Patents

Patent rights can be enforced through civil proceedings in the United Kingdom. There are four main regimes.

England and Wales

In England and Wales, a patent case may be heard in the Intellectual Property Enterprise Court or the Patents Court. In the Intellectual Property Enterprise Court, damages are limited to £500,000 and costs recovery is limited to £50,000. Larger cases tend to be heard in the Patents Court. Appeals are made to the Court of Appeal, and subsequently to the Supreme Court.

Scotland

In Scotland, cases are heard by Scotland’s civil court, the Court of Session. The Court of Session consists of an outer house and an inner house. Initially, specialist judges in the outer house consider the case. The inner house and then the Supreme Court hear appeals.

Northern Ireland

In Northern Ireland, cases are brought before the High Court of Northern Ireland. Appeals are made to the Court of Appeal of Northern Ireland and then to the Supreme Court.

Intellectual Property Office hearings

The UK Intellectual Property Office (IPO) (formerly the Patent Office) can resolve patent disputes. The powers of the IPO are more limited than those of the courts as both parties have to agree to be involved and injunctions are not available. Decisions of the IPO can be appealed to the Patents Court.

Intellectual Property Office opinion service

Anyone involved in a patent dispute can request the IPO to provide a non-binding opinion. Opinions are made by a senior examiner at the IPO and address the main disputed issues. This can help businesses or individuals to negotiate a resolution and avoid costly litigation. The fee is £200 and the process takes three months or less.

Requests for opinions are published and the public can make observations. Observers can submit reasons why they think a request should be denied. If someone makes an observation, the person who filed the request, the patent owner or an exclusive licensee has two weeks in which to file observations in reply. Observations and replies are taken into account by the senior examiner when forming the opinion.

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Patent infringement trials in the Patents Court are usually in front of an expert judge. Before the trial, both parties are generally required to provide the judge with written skeleton arguments outlining their case, a reading list and a bundle of documents, including statements of case, witness statements, expert reports, documents referred to in the statements and reports and legal authorities. The exact format of the trial can vary according to the judge’s discretion. The judge may hear oral evidence from witnesses and experts, which is usually limited to matters contained in the written witness statements and expert reports previously submitted to the court. Witnesses may be cross-examined.

A trial often lasts between two days and two or three weeks. However, there is a streamlined procedure that can reduce the case to one day. The streamlined procedure in general requires all evidence to be presented in writing.

Cases heard in the Intellectual Property Enterprise Court have a simpler procedure. Where possible, cases are decided on the basis of written submissions alone and no further evidence or written argument is allowed without the permission of the judge. Trials last no longer than one or two days and cross-examination of witnesses is strictly controlled.

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In relation to infringement, invalidity and enforcement, the party that has made the allegation must prove its claim to the court on the balance of probabilities.

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The owner of a patent can sue for patent infringement. Exclusive licensees may also sue for infringement that is within the scope of their licence, although the owner of the patent must also be joined as a party. Depending on the terms of the licence, non-exclusive licensees may also request to be added to proceedings brought by the patent owner.

A person who is accused of infringement can apply for a declaration of non-infringement for acts done or proposed to be done. Prior to such an application, the accused infringer must write to the patent owner to set out all details of the act in question and request an acknowledgement of non-infringement. If the owner refuses or fails to provide an acknowledgement of non-infringement, the application can be made.

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Inducement

A person who is alleged to have induced a patent infringement can be joined into a claim if he or she is closely involved with the infringement. This can be useful to the claimant as the alleged inducer will be required to disclose documents that might assist the claimant in proving his or her case.

Contributory infringement

A person can be liable for infringement of a patent if he or she supplies or offers to supply a person in the UK, other than a licensee or other person entitled to work the invention, with any of the means relating to an essential element of the patented invention, when he or she knows, or it is obvious to a reasonable person, that those means are both suitable for putting, and are intended to put, the invention into effect in the UK. Contributory infringement can arise when an article that satisfies these requirements is directly or indirectly supplied to the direct infringer.

The relevant intention of the ultimate users need to exist when they first take possession of the means, and can be formed at a later date. However, the supplier must know (or it must be obvious) that some users will form this intention.

Multiple parties

Persons can be found to be jointly and severally liable for infringement by virtue of a common design. This can apply to persons who assist, procure, enable, facilitate, persuade, induce, incite or authorise others to commit a tortious act. For example, if two or more persons act in concert with one another pursuant to a common design in the infringement, they can be found to be joint infringers. Where a director of a company goes beyond his or her constitutional role in the firm, and personally contributes to the infringing act, he or she may be personally liable.

