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Protective letters and patents: Campbell Forsyth and Nina O'Sullivan for World Intellectual Property Review

Posted on 31 May 2023

Partners Campbell Forsyth and Nina O'Sullivan have outlined the value of protective letters for businesses facing potential preliminary injunctions in the Unified Patent Court (UPC), in an article for World Intellectual Property Review.

As businesses put in place plans ahead of the UPC opening on 1 June 2023, anyone concerned about the risk of a without notice application for an interim injunction in an infringement action in the UPC should consider the options that would be available in this scenario, including filing a protective letter at the UPC Registry.

They set out the "practical and strategic considerations in relation to the framing of a protective letter," such as timing and the criteria to be met. Read in full below. 

This article first appeared in World Intellectual Property Review on 15 May 2023.

With the UPC set to open its doors for business on 1 June 2023, patent-owning businesses are now putting into place carefully considered plans for structuring, and enforcing, their patent portfolios in Europe. This includes opting out, where appropriate, their classic European Patents from the UPC's jurisdiction, during the three month sunrise period which began on 1 March 2023. This article focuses instead on the options available for those that might be at risk of a UPC infringement action, either in relation to a Unitary Patent or a non-opted out classic European Patent.

Preliminary injunctions

One particular risk is a preliminary injunction in all relevant contracting member states (Art. 62 of the UPC Agreement allows a patentee to apply for a preliminary injunction before the UPC where the patent is infringed in at least one contracting member state, or where such infringement is imminent), including on an ex parte (without notice) basis (Rule 206.3 of the Rules of Procedure).

Until UPC panels start to issue a body of decisions (and those have been considered further by the Court of Appeal in some cases), it is hard to predict how individual panels may approach applications for provisional measures, though some clues may be discerned from existing practices. The remedy is a discretionary one and the Court must, in exercising its discretion, "weigh up the interests of the parties and, in particular, take into account the potential harm for either of the parties resulting from the granting or refusal of the injunction", as well as any unreasonable delay (Art. 62(2); Rules 211.3, 211.4).

The recent CJEU decision C-44/21 (Phoenix Contact) dealt with a referral from the Regional Court of Munich regarding the compatibility of German law on preliminary injunctive relief in patent cases. The CJEU found that, in accordance with Art. 9(1) of Directive 2004/48/EC (Enforcement of IP Rights), there is no requirement of a first instance validity or EPO opposition decision to obtain a preliminary injunction. In effect, an examined patent is prima facie assumed valid. This case should have equal impact on the UPC's consideration of the equivalent issue.

With the fundamental right of a defendant to be heard, ex parte preliminary injunctions should remain exceptional. However, the risk of a preliminary injunction covering the UPC contracting states should not be underestimated.

Protective letters

Where a party is concerned that an application for provisional measures may be lodged against it in the UPC in the near future on an ex parte basis, it may file a protective letter (Rule 207). The concept of a protective letter is well known from German patent litigation (where it is known as a "Schutzschrift"). Its availability recognises that the possibility of awarding provisional relief against a defendant on an ex parte basis makes significant inroads to a defendant's fundamental right to be heard. Protective letters can also be lodged in other national courts (e.g., in Switzerland, The Netherlands, Spain and Belgium).

Whilst it should not be perceived as a tool to defend an application for provisional measures, the aim of a protective letter is to try to ensure the defendant's arguments are before the relevant UPC panel/judge when considering an application for provisional measures made on an ex parte basis. In exercising its discretion, the Court shall in particular take into account, amongst other factors, any protective letter filed by the defendant and shall in particular consider summoning the parties to an oral hearing where a relevant protective letter has been filed by the defendant (Rule 209.2(d)).

Criteria for a protective letter

A protective letter is time limited: if no application for provisional measures is lodged within six months, it will be removed from the Register (but can be extended on payment of a further fee).

There are certain criteria:

  • It must be in the language of the patent (Rule 207.2).
  • It must contain certain information about the defendant and presumed applicant for provisional measures, the patent, and any prior or pending proceedings (before the UPC, EPO or any other court or authority) (Rule 207.2).
  • It may also contain (Rule 207.3):
    • An indication of the facts relied on, which may include a challenge to the facts expected to be relied on by the presumed applicant and/or, where applicable, any assertion that the patent is invalid and the grounds for such assertion.
    • Any available written evidence relied on.
    • Legal arguments, including the reasons why any application for provisional measures should be rejected.
  • A fee of 200 Euros (100 Euros to prolong the term) (Rule 207.4, 207.9).

The Registry will (Rule 207.5) record the protective letter in the register and provide details of it to all divisions. Importantly, the presumed applicant for provisional measures will not be notified at this stage, and the protective letter shall not be publicly available on the register at this stage (Rule 207.7).

Where an application for provisional measures is subsequently lodged, the Registrar will forward a copy of the protective letter to the panel/judge, and shall at that point forward a copy of the protective letter to the applicant for provisional measures (Rule 207.8). Where preliminary relief is not granted on an ex parte application and/or the applicant withdraws its application once it has seen the protective letter, the prospective defendant may never be aware the application took place if the applicant requests that the application and its contents remain confidential (Rule 209.4, 209.5).

Considerations for protective letters

There are a number of practical and strategic considerations in relation to the framing of a protective letter. As there is no sunrise period for lodging a protective letter, those that are particularly concerned about an application for provisional measures will need to ensure that they are ready to lodge a protective letter on 1 June 2023. Further, even though a classic European Patent may be opted out of the UPC, a patentee can simply withdraw the opt-out (if there have been no proceedings before a national court) and then seek provisional relief at the UPC – there is then likely to be no time to file the necessary protective letter. It is to be hoped that the UPC Case Management System (CMS) will allow protective letters to be filed against opted-out patents, albeit it is not clear if this functionality will be available.

In terms of the content of the protective letter, aside from the formal requirements, it may be difficult for a potential defendant to provide detailed information about its likely defence (infringement, invalidity or other arguments – for example right to bring an action) when it has an information vacuum. In any event, it probably does not want to 'nail its colours to the mast' – instead the protective letter should do enough to ensure that the panel/judge will consider it appropriate to hear the defendant rather than dealing with the application for provisional measures on an ex parte basis, i.e., by introducing sufficient elements of uncertainty.

Despite some of these challenges, the availability of protective letters is likely to be a significant pre-emptive tool – those monitoring the UPC Register for opt-outs of classic European Patents should be prepared to lodge a protective letter in appropriate cases to meet the eventuality that a potentially blocking patent remains within (or is brought back into) the UPC.

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