Patent Litigation

Patent disputes are no longer limited to clashes among competitors operating in the same field. Big corporations are often sued by individuals or companies (the notorious ‘patent trolls’) whose main objective is not to protect their own invention, but rather to acquire, interalia, a third party’s patent, to evaluate if these patents may interfere with technology used by some third parties (preferably large corporations) and/or attack such third parties to seek large damage awards, or settlement through substantial payments. Sometimes patent trolls even initiate criminal proceedings for patent infringement to make their first strike more powerful and intimidating. This new phenomenon is clearly an abuse of the function of a patent. In a short time it has turned from an instrument to protect a company’s innovations to a means to squeeze money out of successful companies.

As important patents are normally extended to a number of countries, and the modern globalised economy makes international circulation of goods the rule, it is clear that it is often possible to select in which country/ies to file an action against an infringer operating on an international basis. The choice of the jurisdiction(s) in which to take action is influenced by a number of factors, among which are:

• the ‘strength’ of patents in a specific country (especially taking into account if the patent is granted with or without a prior examination);
• the length of the court proceedings;
• the ease of obtaining preliminary relief;
• the need to post a bond in case of preliminary relief being granted;
• the possibility of dealing with validity and infringement in the same proceedings,
• the existence of specialised courts or judges with a specific technical background;
• the choice of languages;
• the possibility of obtaining evidence from the infringer, including accounting and other internal documents;
• the chance to obtain large awards of damages or even punitive damages;
• the enforceability abroad of a national decision; and
• the costs of the litigation.

When facing potentially international patent litigation, it is therefore fundamental to have prompt access to the responses to all of the above questions, in order to be able to compare the different possibilities and make an informed decision as to where it is better to attack an infringer or to retaliate against a competitor or patent troll that took action against your company or your client.

This is why in compiling this comparative law book we have created a template of key questions concerning patent litigation in a specific country. We have also asked practical and often delicate questions such as the duration and costs of a dispute in each country. We trust that the use of the same template for each country will make it much easier and, therefore, user-friendly, to compare each specific aspect of the litigation in a given jurisdiction.

Having reviewed the responses from each reporting country, we believe it possible to summarise the following trends:

• Patent and patent litigation systems around the world are increasingly similar, due in part to the fact that a growing number of countries are parties to the same major international treatises.
• In most countries, patent invalidity and infringement are dealt with by the same court and within the same proceedings.
• More and more specialised courts are being established to hear patent disputes.
• Border measures are becoming increasingly available as a response to the growing international circulation of goods.
• Preliminary relief is widely available.
• The duration of the proceedings on the merits still varies considerably from country to country, ranging from six months (eg China) to five years (eg India).
• While not considering them binding, most judges will carefully consider precedent from a court of another country concerning the same patent ‘family’.
• ADR is starting to be used in patent litigation, but is not yet very popular.
• Damages are now calculated following basically the same rules, even if punitive damages are available only in a minimal number of countries.
• Costs of litigation still vary greatly, the most expensive countries being those where extensive discovery is permitted: in any case, we can certainly state, as our contributor from New Zealand brilliantly suggested, that patent litigation remains the modern ‘sport of kings’.

We are very proud that the most prestigious IP firms in the most developed countries in the world are involved in this book. We hope that it will become one of the leading reference books in this important and growing area, and, with the future updates, in the years to come. Any suggestions by our readers as to omissions or expansion will be more than welcome.

Thierry Calame Massimo Sterpi Zurich Milan

August 2006