Thursday, November 20, 2025
Executive Summary
A Berkeley Center for Law & Technology panel featuring former USPTO Director Andrei Iancu, former USPTO Deputy Director Terry Rea, and InterDigital Head of Litigation Steve Akerley concluded that the compounding erosion of US patent enforcement — driven by eBay’s four-factor injunction test, PTAB attrition, and appellate instability — is redirecting American inventors and global portfolio holders toward the Unified Patent Court, where injunctive relief remains a near-automatic default, proceedings conclude within twelve to fifteen months, and total litigation costs run approximately 90 percent below US equivalents.
Instructor(s)
Steve Akerley, InterDigital, Inc.
Terry Rea, GW Law, and former Acting Under Secretary of Commerce for IP and Acting Director of the USPTO
Andrei Iancu, Sullivan & Cromwell and former Director, USPTO
Wayne Stacy, Executive Director, Berkeley Center for Law & Technology
Keywords
Unified Patent Court (UPC) — injunctive relief default rule • eBay Inc. v. MercExchange — US patent injunction four-factor test • RESTORE Act — proposed US patent injunction reform • Standard essential patents (SEPs) and FRAND rate-setting at the UPC •UPC vs. US district court litigation cost comparison • Patent enforcement erosion — PTAB validity challenges and Federal Circuit remands • Small and medium enterprise (SME) access to patent enforcement • Non-practicing entity (NPE) monetization strategy — UPC and Brazil • Hatch-Waxman 30-month stay and life sciences injunctions •“why US patent owners are enforcing patents in Europe instead of the US” • “UPC injunction vs US damages — which forum is better for patent owners 2025”
Legal Analysis
The Post-eBay Enforcement Environment and Why UPC Injunctive Relief Has Become the Decisive Jurisdictional Advantage
The impetus for redirecting global patent enforcement strategy toward the Unified Patent Court is, in the first instance, a story of subtraction from the United States system. Since the Supreme Court’s decision in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006), permanent injunctions in US patent cases have been conditioned on satisfaction of a four-factor equitable test — a shift that Iancu characterized not as a discrete event but as the starting point of progressive erosion: “it’s gotten progressively more and more difficult with every new decision from the lower courts.” The practical consequence, as Akerley observed, is that the “right to exclude” — the constitutionally enumerated first principle of patent law — is “completely lost in the United States at this point,” with permanent injunctions granted in an extremely small proportion of infringement cases and preliminary injunctions described as effectively nonexistent in the technology sector.
The UPC, by contrast, has operated since its June 1, 2023 inception on the premise that infringement plus validity equals injunction. Akerley noted that the court “has retained these what I consider first principles of patent law, which is the right to exclude,” and that injunctions across all UPC member states — or, in the case of non-unitary European bundle patents, across the states in which the patent has been validated — issue without the balancing exercise that US courts impose. The scope qualification matters: for a bundle patent validated only in Germany, France, and Portugal, the resulting UPC injunction would cover only those jurisdictions, not the full eighteen-member-state territory. An important complication flagged by Akerley concerns EU-domiciled defendants, where the scope of an injunction may extend further, but the precise contours remain contested. The practical significance of this default-injunction posture is amplified by the court’s timeline: Carlson confirmed that a UPC proceeding from filing to resolution runs “about a year, maybe a little bit more,” versus a US timeline of three to four years when PTAB inter partes review is factored in.
That combination — injunction as default and accelerated resolution — is reflected in the economics of enforcement. Carlson placed the total cost of a UPC proceeding at approximately ten percent of a comparable US action, a figure Iancu restated for clarity as “90% cheaper.” Iancu cautioned, however, that the jurisdictional calculus is not uniform: the UPC is an option only for patent owners with validated European rights and commercially meaningful market presence in those territories, conditions that favour established research companies, pharmaceutical innovators, and telecommunications SEP holders over early-stage domestic ventures whose products remain US-centric. Iancu summarised the structural logic concisely: “if you have the choice of jurisdiction, you might look elsewhere where the enforcement environment is friendlier.”
Discovery, SME Access, and the Limits of the UPC’s Cost Advantage for Smaller Patent Owners
The UPC’s cost advantage rests substantially on the absence of American-style discovery. There are no depositions, no expansive document requests, and no multi-year document review cycles; the oral hearing itself typically occupies a single day. Akerley — who described full US discovery as “a very expensive warm blanket” that practitioners are reluctant to surrender — acknowledged that the transition demands more rigorous front-end preparation but reported that, across his own international litigation experience, he had not encountered circumstances where the restricted disclosure framework left a party without sufficient evidence to present its case. A European practitioner in the audience reinforced the point from the plaintiff’s perspective, noting that targeted judicial orders to produce evidence can supply “some really specific documentation” and that European conceptions of “effective access to justice” are calibrated to the relative scale of European SMEs, which are structurally smaller than their US counterparts.
Rea dissented in part, articulating a concern that the compressed evidentiary framework may disadvantage smaller claimants who discover probative information during the proceedings but find themselves foreclosed from introducing it after the statement of claim is filed. “I do worry that a little bit of discovery may benefit them,” she said, while conceding that the UPC’s procedural architecture will likely evolve, drawing on the same iterative reform dynamic that characterised the Patent Trial and Appeal Board in its early years: “just like the PTAB was modified every two to three years, I think the UPC will shift a little bit.” Iancu largely agreed on the direction of travel while cautioning against wholesale adoption of the US model: “I don’t think the goal for them should be to adopt the warm blanket that we have here in the United States — it’s a little bit too warm for some SMEs.”