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Multiple parties can be joined as defendants in the same lawsuit. Generally, courts have significant leeway in joining parties to a single lawsuit. For example, a court can order that a party be added to the proceedings if it is desirable to add the new party in order to resolve the issues in the proceedings, or if there is an issue involving the new party and the existing party that is connected to the matters in dispute in the proceedings. The following are examples of situations where courts may join multiple parties:

• when there is a corporate or commercial relationship to the accused methods or products;
• when multiple defendants are allegedly infringing the same patent; or
• when multiple defendants are allegedly infringing different patents but the accused products are the same and the evidence, disclosure, etc, required in relation to infringement of the different patents are likely to be similar.

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Performing a patented method abroad can support a charge of patent infringement if a product produced by that process is imported or sold in the UK.

For computer systems over a network, making available a computer system located outside the UK to users in the UK can lead to liability for infringement if the software for use with the computer system is sold in the UK, and the computer system is being used by users in the UK.

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Equivalents of the claimed subject matter cannot be shown to infringe. This is based on case law, including Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2004] UKHL 46.

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England and Wales

In England and Wales, a court has wide latitude in issuing orders relating to disclosure, including:

• an order dispensing with the need for disclosure;
• an order to disclose only the documents on which a party intends to rely;
• an order that disclosure should be given on an issue-by-issue basis;
• an order for each party to disclose documents that, it is reasonable to suppose, may contain information that will enable that party to advance its own case or damage the case of any other party, or leads to an inquiry that has either of those consequences;
• standard disclosure (see below); or
• any other order that the judge sees fit.

The standard disclosure includes:

• documents on which a party will rely;
• documents that:
• adversely affect a party’s case;
• adversely affect another party’s case; or
• support another party’s case; and
• the documents that a party is required to disclose by a relevant practice direction.

Depositions in the England and Wales are available under very limited circumstances.

For patent litigation, with respect to validity, a party need only disclose documents created during the period from two years before and after the earliest claimed priority date to two years after the earliest claimed priority date. With respect to infringement, an alleged infringer does not need to disclose documents relating to the operation of the accused product or process if the alleged infringer provides a product and process description that adequately describes relevant technical details of the accused product or process.

Pre-action disclosure of documents is also possible in circumstances where such disclosure would be required as part of regular litigation, would assist in disposing fairly of the anticipated proceedings and would save costs (eg, by resolving the dispute).

Scotland

In order to obtain documents from an opposing party, a request for an order from the court sanctioning a discovery request must be made.

Northern Ireland

A party must produce documents that relate to any matters in dispute in the litigation.

Obtaining discovery of parties outside the UK

A party can obtain evidence from someone who is not a party to the litigation and is located outside the UK through the Hague Convention by having a letter of request issued by the High Court. In addition, EU legislation provides procedures for obtaining evidence from people in other EU states.

There is no standard disclosure in actions in the Intellectual Property Enterprise Court, but limited disclosure may be ordered on specific issues.

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Cases in the Patents Court take about 12 to 18 months. Cases in the Intellectual Property Enterprise Court and cases subject to the streamlined procedure in the Patents Court take about six to nine months.

It takes about 14 months after the initial decision for an appeal to be heard.

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For a case in the Patents Court, costs from the filing of a claim through to judgment tend to range from about £350,000 to £650,000, depending on the complexity of the case. More complex cases can have costs above £1 million. Cases under the streamlined procedure (see question 2) or that are brought before the IPO will tend to be much cheaper, and are often less than £100,000.

Contingency fees are permitted in the UK.

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Appeals can be made to the Court of Appeal based on an incorrect decision of the lower court, or an unjust result stemming from a procedural irregularity. Appeals are generally limited to a reconsideration of findings of the trial judge. New evidence is not allowed at the appellate stage, except in very limited circumstances.

Appeals from the Court of Appeal are made to the Supreme Court.

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In patent infringement cases, an accused infringer may raise as a defence that the patent owner is acting in violation of anti-competition law or other business-related tort; for example, if the patent owner is demonstrating an abuse of a dominant position or where there is an anticompetitive agreement (the ‘Euro-Defences’).

