B. Differences in Enforcing Patent Rights
The worth of a patent, once granted, depends in significant measure on the powers, attitudes, and efficiency with which national court systems enforce patent rights against these alleged infringers. The three major aspects of court-based enforcement are reassessment of validity, determination of infringement, and the strength of legal enforcement. The strength of legal enforcement depends primarily on the powers to collect evidence, the availability of injunctions against alleged infringers, and the availability of punitive damages. According to the chief patent counsel of a large U.S.-based multinational chemical company whom we interviewed, “Enforcement in
1. THE UNITED STATES (AND THE UNITED KINGDOM)
Litigation costs are very high in the United States and the United Kingdom, with their lawyer-dominated (rather than judge-dominated) modes of litigation, but the courts also offer the strongest enforcement mechanisms. Both jurisdictions allow parties to demand pretrial discovery; although, as one lawyer has put it, the U.K. version is a “gentle domesticated animal” compared with the “ravenous beast of the jungle” that one sees in the aggressively adversarial U.S. litigation system.[32] In addition, injunctions (including preliminary injunctions pending trial) are widely used in both the United States and the United Kingdom. In cases of willful malfeasance, treble damages may be awarded in the United States, and in recent years the use of this punitive remedy has sharply accelerated. Treble damages are not available in Japan or in Europe, although broader damages (beyond lost profits or reasonable royalties) are available in the United Kingdom.
In patent cases, as elsewhere, U.S.-style litigation is extremely expensive. Each party typically hires its own expert witnesses.[33] Discovery is timeconsuming and costly. The American Intellectual Property Law Association (AIPLA) estimated that, in 1995, the median litigation cost through pretrial discovery alone ranged from $190,000 (in cases in which the amount at risk was under $1 million) to $1,983,000 (in cases greater than $100 million), and from $301,000 to $2,975,000 through trial.[34]
In addition to costs, U.S. patent litigation is also subject to a disturbing level of legal uncertainty, at least at the district court level. Probably because patents cannot be adequately challenged by competitors during prosecution, infringement suits often become a forum for contesting validity issues as well. Unlike in Europe and Japan, the courts determine both infringement and the patent's validity in the United States and the United Kingdom. To the dismay of Japanese and European patentees who are used to having specialized benches hear patent cases, in the United States, such cases are decided not by experts but by lay jurors or technically untrained district court judges, who may be influenced by the adversarial manipulations of competing lawyers and partisan expert witnesses.[35] To address the problem of legal uncertainty, the United States in 1982 established the Court of Appeals of the Federal Circuit (CAFC), which handles all patent appeals nationwide, and this has increased uniformity in the lower courts.[36]
In most respects, enforcement in the United Kingdom is a paler image of the American system. There, too, courts wield substantial powers. The
2. JAPAN
In patent enforcement, as in many other areas of civil litigation,[40] courts in Japan are expensive, understaffed, and slow, which is often interpreted as part of a deliberate policy of discouraging litigation and encouraging compromise.[41] When a patentee sues an alleged infringer in a Japanese district court, judicial proceedings—an experienced patent lawyer writes—are intermittent, slow, and costly.[42] The small, guildlike patent bar charges high counsel fees,[43] which the winning party cannot recoup from the loser. Defendants may impose additional delays on a patentee in an infringement case by requesting a redetermination of the patent's validity by the Trial Board of the JPO. Pending redetermination of validity by the Trial Board, the court suspends its hearings on infringement, further delaying any relief to the patentee. Japanese courts rarely issue preliminary injunctions pending determination of infringement charges.[44] Nor do the courts offer pretrial discovery, which makes it very difficult to prove violations of process patents. They also interpret patent claims narrowly and literally, and eschew such principles of equity as the doctrine of equivalents,[45] construing even minor improvements on the technology by the defendant to be grounds for noninfringement. Thus, the predominant effect of the Japanese court system in patent enforcement, as in other areas of commercial dispute, appears to be to mediate a settlement between the parties rather than to determine the just allocation of property rights.[46]
3. CONTINENTAL EUROPE