The access-to-enforcement problem extends beyond the UPC’s procedural design to a more fundamental threshold question. Stacy observed that the practical cost of simultaneous US and European litigation excludes companies below roughly $100 million in annual revenue, and that litigation finance in the US market has largely retreated to cases with damages exposure in the $70 million range or above — a threshold that eliminates a significant portion of the domestic innovation economy. For entities below that line, the choice is not between the UPC and US federal court but between the UPC and jurisdictions such as Brazil, where injunctive relief remains more accessible. Iancu characterised this reality in terms drawn from his David-and-Goliath analogy: “the slingshot is smaller than you would like, but it’s all you’ve got” — a diagnosis that framed the UPC not as a complete solution but as a marginally better available instrument for inventors who have exhausted or been priced out of domestic remedies.
SEP Enforcement, the Myth of the Automatic Settlement, and the RESTORE Act’s Potential to Reset US Injunction Doctrine
A recurring theme in the panel’s discussion of UPC injunctions was whether the threat of an injunction in Europe carries the same settlement-coercive force as US large-verdict exposure once carried. Akerley — speaking from experience litigating standard essential patent (SEP) and FRAND cases at InterDigital — disputed the implementer-side proposition that a UPC injunction would automatically force licensees to accept supra-FRAND royalties, characterising it as “the myth of the injunction from the implementer’s viewpoint.” He cited the example of DivX’s injunction against Netflix in Brazil precluding HEVC video streams, which had not produced a settlement, and observed more broadly that surveying five years of worldwide injunction outcomes demonstrates that injunctions do not mechanically produce licenses at any price the patentee demands. His normative conclusion was structural rather than strategic: an injunction matters because “that’s what the patent right is” — without the right to exclude, the patent system collapses into a compulsory licensing regime.
Iancu offered a complementary account of what sustains US settlement pressure in the absence of injunctions: large jury verdicts, a unified high-price consumer market, and the spectre of enhanced damages for willful infringement under 35 U.S.C. § 284. The Federal Circuit’s increasingly skeptical treatment of outsized jury awards has, however, attenuated that pressure, and Iancu acknowledged that sustained damage to the US enforcement environment is distorting the domestic innovation economy at a systemic level: “the enforcement environment goes hand in hand with the original innovation environment.” The distributional concern is sharpest for startups and SMEs, which Iancu argued are both the primary beneficiaries of patent protection and the entities least able to absorb the cost and delay of multi-year US litigation. The founders’ rationale for intellectual property protection, he contended, was precisely this asymmetry: “for effectively a startup nation … you need the protection of the rule of law,” and without a meaningfully enforceable mechanism, the patent grant is functionally hollow.
Against this backdrop, Iancu identified two potentially corrective developments in the US system. First, the RESTORE Act — bipartisan and bicameral legislation that has been reintroduced in the current Congress — would re-establish access to equitable injunctive relief in patent cases without reverting to a pre-eBay automatic-injunction rule, preserving the equitable character of the remedy while lowering the evidentiary threshold for obtaining it. Second, the current administration filed a brief in Radian, a Texas federal court proceeding, articulating the executive’s position that injunctive relief is important for patent owners — a signal, Iancu predicted, that “we may be on a path of change.” Rea and Akerley converged on a practice-level recommendation: every US law firm, regardless of size, should cultivate relationships with at least two European patent practices experienced in UPC proceedings, and US-based counsel should treat UPC analysis as a standard component of any new patent enforcement engagement — “whether or not you act on it, but at least you should preliminarily have initial discussions,” as Rea put it. Akerley reduced the closing injunction to a single imperative: “just break out of the US-centric mindset.”
Generated by AI based on the Interview/Transcript below.
Key Takeaways
- UPC Injunction Is the Decisive Advantage: The UPC’s default-injunction rule — treating exclusion as the natural consequence of proven infringement and validity — is the single most strategically significant difference from US practice; Akerley stated that the “right to exclude … is completely lost in the United States at this point.”
- 90% Cost Reduction, 75% Time Reduction: Carlson confirmed that a UPC proceeding from filing to resolution costs approximately 10 percent of a comparable US action and concludes in roughly one year versus three to four years in the US when PTAB proceedings are included, making the forum materially more accessible for most patent owners.
- RESTORE Act May Shift US Landscape: Iancu identified the pending RESTORE Act — bipartisan, bicameral legislation reintroduced in the current Congress — and an administration brief in Radian as signals that “we may be on a path of change” toward restored injunctive relief in US patent cases.
- Injunctions Do Not Guarantee Settlement: Akerley cautioned that empirical tracking of worldwide injunction outcomes shows that even successful injunctions do not mechanically force licensees into settlements, characterising the contrary belief as “the myth of the injunction from the implementer’s viewpoint.”
- SME Access Remains Structurally Limited: Rea cautioned that the UPC’s front-loaded, discovery-free pleading model may disadvantage smaller claimants who discover probative facts during proceedings, and Stacy observed that simultaneous US–European litigation effectively requires revenues well above $100 million.
- Portfolio Geography Now Drives Value: Akerley reported that private practitioners and institutional patent holders increasingly evaluate portfolio value by the presence and breadth of European (and other non-US) rights, particularly in jurisdictions where injunctive relief remains available, with the UPC supplanting Germany’s national courts as the preferred European venue.
