Thursday 30 December 2010

Access to confidential patent-litigation settlements

A couple weeks ago, Jeremy made reference to the decision of Mr Justice Floyd granting the application to obtain copies of documents from the court file by a third party (here).

We now read in Dow Jones Financial Information Services:
“Cephalon Inc. asked a U.S. judge Wednesday to order the Federal Trade Commission to release confidential documents regarding drug patent-litigation settlements throughout the pharmaceutical industry.

Cephalon says it needs the documents to mount a defense against an FTC lawsuit that seeks to clear the way for generic competition for the company's top-selling drug, narcolepsy treatment Provigil”.
The origin:
“The FTC sued Cephalon in 2008, accusing it of buying off four generic-drug manufacturers including Teva Pharmaceutical Industries Ltd. in settlements of patent-infringement litigation surrounding Provigil, which generates roughly half of Cephalon's revenue.

The patent settlements, in which Cephalon paid a total of $200 million to the generics manufacturers, forestalled competition from cheaper copycats of Provigil until 2012. The drug generated $828 million in sales for the first nine months of 2010. The FTC has asked a federal judge in Philadelphia to overturn the settlements, arguing they are anticompetitive. Cephalon has denied the allegations”.
Cephalon’s argument:
“Cephalon, of Frazer, Pa., says that in the course of the FTC litigation the commission has cited conclusions from two reports it has issued on patent settlements, including one published in January, titled "Pay-For-Delay: How Drug Company Pay-Offs Cost Consumers Billions." The report estimated drug buyers would save about $3.5 billion annually if Congress banned pay-for-delay deals. The study was based on patent-settlement agreements filed with the FTC between 2004 and 2009.

In a court filing Wednesday, Cephalon asked a U.S. judge to either bar the FTC studies from being used in the case or to compel the FTC to turn over documents supporting the studies. The FTC has so far declined to take either step, according to Cephalon”.
FTC’s position:
“The FTC objected to the release of the confidential agreements, saying they are irrelevant to the case and protected from disclosure by law”.
Even though
“The FTC has notified attorneys for several drug makers including Pfizer Inc., Novartis AG and Bristol-Myers Squibb Co. that as a result of Cephalon's request the commission may be forced to disclose confidential settlement information the companies previously filed with the FTC”.
Would those documents be disclosed?
“The FTC advised the parties they could seek protective orders to block the release.
In a previous letter to Cephalon, the FTC said the request would also be burdensome because the companies that filed the confidential settlement documents must be given an opportunity to ask the court to block their release.

"This process is likely to result in an avalanche of petitions to prevent the disclosure of these competitively sensitive materials," the FTC said".
Cephalon's seems to be exploring a new path. Questions and doubts arise.

What interest for the case would have including third parties settlements?

The FTC seems to “suggest” companies affected to ask the court to block the release. This seems very convenient for those affected. What impact would it have on this claim? (bear in mind that Cephalon asked to bar the FTC studies from being used in the case if documents are not disclosed).

Tuesday 28 December 2010

Be careful what you use your patents for

Last month we made reference to the investigation started by the Italian Antitrust Authority to verify possible abuse of dominant position by Pfizer using patent system, artificially extendeding the patent protection of an active principle in order to prevent new generic drugs entering the market (here).

Now is the turn of the European Commission to continue investigating violation of EU antitrust rules to delay generics entering the market.

At the beginning of December some websites (i.e. Businessweek, Reuters) made reference to several raids at the premises of AstraZeneca and Nycomed in the course of an investigation regarding suspected anticompetitive practices. The European Commission published a quite short Press Release (here), informing that:

“The European Commission can confirm that on 30 November 2010 Commission officials carried out unannounced inspections at the premises of a limited number of companies active in the pharmaceutical sector in several Member States. The Commission has reason to believe that the companies concerned may have acted individually or jointly, notably to delay generic entry for a particular medicine. If confirmed, this could be a potential violation of EU antitrust rules that prohibit restrictive business practices and/or the abuse of a dominant market position (Articles 101 and 102 of the EU Treaty)”.

There may be a link between this raids and the Executive Summary of the Pharmaceutical Sector Inquiry Report by the EU Commission we have talked about in this Blog (here). As we said, we are living strange times, being patent system used to prevent competition.

This would not be the first time AstraZeneca is investigated by EC for this reason. On 15 June 2005, the EC fined that company €60 million for misusing patent system to delay market entry of competing generic drugs (text of the decision (text of the decision here). A short summary of the decision was provided by the EC (here):

From 1993 to 2000 AstraZeneca infringed EC and EEA competition rules by blocking or delaying market access for generic versions of Losec and preventing parallel imports of Losec. AstraZeneca did this by:
• giving misleading information to several national patent offices in the EEA resulting in AstraZeneca gaining extended patent protection for Losec through so-called supplementary protection certificates (SPCs). In this specific case, the patent offices essentially relied on information supplied by AZ and they were not obliged – as in normal patent assessments – to consider whether the products were innovative. AZ’s misleading conduct amounted to an abuse in Belgium, Denmark, Germany, the Netherlands, Norway and the United Kingdom.
• misusing rules and procedures applied by the national medicines agencies which issue market authorisations for medicines by selectively deregistering the market authorisations for Losec capsules in Denmark, Norway and Sweden with the intent of blocking or delaying entry by generic firms and parallel traders. At the time, generic products could only be marketed and parallel importers only obtain import licenses if there was an existing reference market authorisation for the original corresponding product (Losec). The purpose of a market authorisation is the right to sell a medicine and not to exclude competitors. Unlike patents, SPCs and data exclusivity, market authorisations are not intended to reward innovation and the finding of an abuse cannot therefore affect incentives to innovate. Subsequent changes in the applicable EU legislation have made it impossible to repeat this specific conduct.
Losec pioneered a new generation of medicines to treat stomach ulcers and other acid-related diseases – so-called proton pump inhibitors. Losec initially received patent protection in Europe in 1979. During part of this period, Losec was the world’s best-selling prescription medicine.
The Commission’s decision does not prohibit AstraZeneca’s dominant position on the proton pump inhibitor market but the company’s abuse of that position. The fine takes into account that some features of the abuses can be considered as novel.
On 1 July 2010 The General Court essentially upholded the decision of the Commission, reducing the fine to €52,5 million, since “the Commission failed to prove that the deregistrations of the marketing authorisations were capable of preventing parallel imports of Losec in Denmark and Norway, and, a fortiori, that the cessation or the sharp decline of parallel imports of Losec in those two countries was caused by AstraZeneca’s conduct” (Press release of the GC here and the Ruling here). This Ruling has been recently appealed by AstraZeneca (here).

