Friday, 24 October 2014

Broad Claims – supported if no indications to the contrary X ZR 19/11

The German Federal Court of Justice (BGH) had to decide on an appeal against the decision of the Federal German Patent Court to nullify a patent relating to stents having two interlacing meandering patterns as shown in the embodiment on the right-hand side.
The pattern looks somewhat complicated at first sight but a thorough inspection reveals that it is basically a superposition of horizontal meanders along the lines 13 and vertical meanders along the lines 9, wherein the latter vertical meanders are phase-shifted or – to use the words of the patent – “even” and “uneven” patterns in alternating arrangement. However, the limitation to “even” and “uneven” patterns in alternating arrangement did not figure in claim 1 as granted but only as a feature of the (single) embodiment of the invention.

The Hoge Raad and the Irish High Court had limited the claim to stents with “even” and “uneven” patterns in alternating arrangement by arguing that the documents as originally filed lacked any disclosure supporting the broader claim.

The BGH did not follow this line and judged that – to the contrary of what the other courts had found – the lack of any disclosure excluding stents without phase shift from the invention leads to the conclusion that these embodiments are disclosed as a part of the invention in the documents as originally filed.

The full text of the decision in German language can be accessed here.

Thursday, 23 October 2014

Federal Circuit Clarifies Limits To "Sale" and "Offer For Sale" Infringement In Foreign Transactions

One perplexing issue facing companies involved in product development, manufacture and distribution in multiple jurisdictions is the potential extraterritorial effect of a nation’s patent laws. The U.S. Supreme Court has noted that, “[t]he presumption that United States law governs domestically but does not rule the world applies with particular force in patent law.” Microsoft Corp. v. AT&T Corp., 550 U.S. 437, 454-55 (2007). Yesterday, the Federal Circuit ruled that the sale of a patented component to a foreign buyer and delivered outside the U.S. is not a “sale” or “offer for sale” under the Patent Act, even if price negotations, customer support, and other activities took place in the U.S. Halo Electronics, Inc. v. Pulse Electronics, Inc., No. 2013-1472 and 1656 (Fed. Cir. Oct. 22, 2014). 

Halo was a patent infringement action involving patents for printed circuit board components manufactured and sold by the defendant, Pulse. Contract manufacturers used the Pulse components to assemble products for Cisco, which Cisco then distributed overseas. Although Cisco did not directly purchase the components, it negotiated with Pulse and other suppliers price ranges than would apply to components purchased by Cisco’s contract manufacturers. The actual sales contracts relating to the Pulse components alleged to infringe were negotiated and entered into outside the U.S., and the actual accused components were manufactured, delivered, and assembled into finished products outside the U.S. Nonetheless, significant activity occurred in the U.S.:
However, Pulse engaged in pricing negotiations in the United States with companies such as Cisco, and Pulse’s employees in the United States approved prices that its agents quoted to foreign customers when the quoted prices fell below certain thresholds. Pulse also engaged in other activities in the United States, including meeting regularly with Cisco design engineers, sending product samples to Cisco for pre-approval, attending sales meetings with its customers, and providing post-sale support for its products.

Slip op. at 4-5. The Federal Circuit ruled that this conduct was not infringement under 35 U.S.C. § 271. First, it was not a “sale” in the U.S.: 
Consistent with all of our precedent, we conclude that, when substantial activities of a sales transaction, including the final formation of a contract for sale encompassing all essential terms as well as the delivery and performance under that sales contract, occur entirely outside the United States, pricing and contracting negotiations in the United States alone do not constitute or transform those extraterritorial activities into a sale within the United States for purposes of § 271(a).

 Slip op. at 12.  Applying that standard to Pulse, the court found no infringement:
While Pulse and Cisco engaged in quarterly pricing negotiations for specific products, the negotiated price and projected demand did not constitute a firm agreement to buy and sell, binding on both Cisco and Pulse. Instead, Pulse received purchase orders from Cisco’s foreign contract manufacturers, which then firmly established the essential terms including price and quantity of binding contracts to buy and sell. Moreover, Pulse was paid abroad by those contract manufacturers, not by Cisco, upon fulfillment of the purchase orders. Thus, substantial activities of the sales transactions at issue, in addition to manufacturing and delivery, occurred outside the United States. Although Halo did present evidence that pricing negotiations and certain contracting and marketing activities took place in the United States, which purportedly resulted in the purchase orders and sales overseas, as indicated, such pricing and contracting negotiations alone are insufficient to constitute a “sale” within the United States.

