Expedition of patent trials – mind the German injunction gap!
The High Court has handed down two decisions in relation to applications for expedition of patent trials, and how the English courts view the issue of a competing German time table. In both Advanced Bionics AG v Med-El Elektromedizinische [2021] EWHC 2245 (Pat) and Abbott Laboratories v Dexcom [2021] EWHC 2246 (Pat), the applicants sought expedited trials in order to influence related proceedings in Germany, and to take advantage of the so-called German ‘injunction gap’. In this article, we discuss how the underlying facts in these two applications led to very different outcomes.
Background
Famously, patent proceedings in Germany are bifurcated meaning that issues of patent infringement and patent validity are dealt with by different courts on different dates; the district courts dealing with infringement and the Federal Patent Court deciding upon validity. As infringement is decided before and separately from validity, it is not possible to raise invalidity in Germany directly as a defence in German infringement proceedings. This is markedly different to the English approach of hearing both together in the same action, typically in about a year from the initial claim commencing. Typically, a German judgment on infringement takes about one year whilst a judgment on validity can take approximately two years. This lacuna leads to what is often referred to as the German ‘injunction gap,’ and can motivate a defendant to a German infringement action of a European patent to seek invalidation of the corresponding patent in the UK courts to resist a German injunction.
In recent months, the German ‘injunction gap’ has led to the English High Court being called upon to expedite several UK actions before the corresponding infringement actions are decided by the German courts. In this article, we review the relevant factors to be considered by the Court when considering applications for expedition, and consider why Mr. Justice Mellor came to different conclusions based on the underlying facts in Advanced Bionics AG v Med-El Elektromedizinische and Abbott Laboratories v Dexcom.
Good reasons for expedition
The leading case on trial expedition is Gore v Geox[1] in which the Court of Appeal granted the appeal of a decision of the High Court to refuse expedition. Gore had sought revocation of two patents and declarations of non-infringement in respect of two designs of shoe construction and wished to expedite the case prior to a trade exhibition. In upholding the appeal, the Court of Appeal set out the following four factors to be considered (the ‘Gore factors’):
- Has the applicant shown good reason for the expedition?
- Would expedition interfere with the good administration of justice?
- Would expedition cause prejudice to the other party? and
- Are there any other special factors to consider (e.g. the conduct of the parties)?
In the later case of Nicoventures Trading v Philip Morris,[2] Mr. Justice Birss (as he then was), supplemented the Gore factors with the following points to consider:
- Has the applicant proved that jumping the queue is justified? As the Courts are busy and many litigants who would like their trial to be heard earlier, there has to be a good reason for expedition to apply.
- A mere wish for commercial certainty is not enough. An applicant has to prove the ‘good reason’ in evidence according to the Gore principles.
- The German ‘injunction gap’ is not enough. Whilst it is a factor to be taken into account, it is not enough on its own.
Advanced Bionics AG v Med-El Elektromedizinische
In Bionics Mr. Justice Mellor considered two applications for expedited patent proceedings in the High Court. The first application concerned Advanced Bionics’ request to expedite the trial of an action in the English Court to revoke a European GB patent in relation to MRI-safe magnet cochlear implants to help improve hearing loss. The patent had already been upheld by the EPO’s Opposition Board and at the time of the application was subject to an appeal to the EPO’s Technical Board of Appeal. As with Abbott Laboratories v Dexcom (see below), the applicant wished to obtain a decision on validity from the English Court before obtaining a swift decision from a German court on infringement.
Advanced Bionics requested an expedited trial primarily on the basis that expedition was required to avoid it suffering severe irreparable damage in the UK market if the German Court injuncted its device. Interestingly, in this case Med-El had offered undertakings that it would not seek an interim injunction in the UK or seek to enforce an interim injunction in the UK. Med-El had also offered to undertake not to publicise in the UK any injunction obtained in Germany or the decision of the German Courts on infringement.
Despite the offered undertakings, Mr. Justice Mellor granted Advanced Bionic’s application for expedition. In delivering his judgment, the judge commented that the task for an English Court in deciding such an application for expedition was to examine the effects that an early injunction in Germany may have on the UK market to the disadvantage of the a party who believes the patent is invalid and/or not infringed. The judge concluded that despite the undertakings, the news of any injunction would reach the UK at what would be a critical time for Advanced Bionics to recover its market share following the Covid-19 pandemic.
