Judicial partiality? Just try proving it ...

Note: this item has been amended in the light of information received subsequent to its original posting.

How easy is it to dispose of a European Patent Office Extended Board of Appeal member on the ground of partiality? The 17-page decision of 15 June on an application to do just that, in case G-2/08, has just been posted today on the EPO website. You can read it in English here. G-2/08 was an application by Bird & Bird on behalf of Actavis to remove an Extended Board of Appeal member:

"In support of this request they submitted that said permanent member of the Enlarged Board of Appeal was Chair of Board of Appeal ... that decided case ....

They considered this decision to be exceptional in that it not only undertook a full review of the previous Board of Appeal decisions which had construed G 5/83 narrowly but also considered the policy reasons for construing Article 52(4) EPC broadly and reviewed certain decisions of the national courts .... In concluding that the claim in issue was allowable on the basis of a broad interpretation of G 5/83, that Board of Appeal had declined to follow earlier Board of Appeal decisions and had not considered that a reference to the Enlarged Board of Appeal was required.

In view of this alleged exceptional way of dealing with the case they came to the conclusion that it might be very difficult for the member involved to approach the
legal questions to be decided in the referral in suit with an open mind, and that this would be seen to be the case by the parties interested in the outcome of said referral.
They requested pursuant to Article 24(3) EPC that ... not participate as a member of the Enlarged Board of Appeal for deciding the referral in this case, on the ground of suspicion of partiality" [omissions are in the EPO's decision itself, not provided by PatLit].

The Enlarged Board considered that the applicant had no locus to challenge the Board member, since it was not a party to the proceedings in question. Nor was the fact that it was a party to proceedings in a European Patent Convention member state which might be influenced by the outcome of G-2/08 a compelling reason for hearing the applicant's complaint, since decisions of the Enlarged Board were binding only in proceedings before the EPO. However, the Board was obliged to consider the issue of partiality if there should come into its knowledge any matter which would constitute even a possible reason for excluding a member. On that basis it was prepared to entertain the application, which it dismissed.

At the end of para 3.3 the Board affirmed down the basic principles:

"On the one hand Board members must duly discharge their duty to sit in cases allocated to them in accordance with their jurisdictions both "ratione legis" and "ratione materiae", and can neither withdraw at will from the proceedings, nor be objected to, at will, by a party to the proceedings, or by any other person.

On the other hand it is the duty of the member not to sit in proceedings in which his impartiality could be reasonably doubted, whatever his feelings might be. In decisions G 5/91 and G 1/05 the Enlarged Board of Appeal already underlined (point 3 of the reasons, and point 5 respectively) the importance of a very strict observance of the requirement of impartiality in proceedings before the Boards of Appeal and the
Enlarged Board of Appeal in view of their judicial functions at final instance within the European patent granting system. The Enlarged Board in its present composition accepts this statement and the conclusions already drawn in these previously cited decisions. It is a general principle of law that a member should not decide a case in which one may have good reason to assume or even suspect partiality".

However, in the Board's opinion, the merits of the allegations of partiality were unsupported by the facts. Board members are presumed to have acted impartially and in good faith unless the contrary is proved. Nor can partiality of an individual be assumed from the decision of a Board, which is the collective result of the decision-making processes in which three individuals participated. The Board concluded:

"It is sufficient to state that said decision does not contain any bold contention, nor has it been substantiated in "such outspoken, extreme or unbalanced terms" that it would preclude the capacity of the member concerned from dealing with the pending referral with an open mind and without preconceived thoughts.

Therefore there is nothing, whether "in concreto" or "in abstracto", in ...'s behaviour or in decision ... that could justify any suspicion against this member who therefore remains a member of the Enlarged Board of Appeal in the present case .... Order".

Litigation fee to be introduced for contested IPO proceedings

"Structure of patent fees reviewed in Intellectual Property Office consultation announced today", a press release from the United Kingdom's Intellectual Property Office today, reveals various measures that form part of the IPO's consultation process which is intended

"to keep fees at a level which ensures that innovative businesses and individuals in the UK (and beyond) can access and enjoy the benefits of the IP system".

One such measure is the introduction of a litigation fee for contested patent proceedings at the Intellectual Property Office. The consultation process is available both as a PDF document and in Word. Proposal 5 relates to the litigation fee and goes as follows:

"Proposal 5: Increases in Patent litigation fees

41. The fee we charge for launching inter partes patent proceedings before the comptroller is currently £50. There are two reasons why we believe this fee to be disproportionately low.

42. First, these proceedings involve very substantial work for the IPO, including (in most cases) holding one or more hearings before a senior Hearing Officer, who then writes and issues a decision. Such proceedings tend to be more resource-intensive than other statutory services which currently have higher fees (such as patent search or examination).

43. Second, it does not seem consistent if the fee for such work, which results in a binding determination of the issues in dispute, is set to be significantly lower than the £200 fee payable to obtain a non-binding opinion on patent validity or infringement.

44. Mindful of these points, and of the Gowers recommendation that we must better match our fees to our costs, we are therefore proposing a substantial new fee relating to patent proceedings before the comptroller of £350. This reflects the significant resources that the IPO devotes to its patents litigation function. However, it would also maintain fees for litigation at a significantly lower level than those payable when taking forward litigation at the Patents Court – thus continuing to ensure that the IPO is a demonstrably lower-cost forum than the courts for resolution of certain patent disputes.

45. In most cases, a fee at this level would not enable us to cover our costs, but it is recognised that to raise the fee to a level where costs to the IPO were fully recovered would be inconsistent with the approach taken by the Patents Court, and would also risk denying certain users of the patents system access to the IPO as a forum for dispute resolution.

46. We propose to retain the current £50 fee for launching proceedings, but to introduce the further £350 fee at a later stage. This would be payable by the claimant after the defendant has filed a counter-statement, and so at the point where it has become clear that proceedings are contested. Failure to pay the fee would mean the proceedings were taken to be withdrawn. This would mean that uncontested actions would only attract a fee payable by the claimant of £50, recognising the reduced IPO costs. It would also ensure that uncontested inventorship actions (the most common way of addressing wrongly-mentioned inventors) remain accessible, as would uncontested revocation actions, which it is in the public interest to encourage as an affordable way of removing invalid patents from the Register.

Q5: Do you think the proposed increase in litigation fees would affect the way that businesses and individuals maintain, challenge or defend patent rights?".

Comments and responses can be emailed to the IPO and should arrive by 12 October 2009.

Are non-binding Opinions a useful tool in patent litigation?

It's a while since I last browsed the UK Intellectual Property Office's Requests for opinions page, which lists the patents in respect of which, for a very moderate fee, an informed opinion has been procured as to (i) the patent's validity and (ii) whether specific activities appear to infringe it. These opinions are non-binding but, at their point of introduction, I argued that they could be particularly useful for any party contemplating litigation.

Although we have not yet seen out July, the number of requests for Opinions this year is 23, which suggests that it will be the busiest year yet for the Comptroller's services (between 2006 and 2008 the annual total of requests ranged from 27 to 30). More significantly, both among those who seek requests and among those whose patents are their subjects, the names of some businesses that are notably active in the field of patent litigation can be seen.

