Report of the Litigation Committee

A. Casalonga (FR), ChairA. Casalonga (FR), Chair

I) UPC courts fees and recoverable costs

The final draft has been published on February 25th, 2016.
It contains:

  • an amended Rule 370 of the Rules of Procedure
  • a table of fees
  • a scale of ceilings for recoverable costs

In addition a draft Guidelines has been issued, for establishing the value of actions for the determination of Court fees and recoverable costs.

When comparing the previous with the current version of the document, the following differences can be noted concerning the court fees:

  • There is no more a fee for opt-out (or withdrawal of opt-out).
  • It has been clarified that only one fee applies in the case of more than one claimant or defendant or a plurality of patents.
  • Reimbursement in case of single judge, withdrawal or settlement is provided in addition of a possible reduction of 60% of all court fees for small and micro enterprises
  • Only small enterprises and micro-enterprises are entitled to the reduction. Medium-sized enterprises, non-profit organisations, public research organisations and universities are not anymore eligible.
  • A sanction has been introduced for the case where an applicant has wrongfully stated to be entitled to the reduction (additional 50% of the regular fee).
  • Changes regarding the value-based fees:
    • In the range above 750.000 E to including 2.000.000 E value, the fees have been reduced.
    • In the range above 3.000.000 E to including 25.000.000 E value, the fees have been increased.
    • Above 30.000.000 E value, the fees have been increased. Additional ranges for up to and including 50.000.000 E value and for more than 50.000.000 E value have been introduced.
  • The fee for an application for an order to freeze assets has been reduced.
  • The fee for a request for discretionary review has been reduced.

The payment of the value based fee will now have to be made together with the lodging of the relevant action, at the same time as the payment of the fixed fee, on the assumption of correctness and based on the estimated value of the litigation. The amount will be rectified during the interim procedure.

With regard to the recoverable costs, it has been clarified in the preamble (para. 1, last sentence) that the Court has a large margin of appreciation and that the ceilings are only a safety net, i.e. an absolute cap.

Changes regarding the ceilings for recoverable costs:

  1. Up to and including 1.000.000 E value, the ceilings have been reduced.
  2. In the range above 16.000.000 E to including 30.000.000 E value, the ceilings have been increased.
  3. Above 50.000.000 E value, the ceiling has been reduced.

The major part of the changes correspond to the suggestions made by epi in the position paper sent to the Preparatory Committee or can be accepted. Nevertheless, the Litigation Committee considers that some points should be further amended.

According to the proposal of the Litigation Committee the epi sent to the Preparatory Committee a position paper containing the following comments:

  1. The 60% fees reduction applies only to small and micro enterprises, while Article 36-3 of the UPCA mentions also medium-sized enterprises, non profit organizations, universities, research organizations and natural persons. Concerning natural persons, the possibility to request legal aid as provided in Rules 375 and following is rather complex so that a reduction of fees would seem a better solution.

  2. §7 of the new draft for Rule 370 states that « only one fixed fee will apply if an action has more than one claimant and/or more than one defendant or if the action concerns a plurality of patents ». This is somewhat unclear since the following table of part IV mentions « fee ». It should be made clear that §7 applies to all fees (fixed fees and value based fees)

  3. The ceilings indicated for the recoverable costs seem to apply only to representation costs, meaning that they do not include experts costs, experiments costs, witnesses costs and any other costs: this should be clarified

  4. In case of bifurcation, it should be made clear that this would in fact constitute almost a second action , with a separate procedure and a separate oral hearing: the ceilings should take this into account

II) Draft Rules of Procedure

The 18th draft of the Rules of procedure dated 19 October 2015 is almost definitive. Nevertheless it seems still possible to make further remarks. According to the proposal of the Litigation Committee the following comments were sent by the epi to the Preparatory Committee:

Rule 5 - Opt-out and withdrawal of the opt-out

According to Rule 5-4, no representation is compulsory for lodging an application for opt-out or an application to withdraw an opt-out. This provision is also in the UPCA and cannot therefore be amended.
However, when a representative is appointed it should be a professional representative or a legal practitioner as defined in Article 134 EPC or in Article 48 of the Agreement.
In other words the sentence contained in Rule 5-4 “such a representative may include” should be replaced by “such a representative shall include”.

Alternatively, if this proposal is refused, it should be proposed to require a power of attorney from any representative appointed.
According to the present wording of Rule 5 as well as the online form of the CMS, there is almost no checking of the person lodging an application for opt-out or an application to the withdraw an opt-out. It is namely sufficient to give a mobile phone number. Consequently, it is extremely dangerous and very easy for any fraudulent person to opt-out any patent from any company.
No examination will be made and only before a National court will be possible to explain that an opt-out is invalid because it was fraudulently applied for. It will be necessary to afford evidence of such a fraud.
For all those reasons, requiring a power of attorney to be filed when an application for opt-out or an application to withdraw an opt-out is lodged should be provided in Rule 5.4. Such a power of attorney should be executed by at least one of the proprietors of the patent and would permit in the future to challenge more easily a fraudulent action if the opt-out or the withdrawal of the opt-out was made against the will of the owner of the patent.

Rule 88 – Application to annul or alter a decision of the Office

In the same way as for opt-out, no representation is compulsory for such an Application.
In view of the technicality of such an Application, the same remarks as for Rule 5 can be made. In the same way if a representative is appointed it should be either a professional representative or a legal practitioner defined in Article 134 EPC or a representative referred to in Article 48 of the Agreement.
A corresponding statement should be added in Rule 88-4.