- UK Absence Remains a Gap: Rea noted that Brexit removed the UK — historically the preferred forum for life sciences patent litigation — from the UPC’s territorial scope, a development she described as “disheartening,” and the panel confirmed that UK rejoinder to the UPC remains uncertain.
- Enforcement Environment Shapes Innovation: Iancu argued at the systemic level that “the enforcement environment goes hand in hand with the original innovation environment,” and that the progressive weakening of US enforcement mechanisms is redirecting disruptive innovation investment in ways that will have long-term consequences for US competitiveness.
- Affiliate with European UPC Counsel Now: Rea’s closing practice recommendation was that every US law firm, “irrespective of its size,” should affiliate with at least two European patent firms skilled in UPC practice, because “when you think of US litigation, you should automatically consider UPC.”
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Interview/Transcript
This transcript was based on a conversation on December 4, 2025 at the 2025 Berkeley-GW UPC Institute. This panel on “The Future of Patent Enforcement: What does the UPC mean for innovators and the U.S.?” was given by Steve Akerley, InterDigital, Inc., Terry Rea, GW Law, and former Acting Under Secretary of Commerce for IP and Acting Director of the USPTO, and Andrei Iancu, Sullivan & Cromwell and former Director, USPTO, and moderated by Wayne Stacy, Executive Director, Berkeley Center for Law & Technology.
Wayne Stacy 00:18
So I want to start with our first panel, if you remember, the advertisements we had Andrei Iancu and Judge Randall Rader. Turns out Judge Rader has a class this morning in China, so he’s not going to make it. So we worked, and we found the right replacements that actually can drive this discussion, so if I can get everybody to come up, I’ll make the quick introductions as you’re coming up. So, I don’t think Andrei needs any introductions from the USPTO to head of IREL to you in charge of Sullivan Cromwell by now. You know, patent litigation, patent prosecution, he’s seen it all. Terry Rea, former deputy director of the USPTO, decade plus at Crowell and Mooring, now in her retirement she said, I get to be my own boss, and does a lot of expert witnessing work. And then, judging by the name tag, one of our great late additions, Steve Akerley. So, Steve, if you don’t know Steve, really is one of the most knowledgeable US lawyers on international litigation, because he’s the head of litigation for InterDigital, one of the great research companies, so we have this, this great group, and I am a little bit humbled to try to moderate this group, not to mention I know how vocal they all are, so with that, let me shift over. So I guess I wanted to start with the question, or with the point, maybe that the UPC still remains a mystery to huge sectors of the US IP industry. My impression is the life sciences lawyers are probably more knowledgeable, but when you talk to the tech lawyers, they’re moderately aware of the UPC, or maybe they’re not aware of it at all, but they just lie to me, so they don’t look like they don’t know. So I would, I would love to just start with that initial question, Why does the UPC matter to American companies, American innovators, so Steve, I’ll start with you. You’re closest. You put me closest. Okay.
Steve Akerley 02:46
Well, it matters for a number of reasons. One is it’s it is a new judicial body that has jurisdiction and authority throughout the EU. It has the benefit of injunctive relief throughout either the member states or where you may have validated a non unitary patent in each of those countries, so there are these benefits to it also the approach that we have seen so far indicates that the it shouldn’t be a mystery, right? the the UPC, so far in its two years, a little bit over two years of existence, has has applied basically EU regulations and laws, much like some of the national courts, following CJ EU, that’s the Court of Justice for the European Union, precedent and authority, and so to not know about it suggests to me a fundamental lack of awareness that really shouldn’t exist if you do this for a living,
Wayne Stacy 04:02
I want to seize on something very quickly to make sure this principle gets out there. You mentioned injunctive relief. I remember a time in the United States when tech companies could get injunctive relief. I think I had hair. You want to just briefly mention what that’s about?
Steve Akerley 04:20
Well, sure, like Like national courts in the EU, German courts are famous for this, because for a variety of reasons, that’s where a lot of companies file patent infringement cases. The principle of issuing an injunction after a successful infringement case is, is I don’t want to say it’s automatic, because it’s nothing is automatic, but it is these courts in the UPC is doing this, so far has retained these what I consider first principles of patent law, which is the right to exclude. That is completely lost in the United States at this point. I say completely. I don’t know what the percentages are, but it’s extremely low percentage of cases where permanent injunctions are issued in patent cases in the United States don’t even talk about preliminary injunctions, effectively don’t exist, and so that’s an important factor. Oh, the question was, what did I mean when I said, were you validated on, so if, if you have an EPO patent, right, you can select jurisdictions where you, that where you, where you file, right, and in the patent game we call that validating in those specific countries, so in the UPC, say I have, if I have, if I’m using a non-unitary patent, that is, I’ve either opted that patent in, it existed before the UPC, I opted it into the UPC, or I opted it out when the UPC became, went live, and withdrew that, you have there’s a grace period where if you’ve opted patents out, you can then withdraw that opt out and use that patent in the UPC. The extent of the injunction that will issue is not all member states in that circumstance. The extent of the injunction, at least as portrayed, there is some question about what might happen if it’s an EU defendant, but the injunction will issue in this in the member states where that company has has sought and paid for patent protection for that earlier issued patent, so if you had only validated in Germany, France, and, and well, Spain wouldn’t work, but Portugal, the it the when you get an injunction at the UPC, the injunction will apply in those states where you have validated, not all. I can’t, I’m not up to speed on how many states have validated now, whether it’s 17, what have you, but the it won’t be that you won’t get the injunction for all member states, you’ll get the injunction only where you have validated,
Wayne Stacy 07:28
And we’ll have several, several panels going through that. I did appreciate the head nods from the European lawyers, so you got it all right so far, Steve. So, well, Andrei, in your view again, why, why do us lawyers need to be paying attention, and maybe with some emphasis on small medium enterprises?