PatLit would be pleased to hear from readers who deploy Opinions preparatory to litigation, or who have thought about doing so and then decided not to. Also, it would be good to hear from readers outside the UK as to whether any comparable service is offered in their jurisdictions. Do please let me know by posting a comment below or by emailing me here.

KCI foam dressing patent held valid, but does anyone know what happened?

According to RTTNews, Smith & Nephew's Advanced Wound Management division has received a favourable ruling from the Court of Appeal for England and Wales in a patent infringement/ validity dispute with Kinetic Concepts Inc (KCI). The Court apparently concluded that KCI's patent for the use of foam dressing kits with negative pressure wound therapy systems was invalid, lifting a previously issued injunction against Smith & Nephew.

The news item reports that KCI plans to appeal to the House of Lords, adding that this ruling is limited to the UK patent at issue and does not directly affect the other patents in KCI's portfolio or any other proceedings outside the UK.

Having failed to find either this Court of Appeal decision or a decision of the Patents Court on the BAILII website, and having found a dearth of news items on the internet, I wonder whether any readers of this blog have any further information concerning it. If so, please post a comment below or email me here

Patent damages: a book review

Winning the Patent Damages Case: a Litigator's Guide to Economic Models and Other Damage Strategies is the sort of title that is bound to set the patent litgator's pulse racing -- and this little book, by California lawyer Richard Cauley, does not disappoint.

The author, a partner in the Newport Beach law firm of Wang, Hartmann & Gibbs, was formerly a partner in the Palo Alto office of McDermott Will & Emery, LLP. An experienced trial attorney, he specialises in complex intellectual property and antitrust matters and lays claim to particular expertise in matters requiring economic and financial analysis. Those last four words often presage an intention to break into algebra at the drop of a hat, informing the legal reader that the proper calculation of damages (x) is along the lines of x = ∞⅓<√∏.

Fortunately the author does not seek to blind his readers with this sort of thing; it's a short book and it's all in English because it explains the principle upon which patent damages may be asserted, leaving the sums to those who can do that sort of work more cheaply than if it were left to litigation lawyers with their calculators. Symbolic notation is simplified into concepts like "Equal Bargaining Power B = 0.5" as the Lemley/Shapiro principle is broken down into lawyer-sized bites. The book is actually very readable and doesn't require to carry either a dictionary or a law library around with him in order to appreciate it.

So what do the publishers, Oxford University Press's US desk based in New York, say about the book?

"Patent litigation is a lengthy and expensive exercise typically dominated by scientific and technical inquiry, but the economic side of a case -- namely, the damages phase -- is too often neglected. In such instances, substantial economic damage to the plaintiff and potentially devastating financial consequences to the defendant are given too little priority before and during litigation, which can result in an ineffective damages case and create unnecessary expenses.

Conducting sophisticated economic analysis and creative discovery for the damages case from the outset can help prevent this detrimental result. By focusing on how to build an analytical framework for likely damages awards, Winning the Patent Damages Case provides valuable information on how to structure a patent case from an economic standpoint, from start to finish".

There's nothing on the website or cover of the book to suggest that it explains the theory and practice of only US law. That's not to say that it's not useful and/or interesting for the non-US reader, and we all know that US patent damages, whether on a reasonable royalty basis or any other, are likely to be way in excess of anything that a court will order elsewhere. However, in an increasingly small world with increasingly global markets it makes sense for readers who need to know about patent damages to get a sense of what happens elsewhere, if only to help focus the mind on negotiating a settlement that spills across other major jurisdictions. If this is right, then OUP should be encouraged to bring out companion volumes -- particularly for Europe.

Bibligraphical details: ISBN13: 9780195366938, ISBN10: 019536693X. Paperback, xiv + 165 pages. Price: $185. Website here.

One in the eye for Novartis: EP 258 valid in NL but not UK

In his ruling published today in Novartis AG and Cibavision AG v Johnson & Johnson Medical Ltd and others [2009] EWHC 1671 (Pat), Mr Justice Kitchin (Patents Court, England and Wales) held that Novartis's controversial '258 patent was invalid for insufficiency, through Johnson & Johnson's attacks based on lack of novelty and obviousness failed. J&J's Oasys lens fell in the scope of claims 1 and 24 of that patent, but not claims 8 or 11.

The same patent was held valid and infringed on 11 February 2009 in the Netherlands (see earlier PatLit post here), in a judgment that was very much shorter, possibly because it did not occupy 16 days of court time.

Every decision in which national versions of a European patent are upheld in one country but not another is a nail in the coffin of the opponents of European patent litigation reform.

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.

Interim relief "more nuanced than expected", says Pharma Report

Today's Pharma Sector Report from the European Commission's DG Competition contains a large amount of statistical data concerning the litigation and/or settlement of disputes involving pharmaceutical patents in more than half the member states of the European Union. There's far too much data for PatLit to be able to make a convenient summary of it and, despite its extensive use of tabular formats to illustrate and contrast numbers and trends, there is in any event only a limited amount that one can learn from them. For example, they cannot take into account the merits of the cases before the courts in terms of such core issues as the (non)obvious nature of disputed patents and the scope of the claims in both infringement and validity proceedings.

While DG Competition comes out in support of both a Community patent and a unitary court system for the litigation of patent disputes, its investigation was principally into matters concerning competitiveness within the pharma sector and the report does little more than endorse the position which the Commission is already known to hold.

One matter which may be of particular interest to readers of this blog is that of interim relief against alleged infringement. On this the report says

"(656) ... the subsample of cases with interim injunctions shows two particular features, namely: a high ratio of settled cases (73%, i.e. 44 out of 60 cases, which are final) and a low ratio of judged final cases (27%, i.e. 16 out of 60 cases). Furthermore, it is interesting to note that in the subgroup of settled cases, there is a tendency to end litigation with the conditions that are favourable to generic companies (i.e. either allowing generic entry or a value transfer from the originator to the generic company). Even if this cannot be regarded to be a conclusive indication as to likely outcome of the respective court cases, this element needs to be borne in mind when interpreting a higher proportion of the cases with interim injunction won by originator companies (11 out of 16 cases).

(657) The overall picture is thus more nuanced than one would have expected from the cases in which interim injunctions, the most restrictive legal tool, were granted, taking into account that, when requesting interim injunctions, the applicant is usually required to show that he is likely to succeed in the main proceedings and to demonstrate urgency. Adding up the actual generic successes (8%) and the settled cases appearing to be particularly favourable to the generic companies (38%), it would seem that in almost a half of the closed cases the grant of interim injunctions might not have been justified, whilst in another 25% of the cases that were settled the situation is unclear".

Taking a gamble: proof of suitability and intention to put an invention into effect

Judgment was given today by Mr Justice Lewison in Cranway Ltd v Playtech Ltd & others [2009] EWHC 1588 (Pat), a decision of the Patents Court for England and Wales. Cranway claimed that Playtech and the Tote infringed their online gambling patent (EP 0625760B1). The patent related to an interactive, real time, realistic "home" computer gaming system using general purpose computers. Playtech and the Tote denied infringement and challenged the patent's validity for lack of novelty, lack of inventive step and for not being an invention within the meaning of the Patents Act 197.