The PCC Pages: a complete list of posts and links

Mistakes at the pre-trial stage can be fatal ...
This autumn PatLit brought you the PCC Pages, a series of short articles, prepared and supplied by Chartered Institute of Patent Attorneys (CIPA) President Alasdair Poore, on the recently re-invigorated Patents County Court for England and Wales, a means of bringing swifter and more affordable justice to litigants of limited means, such as Small and Medium-Sized Enterprises (SMEs).  A new series commences on Tuesday 11 January 2011.  Meanwhile, here's a complete list of the ten posts in the series so far:
PCC Page 1: Introducing the new judge and his revamped court

PCC Page 2: Does the Patents County Court match your needs?

PCC Page 3: avoiding problems at the pre-action stage

PCC Page 4: complementary Alternative Dispute Resolution (ADR) procedures

PCC Page 5: a road-map of costs

PCC Page 6: transfer of litigation from the Patents Court

PCC Page 7: First steps in launching proceedings

PCC Page 8: Limits on the recovery of damages

PCC Page 9: Issuing proceedings

PCC Page 10: Defending a claim

Monday 27 December 2010

Hungary: infringement claim stayed following later patent challenge

In October the Hungarian Supreme Court ruled that, in patent infringement proceedings, a court must suspend the action if the Hungarian Patent Office has not reached a decision in subsequently-commenced patent revocation proceedings. In this case the trial court found that the defendant had infringed the plaintiff’s patent; the defendant appealed to the Metropolitan Court of Appeal on the grounds that he had initiated revocation proceedings in the Hungarian Patent Office. The Metropolitan Court stayed the infringement claim in a decision that was upheld by the Supreme Court.

The patent proprietor had emphasised in the appeal that the defendant not challenged the validity of the patent in the six years of infringement litigation and was deliberately stalling the proceeding. This was not however a significant issue in Hungary's bifurcated system for separating infringement and validity issues.

Source: Petosevic, citing this earlier post on the EPLaw Patent Blog by Eszter Szakács and Anna Sorosi ((Sár & Partners). 

Thursday 16 December 2010

When can a third party gain access to documents from discontinued litigation?

In Pfizer Health AB & another v Schwarz Pharma AG & others [2010] EWHC 3236 (Pat), a Patents Court for England and Wales decision of Mr Justice Floyd, the court had to consider whether a third party -- which was commercially active in a technical field relating to that of certain patents which had been the subject of discontinued litigation -- was entitled to obtain copies of documents from the court file relating to the patents' validity, where the third party maintained it had a legitimate interest in seeing the grounds on which those patents had been attacked.

In this case a law firm, Strickland, sought permission to obtain copies of documents from the court file in both a patent action and counterclaim in an action between Pfizer and Schwarz. The main proceedings, being a claim for infringement of two patents relating to a medicinal compound for treating urinary incontinence, had been stayed and then discontinued with the exception of an application to amend the specification of one of the patents; the amendment proceedings were also discontinued.  Strickland, who represented a client who wished to know of documents having a bearing on the validity of those patents in order to determine its freedom to act in that technical area, sought disclosure of the pleadings (defence, counterclaim and amended counterclaim for invalidity and the grounds and amended grounds of invalidity), applications for directions and documents relating to "experiments".

Floyd J granted the application.  While there was no unfettered right to gain access to documents on the court file in situations not provided for by the Civil Procedure Rules, the function of the requirement to seek permission was a "safety valve" to allow access to documents which should in all the circumstances be provided.  In his view the principle of open justice was a powerful reason for allowing access to documents where the purpose was to enable it to be seen that justice was done.  However, where that was not the purpose but the documents had nevertheless been read by the court as part of the decision-making process, the court should lean in favour of disclosure if a legitimate interest could still be shown for obtaining the documents.

A party who was commercially active in a technical field to which a patent related had a legitimate interest in seeing the grounds on which a patent was attacked, since sight of the documents would help the third party make sensible commercial decisions and might deter him from taking legal action or save him considerable time, effort and money in locating relevant prior art.  The re-amended grounds of invalidity were relevant to this, so Strickland would be permitted to copy them from the court file.

The application for directions had included witness statements from a solicitor acting for the patent proprietor and an expert employed by it.  Since it could be assumed that those statements had been read by or to the court on the application, Strickland would be permitted copies of them too as they had a bearing on the validity of the patent in question and Strickland had established a legitimate interest in having such copies.

There was no reason why Strickland should be permitted to obtain any of the publicly available material exhibited in relation to those statements -- they could be obtained from public sources. While the statement of grounds in the amendment proceedings was likely to be available from the UKIPO, the court was prepared to order disclosure of that too.

The judge summarised the principle of allowing access to the documents in this case as follows.
"28. This is not a case where the third party can contend that it is interested in seeing whether justice was done in the main proceedings, far less monitoring that process while it is taking place. I would, however, accept straightaway that a party who is commercially active in a technical field to which a patent relates has a legitimate interest in seeing the grounds on which a patent is attacked. Sight of these documents will help the third party to take sensible commercial decisions. It may in some cases deter him from taking legal action. In other cases it may save him considerable time and effort and money in locating relevant prior art"

Tuesday 14 December 2010

PCC Page 10: Do I need to get my skates on? Defending a claim

The PCC Pages is a series of Tuesday features on the new regime for litigation before the recently revamped Patents County Court (PCC) for England and Wales, hosted by PatLit but furnished by the Chartered Institute of Patent Attorneys (CIPA). In this post, CIPA President Alasdair Poore explains about defending a claim brought in the PCC.  nb for more about acknowledgement of service, fast forward to PCC 11.

Readers of previous PCC Pages will be aware that Cautious Co issued (and indeed served) proceedings in the Patents County Court last week. The defendant, IPOff Limited, has written a somewhat irate letter to its solicitors:
“I am astonished that I have now received a letter from some patent attorneys acting for Cautious Co., serving proceedings on us, allegedly in respect of infringement of their EPC patent and unregistered rights. They claim the software we use in our Robot Octopus football results predictor infringes Cautious Co’s patent, and that the design of the Robot Octopus has essentially the same appearance as the their own children’s plastic octopus model. This is clearly ridiculous and we need to be as obstructive as possible. I want to make sure these proceedings are very expensive for them.

