The Rule 19 objection
The proceedings kicked off with (from the patentee’s perspective) an unexpected pre-emptive application to revoke a patent in the London branch of the central division. The response to this from the patentee was to make a Rule 19.1(a) objection, which is a preliminary objection to the jurisdiction and competence of the Court. The hearing of this application was delayed somewhat (about which more later), but took place in August 2014 before Judge-Rapporteur Rieu, who (in her day job) is a Member of the Paris Bar working at Bristows. The advocates on each side were two senior associates from the Bristows moot teams, Katie Hutchinson and Claire Phipps-Jones.
The essence of the objection was that the claimant pleaded an intention to rely on certain fact and expert evidence, but had not produced this evidence. It had stated in outline what the evidence would say, and had specifically listed three documents which were “to follow”. Hence it was argued that the claimant had failed to produce the documents referred to in the Statement for revocation in accordance with Rule 13.2 (applied mutatis mutandis under Rule 45), which requires the claimant to supply a copy of each of the documents referred to. Hence, it was argued that the Registry should not have accepted the claim, and the claim was therefore not validly filed. The defendant also pointed out that it was quite clear that the claimant had talked to the witnesses, and that three months on, it had still not filed this evidence. Further, it was critical to see the evidence when in part it related to an allegation of public oral disclosure in a conference presentation, it being stated that one of the witnesses would produce evidence relating to the disclosure made at the presentation, but without explaining what that evidence was. How could the defendant therefore plead in response? Also, the defendant relied on the fact that even though its application was made under Rule 19.1(a), the Court had general case management powers under Rules 334 and 336. On this point, Judge Rieu noted that under Rule 172.2 also, the Court may at any time during the proceedings order a party making a statement of fact to produce evidence that lies in its control.
The claimant responded to the effect that this was a misconceived application, having nothing to do with the real purpose of Rule 19.1(a) which was to permit an objection when there was no jurisdiction under Brussels 1 principles under Article 31 of the UPC Agreement, or competence under Articles 32 and 33. (Also, the Registry noted that under Rule 16.2, that it is only required to check compliance with Rules 13.1(a)-(k) and not the Rule requiring production of evidence (Rule 13.1(m)). Hence, prima facie there had been compliance with Rule 16.2.) The claimant also stated that the evidence did not yet exist, and would normally be produced in the interim phase. It said it had complied with the requirements of Rule 45.1(g) that the Statement for revocation should contain the evidence relied upon “where available” and an “indication of any further evidence which will be offered in support”. The claimant concluded that this was a disguised attempt to obtain early evidence and that the facts should be pleaded out before the costs of producing the evidence are incurred.
Judge Rieu gave her decision (French-style) the day following the hearing, in writing. She dismissed the Rule 19.1(a) objection, because the Court clearly had jurisdiction and competence under Articles 32(1)(d) and 33(4) of the UPC Agreement, but allowed the application in substance by requiring the claimant to produce the fact and expert evidence within six weeks and by extending the defendant’s time for service of its Defence until six weeks after service of the evidence. She reasoned that the Rules should be construed in the light of the “overarching principles of ‘fairness and equity’ expressly stated in both the Preamble of the Rules of Procedure and the Agreement and which ‘shall be ensured by having regard to the legitimate interests of all parties’”. She clearly had little sympathy for the claimant’s argument that it simply did not yet have this evidence, nor the argument that under the UPC procedure it was envisaged that evidence would be submitted during the interim phase, rather than the written phase. She noted that it was more than three months since the evidence was first referred to, and even longer since it had been referred to in a prior-filed protective letter. Hence she applied Rule 20.1 to give instructions to the parties as to the next steps in the proceedings, and the Court’s wider case management powers of Rules 172.2, 334 and 336.
Commentary: judicial discretion and flexibility in untested rules means less certainty for litigants
The ruling demonstrates vividly the dilemma facing claimants in the UPC. If they set out their evidence in full in the written phase, they will front-load their costs, reveal their case more fully than they may wish, and the costs may be incurred unnecessarily if they relate to matters which are admitted. However, if they do not plead their case fully, the Court may order “early” production of evidence, leaving them with a tight deadline to produce the evidence. Whether or not in practice real UPC judges take the same line as Judge Rieu is, of course, another matter, but for this case the claimant is now faced with the task of preparing some of its fact and expert evidence in only a few weeks, and the defendant will have that available to it before filing its Defence. The claimant who pre-empted the patentee by starting the revocation action may now be slightly regretting its decision. It has, however, chosen not to seek to appeal.
Commentary: other features of the “litigation” so far of interest
First, to date the parties have not corresponded with each other in traditional British style, but have communicated with the Court. This appears to have put something of a burden on the Registry and this has caused delays as letters are received, reviewed and sent out to the parties. It also took a little time to arrange the hearing and partly for this reason and partly by reason of the order made, the theoretical timetable has already slipped by three months.
Second, neither party submitted any witness statement evidence or skeleton argument in advance of the hearing, but relied purely on the short written submissions exchanged via the Registry and oral submissions at the hearing. Neither did any party prepare an application bundle for the judge, but simply relied on the Court having its own papers.
Third, when it came to the hearing, no-one really knew what to expect, and whether they would be questioned by the Judge or invited to make submissions, and if so, whether they would be allowed to reply and if so how many times. As it was, both parties were given the opportunity to set out their cases, and to speak twice on the substance of the application. Nonetheless, the whole hearing lasted just half an hour.
Fourth, both parties made an application for their costs of the application, citing Article 69(3) of the UPC Agreement, which states that “A party should bear any unnecessary costs it has caused the Court or another party”. On this, the Court ruled that costs determination was a separate part of the procedure in the UPC which followed the main action and that there would be no interim costs awarded despite a request from both parties.
Coming up next...
The next stage in the action is service of the evidence as required by Judge Rieu, followed by service of the defence by the patentee. Will it include a counterclaim?
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