experimental physics) and qualified as a lawyer in In 2002 he gained US patent experience working in Washington DC and California. Chris speaks and writes regularly on patent issues and is recommended for his patent expertise in various legal directories, including Legal 500, Chambers, Who s Who Legal and Iam250 s Worlds Leading Patent Litigations. Chris sits on the Advisory Board of Informa s Intellectual Property Magazine. He is an active member of AIPPI and an associate member of the UK Chartered Institute of Patent Attorneys. Contact details T: +44 (0) E: [email protected] 203 Thomas Bouvet Member of the Lyon Bar [email protected] Born in 1970, Admitted in 1996, Partner, Thomas Bouvet is an attorney at law specialized in patent litigation. He obtained an LL.M. in the USA and is a Doctor at law. Admitted to the Bar in 1996, he immediately joined Pierre Véron to practice patent litigation and is a partner of Véron & Associés since the creation of the firm in Thomas activity mainly relates to patent validity and infringement litigation in the fields of electronics, telecommunications, mechanics, chemistry, pharmaceuticals, media and biotechnologies. He has extensive experience in patent entitlement cases and in matters for the violation of trade secrets. He defends employers in actions of compensation for employees inventions and advises companies setting up appropriate policies in this respect. He arranged several customs actions. 204 Véron & Associés 102