The proceedings are being brought in the Patents County Court; they say that we have 42 days to reply because we already knew about these proceedings and Cautious Co. made repeated efforts to settle, without any satisfactory response.

Of course I entirely ignored Cautious's threats. They just did not seem serious. You have always told me that software is not patentable, and octopuses are clearly well known animals. The idea that their appearance is in the least bit distinctive is absurd.

I am on holiday for six weeks over Christmas. It is really not in the least practicable for me to respond within 42 days. I had a quick look on the internet and the PatLit Blog and that explained that the time limit for filing the defence was 70 days as Cautious did not give any sensible reasons. Can you bully the patent attorney? Move it to the High Court, then he can’t act; and make it really expensive.”
Legal research on the internet can be fallible: interestingly, unlike proceedings in the Intellectual Property Court (High Court) IPOff need not apparently file an acknowledgement of service (normally required within 14 days of the service of the particulars of claim) – compare CPR 63.7 which introduces the 42 day time limit only where an acknowledgement of service has been filed, with CPR 15.4(1)(a) and CPR 63.22(1). Secondly, if there is a statement in the Particulars of Claim that the claimant “with paragraph 7.1(1) and Annex A (paragraph 2) of the Practice Direction (Pre-Action Conduct”, then the 42 day time limit applies (CPR 63.20(2), CPR 63.23(2)) regardless of whether the defendant thinks enough was done to encourage settlement – the remedy is to apply to the Court for further time (and to provide a rather more convincing reason than that given here). Thirdly, there is always a possibility of applying for transfer – as soon as possible and in any event no later than the Case Management Conference (CPR 63.25(4) – but you will need some convincing reasons: otherwise the Court could decide it, as is its power on all applications, without a hearing (CPR 63.25(3)). The appropriate criteria are set out in PD 30 9(1) and have, of course, been reviewed by HHJ Birss QC in ALK v Meridian Medical Technologies and Dey Pharma [2010] EWPCC 014:

When deciding whether to order a transfer of proceedings to or from a patents county court the court will consider whether:

(1) a party can only afford to bring or defend the claim in a patents county court; and

(2) the claim is appropriate to be determined by a patents county court having regard in particular to:

(a) the value of the claim (including the value of an injunction);

(b) the complexity of the issues; and
(c) the estimated length of the trial.

If this is a case involving SMEs it seems pretty likely that it will stay in place. If the damages or potential damages were very high, then there is a possibility that the case might be transferred on the basis that it is not suitable for the PCC. One clearly has to review that issue on the facts, and the ability to use just a patent attorney could be a good reason for it to be more proportionate to use the PCC.

And even if the PCC were to order transfer (currently only the PCC can order transfer from the PCC (CDPA 1988 s289(1), which has not yet been amended), it might make the order subject to terms which permit the claimant to withdraw without being liable for all the costs incurred up to that time (PD 63 9(2) including “award reduced or no costs where it allows the claimant to withdraw the claim”).

The response to IPOff is that they need to take this issue seriously. Time is short to prepare a proper defence, and the Court will not be very sympathetic if nothing has been done to get things moving.

You have several weeks before you need to learn more. Happy Christmas!

The PCC Pages return on Tuesday 11 January 2011. Meanwhile, a happy Winterval to you all!

Monday 13 December 2010

China’s next five year plan – what does it mean for patent litigation?

China, the world’s manufacturing centre, is still considered by many as the Wild West for intellectual property infringement. But things are changing and indeed have already changed, according to He Fang, of Rouse's Shanghai Office. Chinese electronics company Huawei Technology became the world’s biggest filer of PCT applications in electronic engineering in 2008. And domestic Chinese companies have begun to sue their overseas competitors for patent infringement in China, claiming large sums in damages, a significant departure from what used to be the case. In the well known example of Chint vs. Schneider Electric in 2008, Schneider had to pay tens of millions of RMB to Chint, a Chinese manufacturer, for infringement of a utility model patent.

More recently, in October 2010, in Corun vs. Vale Inco, Vale Inco was ordered by the Hunan Provincial High Court to pay a similarly large amount in damages, nearly RMB 55 million (about £5.3 million) to the local nickel foam manufacturer for infringement of a process patent .

These awards reflect a change in the whole patent landscape in China, and also a growing trend – actions by local patentees to protect their own innovation. But how has this come about? It is informative to understand why.

China has taken an individual approach on its path to innovation. Beginning with Deng Xiaoping’s market reform in around 1978, the Chinese government has set up a series of “Five-Year” Plans. The most recent 11th Five-Year Plan, which concludes by the end of 2010, had innovation as a key element and will by its conclusion have led to a significant advance in independent innovation in China, as well as enhanced R & D competitiveness. President Hu Jingtao, China’s leader, and respective government policies, have clearly indicated China’s eagerness to become a superpower in patents and technology. During the most recent Five-Year plan, however, China paid over 36 billion US dollars in royalties or licensing fees to overseas patentees. While this massive figure reflects the improvement of patent protection in the jurisdiction, it also shows China’s level of dependency on foreign technology. The Chinese government wants this to change and is directing policy towards that.

The next (12th) Five-Year plan commences in 2011 and will be in place when Xi Jingping is likely to succeed President Hu Jingtao as president. The plan is likely to set the following patent-focussed objectives for 2015, according to government publications: the whole patent legal structure will mature ensuring compatibility with other codified laws and regulations; patent filings are expected to exceed 2 million per annum (including invention, utility model and design patents); the number of granted patents filed by Chinese applicants will rank in the top two worldwide; the quality of patents will be improved by increasing the quality of patent examination and the number of examiners; substantive examination for an invention patent will be speeded up to 22 months and the examination period for utility models and designs will benefit from an additionally shortened period of 3 months. These changes will improve enforcement of patents significantly - as Chinese courts do not have jurisdiction over validity issues and may stay an infringement action pending the outcome of a validity challenge, all improvements at the State Intellectual Property Office will help to expedite civil infringement proceedings.

It will be no surprise if these objectives are met within five years as China’s innovation burgeons. And with that, it seems inevitable that there will be an increase in litigation, and more cases like the Schneider and Vale Inco.

Intellectual Ventures' Litigation Adventures about to start

PatLit has been watching with great interest the activities of Intellectual Ventures (IV).  Having spent the past decade stockpiling and licensing patents, this non-practising entity with a difference has now filed its first three patent infringement suits in the United States, naming nine defendants.

