Protective letters in the UPC

Protective letter

At least if the current plan holds, the Unified Patent Court will quite soon be up and running. Businesses express concerns on possible misuse of the UPC’s powerful measures for patent enforcement such as pan-European injunctions and Saisie, i.e., an order to compulsorily preserve evidence on alleged infringers’ premises. Along with these measures, however, the UPC will also provide tools aimed exactly at preventing the misuse of such orders. A so called “protective letter” will be one of the tools to that end. This tool may be unfamiliar to many readers from outside Germany, since it is mainly a German peculiarity and although available in several other European jurisdictions, such as Switzerland, the Netherlands and Belgium, it has limited practical importance there. Now, being introduced by the UPC agreement, the protective letter is expected to gain its influence throughout Europe. This post briefly introduces what a protective letter is, and discusses some special features of a UPC protective letter and some considerations for preparing protective letters.

What is a protective letter?

According to Rule 207 of the Rules of Procedure of the UPC, if a person considers it likely that an application for provisional measures against him as a defendant may be lodged before the UPC in the near future, he may file a protective letter with the registry of the UPC stating reasons why such an application should be rejected, and, where such an application is indeed subsequently lodged, this letter will then be presented to the judges in charge of the case, and a copy will also be forwarded to the applicant. In this situation, Rule 209.2(d) obliges the judges, in exercising their discretion in respect to whether or not to inform the defendant about the application, to in particular consider summoning both parties to an oral hearing. The protective letter is thus intended to give a potential defendant a chance to defend himself in case provisional measures would be sought ex parte.

Pursuant to Rule 211.1, such provisional measures may include injunctions, seizure of goods and property etc. Besides, as confirmed by Rule 194.6, a protective letter can also be aimed at measures to preserve evidence (Saisie).

Such ex parte measures are sometimes justified by the urgency to halt infringing activity that may cause irreparable harm or by the necessity of a surprise effect to prevent evidence from being destroyed. Nevertheless, an ex parte decision could be considered to be in conflict with the defendant’s fundamental right to be heard. In these cases, a protective letter offers a defendant a “limited” right to be heard, while at the same time preserving the effectiveness of those ex parte measures.

Special features of the UPC protective letter

While the basic principles remain the same, the protective letter mechanism in the UPC does have some special features compared to its counterparts in the national jurisdictions. In view of these features, the protective letter mechanism may potentially play a more important role in the UPC than elsewhere.

First, the UPC protective letter will have a pan-European effect. That is to say, one letter will cover all UPC divisions across the member states. As businesses are worrying about pan-European injunctions, a pan-European defense with the protective letter could serve to mitigate these worries.

Besides, a UPC protective letter may be aimed against a UPC Saisie as well as the provisional measures. While provisional measures such as ex parte injunctions are expected to be rare, the UPC Saisie may become a more widely used means, especially considering the popularity its French model – the famous saisie-contrefaçon – enjoys in France. Hence, the potential prevalence of the UPC Saisie may create a significant demand for protective letters.

Moreover, compared to the bifurcated patent system in Germany, i.e., where infringement and validity are decided independently by different courts, the UPC will be readier to accept invalidity defenses – also in a protective letter. This can potentially give the drafter of a protective letter more room to argue.

Considerations for preparing protective letters

To prepare an effective protective letter, however, is not a simple task. An ineffective one may even backfire. Psychologically, after having taken a protective letter into account, a judge might feel less hesitant to adopt a provisional measure than he would if he hadn’t “heard” the defendant at all. Based on a protective letter, a judge might interpret certain facts as undisputed, or interpret a limited defense – e.g. focused only on validity – as an admission that there are no non-infringement arguments. Thus, one should always clarify that other defenses are available and are not waived.

In view of the risk of making a judge feel that he has “heard” the defendant, it is important from a drafting perspective that the judge gets the impression that there are uncertainties that he has to resolve by hearing the defendant. Thus, a protective letter should often not be aimed to win the case, but merely to deflect an ex parte decision and to obtain the possibility to respond to the allegations.

A further risk arises out of the fact that the drafter of a protective letter usually has to first anticipate potential claims and grounds presented by the applicant; even when he already has information on concrete allegations, e.g., based on a warning letter, he still has to predict what concrete arguments the other party may bring forward in the court. If he tries to draft the letter broadly in order to encompass all possible aspects, he runs the risk of giving away too much information, including unfavorable facts and weak points in arguments, which can then be exploited by the other party. Hence, when drafting a protective letter, one should always keep these potential negative consequences in mind and carefully consider the wording.

More information on protective letters can be found in this article from Dr. Wehlau and Dr. Björn Kalbfus.

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