UK: Revisiting Guidance On Granting Stays In Concurrent National And EPO Patent Invalidity Proceedings

Last Updated: 31 January 2014
Article by Scott Baxter

In a decision released 21 November 2013 the Court of Appeal delivered its judgement in IPCom GmbH & Co KG v HTC Europe Co Ltd & Ors [2013] EWCA Civ 1496, revising guidance on when a stay in patent invalidity proceedings should be granted pending the outcome of concurrent opposition proceedings in the EPO. Floyd LJ concluded that judges should continue to exercise their discretion to stay proceedings depending on the facts.

The background in brief

The patent in dispute, relating to wireless telecommunication networks, was considered in two separate (but entwined) proceedings in which the proprietor, IPCom, alleged infringement by Nokia and HTC. After grant of the patent (in March 2010) both Nokia and HTC launched oppositions at the European Patent Office (EPO). Nokia also commenced a revocation action in the Patents Court, which IPCom denied and counterclaimed for infringement.

In June 2011 the High Court held the patent valid and that it had been infringed by Nokia. The Court of Appeal upheld the decision and the Supreme Court refused appeal. After success in the Nokia proceedings IPCom issued proceedings for infringement against HTC and directions were given for the technical trial.

Meanwhile, the EPO's Opposition Division (OD) concluded that the patent was invalid for added matter. The Technical Board of Appeal reversed the decision and the patent was remitted back to the OD for consideration of the remaining issues: lack of novelty and lack of inventive step.

In May 2013 HTC applied to stay the technical trial until the EPO reached a final decision on all aspects of the opposition. Roth J refused the application to stay, and HTC appealed the order.

Revisiting the guidance on stays

Floyd LJ revised the guidance laid out in Glaxo v Genentech (here). He re-emphasised that it is for the Patents Court to decide whether to grant a stay. The Court of Appeal should not interfere with the judge's discretion unless it fails to accord with legal principle or the decision was not made by taking into account all of, and only, the relevant circumstances. However, a stay of proceedings should be the default option and it is for the party opposing the stay to show why it should not be granted. Additionally, Floyd LJ included some factors that the Patent Court should consider when exercising their discretion:

  • The extent to which refusal of a stay will irrevocably deprive a party of a benefit available under concurrent national and EPO jurisdiction. For example, where a patent owner has obtained damages or account of profits for infringement and the EPO subsequently holds that the patent is invalid. However, this factor can be mitigated by providing undertakings to repay.
  • The difference in the length of time it will take the court and the EPO proceedings to conclude. This is an important factor. However, it must be considered in conjunction with any prejudice which a party will suffer from the delay and lack of certainty, and the level of certainty that will be achieved by the stay.
  • Refusal of a stay is suitable where there is evidence that some commercial certainty would be achieved at a considerably earlier date than if proceedings were stayed pending a decision from the EPO.
  • The risk of wasted costs due to concurrent national and EPO proceedings. However, this factor will normally be outweighed by commercial factors concerned with early resolution.
  • Refusal of a stay may, by deciding certain issues, promote settlement.
  • Refusal of a stay may be in the public interest as it would dispel uncertainty surrounding the monopoly rights conferred by a granted patent.

Impact of the revised guidelines

The judge's discretion to grant or refuse a stay is very broad and the factors to consider for refusal are ample. Therefore, it remains unlikely that the court will grant a stay for national patent invalidity proceedings pending the outcome of concurrent EPO proceedings.

However, whilst it is notable that the default position is now that a stay should be granted, it is significant that Floyd LJ addressed recoverability of monetary payments as a factor to consider. Parties should be aware that it may be necessary to provide undertakings for repayment of any monetary benefit derived from the refusal to grant a stay if they wish to successfully oppose a stay in the first place.

The full Court of Appeal decision can be read here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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