It is indeed possible that such enforcement of a patent could be considered abusive conduct under articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU), which deal with restrictive agreements and abuse of dominant position respectively. For example, if a patent owner filed a patent infringement lawsuit where he or she knew or believed that there had not actually been any infringing acts or that the patent was invalid, this would amount to abusive conduct. The same would be true if a patent owner filed an infringement suit solely to harass an entity or individual with a less dominant position in the marketplace.

There are other situations in which anticompetitive conduct could be found. For example, if a patent were essential to a technological standard (such as a mobile communications standard) and the patent owner refuses to license the patent on fair, reasonable and non-discriminatory terms to certain parties, this could potentially be a violation.

In addition, under section 70 of the Patents Act 1977 (the Act), as modified by the Patents Act 2004, a patentee may not make threats of litigation under certain circumstances. This is to prevent patent owners from disrupting markets simply by threatening to sue other parties for infringing patents. Although threats are generally considered justified if the threats refer to acts of ‘making’ or ‘importing’, if the threatened party believes the threats are unjustified (ie, because it believes the patent is invalid), it may bring proceedings against the patent holder for, among other things, a declaration that the threats are unjustified, an injunction against further threats, and damages in respect of loss sustained as a result of the threats.

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Alternative dispute resolution (ADR) is an encouraged and commonly used way for parties to resolve disputes without litigation. The most common forms of ADR are mediation, where an independent third party helps the disputing parties to come to a (generally non-binding) mutually acceptable outcome; and arbitration, where an independent third party considers the facts at issue and makes a decision that is generally binding on the parties. A finding in arbitration, because it is generally binding, can be enforced in the courts.

ADR is likely to be both faster and less expensive than litigation through the courts, and is also confidential, which makes ADR particularly suited for resolving disputes concerning matters that are themselves confidential. Also, because mediation generally results in a mutually beneficial agreement, it is especially helpful when the two parties wish to maintain an amicable working relationship moving forward.

ADR may be less useful in situations where either or both parties are not prepared to negotiate, or if there is little or no prospect for a successful outcome.

Part 1 of the Civil Procedure Rules, known as the overriding objective, says that the court has a duty to actively manage cases. This includes encouraging the parties to use ADR where appropriate and facilitating ADR.

Courts may strongly encourage parties to mediate, but they cannot compel parties to do so. However, there are circumstances in which a court may impose costs or other monetary consequences on parties who refuse to engage in ADR without justification. This is consistent with part 44.4 of the Civil Procedure Rules, which states that when assessing costs, judges must take into account the conduct of the parties, including conduct before and during the proceedings and the efforts made before and during the proceedings to try to resolve the dispute.

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In general, to be granted a patent, an invention must be:

• something that can be made or used;
• new; and
• inventive - not simply a minor modification to something that already exists.

Certain classes of ‘inventions’ are specifically excluded from patentability in the UK, including literary, dramatic, musical or artistic works; a way of doing business, plating a game or thinking; a method of medical treatment or diagnosis; a discovery, scientific theory or mathematical method; new types of plants, seeds or animal; the way information is presented; certain kinds of computer programs; and inventions that are contrary to morality or public policy.

A patent can, however, be obtained for certain business methods and software if those applications are carefully drafted to avoid running afoul of section 1(2) of the Act, although these patents may in some instances later be unenforceable.

In Merrill Lynch [1989] RPC 561, the Court of Appeal held that business methods may only be patentable if it can be shown that they make a ‘technical contribution’ to the known art, an approach that was confirmed in Aerotel Limited v Telco Holdings Ltd [2006] EWCA Civ 1371. Later, in Protecting Kids the World Over Ltd [2011] EWHC 2720 (Pat), the court applied the Aerotel test and noted that it was helpful to consider the task that the computer program is seeking to perform in assessing the technical contribution.

Courts have also held that the mental act exclusion should be given a narrow interpretation to cover only acts actually carried out mentally.

Medical/biotechnical exceptions and considerations

Section 4A of the Act outlines the constraints on patents related to medical inventions. Under the Act, while surgical instruments and medical apparatus or devices may be patentable, methods of treatment involving surgery, therapy and diagnosis (including dosing regimes) are not.