Rule 220- Appealable decisions

This rule is somewhat unclear:
In Rule 220-2 it is stated:
“Orders other than those referred in Rule 220.1 and Rule 97.5, may be either the subject of an appeal together with the appeal against the decision or may be appealed with the leave of the Court of First Instance within 15 days of service of the Court’s decision to that effect.”

The underlined decision seems not to be an order to be attacked. It seems to be a decision about the request for leave of the Court of First Instance. Accordingly, the 15-day term relates to the filing of the appeal following a positive decision about the allowance of the leave by the Court of First Instance. Accordingly, there is no clear term for filing the request for leave of the Court of First Instance (which should probably be 15 days of service of the Court’s order to be attacked).

Consequently Rule 220-2 should be clarified.

Rule 220-3 states: “ In the event of a refusal of the Court of First Instance to grant leave within 15 days of the order of one of its panels a request for a discretionary review to the Court of Appeal may be made within 15 calendar days from the end of that period.”

This wording is also not completely clear: What happens, if the refusal is issued after 15 days? Is a discretionary review allowable? Consequently, Rule 220-3 should be clarified.

Rule 221 – Application for leave to appeal against cost decision

Rule 221-1 states: “A party adversely affected by a decision referred to in Rule 157 may lodge an Application for leave to appeal to the Court of Appeal within 15 days of service of the decision of the Court refusing leave to appeal.”

This statement is not clear. The cost decision referred to in Rule 157 is a decision of the Judge-rapporteur of the first instance. The leave to appeal should first be requested from the Court of the First Instance and not from the Court of Appeal.

If this first request for leave to appeal is refused by the Court of First Instance, a further request for leave to appeal could be filed before the Court of Appeal according to Rule 221-1. The time period for filing this second request is of 15 days of service of the decision of the Court of First Instance rejecting the first request for leave.

The wording of Rule 221-1 should be amended along those lines.

III) Draft Code of conduct for Representation before the UPC

The draft Rules of Procedure (“RoP”) of the Unified Patent Court include certain restrictions on the actions of representatives of parties to actions in the UPC; and additionally create certain rights and obligations.

In the 18th Draft RoP the most important in this regard are:

  • Rule 284 prohibiting a representative from misrepresenting cases or facts either knowingly or with good reasons to know;
  • Rule 287 creating legal advice privilege in confidential communications between clients and advisers – whether lawyers or patent attorneys;
  • Rule 288 creating litigation privilege in communications with third parties;
  • Rule 290(1) granting to the UPC the powers normally accorded to courts of law in respect of representatives;
  • Rule 290(2) requiring representatives strictly to comply with any Code of conduct (“CoC”) adopted for representatives by the Administrative Committee;
  • Rule 291(1) granting the UPC the power to exclude a representative from proceedings before the court for a range of transgressions including failure to comply with the CoC; and
  • Rule 291(2) requiring the presiding judge in the event of exclusion of a representative to stay the proceedings in order to allow time for the appointment of a replacement representative.

Also worthy of mention is Rule 292 detailing the right of audience under Article 48(4) of an assisting patent attorney who is not otherwise qualified to provide representation. Rule 292 states that Rules 287 to 291 shall apply mutatis mutandis to such patent attorneys.

With regards to Rule 290(2), three organizations have taken it upon themselves to participate in drafting of a Code of Conduct. These are EPLAW (, a voluntary-membership organization of commercial lawyers in Europe involved in patent work; EPLit, ( another voluntary-membership organization chiefly representing European Patent Attorneys who are qualified to litigate before the UPC; and epi.

epi differs from the other two organizations in several important respects of course, being (a) constituted by statute (b) characterized by a compulsory membership regime and (c) focused on dealings with the EPO. Moreover epi is considerably larger than either of the other two organizations and is the only one of the three that acts in the interest of all European Patent Attorneys, including those falling under Article 48(4) UPC. This initiative has been welcomed by the Preparatory Committee for the UPC. The current draft of the CoC is to be submitted to the Preparatory Committee for the UPC, for adoption by the Administrative Committee of the UPC once the agreement comes into force and the Administrative Committee has been created.

A preliminary draft will soon be made available for information on the epi web site.

The Litigation Committee is actively working together with the Professional Conduct Committee of the epi to finalize this draft, before it is submitted to the Preparatory Committee.

IV) Questionnaire on the IP rights enforcement Directive

The EU Commission has issued a questionnaire on the IP rights enforcement Directive (2004/48EC of 29 April 2004) with the aim of obtaining the opinion of the users on the present application of this directive in the EU Member States.

The following comments proposed by the Litigation Committee were sent to the EU commission:

The epi studied the questionnaire and felt generally that the future UPC, including the Rules of procedure were in line with the directive which is therefore satisfactory. In particular, the UPCA solves the current difficulties of cross border injunctions and damages for patent infringement within the territory of the Contracting Member States.

Of course, it will be necessary to carefully watch the development of the practice of this new court and the epi would propose to the EU Commission to report on the functioning of this new court in the future.

For the time being one point could be considered concerning access and preservation of evidence in the digital environment:

The increasing number of infringements occurring in the digital environment via websites, social media (such as Facebook pages for commercial purposes), app stores, etc. require namely quick and efficient means for preserving digital evidence that may easily be deleted from the publicly accessible webpage or other source. In that regard the IP rights enforcement directive, seem to be more designed with view to the seizure of physical proof (samples of products, materials, production machines, etc.) rather than to the preservation of digital evidence (such as data stored on servers, old or deleted versions of web pages, etc.).

Improvement in this regard could be considered.