Vringo v ZTE: inventive step and the impact of proposed changes to a standard

From Jan Pot (Brinkhof N.V., Amsterdam) comes news of a recent court battle between Vringo and ZTE, which led to a ruling late last month from the District Court of The Hague. The battlefield was Vringo’s EP 1 186 119 (“EP 119”), which the court nullified for lack of inventive step.  This decision [in Dutch here, and with an informal English translation here] contains some interesting considerations on the closest prior art and problem inventions. Jan takes up the story as follows:

Since 2012, ZTE and Vringo have been involved in litigation on a number of patents, which are part of a portfolio of ca. 500 patents which Vringo purchased from Nokia. EP 119 is one of those patents. In the Netherlands, litigation started in 2014 when the Dutch customs stopped several shipments of ZTE equipment. Vringo attached part of these goods, alleging infringement of EP 119. The preliminary relief Judge of the District Court The Hague refused to lift this attachment, inter alia because he considered the outcome of nullity proceedings on EP 119 too uncertain.

In 2007, EP 119 was upheld by the European Patent Office's Technical Board of Appeal (TBA) in opposition proceedings initiated by Qualcomm. It has also been the subject of infringement proceedings in Germany, where in 2013 the Landgericht Mannheim refused to stay the infringement proceedings pending the nullity proceedings before the Bundespatentgericht as it considered the chance of revocation insufficient.

EP 119 claims a method for transmitting a certain sequence of symbols, and is according to Vringo essential for the UMTS standard. More specifically, it pertains to the situation in which a UMTS base stations transmits so-called synchronization information on the synchronization channel when a functionality called time-switched transmit diversity, or TSTD, is in use.

ZTE advanced several nullity grounds, including lack of novelty, lack of inventive step and added matter. The Court only dealt with inventive step. It found the patent obvious, starting from the latest draft for the UMTS standard published before the priority date, referred to as TS 25.211 V2.1.0, as closest prior art, in combination with a document referred to as TSGR1#5(99)677. This document, which was published by one of the working groups working on the UMTS standard at the time, proposed changes to the draft standard. The Court held that the skilled person would read these two documents together, and in doing so would be confronted with the problem for which the patent aims to provide a solution.

Vringo argued that EP 119 was in essence a problem invention. However, the Court held that Vringo failed to make sufficiently clear why that would be the case. A number of factors were only first advanced by Vringo during the hearing, while the same number of factors were only briefly touched upon in a rather difficult to follow declaration by its expert, Dr. Moulsley. Neither the patent nor Vringo’s Statement of Defence mentioned these ‘pieces of the puzzle’ as joint causes of a problem. What’s more, the District Court did not find these arguments persuasive when looking at other prior art publications and an e-mail exchange between several technical experts who already discussed the issue. Although Vringo disputed that interpretation of the e-mail exchange, it did not provide any convincing explanation as to what they would then be discussing. Finally, the Court stated that restraint must be observed in assuming the existence of a problem invention, referring to TBA case law (T 971/92).

The Court then concluded that ZTE had rightly argued that there were essentially two options to solve the problem, both of which were obvious to the skilled person. On this issue the Court disagreed with the TBA, which had held that there were multiple options. The viability of those other options was discussed before the Court by ZTE and Vringo. In the end and having heard both parties’ experts, the Court was of the opinion that the other options were either not viable or less obvious. In other words, the Court was convinced that the two options mentioned by ZTE were the “natural” solution to redress the problem with which the skilled person was confronted due to the change made by TSGR1#5(99)677. The Court concluded that the choice for the one of the two obvious solutions is not inventive and that no pointer to either one is required.

Brinkhof, through a team consisting of Ruprecht Hermans, Richard Ebbink, Gaëlle Béquet and Jan Pot, represented ZTE in these proceedings.  This summary is based solely on the decision itself and not on information from the file not reflected in the decision.