Andrei Iancu 07:52
Yeah, well, thanks, Wayne, and great to be with everybody again. Lots of familiar faces here, and great to see everyone, so the rise of the UPC and the way it’s enforcing patents both substantively and procedurally, and we’re going to talk about all those mechanics throughout the day, but the rise of the UPC is corresponding to an enforcement environment in the United States that has been weakening, so as Steve mentioned, for example, it’s very difficult to get injunctions in the United States. This is the case for the past 20 years, since the eBay decision, although it’s gotten progressively more and more difficult with every new decision from the lower courts, so that’s one example. It’s, it’s, it’s a, you know, not having access to injunctive relief is a critical issue for being able to to effectively enforce your patent, obviously, it’s gotten more expensive to enforce patents in the United States with added procedures, lengthier cases, lengthier time to trial, the activities at the PTAB with the additional validity challenges and the like, and the environment on appeal, even if you do win below, is also difficult with the court of appeals rarely affirming large judgment judgments, so if you are a patent owner, an inventor that needs to enforce patents against competitors, or just, you know, folks who are infringing on your patent, and you have the choice of. Jurisdiction. Okay, not everybody has the choice of jurisdiction, but if you have the choice of jurisdiction, you might look elsewhere where the enforcement environment is friendlier, and you know this is why it’s, you know, you see more and more, and for more and more patent owners voting with their feet and choosing to enforce at the UPC and some other places around the world, Germany is an example, Brazil had been an example for a few years, even Colombia in some circumstances they’re choosing a different jurisdiction that is that provides more immediate and practical enforcement mechanisms, and the bottom line is, you know, if you’re an American lawyer with clients that have worldwide portfolios, you know, and face worldwide infringement. You absolutely need to be familiar with all these other jurisdictions, because that, you know, it might be more beneficial for your client to enforce elsewhere. We have to come back to all of these points, Wayne, and delve a little bit deeper, but this long term, you know, has and will have already has had and will have a deep impact on the American innovation economy, because the enforcement environment goes hand in hand with the original innovation environment, but that’s a longer discussion we can return to in a minute.
Wayne Stacy 11:44
So, I think one of the phrases that always catches my, my attention is it’s, it’s faster, radically cheaper, and a whole lot more frightening with that injunction than the US system is right now. So, it’s there’s a lot to be learned from the system, in addition to being, I guess you know it’s a model for what we may need to look at as reform on things like litigation cost, but Terry, you, you come from a different tech or different technology stack than the rest of us. I started off by saying tech lawyers are behind, which necessarily means life sciences lawyers.
Terry Rea 12:21
Necessary
Wayne Stacy 12:22
Well, ‘m going to go with most life sciences lawyers are ahead of the tech lawyers on this discussion about the UPC and global markets. What’s what’s your feel on the UPC and what it means to innovation here in the US on the life sciences side?
Terry Rea 12:39
So, I think that this very timely to have the seminar, just so we learn what we don’t yet know, and it is rather complex for us American lawyers, so we’re not going to absorb it all today, but this should be a very, very helpful discussion. So I was in the PTO from 2011 to 2013 and that was just when the UPC was a glimmer in everyone’s eyes, so the EPO Board of Appeals judges were the ones that were looking a whole lot, seeing what they did right, what they wanted to bring over to the UPC. We had a lot of those people come to the USPTO and find out what are we doing with the PTAB, because the PTAB was just being created right then, and one thing that the PTAB was very hard and certain with was timing, for instance, minimal discovery, and a lot of that did remain with the UPC, but from the life science perspective, historically the most international litigation I’ve done, it was in London, because that’s where most life science litigation was, and then after I left the PTO, we had Brexit, and then it was a little bit disheartening to find out that that pan-European injunction wasn’t going to be as big as we had originally thought, but I understand that now more life science companies are are in Paris for the most part, but Munich gets most of the cases, of course, and people always thought that would be the case, and it continues to be, but from the life science perspective, health and well-being is not an American, solely American issue, right, and disease states and conditions are perhaps just as prominent in other countries throughout the world, so even when I was a patent prosecutor way back when I found just about every country of the world, even countries that didn’t have great legal systems, but the UPC, I think, is is people in the life science sector, some of them are now thinking about starting in the UPC, not starting in a US District Court, and it breaks my heart when that happens, frankly. But they’re, they’re starting in Europe now, and they can try and get that injunction, and if they’re six. Suspic, then they think that will maybe they’ll have a better chance if and when the need arises to litigate in the US. So it is sort of interesting just watching the life science community, but I always preferred London. London was where I was the most comfortable, so I can’t stay for the entire day’s discussion, but I am eager to find out what’s the likelihood that the UK will ever possibly be able to join the UPC.
Wayne Stacy 15:27
We have the people that can answer that question.So, Steve, maybe from your perspective, I mean, InterDigital is this great research company, often compared to like universities, in terms of what it’s turning out, how is it viewing protection globally, and in light of the UPC change, what were you looking for in a patent portfolio going forward, kind of thinking about the next decade.
