Global Patent Litigation: Trends, Tools, and Strategies to Enforce Your Patent Rights Globally Data Metrics, Win Rates, and Other Key Considerations for Parties Pursuing a Global Approach Today’s faculty features: 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 1. TUESDAY, JUNE 2, 2020 Presenting a live 90-minute webinar with interactive Q&A Michael Crichton, Partner, Gowling WLG, Ottawa C. Gregory Gramenopoulos, Partner, Finnegan Henderson Farabow Garrett & Dunner, Washington, D.C. Vincenzo Jandoli, Partner, Avvocati Associati Franzosi Dal Negro Setti, Milan, Italy Roland Küppers, LL.M., Partner, Taylor Wessing, Düsseldorf Chris Thornham, Partner, Taylor Wessing, London
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Global Patent Litigation: Trends, Tools, and
Strategies to Enforce Your Patent Rights GloballyData Metrics, Win Rates, and Other Key Considerations for Parties Pursuing a Global Approach
Roland Küppers, LL.M., Partner, Taylor Wessing, Düsseldorf
Chris Thornham, Partner, Taylor Wessing, London
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Disclaimer
These materials have been prepared solely for educational and informational purposes to
contribute to the understanding of U.S. and international intellectual property law. These
materials reflect only the personal views of the authors and are not individualized legal
advice. It is understood that each case is fact specific, and that the appropriate solution in
any case will vary. Therefore, these materials may or may not be relevant to any particular
situation. Thus, the authors and Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
(including Finnegan Europe LLP, and Fei Han Foreign Legal Affairs Law Firm), Gowling WLG,
Avvocati Associati Franzosi Deal Negro Setti, and Taylor Wessing, cannot be bound either
philosophically or as representatives of their various present and future clients to the
comments expressed in these materials. The presentation of these materials does not
establish any form of attorney-client relationship with these authors. While every attempt
was made to ensure that these materials are accurate, errors or omissions may be
contained therein, for which any liability is disclaimed.
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AgendaI. Introduction: The Global Litigation Landscape
A. What are the top countries for litigating patent disputes?B. What trends can be observed in global patent litigation?C. Case examples
II. Comparison of Top Jurisdictions for Litigating PatentsA. Legal frameworks and courts of first instance for patent disputesB. Objective litigation metrics including win rates, time to trial, and costsC. Available remedies, including damages and injunctionsD. Procedural and substantive differences between jurisdictions
III. Tools and Planning StepsA. Four tools for effective planningB. Addressing key questions for each jurisdictionC. Forum selection and timelines
IV. Strategies to Develop a Winning Global Patent Litigation PlanA. Inter and intra country strategiesB. Special considerations and planning for individual jurisdictionsC. Leveraging procedural and substantive differences between jurisdictions
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▪ Founded in January 2002
Michael C. Elmer, Finnegan, Henderson
▪ Members: Top Patent litigators from +30 countries
* Data may include cases concerning utility models, employee’s inventions and/or plant variety rights** Source: JUVE News *** Source: Estimate based on JUVE News
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Patentee Win Rate (2006-2017):
First-Instance Infringement in Germany
― Average win rate for patentees: 64% (855/1364)
Patent Nullity Actions
Commenced in Germany
― Nullity proceedings started and terminated before the Federal Patent Court*
― Success rate for patentee: 50%* (519 of 1.027 decisions)
Patentee Win Rate (2006-2016):
First-Instance Patent Nullity Actions
418
179
430
At least oneclaim amended= partially nullified
Nullified
Maintained
*Global IP methodology: win = maintained + ½ win (partially nullified)
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Remedies
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Type of Damages Available
Country Reasonableroyalty
Lostprofits
Infringer’sprofits
Statute oflimitations(years)
Largest everdamages award(USD $)
Canada Yes Yes Yes 6 $515.3 M
China Yes Yes Yes 2 $44 M
England and Wales
Yes Yes Yes 6 $6.15 M
France Yes Yes No 3 $12.3 M
Germany Yes Yes Yes 3 $2.7 M
Italy Yes Yes Yes 5 $7 M
U.S. Yes Yes No 6 $2.54 B
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Preliminary Injunction Win Rates
29%2/7
58%7/12
69%24/35
41%34/83
31%332/1070
0%
10%
20%
30%
40%
50%
60%
70%
80%
Canada England Germany Italy U.S.
