Innovation & IP Summit 2015
International IP Litigation Strategy
by
Michael C. Elmer
©Copyright
Global IP Project, 2015
Background
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Founded in January 2002
Goal: Compile patentee win rates and other objective
patent litigation metrics for countries around the world
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Members: Attorneys from firms representing 30 countries/districts
Argentina, Australia, Austria, Brazil, Canada, Chile, China (mainland), Denmark,
England & Wales, Finland, France, Germany, India, Ireland, Israel, Italy, Japan,
Mexico, Netherlands, New Zealand, Norway, Russia, Scotland, South Africa, Spain,
South Korea, Sweden, Switzerland, China Taiwan, and United States
-
Current Activities
- Collaboration agreement with
- New Book: Global Patent Litigation: How and Where to Win
- Annual Report (current trends, data, and global strategies)
- GIP website ( www.globalpatentmetrics.com )
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Global Patent Litigation Book
• Global Patent Litigation: How and
Where to Win
– 16 of the Global IP Project participants
in main volume;
– 2 more countries and updates for several
countries/districts included in 2014
supplement;
– Now available for sale from Bloomberg
BNA Books.
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How the Global Patent Litigation Landscape is Changing
Higher jury win-rates
drive change
1973
Very few jury trials
No IP Appeals Court (Fed. Cir. - 1982)
Permanent injunctions essentially automatic
Damages primarily an afterthought
Patentee unfriendly (antitrust focus, fraud on
PTO, judge trials)
WHERE IN THE U.S. TO SUE?
Win rates not yet important
Our research develops
global “win rate” data for
30 countries
Since 2006 data available
by 9 industry sectors and by
court, where applicable
WIN RATES ARE FACTOR IN
GLOBAL FORUMSHOPPING
1990’s
Moving to jury trials
(25% juries, 75% bench)
Higher win rates AND start of large damage awards
Emergence of NPE’s
Start of objective data forum-shopping in U.S.
Patentee friendly (juries, more creative damages law and bigger awards,
emergence of trolls, forum-shopping, CAFC case law)
WHERE IN THE WORLD TO SUE?
Court win-rates drive
change
2000-present
Jury trials predominate in U.S.
( 62% in the 2000’s, 59% in the 2010’s, PwC 2013 Pat Lit Report)
Rise of NPE’s
Explosion of litigation in ED TEX
AIA post-grant proceedings driving issue bifurcation in US causing new intra-country forum-shopping
Finnegan Global IP Project ('02); merging data into DARTs-IP database
Outside US, injunctions automatic and damages not usually awarded
Global forum-shopping emerges
Around 2006 – start to be more patentee unfriendly (anti-troll sentiment, Daubert motions,
USSC and CAFC decisions on damages, AIA post-grant proceedings)
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Where To Win And Leverage Best Business Result
10 Most Litigious Countries With # Of Patent Litigation Filings (2006-2012);
Most Active Court In Each Country/District*
Canada: 510
Toronto/Ottawa/Vancouver
1 court, sits in 3 cities
(equal number of PMNOC
cases)
United States: 23014
ED Tex
96 courts
England: 807
London
1+ courts
Germany: 8750*
Dusseldorf
12 courts
France: 2390*
Paris
1 court
Italy
1325*
Milan
21 courts
China
(mainland):
30,0001,*
85 courts
India: 1225*
Delhi High Court
605 courts
Japan: 1265
Tokyo
2 courts
China Taiwan:
1088*
IP Court
1 court
Source: Finnegan Henderson
Global Patent Survey
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*
•
•
•
•
•
•
•
•
In China mainland, more than 80% of the patent infringement cases were for utility and design patents.
Estimate or partially estimated/partially hard.
Filing numbers outside of the U.S. represent invention patents, utility model, and/or design patent litigations filed. For example, invention patent litigation in
China mainland makes up about 9% of the patent infringement litigation. The filing number in the US is virtually 100% invention patent infringement
litigation.
Note that in Germany’s most active court, Dusseldorf each patent at issue is assigned a separate case number.
It is estimated that Russia has about 100 annual patent litigation filings, which would put it in the top 10, but this number is not verifiable; with the
introduction of a new single court, the filing data should become more reliable.
Note that Canada has a nearly equal number of PM (NOC) annual filings (specialized patent litigation), which, if counted would put Canada 9 and England
10,
The next 5 are (all estimated): Brazil (480), South Korea (460), Netherlands (435), Australia (278), and Switzerland (210).
