At what stage are firms such as yours bought into the patent litigation process?

As a firm, we find it is quite common for patent disputes to arise around 7–10 years after the original patent filing date. The most common patent disputes we are involved in are those between pharmaceutical companies and generic drugs manufacturers. It’s fairly common for generic drugs manufacturers to apply to revoke an originator drug company’s patents many years after the original filing date. This is because it often takes a long time for a patented drug to complete its approval process and become a successful product.

Before embarking in patent litigation, do you recommend that your clients pursue alternative strategies?

It depends on the client and their business model. Some companies chose to manufacture their patented goods themselves in some parts of the world, but licence the use of the patent to another manufacturer in another. If a patent holder wants another company to stop infringing their patent, they may use the threat of litigation to force the infringer to obtain a licence from them. But sometimes licensing isn’t available as an option, because the patent owner may have already granted a licence to someone else. More often than not, the patent holder will just want the infringer to cease the infringement completely, even if that involves a prolonged legal fight.

Patent litigation is expensive - to what extent are legal costs an issue?

All clients are concerned with costs, and no one has an unlimited budget for anything. But some patents are worth billions of dollars in sales per year, and you have to look at the legal costs in that context.

How can in-house counsel help ensure the patent litigation process runs as smoothly as possible?

Operationally, clients must be willing to help their external lawyers to run the case. External counsel can do a lot of the work themselves, but only up to a point. Clients need to ensure their external lawyers have access to the relevant expertise, and are responsive to our questions. There is no escape from the fact that litigation can be time-consuming – and it will distract company employees from their day jobs. Thankfully most of our clients understand that.

Many patent disputes are now international. How does that impact on how patent litigation is conducted?

Although companies can make a single European patent application to the European Patent Office, once that patent is granted separate patents are then created in each European country the company specifies it wants protection in. This means companies can often end up carrying out several separate incidents of patent litigation in parallel, across several different countries.

In-house counsel have to be quite careful about how they proceed in cross-border patent litigation. They have to be absolutely clear who is in charge, and who is reporting to whom. The worst thing that can happen is that, for example, a lawyer acting on the matter files a witness statement in the Czech Republic that addresses a specific aspect of Czech patent law – but which comes back and “bites” the company in other jurisdictions. It’s often easier if one law firm is given the job of signing off all documents to be filed, whatever country they are filed in.

When engaged in cross-border patent litigation, a company might chose to litigate in one jurisdiction in the hope that a victory there will cause the defendant to accept defeat in all other jurisdictions. In general, it is perceived that there are 2 or 3 EU states that are perceived to be “good” places to determine patent disputes in terms of a relatively quick and effective procedure, with experienced judges and good quality decisions – England, Germany and the Netherlands.

But even in these jurisdictions there are important procedural differences which may well influence tactics. For example, in England, court procedures allow for the extensive disclosure of documents – which may help uncover evidence that would be useful in litigation in other jurisdictions – although the law as to the extent documents can be used in this way is not straightforward. Parties to the dispute are also permitted to call and cross-examine expert witnesses. As a result of this level of investigation, English judges are generally thought to be perhaps more willing to come to an independent view about whether an existing patent should be revoked.

By contrast , litigation in Europe is largely paper-based, with little or no discovery, very limited oral testimony and no cross-examination. This may mean that the litigation is less costly but it does tend to mean that many European judges are less likely to revoke an existing patent, particularly if the material relied on has already been considered by the European Patent Office.

As a consequence of these procedural differences between countries, it is quite common to see revocation actions typically starting in the English Court, whilst infringement proceedings will often start in Germany. As a result, in many cases we advise on, it is quite normal to be engaged in parallel litigation on the same matter in both England and also in Germany or other European jurisdictions.

What about the US?

The US is another important jurisdiction for patent litigation, not only because it is an important market for patentable goods, but also because the US has a tradition of extensive document disclosure and jury trials. Juries can award punitive damages against those companies who “wilfully” infringe valid patents. This, combined with the fact that a losing party does not normally have to pay the winners’ legal fees, and the rules which allow lawyers to act on a contingency fee basis, mean that there is much more patent litigation in the US than is seen in Europe – with much of it being on a more speculative basis

Although patents in the US are dealt with under a single national federal system, there is still the opportunity for “forum shopping”. To bring an patent litigation in a specific US state, the patent holder needs to find some local connection – but if they’re selling products into that particular market, that’s often good enough. Bizarrely, some US states seem to compete against each other to be “patent friendly”, and actively promote themselves as an attractive forum in which to litigate patents – some say this is really just a clever tactic to help boost their local economy.. At the moment, for example, the Eastern District of Texas is one of the most popular venues for US patent litigation. It’s a troubling trend, not least for defendants, as the statistics seem to suggest that over 90 per cent of patent holders currently win their disputes – at least at first instance – in that state.