Source: England: DARTS-IP; France: DARTS-IP (2006–2016); Germany: Global IP Project; Italy: DARTS-IP (2006–2016); United States: LegalMetric Nationwide Report, Preliminary Injunctions in Patent Cases Jan. 2000–Dec.2017. Of 1,070 preliminary injunction decisions, 296 were granted and 36 were granted-in-part.
43-
Remedies in Germany – Overview
― Injunction (permanent)
― Removal/recall from trade channels
― Destruction
― Information on sales, suppliers and customers
― Rendering of accounts
― Damages
― Cost reimbursement:− Attorneys‘ and patent attorneys‘ fees
• Winning party is entitled to reimbursement
• Reimbursement limited by statutory fees calculated on the basis of the value-in-litigation
− Court fees
− Necessary costs for proceedings, e.g. translation costs, travel expenses, etc.
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▪ Required: Exceptional circumstances render economic consequences of the injunction unreasonable, i.e.
− patent concerns an essential functional component of a complex product
− no or at least no reasonable possibility of licensing
− aspects of good faith (e.g. finding of non-infringement by lower courts).
▪ In the specific case, the FCJ did not award an exceptional grace period.
▪ Arguments: “airscarf” not functionally essential component, but rather special equipment; car remains
usable without it; lack of licensing possibility not substantiated by defendant.
Remedies in Germany –
Proportionality of Injunction?• Federal Court of Justice, judgment of 10 May 2016, case
no. X ZR 114/13, Wärmetauscher („Heat exchanger“)
• Car manufacturer was sued for infringement of patented,
seat-integrated fan for convertibles (Daimler’s “airscarf”).
• FCJ stipulated requirements for exceptional grace period
for distributing already existing infringing products due to
disproportionality of immediate injunctive relief
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Practically only relevant for damages, rendering of accounts:
− Objection to be raised by defendant, not taken into consideration by the court ex officio
− 3 years from the end of the year in which the patentee had/should have reasonably had
knowledge of the infringing act(s) in Germany
− Claims for unjust enrichment (Restschadensersatzanspruch) still available if more than 3
years have passed
• within 10 years since (known) infringing act and damages were incurred or
• within 30 years from the date of (unknown) infringing act and damages incurred more than 10 years before.
− Calculation methods of the infringer’s profits and reasonable royalty are available
• FCJ, judgment of 26 March 2019, case no. X ZR 109/16 – Spannungsversorgungsvorrichtung (“Power Supply
Device”)
Remedies in Germany –
Statute of Limitations
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▪ Summary proceedings
▪ Requirements:
− Clear-cut infringement
− No reasonable doubts about patent‘s validity
― First instance inter partes proceedings on validity
― or prior successful patent enforcement
― or expiry of patent is imminent
− Urgency, usually within 1-2 months (varying by court)
― after obtaining knowledge of infringement/infringer
― after confirmation of patent‘s validity
− Preliminary relief required to avoid considerable damages (balance of
interests)
― Usually inter partes proceedings in patent cases
― Standard of proof: prima facie evidence
Remedies in Germany –
Preliminary Injunction Proceedings
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Successful plaintiff’s remedies:• Damages or an accounting of profits for post-grant infringement
• Plaintiff may elect one or the other, but profits are only available where plaintiff demonstrates that it would be equitable to grant such a remedy
• Reasonable compensation (reasonable royalty) for pre-grant (laid open period) infringement
• Permanent injunction• Subject to equitable considerations
• Delivery up or destruction
Usually (but not always), the Court will award costs to the successful party (plaintiff or defendant)
• Typically, costs awards represent 20-40% of a party’s actual attorney fees, and 100% of all reasonable disbursements
Remedies in Canada
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How and When Damages Accrue in Canada
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Procedural Differences Between
Germany and Canada
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Document Discovery• Affidavits of documents list all documents (or bundles of documents) that are relevant and
