Stay of proceedings at the UPC

 …. Should we wait for the EPO or not?

In a revocation case between ASTELLAS INSTITUTE FOR REGENERATIVE MEDICINE (revocation claimant) and the patent proprietors Healios K.K and Osaka University, the (revocation) defendants request a stay of proceedings until the conclusion of corresponding opposition proceedings at the European Patent Office (EPO). The Central Division in Munich rejects the request for stay of the proceedings.

Our comments:

The legal framework allows the Unified Patent Court (UPC) to stay proceedings if a rapid decision is expected from the EPO. The court has discretion, considering factors like the timing of EPO decisions and the interests of both parties. In this case, the EPO's first instance decision is expected in just over three months, but the court questions if this qualifies as "rapid." Even if assumed in favor of the patent proprietors, the court finds the Claimant's interests in pursuing the revocation action currently outweigh the Defendants' interests in a stay.

The Defendants argue that an appeal after the EPO decision is not inevitable, but the court considers the most likely scenario and notes the absence of an undertaking not to appeal by the parties. The Munich Central Division notes that the Claimant asserted a legitimate interest in obtaining commercial certainty before launching its product, anticipating market approval well before the patent's expiry in 2034.

The court concludes that, based on the facts and circumstances, the Claimant's interests prevail, and it rejects the request to stay proceedings. The court grants leave to appeal, considering it the first order on a stay request, and defers decisions on costs to the main proceedings. An interim conference is scheduled for March 14, 2024.

Our take-aways:

• Timing and Expectations: The court deliberates on the definition of a "rapid decision" in the context of staying proceedings, highlighting that a decision expected in just over three months may not be considered truly rapid. 
• Balancing Interests: The court emphasizes the need to weigh the interests of both parties when deciding on a request to stay proceedings. In this case, the Claimant's legitimate interest in obtaining commercial certainty before the product launch is considered a significant factor, outweighing the Defendants' request for a stay.
• Appeal Consideration: The court takes into account the likelihood of an appeal after the EPO decision, noting the absence of an “undertaking” by the Defendants not to appeal. Hence, at least as ultima ratio, the party requesting a stay of proceedings might actually consider to “provide an undertaking” not to appeal.