 Slip op. at 12-13. For similar reasons, the court further held that the activity was not an “offer for sale,” which also is an act of infringement under § 271(a): 
An offer to sell, in order to be an infringement, must be an offer contemplating sale in the United States. Otherwise, the presumption against extraterritoriality would be breached. If a sale outside the United States is not an infringement of a U.S. patent, an offer to sell, even if made in the United States, when the sale would occur outside the United States, similarly would not be an infringement of a U.S. patent. We therefore hold that Pulse did not offer to sell the products at issue within the United States for purposes of § 271(a). 

Slip op. at 16. The full opinion is available HERE.


Wednesday, 22 October 2014

Now Ropes & Gray launches EU patent litigation site

PatLit has just been told about the Ropes & Gray Unitary Patent site, which promises to provide "up-to-date resources and information on developments surrounding the EU’s proposed Unified Patent Court". The site can be accessed here.

According to the firm's publicity, its team of qualified US and UK lawyers will regularly be updating the site, so visitors are invited to keep checking back when necessary for any developments.

As usual, readers' responses and evaluations are appreciated, particularly with regard to how law firms' European patent litigation web pages compare with one another.

Tuesday, 14 October 2014

Patents County Court survey: the results

Readers of this weblog may recall the publication of a request for assistance with regard to research undertaken by Kingsley Egbuonu into the Patents County Court for England and Wales. The fruits of Kingsley's research are summarised below, together with a link to his survey results. As Kingsley explains:
In 2010 Lord Justice Jackson published his final report (“The Jackson Review”) which made recommendations for, among other things, the reform of the Patents County Court for England and Wales (“PCC”). One of the recommendations relevant to the PCC was the implementation of the proposals in the Intellectual Property Court Users’ Committee (“IPCUC”) Working Group’s final report. Overall, the main objective of the reform package was to widen access to justice for small and medium-sized enterprises (“SMEs”) and private individuals in intellectual property (“IP”) disputes.

Following various changes to its rules of procedure, the PCC began operating under a new regime on 1 October 2010. The PCC witnessed further changes until 1 October 2013 when it was replaced by the Intellectual Property Enterprise Court (“IPEC”). However, in the year of its abolition, it was possible to find reasonable information which can be used to explain how the PCC’s new regime works in practice (on which see Angela Fox’s book on the IPEC) and/or to assess the extent to which the policy objectives of the reform have been achieved. My research, which was conducted between April 2013 and September 2013, attempted to do both.

The research primarily relied on a body of case law developed under His Honour Judge Birss QC (as he then was) and published by BAILII, legislation, statistics from the Ministry of Justice, existing literature, and empirical evidence from IP practitioners. The empirical evidence was obtained through an online survey which recorded 30 responses. The survey questions were framed based on the Jackson Review recommendations and issues raised in various Consultations relating to it (e.g. see the concerns raised IPCUC Working Group’s final report).

The survey results can be viewed or downloaded here.

The summary of my findings, as of 30 September 2013, are as follows:

  1. Differentiation: Since 1 October 2010, there has been a clear distinction, in practice and procedures, between the PCC (continued by the IPEC) and the Patents Court or Chancery Division of the High Court. This helps the parties, typically claimants, make an informed decision about forum.
  1. Costs capping and financial remedies limit:
    • Generally, both measures were applied consistently, even in peculiar circumstances, in order to reassure prospective litigants. Sample of cases analysed found that average costs award was under £34,000 for liability trial and under £250,000 for damages.
    • The costs capping regime has not deterred parties from incurring own costs above the relevant caps (e.g. see Lumos Skincare Ltd. v Sweet Squared Ltd & Others [2012] EWPCC 28 and Henderson v All Around the World Recordings Ltd & Another [2013] EWPCC 19).
  1. PCC caseload:
    • The statistics on the number of cases issued in the PCC are inconsistent. Nonetheless, it is generally clear that more cases have been issued post-October 2010 than ever before. This view may be supported with the rise in the number of PCC judgments published on BAILII.
    • Further, the uptake of the small claims track was also encouraging: 16 cases were issued in 2012 and 28 as of July 2013. Lastly, the PCC entertained a variety of claims. Overall, the popularity of the PCC post-October 2010 is a clear evidence of success.
  1. Profile of parties:
    • A considerable number of cases involved SMEs and private individuals. Around 63 judgments published by BAILII (between November 2010 and 11 September 2013) involved an SME or private individual as a party. Arguably, this may well be the evidence to support the rationale behind the PCC reform.
    • On the other hand, my research did not find substantial evidence to demonstrate that larger enterprises were abusing or disproportionately using the PCC; equally, there was no evidence to suggest that there was a flurry of litigation against large enterprises by SMEs as a result of the reforms.
    • The PCC served private individuals and SMEs (represented or otherwise) and large enterprises equally.
  1. Length of trial: Cases were generally listed and tried within two days; only a handful lasted longer. There was also an improvement in the length of time cases take to come to trial.
  1. Transfers:
    • My research did not find any evidence to demonstrate that there was a disproportionate number of litigation on transfers between the PCC and the High Court.
    • Statistics revealed that just one case was transferred from the PCC to the High Court, whereas well over 10 were transferred to the PCC from other courts. The overwhelming majority of the PCC’s case load originated and remained there.
Despite the little literature on the subject and difficulty in obtaining reliable statistics -- particularly on the number of cases and the profile of the parties involved -- my research concluded that the reforms generally succeeded. Active judicial case management and consistent application of the rules and case law were crucial to the success of the PCC.

