IPcom GmbH & Co Kg v HTC Europe Co Ltd & Ors

Where national patent proceedings run concurrently with opposition proceedings before the European Patent Office, a stay is the default option if no other factor intervenes. The party resisting a stay must show that the balance of justice requires the national proceedings to continue.

The court must assess all relevant circumstances. These include delay and resulting prejudice, the commercial certainty obtainable nationally, possible irrevocable loss of the EPO process's benefit, suitable undertakings, public interest and wasted costs. Delay has no independent or overriding status. A national trial may proceed where it will materially advance certainty or settlement without conferring an irrevocable advantage.

IPCom alleged that HTC infringed a European patent said to be essential to a mobile telephony standard. HTC challenged validity and sought a stay of the English infringement and revocation proceedings until final determination of concurrent opposition proceedings in the European Patent Office. Roth J refused the stay in [2013] EWHC 2880 (Ch).

After an earlier stay, the EPO had remitted unresolved novelty and inventive-step objections for further consideration. Meanwhile, the English technical trial was fixed for December 2013 and live infringement issues remained. IPCom had undertaken to license on fair, reasonable and non-discriminatory terms, so no injunction would be granted.

The appeal required the court to reconsider its earlier guidance on stays following the Supreme Court's decision in Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46, and then determine whether Roth J's refusal of a stay could stand.

1. Appeal dismissed. Roth J had exercised the stay discretion afresh in materially changed circumstances. His evaluation accorded with legal principle and considered the relevant circumstances. The Court of Appeal therefore had no proper basis for interfering with it.

2. The guidance in Glaxo Group Ltd v Genentech Inc [2008] EWCA Civ 23 required revision following Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46. The discretion under section 49(3) of the Senior Courts Act 1981 remained very wide and was directed to the balance of justice. Concurrent national and EPO validity proceedings are inherent in the European patent system, while national courts retain exclusive jurisdiction over infringement.

3. If no other factor intervenes, a stay is the default course and the party resisting it bears the burden of showing why it should not be granted. Nevertheless, the existence of parallel proceedings alone does not determine the application. The court must examine the practical consequences in the particular case.

4. A weighty consideration is whether refusal of a stay would irrevocably deprive a party of part of the benefit of the concurrent jurisdictions. Non-repayable compensation obtained before later revocation may favour a stay, although an undertaking to repay can remove or reduce that concern. Here IPCom offered such an undertaking, so it would obtain no irrevocable benefit.

5. Delay is important only in conjunction with resulting prejudice, lack of certainty and the useful consequences of the national proceedings. The court may refuse a stay where an earlier UK determination will produce meaningful commercial certainty or promote settlement. It must also consider the public interest and the risk of wasted costs, although commercial considerations favouring early resolution will normally outweigh the latter.

6. The proposed stay could have postponed the technical trial from December 2013 until 2016 or later. IPCom faced prolonged uncertainty and delayed recovery for alleged past and continuing infringement. Conversely, the English trial could establish that HTC's devices did not infringe valid UK claims. There is no general rule that a patentee which cannot obtain an injunction must await completion of the EPO process before seeking any other determination or relief.

1. Court of Appeal (Civil Division): The appeal was dismissed unanimously. The court revised the general guidance governing stays pending EPO opposition proceedings but found no basis for interfering with Roth J's exercise of discretion: [2013] EWCA Civ 1496.

2. Patents Court: Roth J refused HTC's application to stay the technical infringement and validity proceedings pending final determination of the remitted EPO opposition proceedings: [2013] EWHC 2880 (Ch).