Context: Patent attorneys who are not simultaneously attorneys at law may become Unified Patent Court (UPC) representatives and sometimes act on their own, as lead counsel (April 29, 2024 ip fray article).
What’s new: The UPC’s Court of Appeal (CoA) just issued a decision (PDF) according to which a patent infringement action between three Italian companies (Progress Maschinen & Automation AG v. AWM & Schnell) has risen from the dead. The Milan Local Division (LD) had erroneously declared that an infringement lawsuit would have been untimely at a certain point due to the mere passage of time after preservation-of-evidence proceedings. On that basis, it effectively also wanted to undo any measures relating to the preservation of evidence. The CoA, however, noted that the net effect of this would have been to require the plaintiff to file suit prior to having obtained the information subject to the preservation-of-evidence proceeding. The court order furthermore clarifies that even a party’s failure to file a timely confidentiality request cannot be interpreted as tacit consent with the disclosure of such information.
Direct impact: The Milan LD’s decision was deemed reversible error, and the matter has been remanded so that Progress will be provided with whatever information it lawfully should have obtained through the preservation-of-evidence proceeding, and Progress will then be able to file its patent infringement lawsuit within the statutory period (31 calendar days or 20 working days, whichever is longer).
Wider ramifications: This is a landmark appellate win for two Austrian patent attorneys.
This was one of the very first preservation-of-evidence proceedings in the history of the UPC. On August 23, 2023, Progress filed an application for preserving evidence and an application for inspection. On September 25, 2023, the Milan LD granted that application, and the orders (one for each defendant, but saying the same) were execuded at defendants’ premises on October 17, 2023. The orders already contained a passage that the CoA now disagrees with:
“In the event that the Defendants should omit, for any reasons, to file the request for review ex rule 197.2 RoP, it will imply a tacit approval for full disclosure of the contents of the experts’ report and annex, without limitations or any other condition. In this case too, the access of the Claimant shall be nonetheless subject to a previous express authorisation of the Court.”
The CoA emphasizes “the Court’s obligation under Article 60(1) UPCA to protect confidential information and the fundamental right to be heard.” In other words (though the term does not appear in the appellate opinion), there is no such thing as a waiver, by means of inaction, of confidentiality designations in connection with information obtained through a preservation-of-evidence proceeding.
It then took until February 16, 2024, until Progress filed a request for access to the October 18, 2023 reports by the court-appointed experts. A few weeks later (on March 4, 2024), Progress filed another application. In that one, it raised the issue that the time limit for starting proceedings on the merits (i.e., to bring an actual infringement action) must “take[] into account that the reports of the Court’s experts are not available to Progress’ representatives and, as these representatives are bound to keep the results confidential until released by the Court, are therefore not available to Progress.”
The logic is simple: the decision to file suit must be made by the client. In order for the client to be able to make that decision, it needs the relevant information. And the purpose of the preservation-of-evidence proceedings is to have a more knowledgeable basis for that decision, too.
In response to that motion, however, AWM and Schnell asked the Milan LD to declare the provisional measures to preserve evidence “revoked.”
The Milan LD granted that motion, but also allowed an appeal. Given that the appeal has now succeeded, the lower court deserves respect for having understood that this decision involved questions that required appellate clarification.
Progress appealed, and the CoA gave that appeal suspensive effect.
The CoA decision published today comes with lengthy headnotes. Here’s a TL;DR (“too long; didn’t read”) version:
- If a party seeks the preservation of evidence and/or an inspection of premises, this implicitly also means that it wants the evidence to be disclosed. That’s the whole purpose.
- Granting the preservation motion doesn’t mean that all the evidence will subsequently be disclosed. That must be decided later.
- It doesn’t matter if the party whose confidential information is at issue fails to seek a review of or remedy against the preservation and/or inspection order. None of that means consent with disclosure. The party whose confidential information is concerned must always be heard prior to disclosure.
- The statutory period during which the actual infringement action must be brought starts either from the date of the requested disclosure or from the final decision that the applicant is denied access to the evidence sought.
As a result, the proceedings will continue in Milan, and Progress still has the opportunity to get access to the evidence that was preserved last year. It filed its infringement lawsuit in April, and the statutory period hasn’t even begun, so that lawsuit is now by definition timely.
The only part that Progress did not win on appeal is a refund of the security deposit. The CoA declined to resolve that question (which Progress should have raised in the court below).
The decision was made by CoA panel 1c: President Dr. Klaus Grabinski, Judge Professor Peter Blok and Judge Emanuela Germano.
The successful appellant-plaintiff, Progress, is represented by patent attorneys Dr. Markus Gangl and Florian Robl, PhD of Austrian firm Torggler Hofmann.
Defendants AWM and Schnell are represented by a mixed team of patent attorneys Cristina Schiavone and Federico Manzella (both of Manzella & Associati) and attorneys-at-law Paolo Creta and Elisa Viotto (both of Studio Legale Costa-Creta).