Context: The cities of Munich and Mannheim are only about 350 km apart, and the respective Local Divisions (LDs) of the Unified Patent Court (UPC) agree on many questions, but they are presently taking divergent or even contrary positions on certain procedural issues. For instance, the Mannheim LD’s confidentiality regime is stricter with respect to the use of confidential information in related but non-UPC proceedings (July 9, 2024 ip fray article).
What’s new: Another Munich-Mannheim split concerns the (im)possibility of fragmented pleadings, a question that is particularly pertinent to standard-essential patent (SEP) cases as they involve confidential business information that may not be instantly available to the other party. A Mannheim panel has now affirmed (PDF (in German)) a decision by Presiding Judge (and judge-rapporteur) Dr. Peter Tochtermann to put FRAND and technical pleadings on separate timelines in order to keep an early October trial date (July 13, 2024 ip fray article). Leave to appeal was not granted, but there is a need for appellate clarification of whether pleadings can be fragmented only because of the need to grant a party an extension of time. Mannheim believes so while Munich disagrees.
Direct impact & wider ramifications: Xiaomi had to ask for a panel review because an appeal could otherwise be ejreected. Whenever the Court of Appeal (CoA) gets to decide on this question, it will have to say whether pleadings such as a reply or a rejoinder can be split up between, for instance, technical and non-technical arguments in order to be put on different timelines, or whether each pleading is indivisible and extended deadlines apply across the board.
There can be no doubt that both the Mannheim LD and the Munich LD
- are committed to the UPC’s objective of adjudicating cases swiftly and
- want to faithfully apply the applicable rules in pursuit of that goal.
This is where their takes differ:
- The Munich LD considers a filing such as a reply (to the statement of defense) as indivisible with respect to UPC deadlines. As a result, any deficiencies such as initially redacted passages that become available to the other party only after the extent of the redactions and the membership of the confidentiality club have been clarified must be addressed first. Only at the point when the other party receives full access to the entirety of the pleading in question will the two-month deadline for a responsive filing begin in the Munich LD’s opinion. The only liberty that the Munich LD takes is to desynchronize the proceedings relating to an infringement claim and a revocation counterclaim. Had the Munich standard been applied to the Panasonic v. Xiaomi Mannheim case at hand, Panasonic’s reply would have been deemed served only on July 12, giving Xiaomi until tomorrow (September 12, 2024) to file.
- The Mannheim LD, however, believes to have greater flexibility in how it manages its cases. Instead of deeming an entire pleading not served until the other side has full access, it grants a tailored extension for the responsive pleading, pushing back the deadline solely with respect to the topic(s) affected by redactions. In the case at hand, that applies to the FRAND debate, but not to technical (infringement and validity) arguments.
The panel decision affirming Presiding Judge Dr. Tochtermann’s prior order is dated September 9 (this week’s Monday). Xiaomi will have made the necessary filings by now as even a successful appeal would not extend the deadline beyond tomorrow, and an appeal would take longer than that to be resolved.
The reasoning of the panel has two parts. First, they apply the Mannheim standard and look at this question purely from a discretionary angle. For various reasons they find that the court had already been generous with extensions of time, and that August 28, 2024 was (more than) fair. Second, they address the question of whether pleadings can be fragmented like that. The relevant statute is Rule 29(d) of the UPC’s Rules of Procedure:
(d) Within two months of service of the Defence to Counterclaim the defendant may lodge a Reply to the Defence to the Counterclaim together with any Rejoinder to the Reply to the Statement of defence and any Defence to an Application to amend the patent pursuant to Rule 32, if applicable.
The purpose of that rule is to give defendants more time in cases involving a revocation counterclaim. The wording does not say anything about breaking up pleadings into technical and non-technical parts.
The decision by the Mannheim panel simply assumes that the court has the flexibility to grant extension of time in its reasonable discretion, taking into account the specific circumstances surrounding the case at hand.
The Mannheim judges do acknowledge that their colleagues in Munich dealt with this question differently in a July 4, 2024 decision in a parallel case involving the same parties (PDF (in German)). But they stand by the Mannheim approach, which they believe finds support in an October 13, 2023 decision by the CoA’s second panel in a dispute between Amgen and Sanofi (PDF (in German)), where some exhibits were not provided simultaneously with the pleading they were meant to support, and an April 4, 2024 decision by the Dusseldorf LD in FUJIFILM v. Kodak (PDF), which involved delayed access to redacted information. However, those decisions merely mention the principle of judicial discretion concerning extensions of time. The fundamental question is still whether the court’s case management flexibility also involves splitting up pleadings along a border between technical and non-technical arguments.
A key difference between the CoA’s October 2023 decision in that pharma case and Panasonic v. Xiaomi is that the pleading itself was incontrovertibly served, and the question was only how to deal with exhibits provided subsequently. The CoA focused on the question of whether the other party had the chance to defend itself. In Panasonic v. Xiaomi, however, redactions affect the pleading itself (albeit only the non-technical part), which is different from some missing exhibits.
Reasonable people can continue to legitimately disagree on the potential fragmentation of pleadings until that particular question is resolved by the CoA at some point. Is it really such a major loss of procedural efficiency if FRAND and technical pleadings are separated? Or is it simply against the statute, which foresees a monolithic reply to the statement of defense to the infringement claim? Those are valid questions.
Meanwhile, it looks like Panasonic and Xiaomi will square off in the Mannheim LD on October 7-10, 2024.
The panel decision was made by Presiding Judge (and judge-rapporteur) Dr. Peter Tochtermann, Judge Dirk Boettcher, Judge Edger Brinkman (The Hague) and Technically Qualified Judge Klaus Loibner (Vienna).