Holding that the patent would have been infringed, but was however invalid for obviousness and for not being for an invention, the judge had occasion to contemplate the Patents Act 1977, Section 60(2):

" ... a person (other than the proprietor of the patent) also infringes a patent for an invention if, while the patent is in force and without the consent of the proprietor, he supplies or offers to supply in the United Kingdom a person other than a licensee or other person entitled to work the invention with any of the means, relating to an essential element of the invention, for putting the invention into effect when he knows, or it is obvious to a reasonable person in the circumstances, that those means are suitable for putting, and are intended to put, the invention into effect in the United Kingdom" (emphasis added).

This phraseology raises an important issue when it comes to establish proof of suitability and intention, since they are far from being the same thing. As he said at para.156:

"Whether means are suitable for putting an invention into effect must be a purely objective test. But whether they are intended to put an invention into effect cannot be wholly objective. Only human beings can have intentions, although their intentions may be attributed to other legal persons, according to rules of attribution. Thus this limb of the test must depend on the subjective intention of someone. A supplier of essential means might reasonably be supposed to know what the intention of his immediate counter-party is. But it would be a far stronger thing to expect him to discern the intention of a person far down the supply chain. Moreover, at the time of the supplier's supply of the essential means the person who ultimately forms the intention to use the means to put the invention into effect may not be ascertainable and he may not have formed that intention. It thus seems to me to be more likely that section 60(2) was directed to a supply of essential means to a direct infringer rather than to another secondary infringer. ... ".

No ruling on hypothetical issue, says Patents Court

It isn't yet available on BAILII, but Friday's judgment of Mr Justice Floyd (Patents Court, England and Wales) in MMI Research Ltd v Cellxion Ltd and others [2009] EWHC 1533 (Pat) is worth a read, dealing with the popular issues of (i) scope of injunctive relief and (ii) stay of proceedings pending an appeal.

In short, in the main proceedings MMI's anti-phone-tapping patent was held valid and infringed as long ago as 11 March. Subsequently, at a hearing to agree the form of the court's order, the defendant raised a fresh issue as to whether the scope of the injunction might be limited on the basis that some sales of infringing goods might fall within the scope of the Crown use provisions of the Patents Act 1977, s.55. The Court considered that this was tantamount to ruling on a hypothetical issue:

"8. Before any act which would otherwise be an infringement ceases to be so by virtue of this section, it must be established that the person doing the act is a government department or a person authorised in writing by a government department. In opening the case at this adjourned hearing, Mr Howe QC [for MMI] assumed that, given that it was being said that authorisation of police forces was irrelevant, the defendants must be seeking to establish that the police forces were a government department. Mr Wilson [for Cellxion] intervened to say that this was not part of the defendants’ case. He said, although there was no evidence at all to this effect, that his clients were hoping to obtain “an authorisation”. There was no evidence as to what steps had been taken to obtain an authorisation, whether the authorisation was intended to be of the defendants or the police forces, and whether retrospective or prospective authorisation was being sought. This position was of course in contrast to the position taken in the skeleton argument that the authorisation procedure had no application to the case except in respect of demonstrations or non-police sales.

9. The change of position by the defendants also had the effect that the question which I was being asked to decide in respect of police forces had become hypothetical. The court does not readily entertain hypothetical questions. One obvious reason is that the question may never arise in fact – as here. Another reason is that it is far better to decide questions of law when in possession of the facts, rather than in contemplation of a variety of different factual scenarios, not all of which may be foreseeable. That is also the case here. If the defendants obtain an authorisation it may, as they point out, be retrospective. Does that render non-infringing the sale of the original machine made at a time when the defendants had no reason to suppose that the Police were authorised? This is not a matter which has been properly argued before me, and arises only because of the different way in which the defendants now put their case.

10. The defendants did not put before me any draft order explaining how the various injunctions, declarations and inquiry were to be limited in the event of an authorisation of the police or the defendants by the Crown. This is perhaps explicable by the fact that, until the hearing, the defendants were contending that authorisation was “nearly inapplicable to this case”. But such a draft order would have to deal with a variety of hypothetical circumstances, and I am by no means certain that the parties would not encounter further disputes over the drafting of such a document.

11. I have come to the conclusion, reluctantly, that it would be wrong for me to attempt to deal with points which might in the future arise if the defendants or the police obtain an authorisation to use the invention from a government department. It is true that one question which will arise in the event that some form of authorisation is obtained is whether use by the Police can be properly authorised under the section at all, given the dual requirement that the use must be both authorised by the department and “for the services of the Crown”. It is plain that these words operate to limit the acts which a government department can authorise ... There are arguments in both directions on this issue in the present case: the claimants arguing for a narrower “organisational” construction, the defendants for a wider “functional” construction. The clamants also take a point on the absence of any notification to them under section 55(7). But I do not think it would be right to decide even these questions until they actually arise".

On the issue of stay of injunctive relief pending an appeal the judge summarised the position succinctly:

"31. There is no right to a stay of an injunction pending an appeal, far less to a stay pending an application for permission to appeal to the Court of Appeal which has yet to be determined. In order to determine whether a stay should be granted the court needs to be put properly into possession of the relevant facts, in order to answer the relevant questions which are (a) what effect would the grant of an injunction, which later turned out ought not to have been granted, have on the defendants? (b) what effect would the refusal of the injunction have on the claimant who has at this stage established his right? and (c) what steps should the court take in order to place the appeal court in the best position to do justice between the parties?"

You can read the judgment in full here.

Poll results

PatLit is delighted to have secured its place as a Global Top Twenty patent weblog, even though it is still only six months old. According to the IP Watchdog Top Patent Blog poll results, PatLit came joint 20th in the "Favourite" poll and 22nd in the "Most frequently read" poll.

The PatLit team would like to thank those people who took the time and trouble to vote for this little venture -- and to congratulate Patently-O, an outstanding patent blog that deservedly came first by a long way in both polls. Finally, thanks to Gene Quinn of IP Watchdog, who went to the trouble of organising the whole thing and who gets all the stick that goes with it.

A hot day for non-EU precedents

The Court of Appeal for England and Wales gave its judgment today in Generics (UK) Ltd v Daiichi Pharmaceutical Co Ltd and Daiichi Sankyo Co Ltd [2009] EWCA Civ 646. For the court, Lord Justice Jacob upheld the decision of Mr Justice Kitchin of 15 October 2008 that Daichi's levofloxacin patent and the SPC which was based upon it were both valid.

Counsel for the unsuccessful appellant sought to tempt their Lordships with some arguably favourable decisions from three far-flung jurisdictions: the United States, Israel and Australia. The Court of Appeal was having none of it. Said Jacob LJ:

"80. Nor am I impressed with the cases cited from outside the EU, including the one from the US cited by Mr Waugh. The reason is simple – they are all concerned with different statutory language, views of the facts and policies. Thus in the Israeli case the registrar specifically had regard to the fact that the EU Regulation was in different language from that in Israel .... On appeal Judge Sobel specifically had regard to the strong Israeli generics drug industry ... and specifically rejected decisions abroad on the basis that they were of "lesser importance" given the specifically Israeli context of the legislation. He cited a decision of the High Court: "Law is a creature that lives in its surroundings and the environment of Israeli law differs from English or American law, even if their formulation is different".