Steve Akerley 15:55
Yeah, even before I took the job at Interdigital, was five years ago, I was in private practice doing patent litigation. The in the last five years at least of my private practice I was looking for portfolios. If I was looking at, you know, to help someone monetize, I was looking at portfolios that were, if they had a big US component, that was fine, but what we were really looking for, and I think firms are still looking for, is a significant European component, and elsewhere, right? Whether that’s portions of that in Brazil or other countries, but if you think about it, all of that preference is in some ways due to speed and cost, but I think it fundamentally all comes back down to the ability to obtain injunctive relief in a given forum, and what we’ve seen in the US, obviously we’ve already talked about that erosion, but that’s happening now in the UK, as well, at least in standard essential patent cases, where the UK courts seem to be desiring to enforce interim licenses or to take on global rate setting cases to set rates globally, and and are there eroding the ability to get an injunction in the UK as well, and so when, when I think, when anybody looks at a portfolio these days, you have to look at the makeup and see if there are adequate assets where to protect your technology in jurisdictions where injunctive relief is available,
Wayne Stacy 17:56
so for those you don’t know me, I litigated for most of my career, and then got an opportunity to work under Andre at the USPTO. I stepped out of big law because I heard one of his presentations, and for better or worse, it impressed me that you were talking about this idea of small medium enterprises being able to participate in the IP system, just kind of from the very beginning, that it’s the big companies will find their way, maybe everyone else needs a little bit of a boost. InterDigital, I consider one of the giants in the IP space. Can you kind of relate these to that small, medium enterprise, where, where they can get involved, and what do they need to be thinking about in terms of a 10 year plan.
Andrei Iancu 18:47
Yeah, sure. So, you know, Elon Musk famously said that patents are for the weak, he meant that pejoratively, right? But, and I don’t think he realizes that he’s actually right. The reality is that patent protection is first and foremost for the inventor, for the investor in that, in the innovation, for the garage entrepreneur, for the research and development companies, the small and growing entities that need something to take on the big established companies. No matter how brilliant your technology is, once it’s out in the public domain, it is virtually impossible to break through this, the market penetration of the established firms without the protection of the rule of law. One way to think about it is if you have a battle between David and Goliath, okay. David needs his slingshot. Goliath does not need a slingshot. Goliath hates slingshots. Goliath wants to make slingshots illegal, but David cannot take him on without something. And our founders in the United States in the 18th century saw that for a, for effectively a startup nation, for if we wanted to penetrate, and if we do want to penetrate, and you know you need the protection of the rule of law, so a country with a free market system, if you want it, if you want to grow technologically and be a powerhouse innovation economy, you need an intellectual property system. I think, by and large, this is accepted, I think, in, in most circles, in the free, in the free world, but if you don’t have an enforceable mechanism for that intellectual property system, it’s as if you do not have an intellectual property system to have a patent or a trademark or copyright, whatever it is to have it and get it is meaningless by and large, if you cannot enforce it ultimately, and not just enforce it, but meaningfully enforce it, not to take 10 years or 15 years and spend $20 million that very few people can do, and at the end of the day, maybe potentially get some money for that you should have gotten 1015 years ago. That’s not a meaningfully enforceable intellectual property system, and without it, the reduction in principle is basically to where we were without an intellectual property system, and all of these issues are accentuated for the small, for the startups, for the small companies, for the medium companies, for anyone, for entrepreneurs, and their, you know, for inventors and their investors who need to take on the established firms and breakthrough with the disruptive technologies, it’s accentuated for them, just like it is for David in his fight against Goliath, because there’s no other mechanism, there’s no market power that they have to be able to penetrate, there’s no size, and all of those other tools that the big established companies already have, and what’s really important to realize and to understand is that disruptive innovation happens on the edges. Disruptive innovation at scale happens at the entrepreneurial level, at the startup level, of course, the big established firms also innovate, no question, but the disruption time and time again is in the startups. Apple was once a startup, Google was once a startup, the big pharma companies were once a startup, and they often acquire startups even nowadays. And for those our founders knew early on they need exclusive rights. Without exclusive rights is very difficult. So now, what do you do right if you don’t have that mechanism here at home in the United States. If you have the ability, you have to look elsewhere, and that’s where the UPC comes in. But what’s obvious here is, for that to work, number one, you have to have a global portfolio. You have to have rights in Europe if you’re going to use the UPC. Not everybody has that, or the or the resources to have that, and you have to have a market over there as well. It’s not always the case, sometimes for telecom, like what Intradigital does for the pharmas, obviously almost all the time. Perhaps there is both a US and European and an international market, but not all innovations like that, especially at the beginning. The disruptive innovation usually starts at home, so you know it’s not, you know, a tool for everybody, but given the environment at home, I think more and more inventors and patent lawyers are beginning to look at expanding those portfolios specifically to take advantage of this new resource.
Wayne Stacy 24:52
So, Steve Carlson, I’m going to put you on the spot. So, Steve, one of the original. I guess one of the original innovators for this conference brought this to my issue or my attention years ago, but I know you’ve been doing a lot of joint proposals, just in a rough magnitude. We’ll talk about it in more detail. What’s the difference in cost to from filing to resolution from the US to a UPC action?
Steven Carlson 25:20
so,
Wayne Stacy 25:29
so, let me make sure that that number hits the microphone, that the UPC, from beginning to end, through resolution, is 10% of the cost of a US litigation that takes, how much difference in time?
Steven Carlson 25:48
UPC, you’ve got your trial about a year, maybe a little bit more than a year, with us quick and still get through two years, but really you’re looking at, you’re looking at, you know, three or four years, really, in the US system, if you factor in a PTAT challenge, so it’s the bang for the IP buck, is very clearly in Europe, and not, not in the US.