There are certain exceptions, however, relating to ‘second medical use’. Outlined in section 4A(4) of the Act, ‘second medical use’ allows for a patent to be awarded for a substance or composition in use for a specific treatment, provided that the substance or composition has not been known for that specific use previously. Several examples of where this is applicable are where a substance or composition is used to treat a specific disease, where it had previously been used for the treatment of a different disease; if there is a new method, time frequency or dosage of administration (provided the new use is both new and inventive, and is not aimed at the activity of the doctor as opposed to the manufacturer); in limited circumstances where the substance or composition is used to treat a new type of patient (provided this new group of patients could not be contained within the larger group of patients previously treated); or where the substance or composition is combined with a second substance or composition.

Instances that would not fall under these exceptions and are therefore not patentable would be, for example, where a new mechanism of action (by the same substance or compositions) is discovered, where a new advantage to a known use is found or if the same treatment is performed outside the body where before it had been performed inside the body.

In the field of stem cell research ‘uses of human embryos for industrial or commercial purposes’ are excluded from patentability.

Courts have held that a patent should not be granted for an invention if its implementation requires the prior destruction of human embryos or their prior use as base material, although there remain open questions regarding the patentability of inventions that use immortalised human embryonic stem cell lines.

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In general, a patent belongs to the inventors of the underlying invention. If there are multiple inventors, they will be considered ‘joint’ owners, and will be entitled to equal, undivided shares in the invention. A patent held by joint owners may not be licensed or assigned without the consent of all of the joint owners. If a party other than the inventor(s) owned all the rights to the invention at the time of the invention, such a party or parties will be considered the owner or joint owners. Each joint owner must prove that he or she was involved with the creation of the invention or inventive concept, and anyone wishing to be substituted as a named inventor must prove that the original inventor did not have any input into the inventive concept underlying the invention.

If an individual generates an invention during the course of his or her employment and the invention would reasonably have resulted from normal activities carried out under the course of his or her employment, then it and any patents granted thereunder would generally belong to the individual’s employer. If the patented invention grants the employer significant benefit, the individual inventor may be entitled to some compensation.

Patent ownership is recorded with the IPO, and patents may be assigned or transferred under a separate, specific patent assignment agreement or by means of contractual provisions in a broader contract.

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Invalidity is a common counterclaim raised in patent infringement proceedings, and may be made to the Patents Court, the Intellectual Property Enterprise Court or the IPO. Anyone may make an application for revocation due to invalidity.

Grounds for invalidity are set out in section 72 of the Act, and include:

• lack of novelty;
• lack of an inventive step;
• incapability of industrial application;
• the invention falls under an excluded category (as discussed in question 15);
• the invention or patent would be contrary to public policy or morality;
• the invention is insufficiently disclosed by the patent; or
• the subject matter of the patent goes beyond what was disclosed in the original patent application.

A patent may be amended to avoid invalidation, but any newly added material would be subject to invalidation in the same way as the original material.

The Comptroller of Patents (the Comptroller) may also, under limited circumstances, revoke a patent on his or her own initiative, and he or she may continue to review the patent even if a request to review in the IPO has been withdrawn. If such a request is withdrawn in the UK courts, however, the request will not be pursued further.

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To qualify for patent protection, an invention must be ‘novel’ within the meaning of section 1(1)(a) of the Act. Put simply, one cannot obtain protection for a supposed invention if the public was already entitled to the same subject matter of that invention prior to the submission of the application.

Determining novelty is a two-step process:

• determine the state of the art; and
• determine whether the state of the art anticipates the invention.

Pursuant to the Act, an invention is novel if it does not form part of the ‘state of the art’ as defined by sections 2(2) of the Act. An invention is not new if it forms part of the state of the art, which is in the public domain prior to the date of the application, or contained in a patent application with an earlier priority date. An alleged invention is not considered where, for example, the invention has been used by a member of the public or has been sold or supplied to the public; or where an invention was disclosed prior to the filing of an application in such a way that would allow the invention to be easily reverse-engineered. However, an earlier disclosed invention may still be considered novel if it was disclosed in such a way that it could not be readily identified or reverse-engineered.

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To be eligible for patent protection, arriving at the underlying invention must have involved some ‘inventive step’. The test for determining the requirements for the ‘inventive step’ in UK law was initially set out in Windsurfing International Inc v Tabur Marine (Great Britain) Ltd [1985] RPC 59 and later refined in Pozzoli Spa v BDMO SA & Anor [2007] EWCA Civ 588 (22 June 2007):

• identify the fictional ‘person skilled in the art’, then identify the relevant common general knowledge of that person;
• identify the inventive concept of the claim in question or, if that cannot readily be done, construe it;
• identify what, if any, differences exist between the matter cited as forming part of the ‘state of the art’ and the inventive concept of the claim or the claim as construed; and
• determine if, when viewed without any knowledge of the alleged invention as claimed, do those differences constitute steps that would have been obvious to the person skilled in the art or do they require any degree of invention?