81. The Australian case too was concerned with different statutory language: "containing, or consisting of, the substance" were the key words. It is wholly understandable that all the judges concluded that a racemate "contains" its enantiomers.

82. Nor do I find assistance from the US case relied upon the other way by Mr Waugh. It was Ortho-McNeil v Lupin Pharmaceutical, 30th April 2009 (US District Court of New Jersey, Chief District Judge Brown). A patent extension for levofloxacin was granted under USC §156. But again the language of that provision was different from that with which we are concerned, though it indeed may be somewhat closer to ours than the Israeli or Australian language.

83. So the foreign (i.e. non-EU) cases cut no ice either way. The upshot is that the SPC was clearly properly granted and this appeal should be dismissed".

PatLit suspects that barristers are about as likely to give up citing foreign and presumptively irrelevant cases as British judges are to accept them. This blog wonders which counsel will be the next to cite them in an IP appeal -- and whether it is even wise to do so.

"I think he should've shown a little more emotion"

Writing for Law.com today, Zusha Elinson ("Anatomy of a $1.67 Billion IP Verdict") discusses the massive US $1.67 billion patent infringement damages award in favour of Johnson & Johnson against Abbott Laboratories. The dispute related to Abbott's Humira arthritis drug which, J&J alleged, infringed its own Remicade product.

This account is more anecdotal than legal in its analysis, contrasting WilmerHale's William Lee ("one of the biggest names in intellectual property litigation", even though "Lee" is but three letters long) on Abbott's side with Woodcock Washburn's Dianne Elderkin for J&J. This gave a certain flavour to the Texas Federal Court drama, in which each out-of-towner was assisted by a local lawyer:

"The out-of-town lawyers -- Lee is from Boston, and Elderkin is from Philadelphia -- took about half an hour each, with the Texas lawyers finishing the last 15 minutes on folksy notes".

Precisely what were those "folksy notes"? And were they the subject of case management? We are not told, but presumably both parties thought it prudent to ensure those notes were struck, given that US patent infringement trials are heard before a lay jury. A neutral lawyer, not instructed in the proceedings but merely watching from the gallery, said that Lee's body language didn't help him connect with the jurors:

"He was very knowledgeable, but for about five or 10 minutes he stood there with his arms crossed while he was talking to the jury. I think he should've shown a little more emotion".

Aphorisms were much in evidence. Lee apparently alluded throughout the trial to the Chinese proverb, "Give a man a fish; you have fed him for a day. Teach a man to fish; and you have fed him for a lifetime", to persuade the court of his client's truly original role in developing the arthritis treatment. J&J retailiated with a quotation from the prophet Isaiah, asking the jury, "Come now, let us reason together", as they discussed the quantum of damages.

A side issue in this patent pageant was the quantum of damages. J&J sought massive damages on the ground that Abbott's sales of Humira came to some US$4.5 billion in 2008. J&J initially pressed for $2.2 billion, while Abbott's expert (of whom it was not recorded whether and, if so, how he swung his arms) put the damages at just US$200 million even if there had been infringement. The article continues:

"After five hours of deliberations, the jury went with the Johnson & Johnson lawyers, finding willful infringement and awarding $1.17 billion in lost profits and $504 million in royalties",

following which lawyers on each side gave "generic statements" to the press. Then, presumably, they all lived happily ever after ...

Streamlined or not, two days is all that's needed

PatLit is immensely grateful to Tim Powell (Powell Gilbert LLP) for information concerning an application for directions made last week before Mr Justice Floyd of the Patents Court for England and Wales. In Mobiqa Ltd v Trinity Mobile Ltd, an infringement/ revocation action involving a system for transmitting barcodes to mobile phones, he limited each side to two and a quarter hours of cross-examination in a trial fixed for two days.

It's refreshing to see that the judiciary are prepared to take an action by the scruff of the neck, as it were, and impose some sort of order and structure in order to keep the proceedings realistic. After reviewing the issues in dispute, the low level of complexity of those issues and the matters on which the parties were agreed he continued:

"7. Whether or not one calls these directions a streamlined procedure or not, it seems to me from what I have been told about this action that this action should be capable of being tried within a two day time frame. It seems to me that the issues which are raised are not technically very difficult and given that the case is to be tried in the High Court, it should not occupy more time than is necessary for it to be fairly disposed of. I start therefore with the objective that this case should be capable of being tried within two days.

8. What then is there left to decide? Mr Cuddigan [for the defendant] is right that his clients are entitled to choose between giving disclosure of documents or providing a product and process description. Standard disclosure is a less compact way of addressing the issues of infringement. Standard disclosure means that the claimant has to read the documents which were not prepared with a patent action in mind and dig out from them such material as he considers is necessary to establish its case on infringement. A product and process description is a purpose built document which is designed to facilitate the trial of the action and to release the burden on defendants who would otherwise have to trawl through documents to be certain that they have disclosed all the documents which they are obliged to do. For my part, I cannot in the present case understand why the defendants have not yet decided which course they are going to take. Nor do I understand what considerations they say are material to their decision. Nevertheless, they are right that they have in the normal course a right to choose between the two courses. The date for compliance with their obligations, whether they produce a PPD or whether they go by standard disclosure, will be the same. For that reason, I am not going to force them to produce a product and process description rather than standard disclosure. I would hope that in a case such as the present, it will prove possible to confine the documentation to a well drawn up and concise PPD.

9. The next issue to consider is whether there should be any restriction of cross examination. I am of the view that in a case such as this it ought to be possible to complete the cross examination of two expert witnesses and any factual evidence within a day. That, it seems to me, is the sort of case which this is and for that reason I propose to make an order ... simply limiting the cross examination on both sides to a total of half a day, which I calculate at two and a quarter hours. That of course will be subject to review by the trial judge, but it does not seem to me that whatever the importance of the case to either side, the nature of this particular dispute justifies more than half a day's cross examination. That will enable the case to be decided within the two day window.

10. Both sides have made submissions about the importance of the case to them and the proportionality of the procedure that should be adopted in order to decide the case. For my part, the overriding consideration is the nature of the dispute and where it stands in the overall complexity of patent applications that come before this court. It seems to me that it is nothing like a three to five day case, as the defendants contend. For my part, I cannot conceive of what could be discussed to cause the case to last an entire working week. Once the court is put in possession of the prior art with properly written skeletons, and the issue on infringement is identified, the parties ought to be able to present their closing submissions in half a day each without the need for any elaborate opening. Accordingly, what I propose to do is to make an order in that form, requiring disclosure or a product and process description by 24th August [the trial being fixed for the first available date after 1 December] and limiting cross examination on both sides to two and a quarter hours, allowing for a trial with an estimated length of two days and prereading of half a day to one day".

PatLit expects to see case management of this nature increase as the next generation of judges, for whom case management is integrated into their experience at the Bar, ascends to the Bench.

A quick reminder: last chance to vote

As a new kid on the blog, having only gone live this February, PatLit was excited and honoured to have made the starting line-up for the poll of Top Patent Blogs 2009. The 50 "top patent blogs" according to Technorati and Alexa figures are listed on IP Watchdog's polling card and there are actually two separate polls. The first, for which each voter may cast just one vote, is for the blog which the reader likes the best. The second, for which the voter may cast as many votes as he or she needs, is for the patent blogs which that voter regularly reads.