Founded in 2000 by former Microsoft Chief Technology Officer Nathan Myhrvold, IV has earned nearly $2 billion by licensing patents; it also funds inventions in-house with its own team of experts. The defendants in these actions were reportedly all first approached by IV and were invited to take licences but declined to do so. According to Melissa Finocchio, Intellectual Venture's chief litigation counsel:
"The company has said, and I would agree, that litigation is not the most efficient way to monetize inventions. But it has always said that litigation is an option that it has at its disposal".
Given IV's fascinating history and commercial track record, PatLit wonders if the company is going to innovate in its patent enforcement strategy too. All will surely soon be revealed.

Source: Further reading: IV's press release here

Bosnia: more patents to infringe, but ...

The European Commission’s Enlargement Package for 2010 includes a progress report on Bosnia and Herzegovina's IP rights. The number of patent applications has increased and the average time needed to process a patent application has decreased from five to two years [this must be good news for patent litigators; since there are more patents that can be infringed, revoked etc, the litigators now have far more patents to practise litigating with].  However, the Commission has concluded that coordination among enforcement bodies at various levels remains inadequate.

Source: "European Commission: Bosnia must improve IP rights enforcement" by Alma Vilic (Petosevic) in World Trademark Review here.

Sunday 12 December 2010

Microsoft v i4i, the burden of proof and the pharma sector

If you think that shifting the burden
of proof is an uphill struggle, try
a few months of patent examination.
 In Microsoft Corp. v i4i Limited Partnership, 598 F.3d 831 (Fed. Cir. 2010) the United States Supreme Court has granted certiorari to address whether the statutory presumption of validity continues to apply when an issued patent is attacked based on prior art which was not on the record before the United States Patent Office (USPTO) during prosecution.

US legislation provides that, in infringement litigation, an issued patent shall be presumed valid. The burden of establishing invalidity of a patent or any of its claims thus lies with the party asserting invalidity. In Microsoft Corp. v i4i Limited Partnership the alleged infringer cited invalidity based on prior art which was not considered by the USPTO before issuance of the asserted patent. The Federal Circuit, noting that an issued patent is presumed valid, said that it was for the alleged infringer to prove invalidity under 35 U.S.C. l02(b) by clear and convincing evidence. However, the Supreme Court has agreed to hear an appeal on the issue of whether an invalidity defence based on newly-raised prior art must be proved by clear and convincing evidence.

According to Pharmaceutical Patent Attorneys LLP, the outcome of this appeal is of great significance in the pharma sector since it poses a potential advantage to generic drug makers, with a concomitant disadvantage to research based drug makers, if the burden of proof required to invalidate a patent in litigation is lowered. Says the organisation:
"Removing the presumption of validity when new prior art is relied on has some intuitive appeal, because the underlying reason for the statutory presumption – deference to administrative agency fact-finding – does not apply when the agency has not had the opportunity to review the relied-on references. On the other hand, deference should apply where the newly-cited reference is merely cumulative to, or redundant to, the art already of record during prosecution. Distinguishing the truly new from the merely cumulative requires a mini-trial; requiring district courts to adjudicate one for nearly every patent case does not help judicial efficiency".
Source: "Supreme Court May Change Burden of Proof"media release from Pharmaceutical Patent Attorneys, LLC

A more detailed appraisal of the certiorari in Microsoft v i4i has been written by the AmeriKat here and here

What can we learn from Korean appeal statistics?

"Trends and Prospects of Recent Trials Before the Korean Intellectual Property Tribunal", by Hyung Geun Ji and Gregory B. Kang (Kim & Chang) gives some interesting insights into how South Korea's bifurcated judicial system operates. The data, according to the authors, with both fewer appeals being filed against the Intellectual Property Tribunal (IPT) and a higher proportion of appeals being dismissed, suggests that the IPT's decisions must be getting better.  As their article states:

... as shown in Table 3 below, the rate of appealing the IPT decisions to the Patent Court has a decreasing trend with 15.2% in 2009. In the meantime, the rate of the Patent Court reversing the IPT decisions more or less decreased to 23.6% in 2009 compared to 24.7% during the recent five years. KIPO concluded that this is due to quality enhancement of the IPT decisions.

As shown in Table 4 below, the rate of appealing the Patent Court decisions to the Supreme Court has no significant changes during the recent five years. Further, the rate of the Supreme Court reversing the Patent Court decisions more or less decreased to 9.7% in 2009 compared to 10.6% during the recent five years.

According to the above statistics, it can be noted that the reliability of the IPT decisions has been gradually increasing and the rate of the Supreme Court reversing the Patent Court decisions is also no more than 10% or so. In view of the foregoing, it may be concluded that parties handling court trials or IPT actions in Korea should make full preparations from the IPT stage which is the first stage of review.

Source: Kim & Chang Newsletter

Saturday 11 December 2010

EU Patent

On December 8, the Financial Times reported that 10 countries have decided to create their own European Patent System:
“10 countries have formally asked the European Commission to go ahead on an enhanced co-operation” basis. This rarely-used procedure allows a group of member states to pursue administrative co-operation, even if all EU countries are not involved. The 10 include Denmark, Estonia, Finland, France, Germany, Lithuania, Luxembourg, the Netherlands, Slovenia and Sweden.

On Wednesday, EU internal market commissioner Michel Barnier confirmed that he had received the letter and that the commission would be pursuing the matter. Officials, he said, intended to present proposals on unitary protection (a single EU patent), which would be based on the latest proposals circulated by diplomats in Brussels”.
As published two days later in Europolitics 13 additional States have immediately shown their interest to join the initiative.

This seems a clever movement to avoid the “Spanish language boycott”.

Spanish and Italian’s Prime Ministers, Rodríguez Zapatero and Berlusconi have immediately protested and opposed to the application of the enhanced co-operation (here), but in my opinion the initiative is 100% legitimate.

If Euro currency or Schenghen rules have not been implemented by all member States, why this initiative shouldn’t be adopted?

And once implemented what would Spain, Italy and Poland do? Would these countries remain out of the system? If they don’t join, they risk to remain offside and many of us would then be forced to move to a different country if we want to do some patent litigation.

