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2 December, 2013

As part of last week’s judgement for IPCom v HTC, the Court of Appeal has re-considered their guidance as to the circumstances in which an English court considering combined patent infringement and revocation proceedings should grant a stay of proceedings pending the outcome of co-pending opposition proceedings before the European Patent Office (EPO).

The existing guidance was established by the Court of Appeal in Glaxo v Genentech [2007], but has since been called into question by comments made as part of the Supreme Court’s judgement for Virgin Atlantic Airways Ltd v Zodiac Sears UK Ltd [2013]. In dismissing the appeal for IPCom v HTC, the Court of Appeal has therefore taken the opportunity to update the Glaxo guidance in view of the Supreme Court’s comments.

Significantly, the updated guidance makes it clear that, in the absence of any other factors, the default option is to stay the national proceedings. It also specifies that it is for the party resisting the stay to show why it should not be granted.

A lot of elements of the original guidance have been maintained. In particular, the guidance still recognises that the length of time it will take for the respective proceedings in the national courts and in the EPO to reach a conclusion is an important factor to be considered in conjunction with the prejudice which any party may suffer from the delay and lack of certainty. The guidance still acknowledges that it may be desirable not to grant of a stay where it is possible to achieve some commercial certainty at an earlier date in the case of the UK proceedings than in the EPO, and that there is a general public interest in dispelling the uncertainty surrounding the validity of monopoly rights conferred by the grant of a patent.

The updates to the guidance have, however, introduced recognition that a strong factor in favour of a stay may be provided where, if the proceedings before the national court were to proceed, the patentee would be able to obtain monetary compensation which would not be repayable if the patent were subsequently revoked by the EPO. This factor may be mitigated by a suitable undertaking to repay any such compensation.

In conclusion, although the updates to the Glaxo guidance introduce a default position to stay national proceedings where there are co-pending proceedings before the EPO, due to the commercial realities of most cases, it seems likely that parties may still be able to rely on the court’s discretion to successfully resist a stay.