non-privileged
• Onus on each party to prepare one’s own affidavit – scope is relatively broad
• Obligation to update the affidavit of documents with new relevant documents
• Protective and confidentiality orders routinely granted
Oral Discovery• One representative per party examined orally (akin to 30(b)(6) witness in the US)
• Undertakings given where the representative does not know answer, or where further relevant documents should be produced
• Refusals motions and follow up examinations are common
• Discovery evidence may be read in at trial
• Matters refused on discovery cannot be presented at trial by the refusing party
• Ongoing obligation to correct answers
• No other discovery examinations, except inventor examinations permitted
Discovery in Canada
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Expert witnesses• Experts are almost always used in patent litigation, though ultimately
claim construction is a legal issue
• Experts are regularly called upon to provide opinion evidence regarding the technology at issue in the case, and the quantification of monetary remedies
• Parties are limited to a total of five experts each
Expert reports• Claim construction and infringement/validity (multiple rounds of
reports)
• There are no pre-trial examinations (depositions) of experts; experts are only examined at trial
Experts in Canada
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Trial before a single judge (no jury)• Opening statements
• Plaintiff’s evidence (reading in discovery admissions; fact and expert witnesses)
• Defendant’s evidence (reading in discovery admissions; fact and expert witnesses)
• Plaintiff’s reply evidence (fact and expert witnesses)
• Closing arguments of all parties
• Typical duration: 10-20 court days
Trial judge’s decision• Typically published within a few months of the end of trial, sometimes longer
• All issues addressed in written decision
• Thirty (30) days to appeal to Court of Appeal
Trial in Canada
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▪ Permissible evidence in proceedings on the merits:
− Expert opinion
− Documents
− Visual inspection by the court
− Witness testimony
− Hearing of the party
▪ Standard of proof for preliminary injunctions:
− prima facie evidence (e.g. affidavit)
Evidence in Germany
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▪ Types of experts
− Expert witness
− Court-appointed expert
▪ Expert witness/“Private expert opinion“
− Offered by one of the parties in support of own argument
− Written opinion has same evidentiary value as party‘s own statement
− Expert witness can be – but is practically rarely – examined by court
• (supplementary questions by the parties, no cross-examination)
▪ Court-appointed expert
− Neutral
− Delivers written opinion
− Examination by court during trial
• (supplementary questions by the parties, no cross-examination)
Experts in Germany
55
▪ Main arguments exchanged in writing
▪ Front-loaded proceedings
▪ Short trial
− One main hearing date (preparatory hearing as exception)
− Separate hearing if evidence procedure is necessary
▪ Court usually provides preliminary assessment at the beginning of the hearing
▪ Pleadings focused on specific issues
▪ Date for rendering court decision given at end of the hearing
− Exception: Decision at the end of the hearing („Stuhlurteil“)
Trial in Germany
56
Tools and
Planning Steps
57
Global Case Scenario
• Client
Manufacturer based in US, with sales in the US, Canada and Europe
Granted patents in the US, Canada, Europe (Germany, UK, Italy ,etc.) and China
• Competitor
Manufacturer based in China.
Starting to sell in the US, Canada and Europe.
• Questions for the client:
1) Attempt to negotiate global licenses?
2) Pursue infringement action in US?
3) Pursue infringement action in Canada?
4) Pursue infringement action(s) in Europe, but in which countries?
5) Pursue infringement action in China?
6) Wait for declaratory actions by competitor in some countries?
Best strategy?
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A. Four tools for effective planning
B. Addressing key questions for each jurisdiction
C. Forum selection and timelines
D. Early case valuation methodology
Overiew: Tools and Planning Steps
Four Tools
Tool 1: Early Case Assessment
Afford to litigate?
Tool 2: Objective Data
What are chances of success?
Tool 3: Litigation Timeline and
Cost
How much? How long?
Tool 4: Case Valuation
Methodology
What will I get?