Priority and indirect infringement of second medical use claims: when the Sun shines in the Netherlands

Last month, at the International Trademark Association (INTA) Meeting in Hong Kong, this blogger had the pleasure of an encounter with Jaap J.E. Bremer and his colleague Marleen van den Horst (both of the Dutch firm of BarentsKrans N.V.). There, in that undoubtedly trade mark-friendly environment, we discussed a case that Jaap and Marleen were involved in before the Provisions Judge of the District Court, The Hague, regarding indirect infringement of a second medical use patent and the validity of priority claims (among other things). The decision in this action has since been handed down and Marleen and Jaap have kindly treated PatLit readers to the tale of its outcome. As Jaap explains:

Zoledronate

"The case concerns Novartis’ patent EP 1 296 689 for a “Method of administering bisphosphonates”. It claims, inter alia, a dosage regime (2-10 mg once yearly) of the active substance zoledronic acid / zoledronate, administered intravenously for the treatment of osteoporosis. The Dutch litigation between Novartis and Sun Pharmaceuticals runs parallel to the case in England and Wales between Hospira & Generics UK (Mylan)/Novartis that was reported here on the IPKat weblog not too long ago. Marleen and I represented Sun.

Sun had obtained a marketing authorisation for generic zoledronate for the treatment of Paget’s disease and osteoporosis. The use of zoledronate for the treatment of Paget’s disease was not patent-protected. Sun had requested that the indication osteoporosis be removed ("carved out") from the Summary of Product Characteristics and patient leaflet of its product. In October 2013, Sun participated in a public tender by Dutch health insurance company VGZ, which it won. VGZ's tender conditions did not allow specification of the indication.

Novartis alleged that Sun's generic product (in)directly infringed EP 689. It started preliminary injunction proceedings against Sun, seeking an order (a) to stop it selling generic zoledronic acid to the extent that Sun knew or had reasonable grounds to suspect that its product would also be used to treat osteoporosis, and (b) to stop Sun participating in tenders, unless those tenders would allow designation of the product for Paget's disease only.

Sun disputed the allegations of (in)direct infringement and the orders requested by Novartis. In addition, Sun argued that EP 689 was invalid for lack of novelty over the Reid publication as Sun contested that Novartis was entitled to its priority claims. The PI judge of the District Court in The Hague held that the priority right was most likely invalid, since the priority document US 689 did not directly and unambiguously disclose the combination of intravenous use and the dosage range of "2 up to about 10 mg". The PI judge referred to the decision of the courts of England and Wales. The PI judge found that there was a serious, non-negligible chance that the patent would not survive invalidity proceedings on the merits (the validity test in Dutch preliminary injunction cases), rejected Novartis’ claims and ordered Novartis to pay Sun's costs The PI judge did not rule on the other grounds of invalidity, as presented by Sun, nor on the issue of (in)direct infringement".

Thanks to Marleen and Jaap, we also have an unofficial English translation of the Dutch decision of 12 May 2014. You can read it online here or download it here.

Afga/Xingraphics: All Rather Vague in The Hague

Chengdu Xingraphics Co Ltd, a leading Chinese developer and maker of thermal printing plates and related chemistry, announced last week that it had successfully defended itself against patent infringement claims by Belgium-based Agfa Geveart BV. Agfa alleged that Xingraphics' FIT and FIT Xtra thermal plate technology infringed its European patent for a "method for making positive photosensitive lithographic printing plates" which Agfa acquired when it took over Mitsubishi-owned Lastra in October 2004.

Xingraphics argued that its technology not only fell outside the scope of the patent's claims but that it was superior to Agfa's in terms of its characteristics and its performance. Apparently Xingraphics has taken the step of indemnifying all its dealers worldwide against liability for patent infringement, as a demonstration of its confidence that it could resist Agfa's claims.

The Hague District Court has ordered the return of provisionally seized allegedly infringing inventory, plus legal costs.

According to Print Graphic News, the battle is not yet over, though:

"Agfa says, because non-infringement was not proven by Xingraphics either, the court could not grant Xingraphics' request for a declaration of non-infringement.

The court allowed Agfa Graphics to request additional seizures of Xingraphics plates in the future.

Agfa says they will now prepare the necessary additional evidence of the infringement of the Agfa Graphics patent in order to obtain a decision in favour of Agfa".

PatLit hopes for an explanation from some of its Dutch readers as to what is actually happening here. Although statements in the trade press are no more reliable than the press releases on which they are based, it looks as though we have something here which is the continuation of a dispute past the point at which a ruling has been given (and allegedly inventory returned) but which is not actually described as an "appeal". It all seems a little perplexing.