The hypothetical person of skill in the art may be an individual or a team of individuals, and this hypothetical individual may be different from the one used for claim construction purposes.

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A patent holder will not be awarded damages unless an accused infringer knew or had reason to know that a valid patent existed. A patent may also be considered unenforceable if it is found to breach laws or regulations relating to unfair competition, but this is rare.

A court may also decline to award damages or award an injunction, or even decide to issue a fine if it finds that a patent holder has abused a dominant position in the market by failing to license a standards essential patent on fair, reasonable and non-discriminatory terms.

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Section 64 of the Act provides an accused infringer with a defence against infringement charges if he or she can show that he or she was, in good faith, carrying out the allegedly infringing activities (or making ‘serious and effective preparations’ to do so) prior to the priority date of the patent. This is a defence based in the ‘right to work’ doctrine, and is available as a defence for both commercial and non-commercial uses. If successful in such a defence, the accused infringer will have the right to continue to perform those allegedly infringing acts, but he or she may not grant a licence to anyone else to perform the acts.

The leading case on this topic is considered to be Lubrizol Corp v Esso Petroleum [1997] RPC 195, which established that an individual relying on a prior use defence did not need to be doing identical acts to be afforded protection under section 64, but instead ‘gave practical protection to enable a man to continue what in substance he was doing before’. Therefore, the acts needed only to be substantially the same as the prior acts. This was so that the protections afforded by section 64 would not be ‘illusory’. Under this interpretation, though a person who was, prior to the issuance of a patent, manufacturing a certain product may not manufacture a new product or expand into other products, but ‘identicality is not required’. The approach of the court was confirmed in the Court of Appeal ([1998] RPC 727) and was recently applied in H Lundbeck A/S v Norpharma SpA [2011] EWHC 907 (Pat).

The defence is available to cover all types of inventions.

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In UK patent infringement cases, damages are compensatory rather than punitive, as UK law does not recognise the concept of punitive damages for patent infringement. Damages are instead intended to make the patent owner whole and put him or her in the same state he or she would have been in had the infringement not taken place. A patent owner may, however, collect interest on any damages awarded.

The measure of damages is the sum of money that would put the patentee in the same position as he or she would have been in had the infringement not occurred. The patentee may only recover loss that was foreseeable, caused by the infringement and not excluded from recovery by public or social policy. In assessing a reasonable royalty, a court looks on the agreement that would have been reached between a willing licensor and a willing licensee. If there are comparable licences in the relevant field, these are seen as the most useful guidance. A court may also take a ‘profits-available’ approach, which involves an assessment of the profits that would have been available to the licensee, in the absence of a licence, and apportioning them between the licensor and licensee.

A patent holder may also seek damages in the form of lost profits on sales made by the infringing party, to the extent that he or she can prove that these profits resulted directly from the infringing party’s actions. Here, the court must assess what proportion of the defendant’s sales the patent holder would have made. The court must take into account the fact that lost sales are of ‘extra production’ and that only certain additional marginal costs would have been incurred in making the additional sales.

If the infringing actions caused the infringing party to rise to a more dominant position in the market than it would otherwise have had in the absence of the infringement, and this more dominant position caused a loss to the patent holder that would not have occurred but for the infringement, a patent holder may also pursue ‘springboard damages’, though these rarely result in a large monetary recovery.

In the UK, patent damages begin to accrue from the date of the infringing act. As in the US, there is a six-year limitation on the collection of damages.

If a patent is determined to be only partially valid, to assess damages, a patent holder must provide evidence that the patent specification was framed in good faith and with reasonable skill and knowledge, under section 63 of the Act.

There is also a cap of £500,000 on the level of damages that can be awarded in the Intellectual Property Enterprise Court.

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Based in equity, the award of an injunction is always a matter for the court’s discretion. Preliminary injunctions are awarded where the ‘balance of convenience’ approach favours one party over the other. In certain cases, such as in relation to pharmaceutical patents, the financial implications of infringement, such as by a generic pharmaceutical company, are so extensive that damages alone often prove an insufficient remedy and interim injunctions are therefore often granted.