Voting lasts till 30 June (i.e. today) and the results, once tabulated, will be published at the beginning of July.

PatLit is delighted to be doing so well despite its infancy. At present, in the first poll (the popularity poll) the blog lies in 25th position out of 50, tying with Duncan Bucknell's well-established IP ThinkTank. In the second (the 'which-blogs-do-you-regularly-read' one), PatLit is even higher, at number 23.

If you'd like to vote, or are just curious to read the list of leading patent law blogs, you can visit the polling site here.

Lost property: Bruegel paints an ugly picture

Lost property: the European patent system and why it doesn’t work is the title of an 81-page report by Bruno van Pottsleberghe on behalf of Bruegel, "a Brussels-based think tank contributing to the quality of economic policy making in Europe". Unlike some commentators, the author has had some genuine experience of the system and its impact on innovation: a former Chief Economist of the European Patent Office from November 2005 to the end of 2007, he holds the Solvay S.A. Chair of Innovation and teaches courses related to the economics and management of innovation and intellectual property.

Professor van Pottsleberghe clearly doesn't like the global patent warming phenomenon, which he describes as a "mass spamming" by patent applicants. His report -- which is well worth reading since it pulls no punches, whether above the belt or below -- is inevitably far more focused on the administration and governance side of things than on what happens to patents once, freed from the red tape of application, grant and opposition, they are actually exploited. However, he does have this to say about patent litigation:

"The Community patent and a centralised litigation system

The Community patent and a unified and integrated European patent litigation system are key ingredients for ensuring that the EU single market works properly. The failure to implement them means missed opportunities. It is paradoxical to have a patent office – the EPO – that covers the largest market in the world, and which ensures high-quality examination services, but has not contributed to the development of the largest market for technology due to prohibitive cumulated enforcement costs and a high level of legal uncertainty. If European governments wish to foster innovation and create a suitable environment for fast-growing technology-based firms, the Community patent project should become a prime objective. A centralised patent litigation system would reduce the prohibitive costs caused by parallel litigation and ease the uncertainty generated by differing litigation outcomes (22).

(22) Local chambers for infringement and counterfeiting issues should be created, which would then lead to a central chamber for patent validity issues (and then back to the local chamber for infringement and counterfeiting) that could be used by third countries as well. The system should ensure that at least one member of the local chamber would be part of the centralised process, in order to keep a degree of coherence in the assessment. This is required because during the invalidity proceedings patent holders try to reduce the interpretation of the claims (ie limit the breadth of protection associated with the patent), whereas during infringement proceedings patent holders logically try to broaden the interpretation of the claims".

EPO appeal "invalid for insufficiency"

I've just come across (via PLC's IPIT & Telecommunications weekly email) the EPO Board of Appeal decision in Pipe for filling bottles/Gallardo Gonzalez, T 1581/08 - 3.2.07, 3 April 2009, a curious little decision in which the Board of Appeal refused to admit an appeal because it wasn't supported by proper grounds of appeal. Or, to put it another way, it's not just patents that can be invalid for insufficiency.

According to the Board, sufficiency of grounds of appeal is not a question of form but also one of substance: the mere existence of some argumentation in a document carrying the heading "Statement of the Grounds of Appeal" does not automatically meet the statutory requirement, even if it clearly related to the substance of the decision appealed against. As the Board said in para 3 of its decision:

"... Sufficiency of grounds of appeal is not a question of form, but of substance. The mere existence of some argumentation and carrying the heading "Statement of the Grounds of Appeal" or "Grounds" does not automatically pass the threshold of Article 108 EPC, even if clearly relating to the substance of the impugned decision .... On the other hand, sufficiency is also not a question of volume. There is no minimum requirement as to the length or the fullness of detail of the argumentation which is necessary for an admissible appeal. In this context a distinction is to be drawn between insufficiency for the purposes of admissibility and insufficiency as far as the persuasiveness of the grounds is concerned which - if the arguments are not convincing - results in the dismissal of the appeal...

According to the established case law of the Boards of Appeal the grounds for appeal should specify the legal or factual reasons on which the case for setting aside the contested decision is based. The arguments must be clearly and concisely presented to enable the Board and the other party or parties to understand immediately why the decision is alleged to be incorrect, and on what facts the appellant bases his arguments, without first having to make investigations of their own ...

Further, to be sufficient for the admissibility of an appeal the grounds must be analysed in detail vis-à-vis the main reasons given for the contested decision...

If no or insufficient relationship between the two can be established, the Board considers that the appeal is inadmissible.

The bottom line is that representatives of clients in appeal proceedings should check that the grounds for appeal do indeed actually specify the legal or factual reasons on which the case for setting aside a contested decision is based. These grounds should be analysed in detail in relation to the main reasons given for the contested decision.

In this case, said the Board, there was no analysis of the technical features of the claims -- there was just a vague reference to an unspecified document as prior art, so the grounds of appeal were insufficient.

Woolly patents, global warming and the coming flood

At the meeting of the Organisation for Economic Cooperation and Development (OECD) earlier this month, there was a Roundtable on Competition, Patents and Innovation. The British delegation prepared a paper which touched on, among other things, patent litigation. The paper said:

"16. There have been growing concerns about increased pendency periods for patent applications. The EPO has itself mooted the existence of a phenomenon called “global patent warming”. This problem, according to the EPO, has three elements: “woolly boundaries” for patents, globalisation and increasing pendency periods owing to examination backlogs in patent offices. Can patent strategies that exploit this phenomenon, such as loading patent offices with multitudes of patent applications (often called “patent application loading”), have an adverse impact on consumer welfare? It is a feature of patent law that most patents are never worked and that many patents are never renewed. Many patented inventions have no commercial value, and by implication it is difficult to see how strategic use of the patent application process may in many situations have adverse welfare effects. Furthermore, many firms active in patent-rich markets may well be able to assess the viability of their competitors’ patents and, by extension, their patent applications. Lord Justice Jacob, an English patents judge, has said that what he calls patents with “woolly lines” are the ones that cause the trouble and lead to litigation. Moreover, patent infringement proceedings can only commence once the patent has been granted (though admittedly the infringement suit can extend of course to infringing acts done prior to grant) – as such, even marking items with “patent pending” does not necessarily mean that a competitor will not work the invention or “work around” it.

17. All that said, it may well be that, in some cases, pending patent applications will deter potential competitors from working the invention(s) to which the application(s) relates for fear of an eventual lawsuit, especially if the patent applicant is better resourced than the would-be competitor - who may be unable to risk eventual costly patent litigation even if, at the end of the day, the patent is declared invalid. In such a case, it is obvious that the public may be deprived of the benefits of competition with respect to the invention which is of dubious novelty, inventiveness or other aspect of patentability. Patent application loading may also have welfare implications by raising rivals’ costs, either by increasing the need for firms to conduct more extensive patent searches, assessing a greater number of their competitor’s patent applications, or unnecessarily incurring research and development costs in order to “work around” the inventions to which the applications relate. “Patent flooding” may similarly be problematic when engaged in by a firm that already has a myriad of patents in respect of competing technology: forcing cross-licensing may allow it to leverage its strength and raise prices across the board for the technology while potentially deterring innovation, particularly if the cross-licences include exclusivity provisions. Moreover, where “evergreening” at the end of the patent lifecycle occurs through myriads of applications for perhaps dubious improvement patents, then this may have the clear effect of excluding others from being able to work the technology in question in the most commercially attractive way and from delivering the benefits of competition".

