NOTABLE CASE & POTENTIAL IMPACT
DOLBY INTERNATIONAL AB V. HP INC. AND 14 AFFILIATES
Topics: confidentiality; intervenors; access to confidential business information; FRAND; patent pool
In November 2023, Dolby International AB filed an infringement action against HP Inc. and 14 HP affiliates in the Local Division Düsseldorf. In the action, Dolby asserted that HP infringed European Patent (EP) 3 490 258, a purported standard essential patent (SEP) directed to the High Efficiency Video Coding (HEVC) standard for video coding. Dolby contributed this patent and others in its HEVC-essential patent portfolio to a patent pool managed by Access Advance LLC.
Along with its defense to Dolby’s infringement action, HP applied for protection of confidential information pursuant to Rule 262A of the UPC Rules of Procedure (RoP). With its defense, HP submitted its licensing negotiations evidence to support its argument that Dolby had not fulfilled its fair, reasonable, and non-discriminatory (FRAND) obligations. Dolby stated it would only agree to the confidentiality restrictions if Access Advance was allowed access to confidential information pertaining to the license negotiations so that Dolby could respond to HP’s argument regarding Dolby’s FRAND obligations. However, under RoP 262A, access to confidential information is restricted to specific persons, which must include at least one natural person from each party and their respective counsel to the proceedings. Because Access Advance was not a party to the proceedings, HP objected to them having access to the confidential information.
In June 2024, Access Advance joined the proceedings as an intervenor under RoP 313 because, among other reasons, it had assumed Dolby’s FRAND obligations and been in talks with HP regarding a license to Access Advance’s patent pool. Thereafter, HP argued that only Access Advance’s lawyers should have access to the confidential information (which would have precluded any “natural person” from Access Advance from having access). The Local Division Düsseldorf rejected this request, reasoning that, pursuant to RoP 315, intervenors are treated equally as a party and, therefore, pursuant to RoP 262A, a natural person from Access Advance is entitled to access the relevant confidential information.
TAKEAWAYS:
- This case highlights a key difference in rules governing access to confidential information in the UPC compared to US courts. Whereas RoP 262A requires that at least one natural person from a party have access to the confidential information, US courts typically do not provide any such right and parties can designate highly sensitive confidential information for “outside attorneys’ eyes only.” This means that, in the US, in-house counsel may be unable to see confidential information that bears directly on the matter, whereas the same person may get access to such information in a UPC action.
- While the Local Division Düsseldorf relied on a literal interpretation of the rules to require that someone from the intervenor be given access to confidential information, other UPC courts have permitted lawyer-only access to confidential information when it is mutually agreed upon by the involved parties. In practice, parties at the UPC may agree to confidentiality restrictions like those in the US to harmonize access restrictions across global disputes.
EMERGING LEGAL ISSUE
VARYING APPROACHES TO CASE MANAGEMENT: A COMPARISON OF UPC PANELS WITH A FOCUS ON THE LOCAL DIVISION MANNHEIM
The UPC faces an increasing challenge to manage its caseload efficiently as the number of cases before it grows. While some UPC judges offer little guidance to parties before hearings (allowing cases to unfold with minimal court intervention), others, such as Presiding Judge and Judge-Rapporteur Peter Tochtermann in the Local Division Mannheim, have taken a more structured, hands-on approach. This divergence among judges reflects the broader procedural flexibility seen across the UPC, much like the differences in case management across the US judicial system.
Variations in UPC Case Management
Under Article 43 of the Agreement on a Unified Patent Court and RoP 332, the UPC is tasked with active case management across 12 general principles, such as “identifying the issues at an early stage.” To that end, the judge-rapporteur may issue case management orders, subject to review by the panel of judges assigned to the case.
Some UPC judges tend to choose a more passive role, issuing minimal direction to the parties in public orders before oral hearings. For example, a panel of judges in the Local Division Munich held one of its first final oral hearings in June 2024 without issuing any prior public orders to identify the key issues for the parties. In instances such as this, litigants are left to structure their cases with little court intervention, often resulting in hearings that may deviate from the core issues or become bogged down in procedural disputes.
In contrast, other UPC judges tend to adopt a more proactive stance. For example, Judge Tochtermann has taken an active role in case management, providing detailed, written orders before oral hearings to help parties streamline their arguments and ensure that the key legal and technical issues are addressed efficiently. Such guidance allows for greater clarity and focus during oral proceedings while streamlining the issues for the involved parties.
Panasonic Holdings Corporation v. OROPE Germany GmbH, Guangdong OPPO Mobile Telecommunications Corp. Ltd. and Panasonic Holdings Corporation v. Xiaomi Technology Germany GmbH et al.
As an example, in June and July 2024, Judge Tochtermann issued a pair of case management orders in actions filed by Panasonic Holdings Corporation in 2023 against OROPE Germany GmbH/OPPO Mobile Telecommunications Corp. Ltd. and Xiaomi Technology Germany GmbH. In each of its infringement actions, Panasonic asserted that the defendants infringed its patent related to the management of control and reference signals by using certain long-term evolution mobile communication standards. After initial written briefing by the parties, Judge Tochtermann issued orders asking the parties to address certain issues.