Thursday 9 December 2010

The CIPA seminar: Chris Ryan reports

No statements of practice
will be created on the hoof
Chris Ryan, who attended Tuesday evening’s CIPA-organised seminar on the Patents County Court and who penned this report for PatLit, faced delicate challenges (except possibly for the Chair, Vicki Salmon, who was serene throughout).  For the two main presenters, Gareth Morgan (DLA Piper) and experienced patent attorney litigator Nick Wallin (Withers & Rogers), there was the realisation, which they gamely acknowledged, that we were not really there to hear their careful explanation of the rules and the early decisions issued by the court on procedural matters. No, all eyes were on Judge Colin Birss QC, who was sitting alongside them waiting to be cued in for comment on particular issues. And for him there was the difficulty of giving us an indication about the way he planned to run his court, without the perception of informal statements of practice being created on the hoof.

The Judge’s main headline points that Chris picked up were:
• The court was there for patent and trade mark attorneys to use. Any of them who could do an EPO opposition hearing, he said, could do a case in the PCC.
• It was also there for Small and Medium Enterprises, with the emphasis for this purpose on “medium”; a potentially wide user group which would include businesses of greater significance than was sometimes suggested.
• The procedure had deliberately adopted a “paper led” structure with early exposure of each side’s case, including arguments, similar to EPO procedure. So, for example, if a practitioner was in doubt about how much information to include in a Statement of Case he or she should consider how much would be included in an equivalent EPO filing.
• There was no reason why the overlap between the language of a patent claim and a piece of prior art (or an alleged infringement) should not be presented in the form of an integer tick list.
• There would be much more “judge effort” at the case management stage. This was made possible by the greater amount of information that would be available from the new-style Statements of Case (Chris's personal hobby horse intrudes at this stage: this will only work if court administrators cut some slack in the Judge’s workload of trials, once the caseload builds up, to enable him to get right on top of the detail and be able to impose procedural orders on litigants with confidence).
A number of comments and questions came from the audience. But Chris thought that the most incisive contribution was from Keith Hodkinson (Marks & Clerk Chairman) who suggested that persuading Japanese or Korean medium-sized enterprise to prefer the PCC over the court in Dusseldorf would depend on providing satisfactory answers to three questions:
1. What happens if the other side is a much bigger organisation and makes a play to have the case transferred to the High Court?
2. What is the risk of having a (discriminatory) order for security for costs imposed on me?
3. How am I going to have court papers and accompanying advice translated and processed through my company’s decision-making process (possibly a muscle bound one – my words not Keith’s) and then have my instructions translated and passed back to my London advisers, all within the very tight time limits imposed by the rules?
Inevitably the Judge was not willing to provide a definite response to any of the questions, no doubt for fear of those in the audience quoting back at him on some future application whatever he said. And the answer to Keith’s questions will lie, of course, in the track record that the court develops in the next year or two -- not the inevitably general expressions of intent at this stage. The Judge is clearly determined to “make it work” (a phrase he used on several occasions). But before his refreshing approach made Chris too optimistic he had to remind himself of the following, slightly depressing, timeline:
• 2010 – (Chris is playing at least the first part of extra time in his career and) new rules are being tested to address the Jackson Report’s complaint that “SMEs from time to time need to bring or defend IP claims. The costs involved can be crushing”.
• 1970 – (Chris was half way through his articles of clerkship – training contract in less colourful modern terminology – and had just moved from the tedium of conveyancing to the fun of IP when) the Banks Report stated that there had been “concern about the delays, length and expense of patent actions for many years”.
• 1947 – (Chris had just been born and was completely unaware that) the Swan Committee had just reported its finding of “…a widespread, in fact a universal feeling of dissatisfaction” with the method of dealing with patent actions at that time.

Tuesday 7 December 2010

PCC Page 9: The time has come to issue proceedings

The PCC Pages is a series of Tuesday features on the new regime for litigation before the recently revamped Patents County Court (PCC) for England and Wales, hosted by PatLit but furnished by the Chartered Institute of Patent Attorneys (CIPA). In this post, CIPA President Alasdair Poore describes the point at which the fictional Cautious Co. decides to issue proceedings.

"Hang on, we've got 42 days minus
two days for Christmas, one for the
New Year, and throw in a week and
a half when the lawyer's on holiday..."
Says Cautious Co "Right, the time has come. Issue those proceedings. We are not making any headway with our competitors, despite all our explanations and threats. They have 42 days to file a defence – 70 days if you do not think we have provided enough of an opportunity for them to respond. I take it this includes weekends and the holidays; that way we can take advantage of the Christmas break while waiting for their reply.”

Indeed Cautious, who is getting rather more aggressive as time moves on, is right. Time limits over five days include non-working days (CPR 2.8). And there is no reason why the steps required by the Protocol on Pre-action Conduct should not have been carried out by Cautious Co themselves. You will need to advise Cautious as to whether sufficient steps have been taken and whether a reasonable period has been allowed for reply (para 7).  Cautious can then sign the statement of truth in respect of the assertion as required by CPR 63.22 and CPR 63.21.

In accordance with CPR 63.2(2), claims in respect of patents (ie under the Patents Act 1977) and UK and Community registered designs (and semiconductor topographies, plant designs and claims under the Defence Contracts Act 1958) must be started in the Patents Court or the Patents County Court. For the Patents County Court, clearly the preferable route is to start them there, rather than to kick off in the Patents County Court and later seek a transfer. Normally such claims are issued in the Central London County Court (for address see the Patents Court User Guide para 4.2).

The proceedings are started by issuing the “Claim Form” (CPR 7.2). As noted previously, the Particulars of Claim may be included in or with the Claim Form CPR 7.4 or served on the defendant within 14 days after service of the claim form – and no later than the time limit for serving the Claim Form (usually no later than four months from issues: see CPR 7.5, 7.6). When the Particulars of Claim are served they must be accompanied by a form for acknowledging service, a form for defence and a form for admitting the claim. The claim form should be marked “Patents County Court” (PD 63 3.1)

In the County Court, the Court will serve the claim form, or the claimant can choose to serve it on the defendant himself. Practically speaking, serving yourself is often more convenient, as it keeps all the time scales under your control. Note that the time limit for the defendant’s defence runs from the service of the Particulars of Claim (not the Claim Form), assuming that the defendant has acknowledged service.

For other claims which are under CPR 63 (trade marks, copyright, and unregistered rights: see CPR 63.1) the claim may be started in either the PCC or, in any other County Court where there is a Chancery District Registry (see PD 63 16.2 for a list), it can be brought (CPR 63.13). If started in the PCC they must be marked “Patents County Court”, otherwise “Intellectual Property” in the top right hand corner.