The tangled tale of a pre-TRIPS patent in Spain

PatLit doesn't get to hear much about Spain, so today's note in for International Law Office by Yvonne Sastre of Grau & Angulo was particularly welcome. Her article, "Preliminary Injunction Petition for Alleged Patent Infringement Rejected", discusses a decision last March of the Fourth Commercial Court, Barcelona, to dismiss the petition of Sanofi-Aventis and Bristol-Myers Squibb for interim injunctive relief against various pharmaceutical laboratories for alleged infringements of the Irbesartan patent. You can read the piece in full here.

In terms of European patent history, it's quite absorbing since the patent goes back to 1991 -- when chemical and pharma patents were not yet available in Spain -- and its history takes in the momentous changes resulting from TRIPS. The patent's post-grant history is even more remarkable, but PatLit won't spoil the story. The interesting thing here is to work out the grounds on which this elderly patent might have deserved preliminary injunctive protection on the facts as provided.

Cross-border litigation consultation: little time to act

Christopher Stothers, on behalf of the Competition Law Association, has written as follows:

"Some of your readers may be unaware of the European Commission's Green Paper consultation on the Brussels Regulation 44/2001.

This is a broad consultation on the Regulation, based on a 2007 study. Importantly for IP practitioners, the Commission is considering some pretty fundamental changes to the conflict of laws rules applicable to IP disputes. In particular, there are proposals to deal with Italian or Belgian torpedoes and to reverse the outcomes of Case C-4/03 GAT v Luk and Case C-539/03 Roche v Primus, allowing cross-border infringement actions to proceed even where the validity of the patents is challenged before national patent offices or courts.

The website is here and the consultation closes on 30 June 2009.

An ad hoc committee of the LIDC (International League of Competition Law) was set up to respond to the consultation. The committee is chaired by Rhodri Thompson of Matrix Chambers and I've been asked to participate as a representative of the Competition Law Association, which is the British group of the LIDC. Members of the LIDC are welcome to send me their views, which I'll do my best to incorporate in the response (if I get them very soon)".

PatLit endorses the sentiment expressed by Christopher that anyone who wants to make his or her own submissions had best get a move on, given the short time within which one may do so.

When experts change their minds

In Edwards Lifesciences AG v Cook biotech Inc [2009] EWHC 1304 (Pat), a decision last Friday by Mr Justice Kitchin of the Patents Court, England and Wales (noted by the IPKat here), a question was raised regarding the credibility of an expert witness. In particular, does the fact that an expert changes his opinion undermine his value as an expert? No, according to the judge, who explained as follows:

"9. Professor Rothman is a consultant cardiologist and the Director of Cardiac Research & Development at Barts and the London NHS Trust and Honorary Professor of Interventional Cardiology at Queen Mary, University of London. Interventional cardiology has been the focus of Professor Rothman's entire career and he is recognised as one of its pioneers. He has worked with cardiovascular stents since the early 1980s and over the years has advised many different companies operating in the pharmaceutical and medical device sectors in relation to a wide range of devices used in conjunction with interventional cardiology.

10. Edwards accepts that Professor Rothman is a skilled and expert cardiologist but contends his evidence was partisan, as illustrated by a marked shift in his opinions from those he held in an earlier case between Edwards and a company called CoreValve. I think it fair to say the opinions expressed by Professor Rothman in his reports in the two cases are indeed different in material respects and this formed the basis of a good deal of his cross examination. However, as Cook submits, opinions may change in the course of a case, particularly after cross examination, and I accept that in formulating his reports in this case Professor Rothman may have given further consideration to the abilities of the ordinary skilled person. Importantly, I believe Professor Rothman answered the questions put to him fairly and frankly and I found his opinions cogent and reasonable".

Claim construction post-Protocol amendments: no change

Ancon Limited v ACS Stainless Steel Fixings Limited [2009] EWCA Civ 498, a decision of the Court of Appeal for England and Wales, is what one might call a "minor appeal". The patent which was allegedly (i) infringed and (ii) invalid, depending on which side you are on, was low-tech. The trial judge was not one of the more techie members of the Patents Court and the appellate judgment, inclusive of a lengthy summary of the principles of claim construction, barely topped 30 paragraphs.

The Court of Appeal, consisting with the parties' agreement of an even number of judges (Lords Justices Waller and Jacob) since the third member of the court was unwell, allowed the claimant's appeal against a finding that the contested patent was not infringed [for a note on the first instance decision click here]. Nonetheless the decision contained something of broad value to patent litigators: an affirmation that the new-style Protocol to Article 69 of the European Patent Convention was not intended to have the effect of expanding the scope of infringement so as to include matters that might have remained non-infringing under the old version. As Jacob LJ said at para. 3:

"Ancon say that the Judge construed claim 1 (the only claim that need be considered) too narrowly. ACS say he was right. So the whole question essentially turns on the proper construction of claim 1. In their skeleton argument for Ancon Mr Daniel Alexander QC and Mr James St. Ville tentatively advanced a further argument – that even if the claim as properly construed did not cover the ACS assembly, there was infringement nonetheless by virtue of the amendments made to Art 69 of the EPC and the Protocol thereto in 2000. In the event it is not necessary to consider this argument. All I would say is that has considerable difficulties both because our House of Lords has indicated it makes no difference ... and because a trawl through the travaux préparatoires to the EPC 2000 does not show a clear intention to change the law".

Patents County Court reform: now's the time!

Hot off the press today are the proposals published by the Working Group of the Intellectual Property Court Users' Committee for reform of the Patents County Court, England and Wales. The document is some 24 pages in length. It lists the Group's members, provides both background and executive summary, details the proposals and the legislation that would be required in order to implement them and also bravely addresses some potential difficulties.

The Group is made up of the Patents Court's three most patent-oriented members -- Mr Justice Kitchin, Mr Justice Floyd and Mr Justice Arnold -- together with the Patents County Court's Judge Fysh QC and representatives of both the professions and their clients: Richard Miller QC (for the IP Bar Association), Alan Johnson (secretary to the Patents County Court Users’ Committee), Philip Westmacott (secretary to the Intellectual Property Court Users’ Committee), Alasdair Poore (for the Chartered Institute of Patent Attorneys), Philip Harris (for the Institute of Trade Mark Attorneys) and Tony Rollins (for the IP Federation).

The executive summary helpfully focuses on the essence of the Group's proposals:

"The Patents County Court (“PCC”) was created by Parliament to serve the interests of small- and medium-sized enterprises (“SMEs”) by providing an affordable forum for intellectual property litigation. The PCC has not succeeded in providing this, however. There are two main reasons for this.

The first is the fear of having to meet a substantial, and unpredictable, adverse costs award if unsuccessful. The second is that the procedure of the PCC is itself costly, because it is identical to that of the High Court. Changes both to the costs regime and to the procedure of the PCC are therefore needed. As regards costs, we propose that the regime be altered so as to restrict costs recovery to a scale basis except where the conduct of a party has been unreasonable.

