Tuesday, April 30, 2013

Marketa Trimble on Comparative Patent Remedies

Posted by Marketa Trimble

In most cases sound legal advice begins with an attorney learning about the outcome a client wishes to achieve. Matching the desired outcome with an appropriate strategy allows the attorney to recommend litigation and other actions that are most likely to steer the course of events to the desired outcome. Patent cases are no different. A client facing an opponent (who may or may not be a competitor) who manufactures, uses, offers to sell, or sells a product that infringes the client’s patent might have a number of outcomes in mind – preventing the alleged infringer from offering the product online (or making the alleged infringer stop selling the product online), preventing the alleged infringer from offering the product at a trade show, getting damages for infringements, preventing or stopping the importation of cheaper products from abroad, or perhaps gaining leverage for future licensing negotiations.

Increasingly, legal and business advice must be based on multi-jurisdictional strategies as the number of cross-border cases – cases that involve foreign-country parties and/or conduct in foreign countries – increases. The competitor in the example above might be manufacturing in China while offering to sell worldwide via his website that is hosted in Sweden with a domain name registered in the United States, while at the same time offering to sell in the United States at a trade show in Germany and also selling in Japan. In cross-border cases, a client’s expectations create complex scenarios calling for an assessment of the potential impact of national conflict-of-laws rules (rules of jurisdiction, choice of law, and recognition and enforcement of foreign judgments) and patent and other substantive national laws. As is the case in a single-country scenario, the cross-border context requires the knowledge of possible remedies, their availability, their scope, and their effectiveness in practice if an attorney is to provide competent advice and shape an effective course of action for the client.

In order to be able to advise clients on cross-border matters, lawyers need to be familiar with remedies that are available in other countries and how foreign courts award and enforce the remedies. Some remedies are already aligned across most countries because of international treaties (most particularly under the TRIPS Agreement), which provide for some basic minimum standards that countries must meet when designing remedies in intellectual property cases. However, because of various flexibilities that have been included in the treaties, national laws may contain significant differences in the remedies they make available. In the European Union, the EU IPR Enforcement Directive (2004/48/EC) addresses the availability of remedies in intellectual property cases throughout the Union but still allows individual member countries of the Union to vary their laws. Because an individual lawyer is unlikely to be able to master the systems of remedies of all or even multiple countries, consulting a local lawyer with specific knowledge of a particular national law will always be advisable at some point. But all lawyers need to be aware of the existence of differences in national rules on remedies and appreciate the potential extent and effects of the differences.

As have other areas of law, patent law has been exposed to the increasing globalization of the legal practice. Although it was virtually non-existent just a couple of decades ago, cross-border patent litigation exists and – as recent empirical work suggests – appears to be on the rise. With more and more cross-border issues appearing, lawyers need comparative information about remedies available in patent disputes. Therefore, Thomas Cotter’s book Comparative Patent Remedies: A Legal and Economic Analysis (Oxford University Press 2013) is an extremely timely and most welcome contribution to the comparative literature on intellectual property law and the law of remedies.

In looking beyond U.S. borders, Cotter relies on his deep expertise in U.S. patent remedies from his previous publications. His knowledge enables him to detail a theoretical framework for remedies from a law and economics perspective (pp. 39-75), and it is within this framework that he presents his description and analysis of the law and practice of remedies in the United States (which covers slightly more than a fifth of the book – pp. 76-162), and several foreign countries, including the major patent litigation countries – the United Kingdom, Germany, and China. The coverage of countries is impressive because publications spanning this number of countries rarely appear in single-author monographs – they usually result from an international collaboration of several authors.

What makes the book particularly enjoyable – in addition to its feeding the curiosity that a comparative perspective generates – are Cotter’s balanced views on many of the issues discussed in the book. For example, the cost-benefit analysis of intellectual property protection (pp. 28-29) shows Cotter’s careful thought about the effects that intellectual property law and policy have had on the economy and society. Cotter does not claim that one national system is inherently better than another; he appreciates the complexity of individual systems in the context of their historical, social, economic, and other backgrounds (pp. 34 and 379-382). Similarly, he has a balanced position on the role that courts should play in enforcing patent laws; while he argues that courts should apply the law as it is, he acknowledges that courts do have a policy function (pp. 49-50).