Historically all claims which relate to intellectual property issues have then been transferred automatically by the relevant County Court to the Patents County Court. This could produce unforeseen consequences since, if the claim proceeded in one of the non-PCC County Courts, it will be subject to the unamended CPR – no limit on costs, no special procedures, and in principle no limit on damages.  In practice however it seems likely that a case involving substantial damages would be transferred to the High Court, since the normal threshold for cases in the County Court is less than £50,000 damages. It could however, lead to arguments in the future as to which procedure should be applied, and it may therefore be safer to issue proceedings in the PCC immediately – added to which, patent attorneys who do not have litigator rights would not be entitled to conduct the proceedings in the other county courts, including, it would appear, issue of the proceedings.

Northampton County
Court: fabled for its
legendary hi-tech
electronic issuing of
There is also a possibility, used apparently in some cases, to issue proceedings electronically. These are issued by the Northampton County Court (PD 7C), and appear to apply to claims for money only – so not where any other relief is sought, but perhaps the sort of case such as National Guild of Removers and Restorers v Christopher Silveria [2010] EWPCC 015 (discussed here), which illustrates one ideal type of case for the PCC, and also one where a money-only judgment might well be applicable.

Final note: some practitioners have apparently sought to avoid issuing proceedings in the Central London County Court. In practice issuing them in another County Court may indeed work. However, I understand that a primary reason, namely concern over delays in, indeed loss of, documentation getting to the Court, does not now apply to initial proceedings. However, note should be taken – more later – that there are provisions for filing subsequent documentation directly at the PCC (see Patents Court User Guide para 4.5: the St Dunstan’s address is about to change), and failure to do so may result in delays.

Sunday 5 December 2010

Never mind the rigid rules -- be fair to patentees, says judge

Ont Saturday, 4 December, a seminar --  "Comparative Perspectives on Protecting Products by Patents" -- was organised by Justine Pila and Graeme Dinwoodie and held St Catherine's College, Oxford.  Fellow blogger, legal practitioner, podcaster and IP enthusiast Peter Groves, who was present, has recorded some of his thoughts for PatLit:
"The law should concentrate less on rigid rules about claims and more on being fair to patentees having regard to what they have invented, Mr Justice Floyd told a seminar on Protecting Products by Patents in Oxford last Saturday. Contrary to the expectations of opening speaker Daniel Alexander QC's wife, some 40 enthusiasts turned up to discuss the subject (or at least to listen).

Sir Christopher reviewed a series of cases going back to the 1840s on the paradoxical question of establishing the novelty of a known product by reference to a process, by way of the intention of the alleged infringer. It was fascinating stuff, and if it might have seemed arcane it was only necessary to reflect on the speaker's prefatory remarks - an abstract, intangible invention is packaged into claims, giving lawyers a set of words on which they can work. There is, however, he said, a risk of losing something in the course of packaging the invention up in this way - "the tail of the packaging can be seen to be wagging the dog of the invention." In creating a body of rules we might have restrained our ability to give protection to the inventive concept - whereas (as Prof Rochelle Dreyfuss of New York University explained later) in the US it is the scope of patentable subject matter that determines these things, not the claims.

It seems we might be moving towards concentrating on what is patentable and getting less hung up on the language of the claims. Swiss claims and Mobil claims have come and gone, and the Monsanto case (Case C-428/08, Monsanto Technology LLC v Cefetra BV and Others), which provided the inspiration for the seminar, marks an attempt to secure protection under the same rubric. The Court held that Article 9 of the biotech directive did not give protection for the DNA sequence in the soy meal, where it was not doing its herbicide-resisting job, even though it had done that job in the plant and could do it again if the meal were treated in a particular way - a "purpose-bound" approach which limits the scope of protection of the patent".

Thursday 2 December 2010

Summary judgment "rarely appropriate" in patent trials, judge reminds us

In case you missed it,  in this week's big patent case, Virgin Atlantic Airways Ltd v Delta Airways Inc [2010] EWHC 3094 (Pat)Mr Justice Arnold summarised the principles applicable to summary judgments in general terms (as articulated by Lewison J in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch)), then focused on their specific application to patent litigation. What he said was this:
Principles applicable to summary judgment applications

There is no dispute about these. ...[citing Easyair at [15]]
"... , the court must be careful before giving summary judgment on a claim. The correct approach on applications by defendants is, in my judgment, as follows:
i) The court must consider whether the claimant has a 'realistic' as opposed to a 'fanciful' prospect of success: Swain v Hillman [2001] 2 All ER 91;
ii) A 'realistic' claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 at [8].
iii) In reaching its conclusion the court must not conduct a 'mini-trial': Swain v Hillman.
iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10].
v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ 550.
vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] FSR 63.
vii) On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725."
This summary was cited with approval by Etherton LJ (with whom Wilson and Sullivan LJJ agreed) in AC Ward & Son v Catlin (Five) Ltd [2009] EWCA Civ 1098, [2010] Lloyds Rep IR 301 at [24].
Summary judgment in patent cases

It is common ground that summary judgment is rarely appropriate in patent cases. The reasons for this were explained by Dillon LJ in Strix Ltd v Otter Controls Ltd [1991] FSR 354 and Aldous LJ in Monsanto & Co v Merck & Co [2000] RPC 77.
In Strix Dillon LJ (with whom Croom-Johnson LJ agreed) said at 357-358:
"The difficulty that arises where it is sought to strike out a patent action on the ground that there is no arguable case of infringement arises because the construction of a patent, though a question of law for the court, is not a mere question of the judge reading the patent with the assistance of the legal arguments of counsel; it is a much more sophisticated exercise for two reasons. First the language of the patent is deemed to have been addressed by the inventor not to a panel of equity draftsmen but to 'the man skilled in the art', and consequently the court has to consider what the language of the patent would mean not to lawyers, but to the man skilled in the art with his knowledge of the art. Secondly it has long been established that a person does not avoid infringing a patent if he departs from the strict requirements of the claims by what the man skilled in the art would recognise as an 'obviously immaterial variant' – (to adopt a phrase conveniently used by Nicholls LJ in Anchor Building Products Ltd v Redland Roof Tiles Ltd [1990] RPC 283)."
In Monsanto Aldous LJ (with whom Auld LJ agreed) said at 92:
"I do not believe that the judge was right to conclude that the alternative case put forward by the patentees is unarguable upon the assumed facts. Despite the view as to the meaning of claim 20 which I have expressed above, it would not be right, at this stage of the action, to come to any concluded view as to the ambit of claim 20. The patent must be construed as a whole and the claims interpreted according to the Protocol on Interpretation. The subject of the specification is complicated. To come to a concluded view, the mantle of a man skilled in the art must be adopted. That will require the aid of expert evidence. The words of Dillon LJ in Strix v. Otter Controls Ltd which I have quoted, are in my view just as apt today after the Civil Court Practice Rules [sic] came into force as they were when the Rules of the Supreme Court were applicable."
Patent litigants are well advised to read and reread these paragraphs before seeking summary judgment in England and Wales, particularly if the judge is Arnold J ...