On procedure, we propose that procedural rules should be made specifically for the PCC which are tailor-made to enable affordable litigation of intellectual property disputes by SMEs.

The main procedural changes would be:
 to require parties primarily to present their cases by sequential written
arguments;
 to impose robust case management;
 to permit or require disclosure, experiments, factual evidence, expert evidence and cross-examination only where a cost-benefit test is satisfied;
 to limit trials to one or at most two days.
We also propose that the PCC should be clearly differentiated from the High Court".

Time is of the essence. In order for comments to be carefully considered and then passed on to Lord Jackson by 31 July 2009, the Group asks that you let Philip Westmacott have your comments by not later than 3 July 2009 (you can email Philip here).

You can read the proposals in full here.

Revocation proceedings not an abuse of process even if not commercially justified

In TNS Group Holdings Ltd v Neilsen Media Research Inc. [2009] EWHC 1160 (Pat), a decision of Mr Justice Arnold of 20 May, the Patents Court for England and Wales ruled that the Patents Act 1977, s.72(1), which states that "any person" may apply to revoke a granted patent, means exactly what it says. On this basis, the intention of a claimant in revocation proceedings is irrelevant and it is not therefore an abuse of process to bring a revocation action even if the applicant has no commercial reason to do so. In this case, the patent owner had offered the claimant a licence to use the patent (for television audience management measurement systems) on terms which -- though confidential -- must have been sufficiently attractive for the patentee to be able to argue that the plaintiff would be no better off if the patent were revoked than if it remained in force.

The judge went further: a claimant's declared intention to use validity decision in the United Kingdom as persuasive authority when seeking revocation in other European jurisdictions was legitimate, since consistency of decisions as between European jurisdictions is a desirable end. As he said (at para.26):

"It is commonplace for parties litigating on the same European patent in a number of Contracting States to put before the courts of one Contracting State decisions arrived at in one or more other Contracting States. I do not see that such conduct can possibly be stigmatised as an abuse of process. That is particularly so given that such judgments may come to the attention of courts in other Contracting States in any event. The courts of all the Contracting States are seeking to apply the same substantive law. It would be most unfortunate if anything were to be done which made it more difficult for the courts of the Contracting States to arrive at common answers to common questions".

Having so held, Arnold J in any event refused to stay the revocation action before him, pending the outcome of opposition proceedings in the European Patent Office since the EPO proceedings would take at least two years longer than a final decision in the UK courts.

Translation costs: can anyone top this figure?

Lest anyone imagine for a minute that the cost of translation is a trifling consideration, here's a link to a note in the excellent Patently-O weblog on yesterday's ruling in Ortho-McNeil Pharm., Inc. v. Mylan Labs., Inc. (Fed. Cir. 2009)(Dyk, J.), full judgment here. The title of the note -- "Court Costs: $1,000,000 in Translation Costs Awarded to Prevailing Party" -- gives a good clue to what comes next, since the trial court awarded costs in favour of the successful party that looked like this:

Fees of Clerk $ 75.00
Service of summons & subpoena $ 1,676.81

Court reporter fees:
* Trial transcripts $ 31,225.18
*Deposition transcripts $ 112,911.70
* Witness fees $ 53,939.94

Exemplification & copying fees $ 89,424.20
Interpretation $ 24,512.36
Translation $ 1,011,712.00

Total $ 1,330,401.39

In this action, which involved a US patent for levofloxacin, the Federal Circuit upheld this assessment, with the exception of the cost of the depositions, which were split between this action and another in which the same patent was being litigated.

PatLit wonders whether its readers have ever seen larger translation bills. If you have, please email one of the team or post your figure by using the Comment feature below.

EU to "clarify" parallelism of jurisdiction rules

The European Union's Council Decision of 27 November 2008 concerning the conclusion of the Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters has been published today on the website of the Official Journal.

This Decision addresses parallelism between the Brussels and Lugano Convention regimes on jurisdiction and on recognition and enforcement of judgments in civil and commercial matters and declares that the rules of the Lugano Convention should be aligned with the rules of Regulation 44/2001 (which modernised the rules of the Brussels Convention and made the system of recognition and enforcement swifter and more efficient) in order to achieve the same level of circulation of judgments between the EU Member States and the EFTA States. Annex I of the Decision states:

"DECLARATION BY THE EUROPEAN COMMUNITY

‘The European Community hereby declares that, when amending Council Regulation (EC) No 44/2001 on jurisdiction, recognition and enforcement of judgments in civil and commercial matters, it intends to clarify the scope of Article 22(4) of the said Regulation with a view to taking into account the relevant case law of the Court of Justice of the European Communities with respect to proceedings concerned with the registration or validity of intellectual property rights, thereby ensuring its parallelism with Article 22(4) of the Convention while taking into account the results of the evaluation of the application of Regulation (EC) No 44/2001".

For the record, Article 22(4) of the Regulation currently provides as follows:

"In proceedings concerned with the registration or validity of patents, trade marks, designs, or other similar rights required to be deposited or registered, the courts of the Member State in which the deposit or registration has been applied for, has taken place or is under the terms of a Community instrument or an international convention deemed to have taken place.

Without prejudice to the jurisdiction of the European Patent Office under the Convention on the Grant of European Patents, signed at Munich on 5 October 1973, the courts of each Member State shall have exclusive jurisdiction, regardless of domicile, in proceedings concerned with the registration or validity of any European patent granted for that State".

Evidence in process patent infringement proceedings: can you help?

PatLit publishes this evening a reader's request for information:

"In process patent infringements the problem is that the patent holder has considerable problems in presenting evidence on the process actually used by the alleged infringer. In some cases the reversed burden of proof in TRIPS Article 34 (or rather its domestic implementation) may be applied. This does not however resolve the problem. The alleged infringer is usually more than eager to present evidence (via expert witnesses) that the process used is completely different from the patented process. The patent holder and the court may naturally rely on these expert witnesses, but due to risk of bias, since the witnesses have been called by the alleged infringer, the best way to resolve this evidentiary problem would be for the court to engage an independent expert who would visit the plant in order to find out what process has been used.

Now to my question: I have heard that Mr Justice Laddie may have used this type of independent expert at least in one case where the process was located in India. Have I been misinformed or is there such a case?"

Does anyone know? If you do, can you please post the response below so that all PatLit readers can share it?

The new European patent order -- a little more progress

Following PatLit's item on the latest European Union developments nearly a month ago, The Guardian has since reported that the Member States have agreed to ask the European Court of Justice to rule on whether "the draft plans to cut the cost of defending patents in a new system of courts would be compatible with EU law". The article continues:

"A one-stop system for filing and defending a patent in the EU has been a goal for decades but was thwarted by disagreement over which languages and court structure to use [These are only some of the issues. Others exist too].

Now EU states have been discussing a draft agreement [here] that would set up a unified patent litigation system with the European Court of Justice having a role.

Vladimir Tosovsky, industry minister for the Czech EU presidency, said the ECJ's opinion was needed before making further progress. "If such an agreement is concluded it would be much more effective to settle disputes in this area", Tosovsky told a news conference after a meeting of EU industry ministers [it's definitely preferable to settle disputes concerning the proposed system in advance and at the Commission's expense rather than in arrears and at litigants' expense -- but why can't we know what questions are being asked?].