Injunctive relief exists to prevent further infringement from taking place. A court may grant an injunction where there is an actual or implied threat that a party may take infringing action in violation of a patent holder’s rights. Generally, if it can be shown that infringement has actually taken place, this is sufficient to show that infringement will continue to take place. In addition, if a patent holder can show a likely threat of infringement, this may be sufficient to show intent to infringe. To provide adequate protection for both parties, a court may decide to stay an already granted final injunction pending appeal. It is also at the court’s discretion to refuse to grant a final injunction, even if there is clear intent on the part of the infringing party to continue the patent infringement in question.

When granting interim injunctions, the test applied by the courts is generally that elaborated in the case of American Cyanamid Co v Ethicon Limited (No.1) [1975] AC 396. In deciding whether to grant a preliminary injunction, a court generally looks at the following factors:

• is there a serious issue to be tried;
• are damages an adequate remedy;
• where does the ‘balance of convenience’ lie;
• has the patentee delayed in taking action; and
• whether the patentee has a track record of licensing the patent in question.

In cases where damages could easily compensate the loss suffered by the patent holder, injunctions will generally not be granted.

To obtain a preliminary injunction, a patentee would be required to submit evidence relating to the above factors, including that the product falls within the claims of the patent, evidence of the threatened infringing act, evidence to establish that damages would not be adequate compensation, and that the patentee will suffer potentially irreparable harm if an injunction is not granted. Generally, a hearing to decide whether an injunction should be granted would take place within about two months of the application being made.

If the court grants a preliminary injunction, the patent holder must then give a ‘cross-undertaking as to damages’, which is to ensure that, in the event that the injunction is granted but the patent holder does not actually succeed at trial, the patent holder would pay any damages that the court determines the defendant had suffered as a result of the injunction being granted. If a preliminary injunction is sought but not granted, the proceedings could potentially be fast-tracked to trial within about six months to minimise potential harm.

It is also possible for a successful claimant to obtain an order for the destruction or delivery-up of any infringing goods in the possession of the defendant to ensure that those goods do not remain on the market. This remedy can be indirectly effective against third parties that are aware of it but continue to assist the infringer in further infringement.

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Because importation of products into the UK that infringe a valid patent is considered patent infringement, a patent holder can seek remedies such as blocking importation of such infringing products through general patent infringement litigation. As such, a patent holder may, for example, seek an injunction that blocks importation of infringing or allegedly infringing products into the UK market. Such an request, if it meets the criteria described above, is likely to be granted.

Under the EU doctrine of exhaustion of rights, if a patented article has been lawfully sold or offered for sale in the EU, a patent owner may not then prevent importation of the article into the UK. This means that a patented article sold lawfully in other EU member states can be imported legally into the UK without restraint. If, however, the article is imported into the UK after being made available in another member state without the patent holder’s permission, then the patent holder may still assert its patent rights.

Since 1 January 2014, a new regulation concerning customs enforcement of intellectual property rights (Regulation (EU) 608/2013) has been in force in the UK. This regulation establishes certain mandatory rules and procedures that customs authorities use to facilitate the enforcement of certain IP rights at the external borders of the EU, for example, by detaining or destroying counterfeit or infringing goods. As before, infringing goods can be identified and held at UK borders, following which IP owners can commence infringement proceedings against the owner of the goods. Regulation 608/2013 implements a ‘simplified procedure’, under which the Customs Commissioner may destroy and/or treat as abandoned for purposes of destruction any articles suspected of infringement if the owner of the goods fails to provide a response when given the opportunity to agree or object to the abandonment or destruction of the goods. Regulation 608/2013 also introduces certain procedures for the destruction of small consignments of goods (those containing three units or less or weighing less than two kilos). Such small consignments of goods can be destroyed by the Customs Commissioner without requiring agreement; however, the applicant is required to ‘opt in’ to this procedure when submitting its application.

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In the UK, ‘costs follow the event’, which requires that the losing party pay the prevailing party’s reasonable attorneys’ fees (known in the US as ‘the English rule’). This rule holds the potential, at least theoretically, to deter frivolous or non-meritorious lawsuits. When the court assesses costs, he or she has broad discretion under CPR Rules 44.3 and 44.4, and will take into account many factors, including the circumstances of the costs (were they proportionate and reasonable?), the efforts made between the parties to resolve the dispute amicably, the conduct of the parties during the proceeding and the complexity of the matter at hand.