Tuesday 30 November 2010

The PCC Page no.8: Last chance to make your voice heard!

The PCC Pages is a series of Tuesday features on the new regime for litigation before the recently revamped Patents County Court (PCC) for England and Wales, hosted by PatLit but furnished by the Chartered Institute of Patent Attorneys (CIPA). In this post, CIPA President Alasdair Poore urges readers to act fast.

Angry scenes as litigants hurl screwed-up pages
of the Copyright, Designs and Patents Act 1988
at members of the consultation team ...
The consultation on the proposed limit on recoverable damages (£500,000 plus interest) in the Patents County Court finishes on 3 December [that's this Friday]. Some commentators are in favour; others want a lower limit; and some want a higher limit – or no limit at all.

Lets clear up some misconceptions. Understanding them will come in useful later.

First, when a damages limit is introduced – I should be open-minded and say “if” – that means what it says (mostly at least): it is a limit on recoverable damages. It does not mean that a case in which the value of business is higher cannot proceed in the PCC, but only that if you want damages and the other party does not agree, then the maximum you can recover is £500,000 + interest. An injunction might worth much more than £500,000. That does not mean the judge cannot award an injunction or that the case cannot proceed in the PCC.

Secondly, it does not prevent you from bringing a claim in which the damages are more than £500,000 in the PCC. It just means you will have to abandon the excess and the Court has no jurisdiction to award more – (Copyright Designs and Patents Act (CPDA) s 282(2)).

Building on this, because the power to make the rule comes under the CPDA 1988, the judge does not have a discretion to award a higher amount than whatever limit is put in place, unless the parties agree. In any event it would simply lead to lots of special pleading. But, it is open to the parties to agree a higher limit (CDPA s 288(4)) – all they have to do is to follow the approach in that section.

I should add, to avoid any misunderstanding, that the value of the case may be one of the factors taken into account in considering whether the case is appropriate for the PCC, so the £500,000 limit would not be altogether irrelevant (PD30 9.1(2)(a))

Should the limit be lower? In the writer’s opinion, the answer is a pretty clear no. If it were lower, it would mean that the cap on recoverable costs would start to look disproportionately high for almost all cases in the PCC, and that cases just above the limit would often have disproportionately high costs in the High Court. Let's say that the limit was £250,000. Parties seeking damages of a little more than £250,000 would have to proceed in the High Court, where they could expect costs of, well maybe well in excess of £250,000 (and a possible exposure to the other side's costs of the same magnitude). This does not make sense, even if you factor in the value of an injunction, which in an IP case might be several times the value of damages.

What of a higher limit? The last argument suggests the limit could be much higher. However, in an average intellectual property case with damages of £500,000, the damages might cover a couple of year’s infringement. An injunction could push the total value of the claim quite a lot higher. A lot is at stake. Parties will start to spend more on preparation and strategy, and develop ways of complicating the procedure, and arguing for complicated procedures. That is not an attractive prospect for the PCC, especially at this stage.

There is no perfect answer. One possibility was to look at value. As some commentators have said, it is very difficult to assess value. For that reason opting for a definite figure, albeit imperfect is a good idea.

After all, the new rules make some cases worth litigating when they were not before. They do not stop anything which could have been done before. It's much better to start with a limit which provides a real opportunity for SMEs to bring some of their cases before an affordable court, rather than to clog up the court with applications for transfer and complicated cases with which parties seek to complicate the procedures. That is a view supported by the decision in ALK-Abello v Meridian Medical Technology [2010] EWPCC 014 (noted on PatLit here). Lets give it full support.

My vote is for the proposed limit.

By the way, there is an additional twist. The CDPA 1988 does not allow a limit to be applied to cases which are not patent and design cases. However, it is likely that a power under the Courts and Legal Services Act 1990 will be used to create a corresponding limit on trade mark and copyright (and other IP) cases in the PCC.

Monday 29 November 2010

Scottish springboard leads to account of profits

PatLit sends its most grateful thanks to the invaluable Susan Snedden (Associate, IP & Technology, Maclay Murray & Spens LLP) for the following note on a piece of Scottish litigation that raises extremely interesting issues relating to relief for infringement: Bayer Cropscience KK v Charles River Laboratories Pre-clinical Services, Edinburgh Limited and Albaugh Inc [2010] CSOH 158, a decision of the Scottish Court of Session to the effect that springboard relief for patent infringement is available in terms of an account of profits as well as damages [note: the "springboard" effect is caused by an infringer using his infringement as a springboard to leap ahead of other traders by entering the market before them]. Previous UK springboard relief authorities related only to damages/injunctions. Says Susan:
"This case provides, for the first time, useful confirmation that a springboard claim can be made in respect of an accounts of profits as well as damages, under the Patents Act 1977, s.61(1)(d). It also demonstrates that the Scottish Court of Session’s debate procedure can be used effectively to focus the issues in dispute and thus save costs. For example, had the defender’s argument been successful, there would have been little benefit in incurring the expense of a full trial as no remedy would have been available.