Wayne Stacy 26:12
So, this, this idea, it’s 10% cheaper, it’s got an injunction, and it’s fast enough to actually be in the innovation cycle, and I think that’s something that people don’t discuss enough, especially in the high-tech space.
Andrei Iancu 26:28
To be clear, I think he said it’s 90% cheaper.
Wayne Stacy 26:31
Oh, sorry, 10% of the cost, 90% cheaper. Yeah, big difference. 90% cheaper, and considerably faster to be in that cycle.
Audience 26:43
Would you please address a little bit about 101 environment bear in discrimination against MPE? I think while you say 90% reduction, it means there is no discovery.
Steve Akerley 26:59
Yeah, certainly, that’s one of the big.. I was going to say that if it’s not known to people, the US is unique in that we have full discovery, and I say that if you’ve been through it, you know what I mean, but I mean, you send out document requests, you get depositions, and you get sometimes millions of pages, right? In a big case, discovery doesn’t exist in any other jurisdiction I’ve had cases in, which is a fair number. Now, there are disclosures, right? There are some disclosures. The UK has more disclosure requirements, for instance, than a German case or a UPC case, but enormously reduced, so that is part of the the increased cost in in US cases. I will say UK SCP FRAND rate setting cases are extremely expensive because of the complexity involved, a lot of that, that time, and the different approach in the UPC, at least to date, in some of the national courts, like Germany, have even, like I said, fewer disclosure requirements, so that certainly adds to the cost. The one thing that I wanted to say, picking up on something that Andre mentioned, the other issue is finality. In my experience, and I think this is right, we’ll see if the European lawyers nod their heads again. The courts of appeal will rarely remand cases back to the court of first instance for a retrial or discussion, or a new decision on a particular issue, they typically affirm, reject the appeal, or will render their own decision, right. And so, and that has been the case in my experience at the First Court of appeal, and then, for instance, in the UK Supreme Court, the same thing. So, in the US, by contrast, the Federal Circuit, and other, if you take it out of the patent context, I think it’s largely the same. Many, many times the courts of appeal will remand back for a full trial. Sometimes it’s partial, sometimes it’s just on damages, but that’s a significant part of any patent case, and sometimes it’s a full retrial that leads to sometimes more than a decade of cases going up and back between district courts and the court of appeal in, in, in the US, and so again, that’s a, it’s a, just a distinction in how the courts of appeal in foreign jurisdictions handle those appeals, and what the result is then.
Wayne Stacy 29:52
Terry
Terry Rea 29:54
so I thought your question was good in terms of discovery, because I personally. Worry about SMEs, do they have access to sufficient information to even be involved in a case at the UPC, and I realize that in the US we oftentimes overdo discovery and the cost is tremendous, and we seem to have this basic inability to rein it in. How would we rein it in? I don’t know. People have tried it many times, but I do worry that your complaint, or whatever, is filed at the UPC, you’re sort of stuck with the allegations there, and that if you become aware, even of information during the course of the case during that year, you may not be able to bring the issue before the court, it might not be alive, and so I do have concern that they don’t have the benefit of, and I don’t want to say robust discovery, but some limited discovery, more than what you see now, it’s only been in action for two years, so it remains to be seen. I’m sure that just like the PTAB was modified every two to three years, right? I think the UPC will shift a little bit, and one court will try something, and then another court will say, ‘Oh, that was a good idea, so we’ll do it, so they could play off of each other. But in terms of SMEs, I do worry that a little bit of discovery may benefit them.
Wayne Stacy 31:26
Steve, you’ve been there, so what do you think?
Steve Akerley 31:27
Well, I will, et me say this. It’s extremely uncomfortable if you, if you’ve only been in US litigation, and then you have to go overseas and do it. By the way, whether you’re the patent owner or the defendant, it’s frightening to lose that it’s like a warm blanket, right? Discovery in the US, you can never get enough ofit. Very expensive, a very expensive warm blanket. The so I have found that it takes maybe a little bit more work at the front end to make sure that you have the information that you need, and again on both sides as you go through a case, but we haven’t experienced, I haven’t experienced personally, having done those cases even before I was at Interdigital, I haven’t experienced a circumstance where I felt that we didn’t have enough information. It is possible, of course, that a smaller entity might, might not have access to some of that information, but I think, in general, in this day and age, that’s probably minimized at this point.
Andrei Iancu 32:35
I will say that it’s also going to be different between technologies. Absolutely, so you know, if you have a case on standard essential technologies, you have automatic access to the standard, and, and so on. So it’s a bit different than if you’re dealing with proprietary formulas and formulations in pharma cases, and the like, but either way, I generally agree that there is, you know, they’re on the sufficient side of information over there in Europe. They could do better, no question. And I do agree with Terry Ray that they will improve, I think, in time, but I don’t think the goal for them, not to the time in a position to advise the UPC, but I don’t think the goal for them should be to to adopt the warm blanket that we have here in the United States. It’s a little bit too warm for some, for some SMEs.