The UK Intellectual Property Office, which should have better access to reliable data, is expected to publish its evaluation report on the PCC reforms this year. 

Monday, 13 October 2014

The UPC Agreement: is it compatible with the German constitution?

PatLit has received news of a new article by Ingve Stjerna (Rechtsanwalt and Certified Specialist for Intellectual Property Law, Düsseldorf), which has very recently gone “live”. This piece, “Unitary patent“ and court system – Compatible with Constitutional Law?", can be read in English here and in German here. Explains Ingve:
"The paper mainly addresses the question of whether a ratification of the UPC Agreement would be compatible with the German constitution and describes the special procedural redress in place under German law in relation to the ratification of an international Agreement (in principle, each [natural or legal] person affected can take recourse to the Federal Constitutional Court and request an assessment of its compatibility with fundamental rights).

I am also offering a theory what may be the reason for the recent delay of the Advocate General’s Statement of Position in CJEU proceedings C-146/13 and C-147/13".
PatLit thanks Ingve for his continuing contributions to the discussion of the UPC and for his willingness to investigate issues that many people seem comfortable to ignore.

Friday, 10 October 2014

686 Requests are Enough - T 0280/11

The following headnote (in a free translation from German) of the decision T 0280/11 reminds us that we should not mess with the Technical Board of Appeal after 16.45h:
The patentee, who had presented a very high number of requests (one main request and 681 auxiliary requests, of which 454 had been filed only three days prior to the oral proceedings), and further requests (four) in the course of the oral proceedings, has to be prepared that a substantial part of the available time on the day of the oral proceedings is required for managing the (total of 686) requests. After having discussed these requests in the oral proceedings and after having rejected them or after not having admitted them into the procedure (new requests 682 to 685), the patentee cannot reasonably expect that the oral proceedings be interrupted again on the late afternoon of the day of the oral proceedings to allow for the elaboration and presentation of further requests (cf. Nr. 5.5 of the reasons).

Thursday, 9 October 2014

Test the Prototype Case Management System of the UPC!

The UPC preparatory committee has now made the prototype e-filing / case management system available to test here. Curious readers are invited to test how it will feel to file an infringement claim.

The committee explains:
The prototype e-filing / case management system is now available to test. If you would like to test it and provide feedback please visit

Testers can supply feedback using the 'BugHerd' feedback application using the button at the bottom right-hand of the screen (this allows you to click on and highlight certain parts of the prototype, such as fields in forms, and write notes about them).

Purpose of the prototype

The prototype is being configured using an off-the-shelf product, based on UPC draft Rules of Procedure 13-28, allowing testers to file an infringement claim. Feedback from testers is being used over October and November 2014 to help us continue configuration in an iterative way and to then evaluate lessons to inform the procurement process.

The purpose of the prototype is to test the viability of a cloud-based, off-the-shelf, configured system for the UPC, where data is stored by a supplier and can be accessed securely from any location.

We are also learning lessons about user-friendliness, and how to ensure the system might support the UPC Rules of Procedure.

Further information on the prototype and what we hope it will achieve can be found on the prototype site.

Next steps

We will use lessons from the prototype to inform the tender for the UPC e-Filing and case management solution. We plan a full, open procurement process, with publication of the procurement notice in the Official Journal of the European Union in November 2014 and contract award in summer 2015.