Cotter also presents a balanced view in his analysis of the potential role of law and economics in shaping intellectual property laws; he does not claim that law and economics provides answers to everything, and he is aware of the limitations inherent in a law and economics analysis. At the same time, he maintains that the analysis “can be a useful tool for better understanding the workings of IP systems in general and of the system of patent remedies in particular” (p. 32).

Given Cotter's focus on a comparative law and economics analysis it is possible that readers who focus on law and society might miss a law and society insight, such as information about the public relations aspects of litigation in various countries or the likelihood of a party’s nationality affecting the outcome of patent litigation and thus the availability of remedies. While these aspects would certainly be susceptible to close comparative scrutiny as well and may impact the strategies that parties adopt in patent disputes, such an analysis is outside the scope of Cotter’s endeavor in this book.

The law and economics focus of the book also explains why Cotter does not discuss non-economic remedies. Although he covers injunctions and declaratory judgments, he does not mention remedies that are not designed to have a direct and immediate economic impact. One such example is a publicity measure – a court’s order to disseminate information about the court’s decision in a case (see, e.g., Article 15 of the EU IPR Enforcement Directive (2004/48/EC)); another example is a court-ordered public apology. That these types of remedies have a place in the patent litigation landscape was recently confirmed in the Samsung v. Apple design patent saga (see Judge Briss’s order in Samsung v. Apple, Chancery Division, July 2012). The omission of these remedies from Cotter’s book is understandable, not only because of their non-economic nature but also because of their minimal impact, if any, on a party’s choice of litigation strategies.

If there is any additional analysis that could be added to the book’s comparative analysis of patent law remedies, it would be a discussion of the scope of injunctions that are available in the various countries. While patent injunctions tend to be phrased similarly across countries, the actual scope of injunctions can vary significantly – in terms of the conduct they prohibit or order and also the products that they cover. Of course, a comparative study of the differences in the scopes of injunctions would itself fill an entire book – it would require a comparison of countries’ interpretations of the scope of patent rights (including their territorial scope) under their national laws and also an analysis of the standards that courts apply when they enforce injunctions and determine whether a design-around falls within the scope of an injunction. Given the magnitude of such a study it is not surprising that an author as detail-oriented as Cotter chose to leave the problem of injunction scope for another study.

The book’s focus on patent law remedies, or remedies that might be available in patent cases (which may or may not be strictly patent law remedies, meaning remedies stemming from a national patent act), raises another understandable limitation: the book does not cover instances in which patent protection overlaps with protection provided by other intellectual property or other laws that may provide for additional or alternative remedies (p. 18). In practice, the consideration of such additional protection is of paramount importance; an attorney should evaluate all scenarios comprehensively and explore all legal and extra-legal options available to the client. By focusing on patent law remedies Cotter provides a solid building block and suggests that future work contribute additional blocks to construct a comprehensive structure of knowledge about remedies.

Though he set out to write the book to “fill the gap [he] perceived in the scholarly literature” (p. xi), Cotter does a remarkable job of speaking to a variety of audiences. He has produced a work of scholarship that is not only intriguing to academics but also easily accessible for practitioners – whether they practice in the United States or elsewhere. The book will also be valuable reading for law students interested in patent law. Some critics could view a wide breadth of potential audiences negatively – as a sign that a book does not have a focus that is sufficient to satisfy a single category of readers. However, Cotter’s book’s wide appeal corresponds to the best tradition of the legal profession – a tradition based on perpetual learning, the mutual dependence between practice and theory, and the perspective of both practitioner and academic.

The book gives valuable insights that should resonate with the well-rounded attorney – an attorney who appreciates the interrelationships between the practical and the academic. As such the book spurs our thinking about the future course of legal education – a current topic of hot debate. Perhaps law schools should educate the type of students who want to read this book – future lawyers who will always want to stay abreast of current law, learn about new and novel developments in legal doctrine, understand the trends that influence current practice, and understand theoretical frameworks and policy arguments. These future lawyers should continually strive to understand how other countries approach legal issues, because it is only with this knowledge that they will be able to provide superior advice to their clients in cross-border scenarios and identify specific policy choices made in other countries that might be worth following or avoiding in the United States (pp. 8-9).


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