In March the EU's executive European Commission formally asked member states for a mandate to set up a court system that would have jurisdiction over existing European patents and a future single EU community patent. This would avoid the need for a company to defend a patent in several national courts, a costly process.

By 2013 a unified court system would save an annual 148 million euros to 289 million euros ($202-394 million), the Commission has said. [The bases for calculations of this nature are inevitably conjectural. A new system may cause more litigation, therefore more spend]

"Once the Court of Justice gives an answer to the question then we will determine the further procedure," Tosovsky said.

If the ECJ gives the green light to details such as how many local and regional courts are needed, how to fund them and which languages should be used would have to be thrashed out"

We await further developments with excitement and trepidation.

For more information see IP:JUR here 

Where in the world ...? Second Global IP Index reviews 24 places to litigate patents

Last month saw the publication of the second Taylor Wessing Global Intellectual Property Index. According to the firm's website,

"Based on an innovative analysis of surveys of senior industry figures globally and an array of published empirical data, the index provides an assessment of the best and worst jurisdictions to obtain, exploit, enforce and attack particular types of IP. Where once anecdotes, conjecture and even some prejudice may have informed our view of a particular jurisdiction, we are now able to rely on statistical analysis.

GIPI 1 [= Global Intellectual Property Index 1] covered the three main IP rights of trade marks, patents and copyright in 22 jurisdictions. GIPI 2 provides an update on that, using data from even more respondents (20% more than in GIPI 1), to whom we are most grateful. In addition, GIPI 2 includes:

* coverage of Ireland and Turkey, bringing the total to 24 jurisdictions;

* assessments relating to designs and domain names;

* consideration of regional systems of the Community Trade Mark/OHIM and European patents/European Patent Office (not fully ranked); and

* assessments of the cost-effectiveness of enforcement in each jurisdiction".

On patents, the report had this to say:

"Initial observations

Remarkably, the ratings for all jurisdictions have risen ..., with a narrowing of the margin between the lowest and highest ranked countries. The UK remains 1st and Germany has climbed into 2nd place ahead of the USA.  Australia is now 4th ahead of the Netherlands and Canada. Ireland is a new entry in 8th place sharing the same rating as Singapore. Japan consolidates its mid-field position in 10th place and South Korea moves further up to 12th place.

Turkey is another new entry, in 17th place. Mexico, South Africa and UAE show strong gains in their ratings. The BRIC jurisdictions again occupy the bottom four places of the Patent Index although they have all gained points in their ratings. Russia is now leading this group with the strongest score gain of any country.

The biggest fallers in rank (ignoring the effect of new joiners) were Israel, Spain and Poland.

Analysis

Respondents continue to identify the same factors as key to high scoring as in GIPI 1. These are:
* Relatively speedy and effective procedures.
* Specialist patent courts.
* Well-respected and experienced judges.
It is these, above even cost considerations, that continue to place the UK, Germany and USA in the top 3 positions, both overall and also for each of enforcing, exploiting and attacking patents. ...

It was concluded in GIPI 1 and now confirmed by GIPI 2 that cost considerations play a role, but not a determinative one, in the ratings and ranks. This was somewhat unexpected, given the present adverse economic climate. When asked to score jurisdictions for cost-effectiveness of enforcement, the spread of scores was narrower overall. As with all the other major IP rights, Germany was rated highest for cost-effective enforcement by a clear margin and, as with trade marks, Mexico came 2nd. With virtually identical scores, New Zealand, Canada, France and the UK come next. The USA came last.

To have the UK ranked highly for cost-effectiveness may surprise some. This is not least given the very public criticism made by a High Court judge in his judgment last year against a patentee for racking up £6 million in legal fees on enforcing its patent and defending it against a revocation counterclaim. With losers generally having to pay a substantial part of the winner’s costs, the possibility that those costs can approach this figure is a disincentive to litigation. It has to be said that this case was exceptional, with costs about five times more than an average one. However, it has resulted in the English patent court judges taking a more proactive role in seeking to cap patent action costs. 

Significantly, the USA was ranked bottom, alongside India as the least cost-effective country for patent enforcement (just below China). Aside from cost considerations, England is still perceived as somewhat anti-patent, at least for pharmaceuticals. It topped the score table, by some 40 points, for challenging patents. In fact, this reputation and that score may be less justified now since, in just over 30% of the English cases in 2008, the patent was held to be valid – considerably up on previous years.

In Germany, the EU Enforcement Directive was implemented during 2008 broadening patentees’ rights to information concerning the scope of infringing acts and gathering evidence. In particular, the court practice on granting pre-trial inspection orders was confirmed by statutory provisions added to the German Patents Act Although Germany and the US have tended to be regarded as patentee-friendly systems, they were likewise high scorers for attacking patents.

Other common law countries also saw gains in ratings but not necessarily rank:  Australia is rated highly for obtaining and exploiting patents but drops back a little in the contentious arena. Judges and court users have long recognised a need to streamline the Australian patent litigation system. This has led to the Australian Federal Court to rolling out an intensive case management procedure that aims to limit discovery and expert evidence.

New Zealand increases its rating but falls effectively one place. ... “New Zealand’s patent law is over 50 years old and antiquated for emerging technologies.”

Canada, dropping one rank but with a slight rating increase, is criticised for being the only G7 economy not having patent term restoration. ...

The Asian jurisdictions all see rating gains: Japan and South Korea showed respectable gains in ratings points and retained their mid-table positions. ... [Japan's] specialist IP courts are perceived to have been further improving both their speed and quality of first instance decisions. Singapore’s slight gain may reflect the benefits of recent amendments to its laws aimed at facilitating patent licensing (its highest rate and ranking, 7th, was for exploiting patents). China’s increased score still leaves it bottom of the table. ...

Israel’s drop in rank, but gain in rating, suggests its progress is not as good as others. It has notably remained in this year’s Special 301 Priority Watch List largely because its laws do not, according to the USTR, satisfactorily prevent unfair commercial use of undisclosed test data used in applications for marketing  authorisation and makes no allowance in patent duration for delays in obtaining such authorisation (i.e. there is no equivalent to the UK Supplementary Protection Certificate). Mexico is likewise hauled up for this.

There was again major disparity across Europe for dealing with patent disputes. Score variances of 231 points (attacking patents) and 211 points (enforcing patents) arose between the top and bottom scoring EU Member States. The latter were Spain, Italy, and Poland. The rank variance was from 1st to 20th/21st, so almost the entire GIPI table. To the extent there is a centralized European system at all (for obtaining and attacking patents), the European Patent Office would have been placed 7th overall and slightly higher for obtaining patents. The latter may reflect the implementation of the London Agreement which has assisted in cutting back on the material cost of translation in obtaining European-wide patent protection.
However, responses expressed mixed feelings about the EPO:"

This year's survey is not only wider in scope and deeper in content -- it is also more rigorous in terms of methodology than its predecessor. Taylor Wessing has provided a valuable service to the patent litigation community in commissioning this work and making it available to the critical scrutiny of all. It would be good to think that work of this nature, which reflects the opinions of those who work within the patent dispute resolution system, would be given as much weight as some of the more academic materials on which Europe's leaders are likely to base their next moves towards European patent litigation reform.