Evidence - Sparkle - Patent Dispute

2011-06-02T05:03:00.000-07:00

Evidence is the sparkle which can ignite a patent dispute. On the other hand evidence when discussed in a fact-finding meeting between opponents may also provide the key to entering into settlement negotiations with a view to resolve the patent dispute out of court. Needless to say that in case there is no evidence of patent infringement there will be no enforceable case for the patent holder against an alleged infringing competitor. This could be the case when after a (further) novelty search has been carried out the patent is found to be invalid. Novelty destroying prior art makes the patent invalid and by definition an invalid patent cannot be infringed. Therefore allegations of infringement without having carried out a thorough novelty search and study on the prior art should not be made. The accusing patent holder (plaintiff) may at the end of the day have to pay the legal costs incurred by the defendant, i.e. the alleged infringer.

However once sufficient evidence has been gathered the patent holder has two options to protect its business position. In both options, also referred to herein as the litigation mode and the settlement mode, the gathered evidence plays an essential role. For many patent holders the obvious option is to take legal action against the alleged infringer on basis of the gathered evidence. ‘Sue first then talk’ is what one may hear as an advice from patent litigation lawyers. Dependent on his financial resources a patent holder could design with the help of his attorney at law and patent attorney sophisticated ways of strategic litigation and forum shopping. A layman looking at this from the outside may compare this behavior with that of a chess player or Stratego ® player. Needless to say most attorneys at law and patent attorneys love these challenging games and may experience similar emotions when ‘playing the patent litigation game’. Still such behavior and mind-set lead away from private settlement negotiations which may turn out to be a viable and possibly less expensive and no doubt less time consuming dispute resolution option for the client.

The absence of a single European litigation system stimulates patent attorneys and attorneys at law to develop refined strategies taking full advantage of the fragmentation of litigation in Europe under separate national jurisdictions. Forum shopping in Europe will no doubt further develop as long as there is no European Patent Litigation system in place. A plaintiff will choose the jurisdiction and court in the European Union where he may expect the best possible outcome for first litigation actions. Forum shopping would not only be applied for different national jurisdictions but also for different courts under one jurisdiction, e.g. in

Germany

. A plaintiff has a choice from twelve courts. The most experienced courts are Düsseldorf, Mannheim and Munich. First instance courts generally decide in favour of the patent holder. Some courts are more willing than other courts to grant interlocutory relief. Hence forum shopping should be considered when deciding to initiate patent litigation proceedings in

Germany

Most patent attorneys and attorneys at law have been trained in only dealing with the litigation mode. This is, of course, also caused by the attitude of their clients, the businesses in Europe, which is one of making war rather than reaching settlements through friendly negotiations. However there are clear indications that global companies have begun to discover the possibilities of concluding agreements on transfer of technology and co-operating in Research en Development rather than opting for IP litigation. In order to make the European Union a more attractive business region both for European companies as well as companies outside Europe seeking protection of their businesses including enforcing patent rights on their technology and products and technology licensing, European Patent Attorneys should develop an Alternative IP Dispute Resolution Approach - skill in addition to their Problem Solution Approach - skill. The latter skill relates to the method of assessing validity of a patent in terms of inventive level of the claimed subject matter. However the assessment will result in an opinion which has still to be tested in court and therefore the opinion does not provide certainty. The situation for a company enforcing patent rights in the European Union is even more uncertain as litigation of European patents issued by the European Patent Office cannot be processed before a single European Patent Court.

