The Court of Appeal in Glaxo v Genentech [2008] EWCA Civ 23 has clarified the test on whether to stay UK proceedings for revocation of a UK designation of a European patent pending resolution of opposition proceedings to the patent at the European Patent Office (EPO). The previous approach of the UK Courts has been to apply a presumption in favour of a stay but not where to do so would cause injustice. In the past various factors had been taken into account in exercising this discretion. The Court of Appeal was therefore asked in the present case to provide determinative guidance on the issue.
The starting point in conflict of laws cases in general commercial cases is that there should only be one court for determining the issue in question, and there is therefore a general presumption in favour of a stay. The Court held that in patent cases, however, the Patents Act 1977 and the EPC expressly allowed for invalidity of a patent to be tried in two forums, and the risk of duplication of proceedings was inherent in the present system. Therefore, the decision to grant a stay was one of wide discretion.
Although the Court of Appeal expressly chose not to compile a complete list of factors valid for all cases, it did provide some general guidance on the discretion to grant a stay. In general terms, the Court stated that the wide discretion afforded to the Court had to be exercised to achieve the balance of justice having regard to all the relevant circumstances. The test for determining a stay in patent proceedings, however, had to be distinguished from the general test for commercial litigation and there is no presumption in favour of a stay in patent cases. The Court also set out the following factors which the Court should consider:
1. The length of time it will take for the respective proceedings (in the UK and at the EPO) to achieve some certainty on validity. Where proceedings in the UK will achieve resolution significantly sooner than the EPO, as is often currently the case, it will usually be a proper exercise of discretion to decline the stay. This factor will usually carry more weight than any other.
2. Commercial certainty in the UK, even if a party will still have to wait to obtain certainty elsewhere in Europe; some certainty, somewhere, was in general preferable to continuing uncertainty everywhere.
3. Other considerations may affect the balance of justice in the particular case, including additional costs in duplication of proceedings and the order in which proceedings are commenced, but these other factors are of lesser importance than obtaining commercial certainty somewhere sooner.
As a result of this decision, a party still cannot be sure of succeeding with, or resisting, an application for a stay pending opposition at the EPO. However, in light of this authoritative guidance, and the current delays at the EPO in concluding opposition proceedings (which can take up to four years or more with appeals), a party will have good arguments to resist an application for a stay of UK proceedings. The UK should therefore continue to remain a favourable jurisdiction in which to obtain a (relatively) quick and exportable decision on the validity of a European patent. On the other hand, there will be no automatic refusal of any stay application made, and applications will continue to require filing of evidence on the various factors raised.
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