No interim relief pending appeal against invalidity, rules Dutch court

PatLit thanks Jaap Bremer and Marleen van den Horst (BarentsKrans NV) for the following information concerning a very recent decision by the Provisions Judge of the District Court of the Hague. According to Jaap and Marleen (who represented Mylan in these proceedings),

"Novartis initiated interim injunction proceedings to obtain a preliminary injunction against two generics manufacturers, Mylan and Actavis, based its European Patent 0 948 320 for a sustained release formulation of fluvastatin, a drug for the treatment of hypercholesterolemia.

Novartis' patent had been nullified by the District Court for lack of inventive step by decision of 4 June 2008. Novartis had appealed against the first instance decision; the oral hearing in the appeal proceedings is scheduled for December 2009. Normally, in such a situation, the patent owner would not take infringement action unless and until the Court of Appeal has overturned the decision of the District Court. However, Novartis argued here that the District Court had clearly erred when finding that the patent lacked inventive step. For that reason, and since the recent market introduction of generic fluvastatin SR meant that Novartis was about to incur irreparable damage (or so it said), Novartis argued it had an urgent interest in obtaining an injunction against Mylan and Actavis and could not await the appeal judgment.

This is the first time that, in the Netherlands, a patent owner has attempted to obtain a preliminary injunction based on a patent that had been nullified in proceedings on the merits beforehand. Novartis' action is likely to have been inspired by the recent Olanzapine case in Germany, the facts of which case were similar to those of the Dutch case.

In the instant decision, the Provisions Judge found that there were no grounds for an injunction, since Novartis had not established that the District Court in the proceedings on the merits had made an evident error. Furthermore, the Judge ruled that, contrary to the arguments of Novartis, the decision of the District court to invalidate the patent has immediate effect erga omnes and is not suspended by appeal. This seems to imply that, after an invalidity decision in first instance, generics companies can enter the market pending appeal proceedings without fear of an injunction (of course, should the patent later revive as a result of a later judgment overturning the first instance decision, they could be liable for damages).

A translation of the decision is not yet available".

Thanks, Jaap and Marleen, for this information. PatLit's readers look forward to finding out what happens next.

An insight into Dutch costs

A good deal has already been said on the recent Dutch ruling in ratiopharm, Tiefenbacher and Centrafarm et al v Lundbeck (see earlier comments on the IPKat and The SPC Blog here and here). In this decision the Hague District Court, ruling on the validity of Lundbeck’s escitalopram patent (EP 066), held that all the claims were invalid for lack of inventive step. Now, courtesy of Daan de Lange (Brinkhof), PatLit has obtained a full English translation of the decision.

For obvious reasons the cost of patent litigation varies considerably between different European forums and there is no stable and predictable scale by which they can be confidently measured and compared against one another.  This does not stop litigants asking where litigation might cost them less, though.  The paragraph reproduced below, however, serves to give some guidance concerning what started out as three separate actions which came before the preliminary relief judge in April, May and June 2008 respectively, but which eventually coalesced:

"The costs of the proceedings on the part of Tiefenbacher and Centrafarm, fixed at €276,357.97 are not disputed. These will be allocated to the parties in equal shares. Lundbeck has disputed that the attorney’s fees presented by Ratiopharm in the amount of €427,346.58 are to be deemed 'reasonable and balanced'. The court shares Lundbeck's opinion that these costs, in comparison with the attorney’s fees claimed by Lundbeck and Tiefenbacher/Centrafarm (€291,691 and €126,155.80 respectively) appear to be too high and are not justified by the circumstance that it, contrary to the other parties, was not involved in foreign litigation. It has not appeared, after all, that the Dutch attorneys of the other parties were involved in such litigation, while moreover these proceedings included other experts and, in part, other positions than was the case in those foreign proceedings. The court will reasonably fix the attorney’s fees of Ratiopharm at an amount of €290,000, equal to the amount in attorney’s fees claimed by Lundbeck. The costs of patent attorneys and experts of Ratiopharm of €141,186.72 are not disputed and will therefore be awarded as claimed, so that of the costs claimed by Ratiopharm a total amount of €431,186.72 is eligible for allocation. As no independent arguments were presented in the counterclaim, all costs will be allocated under the principal action".

PatLit is curious to hear from its readers, in the light of experiences in their own jurisdictions, whether the Dutch award would rank as a bargain buy, a fair figure or an expensive deal in comparison.

Keith is not doing too well, but he may survive ...