60
Typical early case assessment questions for a
company pre-suit:
1. Can you afford patent litigation?
2. Are you using/licensing the technology of your patent?
3. Does infringement cause significant damage to you/licensees?
4. Where might a case have most impact against your opponent?
5. Are you aware of any action an infringer could initiate?
6. Do you have a specific patent policy? Is it important that
competitors see you will pursue infringement?
Tool 1: Early Case Assessment
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Tool 2: Objective Data Metrics
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Tool 3: Time and Cost of Litigation
63
30 months$4 million
Tool 4: Expected Value Calculation
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• WRc Combined Win Rate (Validity and Infringement)
A Expected Value of Past Damages
B Expected Value of Future Remedy
C Expected Value of Reimbursed Litigation Costs
• WRv Validity Win Rate
D Expected Value of Lost Licensing Revenues
E Expected Value of Reimbursing Opposing Party Costs
F Costs of Going to Trial
Addressing Key Questions for a Jurisdiction
(England and Wales)
26
26
ENGLAND: TIME AND COST
Infringement and invalidity per party per month (average case)
11 MONTHS
$1M6 MONTHS
Actual average time from filing to decision in 2010: 15 months.
Source: TaylorWessing
65
As a case progresses: • There are peaks and troughs of activity/costs• Parties refine their case assessments• There are windows for settlement
Forum Selection and Timelines
For each jurisdiction consider the four questions:1. Chances2. Time3. Cost 4. Value (EV2 formula or other)
In Europe:
• Germany is common "first strike" location to sue for infringement
• The UK is a common location to challenge validity
• Italy may be a good forum due to market size or location of litigants
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Early Case Valuation Methodology
1. Early case assessment
2. Consideration of evidence to support the case/improve chances― pre-action procedures― inspection / samples― disclosure (discovery) of documents during proceedings― deposition of witnesses― material from other court proceedings― experts: appointed by parties or the court?
3. Timing considerations that may favour a jurisdiction
4. Case value in each jurisdiction (EV2 or other calculation)
67
Strategies to Develop a
Winning Global Litigation Plan
68
Developing a Winning Global
LitigationStrategy
69
▪ “Global Case Scenario”– Products sold or offered in more than one country
– Patents exists that provide opportunity to litigate in more than one country
– Forum shopping (inter and/or intra-country)
▪ Preliminary Analysis– Strengths and weaknesses of patent
▪ WHO: IT MAY BE REQUESTED AND OBTAINED EX PARTE BY THE PATENTEE ORLICENSOR.
▪ WHERE (JURISDICTION): PLACE OF DEFENDANT OR WHERE THE INFRINGINGEVENTS TOOK PLACE. IF MORE THAN ONE, PLAINTIFF CAN CHOOSE AND EXECUTEMORE DESCRIPTIONS EVEN SIMULTANEOUSLY.
▪ HOW: CARRIED OUT BY A BAILIFF WITH A TECHNICAL INDEPENDENT EXPERTAPPOINTED BY THE COURT (BUT WITH POSSIBLE INTERVENTION OF PATENTEE LEGALAND PATENT ATTORNEY COUNSELS ).
▪ WHAT: EX-OFFICIO DISCOVERY AIMED AT COLLECTING TECHNICAL (FORMULA,DRAWINGS, ANALYSES ETC.) ACCOUNTING AND COMMERCIAL EVIDENCES (ORDERS,INVOICES, TRANSPORTATION DOCS, CORRESPONDENCE, ETC).
EXAMPLE #1: DESCRIPTION CARRIED OUT IN ITALY HAS BEEN USED TOCORROBORATE A PRELIMINARY INJUNCTION FILED IN SPAIN ON THE SAMECONTESTED MACHINE BUT VERSUS OTHER PARTY (DISTRIBUTOR); OR IN A FULLSCALE LITIGATION IN TURKEY
EXAMPLE #2: DESCRIPTION GRANTED BY THE JUDGE OF VENICE EXECUTED INGERMANY VERSUS GERMAN COMPANY. COURT OF VENICE 20TH FEBRUARY 2018AND GENOA 2ND MAY 2005.