In addition, the prevailing party may also collect certain reasonable costs, including filing fees, court costs, photocopying, postage or fax charges, secretarial time, travel expenses and costs for process servers. Additionally, after the parties submit their bills of costs, the court will take into account certain ‘reasonableness’ factors, such as that the costs incurred must not be unduly excessive, and must make sense in terms of the type of case and the amount of damages sought. The 2004 Patents Act also instructed courts to consider the financial standing of the parties in (among others) patent infringement proceedings, and proceedings for a declaration of non-infringement.

Since April 2013, the UK has instituted certain reforms with the goal of keeping costs down through proper case management. For example, lawyers or solicitors in the UK may be required prepare budgets exchanged between the parties and the judge and reviewed, amended and approved during the initial case management conference. If there are changes to these cost budgets afterwards, such changes must be agreed upon as the case progresses. The judge will also award costs based on these budgets, which are approved at the conclusion of the litigation.

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Because damages in the UK are compensatory as opposed to punitive, there are no additional specific remedies against a party guilty of wilful or deliberate infringement. Under the 2006 Intellectual Property Regulations, when making a damages award, the court may, however, take into account elements besides purely economic factors, including any ‘moral prejudice’ caused by the infringement.

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As stated above, in the UK, patent damages begin to accrue from the date of the infringing act. As in the US, there is a six-year limitation on the collection of damages.

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As with the US, although a patent owner is not necessarily required by statute to mark products covered by patents with the corresponding patent number or patent pending application number, there are compelling reasons why it may wish to do so. For example, the presence of such a patent number would serve to refute a would-be infringer’s claims of ignorance that the marked product was covered by a patent. This is important in proving the patent owner’s right to collect damages. So, while a patent owner may not be required to mark its products, it is advisable to do so.

Finally, it is a criminal offence to fraudulently mark products with a patent number or pending patent application number. Those found guilty of this offence can be liable to a fine of up to £1,000 under section 110 of the Act.

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In general, in entering into a licence agreement, parties may decide for themselves what terms, conditions and restrictions may be acceptable. However, in the UK, patent licensing is subject to both EU and UK competition law, namely mainly articles 101 and 102 of the TFEU, as well as the corresponding UK competition laws. These laws help prevent activities that, respectively, disrupt competition in free markets and that amount to abuse of a dominant market position. Under these provisions, certain licensing arrangements may be prohibited, including price-setting, tying, certain types of market restrictions or refusing to deal or supply, depending on their effect on trade and competition in the EU member states. Also depending on any resulting anticompetitive effect, the TFEU provisions may also apply to licence provisions governing duration, exclusivity, non-competition restrictions and/or grant-back provisions.

However, there are certain exemptions to article 101 of the TFEU created for licence agreements between parties that have less than a certain share of the market, although some of these exemptions may be unenforceable if considered anticompetitive. There are no existing exemptions to article 102.

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A patentee may obtain a compulsory licence by application to the Comptroller any time after the third anniversary of the grant of the patent. The Comptroller may then use his or her discretion to determine whether and under what terms the applicant may have such a licence.

If the patent holder is a UK national, one may obtain a compulsory licence against him or her:

• where the demand for a patented product is not being met on reasonable terms;
• by reason of the refusal of the patent holder to grant a licence on reasonable terms (such as if the invention unfairly prejudicing the development of UK industrial or commercial activities); or
• where, by reasons of conditions imposed by the patent holder, non-patented activities are being unfairly prejudiced.

If granted, the terms of the compulsory licence will be determined by the Comptroller on a case-by case basis. However, it will be subject to certain conditions:

• the licence shall not be exclusive;
• it can only be assigned along with the part of the applicant’s business that enjoys the use of the patented invention;
• it must be predominantly for the supply of the market in the UK;
• it must include conditions entitling the patentee to adequate remuneration in the circumstances of the case; and
• it must be limited in scope and duration to the purpose for which it was granted.

The Comptroller may also modify the terms of an existing licence.

If the Comptroller determines that the licence should be granted as a ‘licence of right,’ any person is entitled to a licence under the patent. If the patent holder cannot agree upon terms for such a licence, the terms will then be determined by the Comptroller.

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In general, it takes approximately three to four years from application to patent grant in the UK, although this can be shortened to one year or less under certain circumstances if the patent applicant requests an expedited procedure at the outset of the application process.