First, he asked the parties to address the impact of Panasonic not addressing claim interpretation in its initial pleading. Judge Tochtermann clarified that for patent claims that do not deal with simple technology, such as the ones asserted by Panasonic, RoP 13 requires the plaintiff to explain any proposed claim interpretations in its initial pleading. Because Panasonic did not provide such an explanation, Judge Tochtermann’s order asked the parties to address several legal questions, including the need for additional briefing and delays in the proceedings.
Second, he acknowledged issues that were agreed upon between the parties and addressed disputes over particular claim limitations, providing guidance on which issues would require additional explanation. For instance, Judge Tochtermann proposed more detailed discussions for certain claim limitations because the claim was unclear considering Panasonic’s arguments in its reply briefing.
Third, Judge Tochtermann cautioned the parties about late application submissions to amend the patent. Under RoP 30.2, a patent holder can only submit such applications with the UPC’s permission. It appears this rule will be strictly enforced to prevent delays, ensuring that cases are not prolonged by tactical amendments designed to give one party a procedural advantage.
Fourth, he asked the parties to address various issues related to FRAND royalty rates and declaratory relief. For example, the parties were asked to address how a finding of invalidity, noninfringement, or an unwilling licensee could impact a counterclaim for a FRAND rate setting.
Although case management orders can raise many issues that need to be addressed in more detail, it is unlikely that the UPC will give parties more time to submit their arguments. Rather, parties will need to address such issues within the remaining deadlines in the written procedure. This strict approach to case management further cements the UPC’s role in managing cases efficiently and effectively.
Implications of an Active Case Management Style
By issuing detailed written guidance, the Local Division Mannheim ensured that:
- The key issues were identified early.
- The parties remained focused on the most critical aspects of the case.
- Procedural efficiency was maintained through strict adherence to the UPC’s rules.
Case Management Efficiency and Choice of Forum
Differing case management styles across judges or divisions will be familiar to those involved in patent litigation before US courts. Like the UPC, US courts give substantial deference to individual judges to manage their dockets. Some US district courts, such as the Northern District of California and the Eastern District of Texas, have developed local patent rules to provide structure to parties litigating patent infringement and validity issues. Even in US district courts without patent-specific rules, some judges, such as US District Judge Alan Albright, have issued detailed standing orders to manage patent cases efficiently. Other judges have promoted efficiency by holding specialized hearings for common legal issues that span across multiple cases. For example, Judge Leonard P. Stark was well known when he was a US district court judge for holding “Section 101 Day” hearings in which he resolved multiple patent eligibility motions under 35 U.S.C. § 101 on the same day. While US courts with active patent case management tend to move more quickly and thus attract more plaintiffs, it remains to be seen if a similar pattern will emerge at the UPC.
Looking Ahead
Judge Tochtermann’s orders in the Local Division Mannheim set a high bar for case management, with a structured, proactive approach that ensures parties focus on the key issues. By issuing detailed written guidance prior to oral hearings and enforcing strict procedural rules, such orders help litigants streamline their arguments and avoid unnecessary delays.
As the UPC continues to evolve, a proactive style of case management may serve as a model for other divisions, particularly in complex, technically demanding cases. This hands-on approach ensures greater efficiency and provides a clearer understanding of the UPC’s expectations.
RECENT FILINGS
This section reflects updated data regarding UPC usage, taken from the UPC’s register as of August 31, 2024.
Note: McDermott collects the data in the Recent Filings section directly from the UPC’s register and is not responsible for the accuracy of the data.
NUMBER OF CASES ON UPC REGISTER BY TYPE
*The number of counterclaims for revocation cases does not necessarily reflect the UPC’s true case load because the UPC’s Case Management System required several defendants in infringement proceedings to launch their own counterclaim for revocation, even if the substance of the counterclaims was fully identical across the parties. This inflates the number.
NUMBER OF CASES ON UPC REGISTER PER DIVISION
LANGUAGE OF UPC PROCEEDINGS
FIRST INSTANCES OF INFRINGEMENT AND REVOCATION CASES PER MONTH IN 2023 AND 2024
*August 2024 values are incomplete.
INFRINGEMENT AND REVOCATION CASE VALUES
HIGHLIGHTS FROM McDERMOTT'S UPC TEAM
OUR WORK
- On September 10 and September 12, 2024, the McDermott UPC team argued its first two hearings before the Court in Paris.
- According to JUVE Patent and World Intellectual Property Review, McDermott is one of the top five claimant law firms active before the UPC, having filed nine revocation actions in the Central Division Paris.
- McDermott’s cross-Atlantic team consists of lawyers in Düsseldorf, London, Munich, Paris, and across the US.
LATEST INSIGHTS
- Legal Lens on the Unified Patent Court, August 2024
- Legal Lens on the Unified Patent Court, July 2024
- 1 Year at the UPC: Implications for Transatlantic Disputes, July 17, 2024
UPC TEAM
Have questions or want to discuss your UPC strategy? Contact Hon.-Prof. Dr. Henrik Holzapfel, Chuck Larsen, or Diana Pisani.