Wayne Stacy 33:30
So, Mark,
Audience 33:31
yes, a few words regarding the cost. I just want also to mention that, compared to the US system, you have no deposition, and it’s only a one day trial hearing, so it means that basically you’ve got just going to be in a trial lawyer position, where you’re going to have your, as a UPC representative, you’re only going to get your prior art, and you’re not going to discuss it directly with the judge, which means that you spend way less time preparing for the position, you don’t record anything, hearing is recorded, but I think this is a really cost-effective way of dealing with this issue, on the other side, about what you mentioned regarding the access to evidence, and from a trial lawyer point of view, I think we kind of have the same thing, in a way that you’re still going to discuss, you still going to tell your story to people, that’s what we do, you know, the only thing which really, really changes the way you’re going to do that, you can have access to a lot of information, but it’s actually going to be extremely different from what you have in the in the US, because you’re not going to have discovery, but you’re going to have order to present evidence, and then you can obtain some really specific documentation, because what the judges have in mind in Europe is the effective access to justice, because when you are talking about SME, SME in the US will be huge for an SME in France, Netherlands, or Germany. So I think that even though I completely understand the concern, and I can share some of it at the end of the day. You manage to get what you want.
Wayne Stacy 35:03
so alright, I think you can take the mic here.
Audience 35:08
Yes, thank you. I had a question, actually two questions for the panel, if I may. They’re linked because you were saying a moment ago that in the US you just don’t get injunctions nowadays, but it’s been an orthodox view for some time that if you’re going to get to the ultimate resolution of a dispute, you need a US case, because that’s got enough punch to break through and cause a settlement of the parties, but it does it without an injunction. So, my first question is, How is that possible, because there’s no injunctive relief, so what’s the thing that makes things settle after a US trial. Second question is, you do get an injunction in the UPC, do you think it’ll actually work in the same way that the US gets there without an injunction? Does is the UPC injunction powerful enough to have that punch to make the settlement happen?
Andrei Iancu 36:02
Yeah. happy to start. Great questions. First of all, about the United States. Let me just say that there, just to clarify the record here, you, there are still injunctions in the entered in the United States. In some cases, it’s not a universal blanket rejection of injunctions, so you know specifically, if you have a direct competitor to competitor case, and you go through the factors and the public interest and all of that, there are situations where injunctions are entered, there are situations where preliminary injunctions are entered, so it’s not universal, but bottom line is, it is significantly more difficult in a large band in a large number of cases, especially when you’re not in a competitive position. Then you don’t get injunctions. So, what makes a case settled in the United States? Look, the one thing you do still get in the United States, that it’s more difficult anywhere else in the world is significant damages, you know. Number one, the market is very large for many, for many patented technologies in the United States. There are a lot of it’s a unified large consumer market. Number one, number two, the prices are usually depending on this case, but, but usually the prices per unit are usually higher than in most of the rest of the world, and and juries, because these are jury issues in the United States, on top of everything else, are much more inclined than courts elsewhere around the world to give fair value to those to that infringe large infringement, whether that stands up or not on appeal. It’s a different issue, it, you know, lately it’s had a tough time for large judgments, have had a large, a tough time, but the threat of a large verdict combined with potentially enhanced damages for willful infringement is a concern to many defendants, and you know, together with the litigation costs over the same number of years, four or five years, however long it takes, that does sometimes drive settlement, but, but you’re absolutely right, you know, I mean, the reality is it takes longer than before when we had injunctions routinely, but it’s still there at the UPC, once you get an injunction there, obviously an injunction has teeth, but you know it’s not like it’s an automatic settlement all of a sudden, you know, large companies, in particular, can just, you know, pull the feature out, stop selling in the particular countries where the injunction is effective for a while, it’s not like you have, you know, a settlement the day after every single time, but these are all pressure points, you know, large judgments in the United States, injunction in Europe, and maybe elsewhere, those are pressure points to return to the patent owner the correct value, and to make the accused infringer realize that they should take a license or reach reach a settlement. Neither one is a perfect and complete solution, and that’s why a lot of patent owners, and I think Steve here can speak to this more directly, you know, that’s why there’s usually a worldwide or a multi-jurisdictional effort to be able to touch on all these different pressure points.
Steve Akerley 39:56
The second part of that question is really good about. Out, what if you get an injunction out of the UPC or German court? Does it, does it get you what you want? Does it lead to a settlement? No, is the answer. I mean, it depends. It depends on the market, your.. it depends on the scope of the injunction, depends perhaps on the feature, right? It depends on the exposure in that location in that jurisdiction, but there is a the present mantra of implementers in Europe, because it’s already here in the US, is if, and let’s do this in the context of an SEP case, standard essential patent case, if an injunction issues, the implementer will automatically have to sign up for super friend rates, right? That the patent owner shouldn’t be entitled to. Well, empirically, you could go back and just look at the last five years and track it, doesn’t it? Wouldn’t be the UPC cases, but it could, could be at the end of that, but look at the cases where around the world, where injunctions have issued, they didn’t result, they didn’t force the implementer to take licenses at all. In some circumstances, DivX has an injunction against Netflix in Brazil that I think precludes Netflix from providing HEVC video streams to Brazil. I don’t believe that they’ve settled that case. If they did, I’m not aware of it, and it took a long, long time. There are other.. there are lots of others out there, and you could.. so it is when I look at it, because I’ve been talking about injunctions. You might say, “Well, why are you all wrapped up on injunctions and the need for them? It’s because that’s what the patent right is, right? Bottom line, it’s not. Otherwise, it becomes a compulsory licensing regime, right. And, and to me, you know, it’s not that silver bullet or the thing that causes somebody to have to pay supra-friend rates. It’s, it’s, it’s a victory. It upholds the patent. I get an injunction. If you can design around that patent, fine, go ahead and do that. If you have to remove the feature, then you have to remove the feature, but it is not the it’s viewed as something that if it, if it occurs, then the whole system will break down, because you’ll have people paying, like I said, super friend rates, and it just hasn’t, that’s the myth of the injunction from the implementer’s viewpoint, in my view,
Wayne Stacy 42:40
Just ask the question, how big do you have to be? How much money do you have to generate every year to litigate both in Europe and the US? You know that precludes companies that are under what, 100 million in revenue. It’s a tremendous cost, and I did talk to, heard from from one funder, litigation funder, that said they really weren’t interested in any case that wasn’t in about the $70 million damages range that cuts out a huge portion of the US innovation economy. I mean, that’s an enormous company, and if you’ve got to do both, both continents, or maybe three continents, you’ve got to be, you’ve got to be looking for billions in damages, and that’s kind of the part of the disturbing piece. Some people don’t have the option to do Europe and the US, they don’t have the option to do the US, so they have to look at markets like Brazil or the UPC to gain any leverage at all, as using Andre’s analogy, you know, the slingshot is is smaller than you would like, but it’s all you all you’ve got, so but one thing about the injunctions, Terry, your world is different, the place where injunctions are, I think still more feared is in the life sciences space.
