Rantasaari on Fee Shifting and the UPC

Krista Rantasaari has published an article titled Patent Litigation in Europe:  intermediate fee shifting and the UPC, 18 JIPLP 642 (2023).  Here is a link to the paper, and here is the abstract:

 

            This writing explores the European understanding of fee shifting rules and how the unitary patent regime addresses fee shifting rules. In European jurisdictions, the IP Enforcement Directive has harmonized some parts of the remedies, even though they are mainly governed by national law.  European jurisdictions often apply fee shifting rules, meaning that the losing party pays the winning parties’ expenses and fees.

 

            However, in most cases, costs are not fully covered. Instead, European jurisdictions use intermediate fee shifting that allows the winning litigant to recover some, but not all, of its litigation expenses.

 

            The UPC follows intermediate fee shifting. Hence, the UPC may lower or raise the ceiling of the recoverable costs or, upon request, wholly or partially reimburse expenses. For example, the recoverable cost might be disproportionate if the unsuccessful party is a small and medium size company. Like national rules, fee shifting in the unitary patent regime has limitations and discretionary elements, such as proportionality, equity, and partial success. In addition, the UPC will follow the case law of the Court of Justice of the European Union related to the interpretation of the IP Enforcement Directive.

I’ve been working on a book chapter that addresses, among other matters, fee shifting, and I found this article very informative.  The UPC approach reminds me a bit of the aborted attempt by the U.S. Congress in 2013 to incorporate a version of intermediate fee shifting into U.S. patent law—it would have made fee shifting mandatory  “unless the court finds that the position and conduct of the nonprevailing party or parties were reasonably justified in law and fact or that special circumstances (such as severe economic hardship to a named inventor) make an award unjust.”  Although compromises are not always the best solution, it may be that some sort of intermediate fee shifting is the best way to reconcile the positive and negative effects of fee shifting, though I’m still inclined to think that in most cases the prevailing party should recover the majority of their actual fees and expenses.