In Europe, litigation costs in patent enforcement are lower than in the United States, the United Kingdom, and Japan. Fact-finding and legal argumentation are controlled by judges rather than by the parties' lawyers. In France and Italy, proceedings are based almost entirely on written documentation and testimony. In Germany there are two oral hearings, but they are far shorter and less elaborate than U.S. (or even British) trials,
| Prosecution Features | United States | Japan | Europe (EPO) |
|---|---|---|---|
| Basis of deciding patent priority | First to Invent∗ | First to File | First to File |
| Native language filing permitted? | Any language (English translation for record) | Japanese (but canfile in English, with translation to follow)∗ | Any EPC member language, with English, French or German translation; translations required for each country designated |
| Patent term | 17 years from grant∗ | Lesser of 15 years from grant and 20 years from filing∗ | 20 years fromfiling |
| Publication of patent | No∗ | Yes, 18 months fromfiling | Yes, 18 months fromfiling |
| Examination deferral | No | Yes, 7 years fromfiling | Yes, 6 months from publication |
| Third-party contestation of patent | Limited reexamination∗ and interferences∗ | Pre-grant oppositions∗ | Post-grant oppositions |
| Patentability standards | Least unfavorable to applicants (1 year grace period for prior publication) | Strict standards—claims need working examples, very limited grace period∗ | Moderate standards; some variation by nationality, limited grace period |
| Breadth of claims awarded | Very broad | Narrow | Broad |
― 287 ― | |||
| Time taken | 18–24 months | −36 months + oppositions (3–5 years)∗ | −30 months + opposition (expeditious) |
| Overall comparable costs | $13,000 | $30,000 | $120,000 |
| Enforcement Features | United States and United Kingdom | Japan | Continental Europe |
| Jurisdiction over validity of patent | With Courts, and often exercised | With Patent Office Appeals Board | Varies by national court system |
| Strength of Enforcement: | Very strong | Weak | Medium (varies) |
| Discovery and depositions | Widely used (“rampant” in U.S.) | Not available | No, but alternatives exist in some countries |
| Preliminary injunctions | Yes | Not available in practice | Yes, but sometimes difficult (e.g. Germany) |
| Interpretation of claims | Literal interpretation, propatentee court systems, equivalents applied | Narrow interpretation linking back to specifications, equivalents not applied | Interpreted less literally; equivalents applied, but under different principles |
| Prior user rights available? | No | Yes | Yes |
| Judicial style | Adversarial court trials, jury trials often seen | Brief intermittent hearings with judge, written testimony is widely used | Largely by written testimony, some oral hearings, court experts used |
| Uncertainty in outcomes | High, due to lay judges (in District Courts) and juries. Not in U.K. | High, especially due to delays, and pressure to settle out of court | Relatively low in all jurisdictions |
and in the words of one ACME attorney, they tend to offer “rough and ready justice.” European courts are much less open to hired expert testimony; the judges consult their own experts or technical publications when necessary. In Germany (as in Japan, but unlike the United States), invalidity proceedings must be brought separately in the patent court, but unlike Japan, infringement actions usually will not be stayed while a validity suit is pending. For all these reasons, European court proceedings, in a crossnational perspective, are expeditious and not costly for the parties. One author describes European patent litigation costs as less than those in the United States even if enforcement actions are pursued in several nations simultaneously.[47] In Europe, however, aggrieved patent holders do not have access to the potent and extremely effective legal weapons afforded by U.S. and U.K. law. Party-directed pretrial discovery is limited, although French and Italian courts provide some investigative assistance.[48] In terms of remedies, treble damages are not assessed. Injunctions are available, but preliminary injunctions are employed infrequently, and not at all in Germany.[49]
In most spheres of law, European courts, with their judge-dominated procedures, emphasis on legal uniformity, and highly professional bureaucratically supervised judiciaries, are regarded as more predictable than U.S. courts. But for a company seeking cross-national protection of patent rights, European courts entail a different kind of uncertainty, stemming from the different interpretive standards applied by different national judiciaries to the centrally granted EPO patent.[50] In the absence of a common European Appeals Court, firms have no recourse against the ruling of a national court on a patent obtained even through the EPO. Nonetheless, many lawyers we spoke to were positively disposed toward European enforcement because it afforded effective justice at reasonable costs and risks.
The overall differences between the patent systems of the United States, Japan, and Europe, circa 1993, are summarized in Table 9.1. Laws or practices that have changed, or are in the process of being changed, are marked with asterisks.[51]