Note that for the bifurcated systems of China mainland, Germany, Brazil, South Korea, the filing numbers represent infringement litigation only.
Europe:
•
Most patentee friendly:
•
Least patentee friendly:
Asia
•
Most patentee friendly:
•
Least patentee friendly:
Germany; France
England (over half of plaintiffs in recent years are alleged infringers).
China mainland
Japan, China Taiwan
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Historical Patentee Win Rates
(U/B4)
(CI/CO5)
(# trials required: V/I/D6
2006-2012
# of patent
litigations filed
% of cases going to trial
(decision on the merits)
China (B)(CI)(2)
30,0002, 3
Inf. Cases ≈ 33%
Val. Chall. ≈ 67%
US (U)(CO)(1)
23,014
3.1%
(720/23,015)
Germany (B)(CI)(3)
87552
≈ 40%
2006-2012 Win Rate1
Infringement (2007-2013)
Invention patents 67.8%
Invalidity only
(194/286);
Invention patents 48%
Utility models 72.7%(336/462)
Utility models 44%
Design patents 86% (940/1093)
Design patents 44%
(2007–2013)
Overall 59.4% (7,924/13,340);
Contested 24% (987/4112);
Combined trial win rate (bench and jury) 60.4% (696/1152)
Infringement (Düsseldorf
Nullity actions (FPC)
only)
(2007–2012)
(2007-2012)
39.1%
66% (577/869)
France (U)(CI)(1)
23902
≈17% (412/2390)
39% (161/413)
Japan (U)(CI)(1)
1265
40% (21%
(260/1265))7
22% (58/259)
England (U)(CO)(2)
807
13% (105/807)
25% (26/105)
South Korea
(B) (CI)(2)
4602
Inf. cases ≈ 50%
Infringement
26% (106/406) (2000–2009)
Invention patents at least
44% (1486/2659)
Utility models at least 45%
(754/1361)8
Combined win
rate for
bifurcated
country if same
patent at issue
Invention
patents 33%
Utility models
32%
Design patents
38%
26%9
25%2
A “win” is defined as a case where at least one claim was found valid and infringed in a court of first impression.
Indicates number is estimate based on discussions with GIP participants and incomplete data.
In China, utility model and design patent cases account for more than 80% of all patent litigation filed.
4 “U” stands for unified system, where validity and infringement are determined in one forum. “B” stands for bifurcated system, where validity and infringement are determined in separate fora. resulting in separate validity and infringement win rates.
5 “CI” stands for civil law jurisdiction, “CO” stands for common law jurisdiction; note fewer cases to trial in CO jurisdictions.
6 “V/I/D” stands for validity/infringement/damages.
7 While the data shows 260 patent litigation cases decided on the merits, the 1,265 patent cases filed include all patent-related cases such as patent license cases and employee invention cases. 260/1265 gives a figure of 21%, which is too low, considering
the denominator is not just patent infringement litigation cases filed. 40% is considered a reasonable estimate.
8 The win rate cannot be determined more precisely according to the book definition (all claims maintained without change + hal f of the claims amended) because this level of data is not available. The number indicated here are the decisions where no claims
were invalidated (patent claims remain intact without change; a win for the patentee). Source: Korean Intellectual Property Office (KIPO) Intellectual Property Tribunal (IPT), 2005–2009.
9 this number only applies if the same patent is involved in an infringement proceeding and a validity challenge; a large number of German infringement cases are decided without any parallel nullity action being initiated in the Federal Patents Court.
1
2
3
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Historic Patentee Win Rates
(U/B3)
(CI/CO4)
(# trials required:
V/I/D5
Brazil (B)(CI)(2)
Canada
India (U)(CO)(1)
Russia (B)(CI)(2)
# of patent
litigations filed
(2006–2012)
% of cases going to trial
(decision on the merits)
(2006–2012)
157
Infringement
only
34% (53/157)
Infringement only
434
(+ about same
number of PM
NOC filings)
6% (28/493)
12252
≈ 100%2
7002 inf.
1487 revocation
actions on
invention
patents;
684 revocation
actions on utility
models
(2008-2012)
2006-2012 Win Rate1
Infringement
41% (14/34)
Validity
41.5% (2012 only)
Combined win rate
for bifurcated
country if same
patent at issue6
17%
46% (19/41) (per patent)
>90%2
(179 inf. decisions in
Moscow only 2006-12)
Preliminary injunction grant rate : 45% (28/62)6
Infringement
42% (183/434)
Validity
upheld or partially
upheld ≈ 36%
(571/1579)
(2008–2010)
15%
A “win” is defined as a case where at least one claim was found valid and infringed in a court of first impression.
