(III) Comparison of Opposition Proceedings at the EPO and Nullity Proceedings at the UPC
Opposition proceedings before the European Patent Office (EPO) are an attractive forum for challenging patents; the procedure is virtually unrivaled worldwide in terms of value for money. The process is simple, streamlined and relatively inexpensive. The practice is well tested. However, there are restrictions and drawbacks – for example, a deadline of nine months after the grant date for submission, the long duration of the opposition and appeal proceedings, and strict rules for admitting evidence submitted late.
The UPC now offers a second chance by providing another forum for central revocation of a European patent throughout the territory of the UPC states. Moreover, revocation actions can be brought before the UPC at any time after grant, independently of opposition proceedings before the EPO. Therefore, it is indeed a (further) effective attack on the European patent, and even in case European opposition and appeal proceedings were already pending in parallel. In the German legal system, on the other hand, there is the restriction – besides the fact that it only acts against the German part of the European patent – that revocation proceedings are inadmissible as long as European opposition and appeal proceedings are still pending.
The opposition procedure at the EPO is essentially a written procedure with an oral hearing at the end; the oral hearing takes place before a three-member panel and may last a full day. The UPC follows a similar approach – a written procedure followed by an oral hearing. However, there is a tight timing in the invalidity proceedings before the UPC. The UPC requires the patent owner to file a response within two months (while the EPO sets a four-month deadline); then the plaintiff may file a reply to the response within two months, and the defendant (patent owner) may file a rejoinder to the reply within one month, limited to the points raised in the reply.
The faster procedure before the UPC may allow for tactics on the nullity plaintiff’s side that weren’t available before. This is because, whilst the plaintiff can prepare his facts and arguments (and potential counter-arguments) well in advance of lodging the action, pressure is put on the defendant (patent owner) with respect to time and effort. Therefore, an efficient interaction of the patent owner with his team of attorneys is important. If on the other hand the patent owner starts with an infringement action, pressure will rather lie on the side of the infringement defendant in case he seeks to raise a defence by counter-action of nullity; this is because the counter-action should then be lodged soon after the start of the infringement action for being considered during the infringement proceedings.
A difference is that filing an invalidity action at the UPC is more expensive than filing an opposition at the EPO: court fee amounts to 20 000 EURO, whereas at the EPO it is presently only 880 EURO. The costs at the UPC are comparable to filing a German nullity action – however with the difference that the decision is effective throughout the UPC territory.
Although the opposition divisions of the EPO could, in principle, order the parties to pay the costs, this very rarely happens in practice; the predominant rule is that each party bears its own costs. The UPC Rules of Procedure provide that a winning party is entitled to reimbursement of its costs insofar as these are reasonable and proportionate.
There is also a risk that matters before the UPC will become complicated if the validity of a European patent is challenged by a counterclaim to an infringement action. In opposition proceedings before the EPO, only the validity itself is examined – the EPO does not consider infringement at all.
However, there is also the possibility that the proceedings before the UPC are split into two – i.e. a bifurcated system like the one practiced in Germany – where infringement and the validity are decided separately by two different courts (the former by the Local Division, the latter by the Central Division).
While all isolated revocation actions are heard by a central chamber of the UPC, revocation counterclaims in response to infringement may instead be brought before the then competent local chamber of the UPC; however, it is at the discretion of the local chamber to refer the revocation counterclaim to the central chamber. Practice will show which principle – the one-track or the two-track procedure – will bring overall advantages before the UPC and possibly prevail in the long run.
As can be seen from this overview, there are similarities but also differences between the opposition procedure before the EPO and the nullity procedure before the UPC. Probably the most significant difference in practice is the relatively strict time regime foreseen for the proceedings before the UPC. This is especially true when the infringement and revocation counterclaims run concurrently and thus require effective and expeditious action by the parties and their representatives. However with the benefit of a decision within a short time.
Further to Part 1: (I) Introduction and Overview
Further to Part 2: (II) Strategic Considerations of using the new EU Court, or Opting out