Although the cost of prosecuting a patent varies based on the subject area and complexity of the invention, obtaining a patent in the UK costs approximately £3,000, including attorneys’ fees and IPO fees, including search and examination (£230-£280). Should a third party (someone other than the inventor or applicant) prepare the patent specification itself, this will also invite additional fees.

In the UK, renewal fees of £70 to £600 (depending on the year of the patent’s life) must be paid annually.

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As noted above, a patentee may request an expedited review process at the outset of examination, which would allow the grant of a patent within 12 months. There are three types of accelerated procedure in the IPO, which may also be used in combination:

• combined search and examination;
• accelerated search or examination, or both; and
• early publication.

To obtain accelerated examination procedures, the patentee must demonstrate a good reason for the patent application to be accelerated (such as to secure an investor’s involvement or if a faster grant would allow the patentee to initiate action against a potentially infringing third party), or the patentee must show that the patent relates to ‘green’ technology.

There may, however, be strategic or financial reasons why an applicant would prefer a longer examination; for example, to develop commercialisation of the product and avoid waste of financial resources.

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In the UK, a patent application must adhere to the standards set forth by the IPO. According to the Act, a patent application must contain both a specification and claims. The specification describes the invention in a way that it sufficiently, clearly, and completely describes the claimed technology such that it can be made or performed by a person skilled in the art. The specification generally includes an abstract, a detailed description and drawings. The claims must be clear and concise and fully supported by the description. Because a court will look to the description and drawings when interpreting any ambiguities in the claims, it is important for the specification to be clear and complete.

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There is no obligation for a patentee to disclose prior art to the patent office examiner in the UK. However, it is common practice for the examiner to request such a disclosure.

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An applicant may file a divisional application related to an earlier-issued patent as long as the new claims relate to material that was fully and unambiguously disclosed in the earlier application. Although the new claims must be outside the scope of the claims of the original parent application, the claims may contain material not raised previously in the parent application, or even claims that were raised in the parent application but cancelled when they were deemed to relate to a separate invention from the one already claimed.

The divisional claims must be filed prior to the date on which the parent application is either granted or denied, although they will have the same filing date as the parent application. Furthermore, a divisional application must be filed a minimum of three months prior to the deadline for the complete parent application.

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Appeals can be made without permission to the Patents Court. The Intellectual Property Enterprise Court does not have jurisdiction to hear appeals.

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A third party may not necessarily oppose a patent prior to its grant, although during this pre-grant phase a third party may make observations and comments to the IPO with regard to patentability. The examiner may take these comments into consideration and decide whether to make any formal objection on the basis raised by the third party. The third party, however, is not a party to the grant proceedings.

Once a patent has been granted, a party may apply for revocation of the patent with the IPO or with the patent courts or, in the case of European patents, with the European Patent Office. Revocation proceedings generally last several years.

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The UK patent system operates on a first-to-file basis, meaning that the first party to file a patent application will generally receive the patent. There may also be limited circumstances in which two parties file simultaneously, and both are allowed to proceed. Disputes regarding entitlement to priority may be handled at the IPO or in the patent courts.

If ownership of the patent is in question, an application may be made to the IPO to determine ownership.

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If a patent holder is involved in proceedings with the patent courts (such as an invalidation proceeding) or with the IPO, he or she may file amendments under section 75 of the Act. If he or she is not involved in such a proceeding, a patent holder may file amendments under section 27 of the Act. To obtain an amendment, a patent holder must apply to the IPO with details of the scope of the proposed amendments and the reasons why amendment is necessary, along with fees totalling approximately £400. If a patent holder has filed for amendments under section 75 before the courts, anyone opposing the amendments must file a notice of opposition with the court and with the IPO.

Should the court find that the patent holder has not made a request to amend the patent in a timely manner, or if the court finds that the scope of the proposed amendments exceeds the scope of the original patent, then the amendment will not be allowed. In certain circumstances, the patent might even be revoked. The Comptroller has the authority to revoke a patent on his or her own initiative, for example, if he or she determines that the patent is invalid over prior art. If such a determination is made, the patent holder has the opportunity to respond and potentially amend the specification.

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In the UK, patent protection generally lasts 20 years from the filing date. However, an applicant may obtain a five-year supplementary protection certificate for certain types of inventions relating to medicinal and plant protection products.

Once a patent is obtained, however, a patentee must renew his or her application annually. As noted above, annual renewal fees are approximately £70 to £600 (depending on the year of the patent’s life).

* The information in this chapter is accurate as of 2016.

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