Indicates number is estimate based on discussions with GIP participants and incomplete data.
3 “U” stands for unified system, where validity and infringement are determined in one forum. “B” stands for bifurcated system, where validity and infringement are determined in separate fora.
resulting in separate validity and infringement win rates.
4 “CI” stands for civil law jurisdiction, “CO” stands for common law jurisdiction; note fewer cases to trial in CO jurisdictions.
5 “V/I/D” stands for validity/infringement/damages.
1
2
6 Preliminary
injunction data is reported for India because there is insufficient data for decisions on the merits in the first instance. One decision on the merits, Roche v Cipla, Delhi High Court, Sept. 7, 2012.
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Example: How Objective Data Can Make a Difference
German Company Employing Defensive First-strike
Strategy In A Medical Device Case Before Win-rate Data
Available
•German Company: Small medical products manufacturer wanted to enter
U.S. market.
•Two litigious U.S. competitors with blocking patents who did not want
German Company in U.S. market: big Company-A, 50% of market; big
Company-B, 25% of market.
•Needed:
-
U.S. and worldwide licenses from Company-A; and
U.S. license from Company-B.
•U.S. FDA approval was 2 years away
•Client asked us to file a declaratory judgment action in U.S.
•After early case assessment, concluded client could not “afford” to
litigate in the U.S.
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Example: How Objective Data Can Make a Difference
(con’t)
• Solution before win rate data available
• German company provoked infringement suit in Dusseldorf, patentee 63%
win rate (37% chance of success for German company).
• German company negotiates global license with Company A based on
“leverage” of putting licensor’s patents at risk in a foreign (unfamiliar) court.
• Preferred solution with win rate data
• Bring declaratory judgment action in London Patents Courts, patentee win
rate 12% (88% chance of success for German company).
• Greater opportunity to leverage better settlement in patentee-unfriendly
forum.
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If Objective Win Rate Data Had Been Available Then…
• Would have challenged
patent portfolio in London,
where patentee win rate is
very low and can negotiate
better leverage for
settlement.
• Try to knock out competitors’
patents.
• London relatively fast, so
decision before FDA approval
likely.
England patentee win rate
2008
2009
2010
2011
2012
13%
30%
20%
36%
33%
Overall patentee win rate 2008-12:
27% (22/81)
Germany patentee win rate
2009
2010
2011
2012
2013
62%
No data
64%
57%
64%
Overall patentee win rate in Dusseldorf
(infringement) (2009-13): 66% and Federal
Patents Court (average 2009-2013 = (22% all
claims maintained + ½(32% at least one
claim amended) = 38%
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Four Key Questions for a Litigant in Any Country/District
1.
How much will it cost?
2.
How long will it take?
3.
How strong is our case? (what are our
chances of success?)(win-rates); and
4.
What will we get? (case valuation from
early case assessment to final outcome)
Business managers do not like a “random walk through life.”
(Marshall Phelps)
Global IP Project developed 4 tools to answer these 4 questions with objective data using
a hypothetical fact scenario.
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U.S. District Court Forum-Shopping: 7 Data Metrics
Global IP Project Developed Data on these Metrics Globally
1. High patentee trial win rate:
• Best U.S. district courts in
which to initiate patent
litigation as patentee:
ED Tex, MD Fla, ND Tex
7. High chance of
granting preliminary
injunction:
2. Fast time to trial:
ED Va, WD Wis, MD Fla
D Del
ED Tex,
D Del
6. High chance case
filed will go to trial:
3. High damage
awards:
D Del
• Best U.S. district courts in
which to initiate patent
litigation as alleged
infringer:
SD Tex, ED Va, D Del
5. Low rate of granting
stay pending post-grant
proceeding
4. Low rate of
granting summary
judgment:
ED Tex
ED Tex
1. Low patentee trial win rate:
ND Cal, SD Tex, SD Fla
7. Low chance of granting
preliminary injunction:
2. Slow time to trial:
ND Ill, D Mass, SD NY
ND Ga, MD Fla, D Mass
•Note: Boldface indicates those courts that appears more than twice on chart.
•Source: PricewaterhouseCoopers 2013 2014 Patent Litigation Study (Numbers 13) and LegalMetric District Court Reports (Numbers 1–2, 4–7), Stay Pending
Reexamination in Patent Cases June 1991–January 2013; Preliminary Injunctions
in Patent Cases March 1990–January 2013; Summary Judgment Motions in Patent
Cases January 1991–January 2013Feb. 2014; Top 5 Report Most Favorable to
Accused Infringer Patent Cases January 2008–January 2013; Top 5 Report
Slowest to Judgment Patent Cases January 2000–January 2013.