That court does not exist yet and will probably not exist in the foreseeable future. This means that a patent holder may have to initiate parallel court actions in all relevant member states of the European Union under the respective national patent laws. Attorneys at law and patent attorneys being focussed on the patent legal aspects will prepare their client for litigation rather than seriously carrying out investigations on alternative resolutions to the patent dispute. This is the reason that also the client will not change its mind-set and leaves the control of the patent dispute to his IP counsels. At the end of the day the client is the one who makes the decision. However lack of knowledge of patent law and legal procedures leaves the client with no other option than to rely on the good services of his IP counsels. These counsels are committed to protect the interests of their client to the best of their abilities. However their efforts are focussed on litigation rather than seeking alternative solution to the patent dispute. It depends on the assertiveness of the client whether he can still control the litigation process as ultimate decision maker. IP counsels, in particular attorneys at law, tend to take over control during the litigation proceedings. The client simply does not fully grasp what is going on and trusts his IP counsels that they will resolve the patent dispute. Only clients who stay in the lead will be able to fully control the litigation process. European Patent Attorneys could play an important role here as manager of the IP litigation process as they will be able to fully understand both the technical and legal aspects of the case. And if these patent attorneys have sufficient experience in licensing they could be a sound-board for the client who wants to understands the steps to be taken during the patent litigation proceedings. It should be noted that clients should be made aware of the fact that wherever they are in the litigation process there will always be opportunities to initiate settlement negotiations.

The settlement mode, may result in an agreement with terms which will have the effect of law between the parties. In the latter case uncertainty is avoided and the parties will not have to deal with (an ongoing) time-consuming patent litigation, which interferes with their day-to-business activities. Not for one member state but for more member states the alleged infringer and the patent holder will be in a position to reach an agreement which provides them (in a single agreement) with certainty as to, respectively, their freedom of action and monetary compensation for giving up a monopoly position in the member states concerned. With a thorough training in licensing and mediation the European Patent Attorneys could, in addition to their traditional services, offer their clients advice on options for avoiding or ceasing patent ligation proceedings through negotiation. Given the increasing cost of patent litigation in Europe the Alternative IP Dispute Resolution Approach may well turn out to be a business strategy which is at least compatible with the patent litigation strategy and may prove to be less expensive and less complicated. After all one can negotiate a licence agreement for the whole of Europe. In the licence agreement the governing law and dispute forum can be agreed on. This means that companies do not need to spend time and money on complicated parallel patent litigation proceedings in several countries of Europe. Uncertainty is avoided as long as the terms of agreement are clear. The Alternative IP Dispute Resolution Approach offers business managers a possibility to remain in the driving seat as far as the resolution of disputes with competitors is concerned. They will not be dependent on what national courts will decide as to the validity of patent rights in case an out of court agreement can be reached. However selective patent litigation in one or a couple of Member States where a European patent is in force may still remain a suitable confrontational negotiation strategy as a prelude to licensing negotiations.

A further aspect which influences the attractiveness of Europe for seeking resolution of international patent disputes is the following. Patent attorneys, attorneys at law and judges, although regularly meeting each other on the ‘playing field’ in court during patent legal proceedings in fact form different groups working in their three separate ivory towers. The commercial companies who consult and seek legal certainty are often confronted with legal arguments and judgments which are for them difficult to understand. The three groups of professionals have a common interest and also a responsibility towards the commercial companies for securing clear and well balanced judgments.

Judges, attorneys at law and patent attorneys should not stay in their ivory towers disconnected from the businesses, i.e. the commercial companies which use patents for supporting their business activities. European Patent Attorneys speaking both the technical language and the patent legal language should first leave their tower and dovetail into the business. Furthermore they are the ideal professionals to give training to judges and attorneys at law in the understanding of the technical features in patent documents and their patent legal relevance. The aim of the training is to equip judges and attorneys at law having no technical academic background with sufficient basic technical knowledge for improving the quality of their judgments and opinions in patent litigation cases. Patent Attorneys, attorneys at law and judges should also co-operate more in the interest of the businesses. Rather than working from their respective towers they should meet each other more often to discuss ways to improve the user-friendliness of the patent litigation system. After all this system is not created for the professionals but for its users, i.e. the businesses. Furthermore litigation is just a business tool for the client to secure/safeguard freedom of action and/or a better competitive position. The uncertainty and unpredictability of the outcome of patent litigation and the long time (2 years or more, sometimes up to 10 years) litigation takes in Europe also encourages competitors to reach a settlement. Furthermore as the price tag of patent litigation in Europe is hanging increasingly heavy on the neck of the business manager he will be seeking less expensive ways to solve the patent disputes of his company.

The Hague, 2 June 2011

Jowi Burger

Evidence or the Sparkle igniting a Patent Dispute

Evidence - Sparkle - Patent Dispute