During opposition before the European Patent Office (EPO), the ability of an alleged infringer to intervene in pending proceedings presents the opposing parties with the opportunity to file new evidence that might otherwise have been disregarded if it had been late filed by the original parties. Furthermore, recent case T 1665/16 demonstrates that an intervention filed during appeal proceedings could result in remittal of any new evidence to the opposition division, potentially lengthening the proceedings by many years. We take a look below at the tactical considerations that a patent proprietor may need to make when choosing to litigate under an opposed patent.
The opposition procedure at the EPO provides the general public the opportunity to challenge the validity of a granted European patent, the result being applied universally across all contracting states in which the patent is in force. This “blanket” effect makes opposition an attractive option to many companies who wish to invalidate their competitor’s patents, and is often much cheaper in the long run than challenging the patent separately in each different contracting state. However, the trade-off for this centralised approach is that an opposition can only be filed within a short period, namely the first nine months following grant. Under most circumstances, if this nine month period is missed, opposition at the EPO is no longer an option and the patent must be challenged on a national level across Europe, rather than centrally at the EPO.
Intervention of the Assumed Infringer
The single exception to the nine month rule above is that, if an opposition against a European patent is already underway and the proprietor uses the patent to sue a party which is not already part of the opposition proceedings, then that party will be allowed to join the opposition as an intervener. To do so, the intervener must file a notice at the EPO to this effect within three months of the date they were sued. The purpose of intervention is to ensure that alleged infringers are able to challenge validity at the European level and are not restricted simply to national proceedings. This is particularly useful, for example, for companies based across a number of European countries or who may be facing parallel proceedings in different jurisdictions and for whom a centralised procedure would be an attractive prospect.
Tactical Considerations for Proprietors
Patent proprietors should consider the potential effect of intervention if an opposition is pending and they suspect that they have identified a potential infringer. In normal circumstances, the opponent must present all of the evidence that they wish to rely upon before the end of the nine-month opposition period, since, as a rule, late-filed evidence will only be admitted if it is highly relevant. By and large, this means that the grounds and evidence upon which the opposition will be decided are known at the outset, and generally prevents evidence that is only peripherally relevant from being admitted later in the proceedings. For an opponent who has already initiated an opposition against a granted patent, if the proprietor sues the opponent for infringement under the patent whilst the opposition is ongoing, this will not automatically grant the opponent the right to introduce new grounds or evidence into the opposition. However, if the proprietor enforces a European patent against a third party whilst an opposition is underway, this will allow the new party to introduce further evidence into the opposition with the accompanying risk that this could be more relevant than the evidence already on file. For example, the third party may have been aware of the patent and may already have their own invalidating prior art, or may simply be lucky enough to find knock-out prior art in their own searches. Nevertheless, if the proprietor feels confident that the patent is valid, this may be a risk they are willing to take for the sake of stopping infringement at an early stage.
It is not uncommon for large commercial enterprises to be composed of a number of separate legal entities, and it may be difficult for the proprietor to determine which of these entities is the actual infringer. Alternatively, the proprietor may be aware of the identity of the infringer, but this may involve infringement occurring in multiple countries, each by a separate entity of the infringing enterprise. Take, for example, the situation where companies A and B are part of the same commercial enterprise but are separate legal entities and company A files an opposition against a patent during the nine month opposition period. If the proprietor knows or suspects that A and B are infringing the patent, they may be minded to sue both companies. However, European patent law recognises B as a separate entity to A regardless of their close association or any common ownership. Therefore, suing company B will give company B the right to file an intervention where they may then introduce new grounds and evidence to attack the patent. If opposition proceedings are at an advanced stage when the intervention is filed, intervening company B could use this opportunity to introduce new evidence into the proceedings that, if filed by A, would have otherwise required a high level of relevance to be considered admissible. This opportunity could be particularly useful to both A and B as it allows the introduction of “soft” or “peripheral” evidence that could help shore-up any gaps or weaknesses in the evidence already on file. Company B’s intervention can therefore be used to give company A a ‘second bite at the apple’, with the added benefit of hindsight to determine how their original arguments could have been improved. Even if companies A and B are not related, should the patent be valuable enough, company B could choose to collaborate with company A to present a stronger case.
Effect during Appeal Proceedings
The situation may be further complicated if the intervention is filed during an appeal. For example, if the proprietor has won the opposition, they may be more confident in the validity of the patent and therefore more bullish about enforcing the patent against entities related to the opposing side. Taking the same situation as above, if the proprietor waits until after the first instance decision is issued to sue companies A and B and subsequently company A files an appeal against the decision, company B will be able to intervene in the appeal proceedings, regardless of the fact that company B was not party to the original decision under appeal. Company B can then introduce new evidence at the appeal stage that was not considered in the first instance hearing and which the Board might have rejected if filed by A on the basis that it was not part of the original decision under appeal and is therefore deemed ‘late filed’. These circumstances arose in a recent case before the EPO Boards of Appeal, T 1665/16, in which the Board decided that, whilst the original decision to maintain the patent was correct, the case should be remitted back to the opposition division to decide upon the new grounds and evidence introduced by the intervention. This leaves open the possibility that an additional appeal could be filed once the new grounds and evidence in the intervention have been decided upon by the opposition division in the newly-instigated first instance proceedings. Generally speaking, each ‘round’ of opposition or appeal could take two years (or more), and therefore it could in some cases be the best part of a decade following grant of the patent before a final decision on its validity is reached.
Whilst opposition before the EPO may be attractive to an opponent as a relatively cost effective way to deal with problematic patents or to at least frustrate their competitors, for proprietors an opposition presents a risk that the patent could be lost across all European countries in one go. Furthermore, any attempts to enforce the patent whilst the opposition is pending could present the other side with procedural advantages, particularly if multiple entities under the same commercial enterprise are involved in any infringement. Nevertheless, a European patent that is maintained in opposition proceedings, once finally settled, places the proprietor in a powerful and commercially valuable position, providing an enhanced deterrent to infringement and improved leverage in settlement discussions or future commercial deals.
At Marks & Clerk our professionals have copious experience defending and attacking commercially valuable patents before the EPO and in national proceedings on behalf of our clients. Due to our joint litigation and prosecution offering, our IP experts are well placed to provide practical advice to our clients regarding the tactical considerations required in complex contentious matters.