Terry Rea 44:04
Yeah, so you know we have that Hatch-Waxman paradigm where you get that automatic 30 month stay where the FDA can’t approve another product like yours, but it’s amazing the number of, we call them generic pharmaceutical companies here that launch at risk, and I’ve, I’m involved in some of those, you know, as a consultant, and it is – I’m not sure the right word is fascinating to watch, but it is fascinating. It’s fascinating to go to court and just to watch the faces of both sides. It’s an interesting, you know, we’re jealous that you can get injunctions, put it that way, that the Europeans can get injunctions. What’s the full value of the injunction? I don’t know, but I can also tell you that in the US, when Andre mentioned enhanced damages, it’s treble damages, it’s triple whatever you thought you were going in, and it is a huge amount of money. The motivation to settle is still very much there, but every case is different, and the UPC is growing, and who knows where it’s going to go in the future. Hopefully, it’ll get better, and the US system will somehow get better.
Wayne Stacy 45:14
So, I’m going to give everybody one final, one final say. Terry, you’ll get the closes out. Just the question is, what’s what do usUScompanies need to be thinking about, and what do US lawyers advising us innovators need to be learning to understand kind of the new new paradigms for IP protection. So, Steve
Steve Akerley 45:37
just break out of the US-centric mindset. I was relaying a story to Wayne at the beginning. I, in a case, I’ve got the firm on the other side is a firm that I worked for, and I relayed once they appeared in the case to my management that it was was a great thing. They were great lawyers and good people, and I would always rather have that combination on the other side than a bad lawyer and not a good person. The they have not done that well in, in the particular case, because they, it seems to me, have not looked beyond what they have done for 20 or more years, right? They’re looking at these things as US-centric cases, and it’s.. it’s a big world, and there are other options out there.
Wayne Stacy 46:36
Andrei
Andrei Iancu 46:38
yeah, so to two points at the policy level. First of all, you really cannot have a patent system without the right to exclude. The Constitution says that the patent and copyright system must give exclusive rights, and it’s really difficult to understand how you have any type of a property right, whether intellectual property or real property or personal property, without the right to exclude its fundamental and not having it in many cases in the United States is distorting the system, and it’s creating all these issues where a lot of people are looking, American inventors are looking elsewhere, like the UPC, and this we’ve discussed. However, at the same time, I don’t think anybody here should give up on the US system. Number one, you can’t. It’s a really important market, and for us here in the United States, it is our home market. We have to fight for our home market and make sure it is, it is, it works, and it is efficient, and we continue to be innovation leaders around the world. And when it comes to injunctive relief, there is hope on the horizon that the system will be set on the right path. First of all, there is a bill in Congress. It’s bipartisan, bicameral. It’s been reintroduced in this, in this Congress. It’s called the Restore Act, and it would provide access to an equitable exclusive right. Again, it’s, it’s equitable, and it’s not automatic as it shouldn’t be, since it’s an equitable remedy. So that bill is pending, and Congress may take action in the near future, and the administration has said recently in a filing in court in Texas, in the Radian case, that from the administration’s point of view, injunctive relief is important for four patents. So, between Congress and this administration’s perspective, we, we may be on a path of change when it comes to injunctive relief here as well, so we should keep an eye on it.
Wayne Stacy 49:06
So, Terry, final word.
Terry Rea 49:08
So, I’m as optimistic as Andre is that the US system will continue to improve. I do think that the right to exclude.. I teach law school, and I, I say the right to exclude, and I think, but not really asterisk, right, and so it makes it sort of complex, but I do think that the US system hopefully will continue to evolve in a positive way. But my recommendation, I just left big law at the end of 2023 I would recommend every law firm, irrespective of its size, to affiliate or develop a relationship with at least two European patent firms that are very talented and are good with the UPC, so you’ve got two different perspectives, because you have a vast geography, it’s not one country when you look at Europe, right, and that you should be affiliating and with. You think of us litigation, you should automatically consider UPC, whether or not you act on it, but at least you should preliminarily have initial discussions and identify how relevant it is, either for the current time or for later on.
Wayne Stacy 50:17
Wonderful. Well, I want to thank all three of you for starting us off, and for our next sessions, you’ll notice distinct change in accents as we bring you a group from around the world, and I’m not talking about my leftover Texas accent, so.