From the NautaDutilh E-newsletter Intellectual Property, 16 March 2009, comes this note on the recent ruling of the Dutch Supreme Court in Boston Scientific v Medinol. According to the article,

"The Supreme Court does not usually take into account new facts once the appellate court has ruled on a matter. However, in its 6 March 2009 decision in Boston Scientific v Medinol, the Supreme Court allowed new facts to be introduced and took the opportunity to do away with a doctrine on the partial validity of patents which has come under substantial criticism for not conforming to the European Patent Convention.

Scimed Life Systems (now Boston Scientific Scimed) sued Medinol on the basis of its European patent EP 0 591 199 (also referred to as the "Keith patent") for a balloon catheter with distal guidewire lumen. In the first instance, the Keith patent was invalidated for obviousness. On appeal, Boston Scientific changed its position and argued that a particular combination of three elements constituted a novel and inventive step, while in the first instance it had argued that the inventiveness of the Keith patent lay in the inclusion of a semi-rigid centre portion in the catheter
(which has a flexible tube-in-tube distal part and a rigid metal proximal part). In support of its position, Boston Scientific proposed including limitations in the main claim.

The court of appeal upheld the lower court's ruling (i.e. that the patent was invalid) but took a different approach. The appellate court held that the particular combination of three features which Boston Scientific regarded as inventive did not have a single inventive concept ("unity") and thus constituted separate inventions.  The court of appeal went on to state - although its reasoning on this point is rather unclear - that part of the alleged invention would form part of a divisional application and therefore the patentee was effectively trying to reintroduce subject matter it had abandoned in the context of the patent application at issue.

The Supreme Court rightly overturned this portion of the decision as lack of unity is not a ground for invalidating a patent. The Court held that, without further explanation by the court of appeal, it was (a) unclear how an alleged lack of unity relates to the claimed invalidity and (b) it was unclear why a skilled person would not independently conclude that the Keith patent should have been granted in the amended form proposed in the proceedings.

With respect to the second point, the Supreme Court referred to its Spiro/Flamco decision on partial validity, in which it held that an amended claim is only allowed if a skilled person could independently conclude that the patent could only have been awarded in a certain manner, which may be directly derived from the patent description. This test was generally perceived to be stricter than the criteria in Article 123(2) and (3) EPC, i.e. extension of the subject matter or post-grant
broadening of the scope of protection.

After the court of appeal rendered its decision, Boston Scientific used the EPO's central limitation procedure provided for in the revised EPC and changed the Keith patent’s claims. The Supreme Court held that this fact should be taken into account and that the case should thus be remanded to the appellate court for further review. The Supreme Court also held that for this further review, its former doctrine on partial validity no longer applies and only the EPC criteria should be applied.

The risk of invalidation of an entire patent in the Netherlands is now somewhat reduced (especially if the patentee prepares a limitation proposal, where appropriate), and the Netherlands is now even more aligned with the other key patent-litigation jurisdictions in Europe".

One in the eye for J 'n' J, as Novartis strikes

From Mark van Gardingen and his colleagues at Brinkhof, The Netherlands, comes a very splendid English translation of a recent and eagerly anticipated Hague District Court decision by Judges Van Peursem, Blok and Van Oostveen in Novartis AG v Johnson & Johnson Medical BV and others. This 11 February decision upholds the Novartis/Ciba Vision European Patent (EP 258) for extended wear contact lenses, additionally granting an injunction against Johnson & Johnson to block further sales in the Netherlands of its Acuvue Oasys product. Says Mark:

"The decision deals with almost all aspects of patent law: priority, clarity and sufficiency, novelty, inventive step and infringement. The Court follows the EPO case law road map on the validity topics (and in effect confirms correctness of TBA decision T 0246/04 of last year regarding the same patent).

Parallel proceedings are pending in the UK and in Germany, but have not yet come to hearings".

On the question of injunctive relief pending an appeal the court had this to say:

"4.55. The order will be enforceable regardless of any appeal, in spite of J&J’s opposition. In the opinion of the court, Novartis’ interests in direct enforcement of the judgment outweighs the interests of J&J in maintaining the status quo until the appeal is decided. Novartis’ interest follows from the continual nature of the infringement of its exclusive rights. J&J has insufficiently substantiated why that interest should in this case give way to its desire to continue the infringement. The mere fact that there is a limited number of parties in the market and that there is no reason to assume that J&J would eventually have no assets from which damage could be recovered, is – for whatever it is worth - not sufficient".

You can read the full text of this decision here.