Mr. Justice Mellor also rejected Med-Al’s assertion that expedition was only sought so that a decision on validity could be obtained in the hope that it would be different to the decision of the Opposition Board and handed down before the matter reached the EPO’s Technical Board of Appeal. The Judge was of the view that the effect on the UK market of the news of a German injunction was a good reason for expedition. The Judge commented that whilst there was no guarantee that a UK decision of invalidity would prevent a German injunction, there was a good chance that the German court would take it into account. Furthermore, the judge found that there would be no interference with the administration of justice if the trial were to be expedited.
Abbott Laboratories v Dexcom
The second application considered by Mr. Justice Mellor concerned Abbott’s request to expedite its invalidity action against four of Dexcom’s patents directed at a sophisticated glucose monitoring system used by patients with diabetes. At the time of Abbott’s application, Dexcom’s patents were still in the nine-month opposition window following grant. Therefore, a German nullity action could not be filed, and in the event that Dexcom were to obtain a German injunction against Abbott in German infringement proceedings, in order to obtain a stay Abbott would need to file oppositions against the patents. Given the timelines for both the EPO opposition proceedings and the German patent infringement proceedings, there was a possibility that an injunction against Abbott could be in place for up to a year.
Applying the Gore factors, Mr. Justice Mellor refused Abbott’s application and in doing so, he noted that Abbott had not demonstrated a sufficiently good commercial reason to support expedition. The Judge also noted that Abbott was also claiming infringement of its own patents by Dexcom in Germany. Therefore, the Judge recognised that both parties might suffer similar consequences as a result of the ‘injunction gap’ in their respective actions. If the application were to be granted, Abbott would secure protection against the injunction gap in Germany, but Dexcom would not. As a result, Mr. Justice Mellor considered that a ‘symmetric solution’ was needed so that both parties were afforded fairness.
Before trial began, Mr. Justice Mellor proposed that each party give an undertaking to the other party that it would not seek an injunction in Germany (or elsewhere including the UK) until the validity of that patent (in whatever EP designation) had been considered at first instance in a national court. In the event, the parties were not able to agree mutual undertakings, and the judge found this to be “unfortunate because this seemed to be an ideal opportunity by which both sides could avoid the problem of the injunction gap in Germany.”
Comment
Requests for expedited patent trials have been commonplace due to the potential advantage to a patentee that the threat of an injunction in Germany creates in the period between the German infringement judgment and the German validity judgment. England is in international competition and it has proven a popular place for litigation as a result of the willingness to deal with cases on a timely basis with full reasoned judgments.
Given the commercial importance to parties, the pragmatic English Courts will take action to intervene and expedite UK proceedings if the unfairness created by the German injunction gap is shown to be likely to impact the UK market. However, as these cases demonstrate, the outcome will very much depend on the specific underlying facts to justify displacing others already before the English courts to make way for the expedition. In Abbott v Dexcom, the Court grappled with the asymmetry that would be created if the application was granted, and so instead proposed the pragmatic approach of mutual undertakings. On the other hand, the UK Court will look to expedite a trial if it is clearly demonstrated that there is a real effect on the UK market, as was the case in Advanced Bionics AG v Med-El Elektromedizinische.
Although not discussed at any length in the judgments, it is noteworthy that Advanced Bionics AG v Med-El Elektromedizinische involved only one patent and the proceedings were already part of the Shorter Trials Scheme (STS) where a trial would be expected within 8 months of the case management conference. On the other hand, Abbott v Dexcom involved considerably more patents requiring a longer trial, which would have been more difficult for the Court to re-list, particularly as doing so would of course result in other proceedings being pushed later into the Court’s timetable.
The attractiveness of the English courts is clear and so we hope the UK will expand judicial capabilities, as the coming changes to pan-European litigation may well mean greater demand for English justice in the coming years.
A copy of the High Court’s decision in Abbott Laboratories v Dexcom can be found here.
A copy of the High Court’s decision in Advanced Bionics AG v Med-El Elektromedizinische can be found here.