6. Low chance case filed will
go to trial:
CD Cal
CD Cal
D Mass
SD Fla
3. Low damage awards:
MD Fla, SD Fla, D Minn
5. High rate of granting stay pending
post-grant proceeding
4. High rate of granting summary
judgment:
SD Cal, ND Ga, D NJ
CD Cal, WD Wash
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INTER-COUNTRY FORUM-SHOPPING IN EUROPE
BASED UPON 5 OBJECTIVE FACTORS
•
Best European court of first
instance in which to initiate
patent litigation as patentee:
Germany (pretty good chance
of winning infringement (prelim
and perm), and costs paid by
other side2)
1. High patentee win rate
Germany/infringement
Netherlands
2. Fastest time to trial
Netherlands, England ,
Germany
5. Preliminary
injunction
Germany; Netherlands
Germany/
Netherlands
4. Unlikely case will be
stayed for validity challenge
(England, Germany, Netherlands)
•
Best European court of first
instance in which to initiate
patent litigation as alleged
infringer:
England (expensive, but very
good chance of winning.)
3. Low Cost
(Germany, if win;
Netherlands)
1. Low patentee win rate:
(England)
5. Preliminary
injunction data
(France, 20% (2/10);
2. Slow time to trial
(France)
England
4. Likely case will be
stayed for validity
challenge
(Italy)
3. High cost
(Germany, if lose;
England)
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INTER-COUNTRY FORUM-SHOPPING IN ASIA BASED UPON
5 OBJECTIVE FACTORS
•Best court of first instance in
which to initiate patent litigation
as patentee:
China, but note possible
enforcement issue
1. High patentee win rate
China, S Korea
2. Fast time to trial
China, Taiwan
5. Damages
(Japan, Taiwan)
China
4. Unlikely case will be
stayed for validity challenge
(China; Taiwan)
•Best court of first instance in
which to initiate patent litigation
as alleged infringer:
Japan, Taiwan
3. Low Cost
(China, S Korea)
1. Low patentee win rate
Japan , Taiwan
5. Damages
China
Japan
Taiwan
4. Likely case will be
stayed for validity challenge
S. Korea
2. Slow time to trial:
was Japan, though
changing recently
3. High cost
Japan
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Global Patentee Win Rate Averages
2006-2012
General speaking, Patent
Owners win globally about
44% of the time.
Notes:
China and Germany date range is 2007-2012; Taiwan is 2010-11; Netherlands 2006-2011; US 1991-2014.
US win rate is trial win rate from Legal Metric LegalMetric LegalMetric Nationwide Patent Litigation Report
February 2014.
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China: Combined Patentee Win Rate From Infringement
Litigation and Invalidation Trials, 2007–2012
Infringement win
Infringement
Invalidation
rate × invalidation
litigation
trial
trial win rate
Invention patents
68%
48%
33%
Utility models
73%
44%
32%
Design patents
86%
44%
38%
Source: Global IP Participant. Sample of cases 2007-2012.
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“First-Strike” Strategy
• IN THEORY: No res judicata effect of litigation
outcome in one country on litigation outcome in
another country/district (limited collateral
estoppel).
• IN PRACTICE: Leverage power of first litigation
outcome to settle disputes globally/other
jurisdictions. Clients want to settle conflict globally
(exception is pharma).
– Leverage historical win rate to increase case value.
– First litigation outcome to settle dispute globally.
Develop patent enforcement strategies
(“where sue first”) with patentee win rate in
mind.
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Thank You!
For further information,
please contact
Mike Elmer
650-849-6610
949-715-5263
[email protected]
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Disclaimer
These materials have been prepared solely for educational and
entertainment purposes to contribute to the understanding of
intellectual property laws. These materials reflect only the personal
views of the authors and are not individualized legal advice. It is
understood that each case is fact specific, and that the appropriate
solution in any case will vary. Therefore, these materials may or
may not be relevant to any particular situation. Thus, the authors
and their respective law firms cannot be bound either
philosophically or as representatives of their various present and
future clients to the comments expressed in these materials. The
presentation of these materials does not establish any form of
attorney-client relationship with these authors or their respective
law firms. While every attempt was made to ensure that these
materials are accurate, errors or omissions may be contained
therein, for which any liability is disclaimed.
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