Countdown to the Unified Patent Court, Part II: The Timelines
“If the UPC can keep up with the timelines outlined [by the Rules of Procedure], it will become the fastest patent trial court in the world.”
On February 17, 2023, Germany ratified the Agreement on the Unified Patent Court. In order to facilitate preparation for the UPC, we will be providing a series of five articles that will deal with the most important aspects of the UPC. Whereas Part 1 focused on the designated UPC judges, this Part 2 will deal with the timelines that govern the proceedings before the UPC.
The Timelines
Prepare for a team with sufficient redundancies at all levels
The Agreement on the Unified Patent Court (UPCA) is silent on the timelines that have to be observed by the parties in suit when litigating before the UPC. However, the Rules of Procedure (ROP) of the UPC fill this void and provide for a very ambitious regime with repsect to deadlines. Pursuant to Rule 9.2, the Court may disregard any step, fact, evidence or argument which a party has not taken or submitted in accordance with a time limit set by the Court or the ROP. If a party wants to rely on a late filed fact or argument and to convince the Court to allow such a fact or argument into the proceedings, it is fair to assume that at least a very detailed explanation will be necessary, why the fact or argument in question could not have been made with reasonable diligence at an earlier stage. However, even if a satisfactory explanation was provided in this regard, it follows from Rule 263.2 that the Court might still disregard such fact or argument, if allowing such late filed fact or argument into the proceedings would unduly hinder the other party in the conduct of its action.
It is furthermore in the Court’s discretion, to allow or to deny requests for term extensions (confer Rule 9.3). Many designated UPC judges have already stated publicly, that a very strict approach will be applied when it comes to such requests for term extensions, since the mission to allow the final oral hearing on the issues of infringement and validity at first instance to take place within one year can otherwise not be met. Simply put: a term extension may be conceivable if the lead counsel was run over by a train, but not if he was run over by a car. An automatic extension of deadlines is only available in very exceptional circumstances (confer Rule 301). Last but not least, judicial vacations (confer Rule 342) shall not suspend the periods set by the Court or the Rules (confer Rule 300 lit. (h)).
It follows from the above that parties should carefully choose their legal service providers in order to be on the safe side that sufficient legal firepower is available at all times, in particular also during the continental European vacation periods. This firepower should be present at all levels so that we will likely see legal battle teams spearheaded by two silver backs or even more.
First Instance Proceedings (Main Action Infringement)
Proceedings before the Court of First Instance consist of three stages, (i) the Written Procedure, (ii) an Interim Procedure, which may include an interim conference and (iii) an Oral Procedure which shall take place after one year.
The written procedure shall in principle consist of the following four main submissions:
- Statement of claim (Rule 13)
- Statement of defence (Rules 23 and 24)
- Reply to the Statement of defence (Rule 29)
- Rejoinder to the Reply (Rule 29)
The deadline regime during the Written Procedure is rather complicated. In summary, the Written Procedure shall be completed within nine months if a counterclaim for revocation is filed and in six months if the defendant for whatever reason decides not to do so (e.g. cost or strategic reasons). It goes without saying that in most cases such counterclaim will likely be filed.
Once the Statement of claim is served, the clock is ticking in favor of the patentee, since the defendant is put under a lot of time pressure by the ROP. In the first place, the defendant must observe a one month deadline, during which he may lodge a Preliminary objection pursuant to Rule 19 concerning: (a) the jurisdiction and competence of the Court, including any objection that an opt-out pursuant to Rule 5 applies to the patent in suit; (b) the competence of the division indicated by the claimant (Rule 13.1 lit (i)); (c) the language of the Statement of claim (Rule 14).
Within two further months (making it three months in total), the defendant must lodge a Statement of defence. This submission shall include inter alia, the evidence relied on, as well as the reasons why the action shall fail, arguments of law and any argument arising from the provisions of Article 28 of the UPCA and where appropriate any challenge to the claimant’s proposed claim interpretation (confer Rule 24). If the Statement of defence includes an assertion that the patent in suit is invalid, the Statement of defence shall include a Counterclaim against the proprietor of the patent for revocation of said patent in accordance with Rule 42. Simply put, the defendant has three months to build up the defense case and no single day more. Any argument or fact presented by the defendant after this three-month deadline faces the severe risk to be ignored by the Court as late filed.
After service of the Statement of defence, the judge-rapporteur shall, after consulting the parties, set a date and where necessary a time for an interim conference and set a date for the oral hearing.
Within two months of service of a Statement of defence, the claimant must lodge a Reply, including a Statement of defence to the Counterclaim for revocation and an application to amend the patent in suit, if applicable. This means that the pressure is now on the plaintiff and the tough deadlines provided for in the ROP are now strong headwind for those plaintiffs who did not properly prepare their case and who are caught by surprise by new factual evidence, new claim construction or new pertinent prior art brought forward by the defendant.
The complete deadline regime of the Written Procedure can be visualized as follows:
During the interim procedure, the judge-rapporteur shall make all necessary preparations for the oral hearing. He may in particular hold an interim conference with the parties. The interim conference shall be audio recorded. The recording is not public and shall only be made available to the parties or their representatives after the hearing. However, it is very likely that the audio recording will become public, since the parties’ representatives will likely cite from the audio recording in their further submissions. The interim procedure shall be completed within three months of the closure of the written procedure.
After one year, the oral hearing shall be held. Also, this hearing will be audio recorded and the presiding judge shall aim to complete the hearing within one day. Just like before the Court of Justice of the European Union, the presiding judge may set time limits for parties’ oral submissions in advance of the oral hearing. A decision on the merits may be given directly after the closure of the oral hearing and written reasons may be provided on a subsequent date. In the alternative, the Court shall issue the decision on the merits in writing within six weeks of the oral hearing. Thus, an enforceable decision might be available within 14 months from filing the complaint. It remains yet to be seen, which enforcement securities will be imposed on the prevailing plaintiffs by the various local divisions of the UPC. Insofar, the following rule will likely apply: the broader the requested court order with respect to territory, defendants and accused products, the higher the enforcement security. Thus, requests for very specific court orders might become the rule (e.g. injunctive relief in relation to accused product X, sold in UPC member state Y, by defendant Z).
Preliminary Injunction Proceedings
It does not come as a surprise that the ROP do not provide for fixed timelines in case of preliminary injunction proceedings. However, the gist of the Rules is clear: a request for a preliminary injunction shall be dealt with in an expedient manner, whereby even ex-parte relief is available in special circumstances. It is fair to assume that first instance preliminary injunction proceedings will be completed within a few months and in any event in less than half a year.
Appeal Proceedings
If first instance UPC proceedings can be characterized as a rocket docket, the same is certainly true for UPC appeal proceedings. Here, the timelines are even tougher and a final decision on infringement and validity can be expected in less than a year’s time. This is of particular importance since judgements that are rendered by the Court of Appeals are generally enforceable without the need to provide an enforcement security.
Summary
If the UPC can keep up with the timelines outlined above, it will become the fastest patent trial court in the world. The speed of the proceedings require careful planning and workflow management at both ends.
Image Source: Deposit Photos
Image ID: 271585360
Author: AntonMatyukha