The parties to the dispute were Bayer Cropscience (the pursuer/claimant), Charles River Laboratories (the first defender/defendant) and Albaugh Inc (the second defender/defendant). Bayer was the proprietor of a European patent which expired on 31 March 2006 and the equivalent US patent, which expired on 21 January 2006. Bayer never sold the patented product on its own, and only once incorporated it into an end product. Albaugh was a competitor of Bayer Cropsciences.
Around a year before expiry of the patents, Albaugh applied to the US Environmental Protection Agency for registration of an insecticide containing the patented product as its active ingredient. The EPA required chemistry test data before it could register the product, so Albaugh instructed Charles River to carry out the necessary tests and arranged for the patented product to be imported from China to Scotland for this purpose. Albaugh did not dispute that these acts amounted to patent infringement. However, Albaugh's position was that the products were not placed on the market until the expiry of the European Patent in April 2006.
Charles River settled their involvement in the case extra-judicially.
A debate (this is the term for a Scottish preliminary hearing on a point of law) then took place at which Bayer argued it should be entitled to a springboard account of profits for Albaugh’s sales in 2006, 2007 and 2008. Albaugh argued that the court had no power to order a springboard account of profits. Albaugh's profits were derived from lawful transactions, namely the post-expiry sales, rather than the infringing acts. The infringing acts were not commercial transactions capable of generating profits. They were no more than a precursor to profit- generating activities which all occurred after expiry of the patent.
In response, Bayer noted that Albaugh did not dispute that the purpose of the infringement was to allow it to enter the market earlier than it otherwise would have done on expiry of the patent. Bayer pointed out that Section 61(1)(b) of the Patents Act 1977 specifically allows the Court to order an account of the profits, "derived by [the infringer] from the infringement." In this case Albaugh had generated unfair profit which, but for the infringement, would not have been generated. The fact that the profits were achieved after the expiry of the patent was of no significance. The matter should go forward to a Proof (full trial) to give Bayer an opportunity to prove that the profits were derived from the infringement.
Lord Malcolm reviewed the case law in respect of springboard damages/injunctions. In his view the authorities supported the validity of Bayer’s claim for an account of profits. The basic purpose of the remedy sought by Bayer was to deprive Albaugh of unfair or unjustified profits. Albaugh deliberately used the invention to obtain an unfair advantage over its competitors and then exploit it for financial gain. The fact that the sales were lawful acts did not automatically sever the chain of legal causation between the infringements and the profits.
The matter will now go to Proof (trial). It will be interesting to see what evidence Bayer leads to support its claim that the profits not just in 2006 but also in 2007 and 2008 derived from the infringing acts. Their position is that, had it not been for the infringement, Albaugh would not have been ready to launch on to the market until the end of 2006 and also that, as a result of its early entry into the market place, Albaugh achieved enhanced levels of sales in 2007 and 2008".
Thanks so much, Susan.

Costs order knocks spots off pimple patent

Pimpled ... but not
the finished product
PatLit thanks Richard Kempner (Kempner & Partners) for drawing its attention to his firm's note on a recent Patents Court for England and Wales decision, Select Healthcare v Cromptons [2010] EWHC 3055 (Pat).  In this case Mr Justice Mann emphasised how important it is for a claimant to provide proper details of its claim, in order to allow a defendant to understand the case against it.  In this action the claim was for infringement of a patent relating to a patient slide sheet with a “pimpled finish”. The defendant asked for clarification, including details of what was meant by “pimpled finish”, and where the pimples were alleged to be found on the defendant’s product. Following a refusal by the claimant to provide any such information, the defendant applied to the court for an “unless order” (that unless the requested information was provided, the claim should be struck out).

Mann J did not strike out the claim, but he did order the claimant to provide a statement of case and an expert report explaining it.  Most unusually the judge also awarded the defendant costs on the higher, indemnity, basis, on the ground that the claimant had wilfully refused to disclose its case until compelled to do so at the hearing.  Said the judge
"13. In my view this is a case in which the claimants have given every impression of playing games in this action. I do not need to make a finding as to whether are not they actually were playing games but they have certainly given that very strong impression. The claimants have also given the very strong impression that they do not know what their case is and they have been reluctant to be pinned down, and have demonstrated a tendency from time to time to change their case.
14. There is nothing inherently wrong with changing a case; it happens all the time in these courts. When it happens in the manner in which it happened in this case and with decreasing rather than increasing clarity as to what the case is, then that is a practice which must be stopped. It has been said more than once, particularly in the context of patent litigation, that it must be conducted efficiently, properly and with a proper regard to costs. All litigation must be conducted with a proper regard to the need to disclose what a case is so that the other party can understand it and meet it.
15. In this respect the claimant has, in my view, fallen lamentably short of the standards required of patent litigants in this court. I am quite satisfied that the claimant has brought this application on itself and has brought itself close to having its claim struck out and, therefore, as a matter of principle the claimant ought to pay the costs of this application.
16. I also have no doubt that the claimants should pay the costs of this application on an indemnity basis. The wilful, as it seems to me, refusal to disclose its case until asked point blank by a judge of this Division what the case was and their reliance on totally misconceived technicalities arising out of the patent, and a reliance on an assertion that the defendant really ought to ask the right questions, are, in my view, rather remarkable in the context of the litigation that I have seen. It is simply not the way in which litigation ought to be conducted and is plainly, in my view, within the category of conduct which falls to be penalized by an award of indemnity costs. I therefore order that the claimant pay the costs of this application on an indemnity basis".
Claimants always face the challenge of having to provide sufficient information to comply with the Civil Procedure Rules while striving as far as possible to “keep one’s powder dry” as to certain aspects of a claim. A claimant is not required to disclose full details of its entire case before trial, but it is clear in this case that the judge believed the claimant had overstepped the mark, penalising it by ordering indemnity costs.  The moral of the story, says Kempner, is that a claimant, facing a request for clarification and/or further information from the defendant, must ensure it has provided proper details of its claim before it can safely decline to provide the requested clarification and/or further information.

Friday 26 November 2010

Recent publications

Patent Law in India, by M. B. Rao and Manjula Guru, is a bit of a curiosity.  Just out this September, this book is part of Wolters Kluwer's Law & Business series (web page here).  The authors are, respectively, a senior consultant on tax, corporate and arbitration issues and member of the Law Commission of India, and a law-and-economics consultant, with an interest in the agricultural sector.  There is nothing in the biographical details of the authors, or in their acknowledgements to those who have assisted them, to suggest that they have any practical experience in patent law or any specific first-hand experience of the subject.   This is no crime: the fact that an author has extensive professional expertise in an area no more guarantees the high quality of his writing in that area than the absence of such expertise disqualifies him from producing a good book.  However, in an area such as patent law, a purchaser preparing to spend US$196 on a book may wish to be reassured that, at that price, he is purchasing more than the authors' thoughts.

As for the book itself, its ambit is set out clearly by the publishers:
"The 2005 Amendments to the Indian Patent Act expanded the scope of patentability by (among other provisions) allowing patenting of new substances brought about by incremental innovations. What exactly is an ‘incremental innovation’? And how does the amended Act alter the legal definition of patentable subject matter and restructure the essential criteria - utility, novelty, no prior publication, and non-obviousness - around which patent law revolves?

This masterful analysis of patent law in India, by two of India’s most distinguished jurists, investigates thoroughly the scope of the possible answers to these crucial questions. Recognizing the character of the revolution taking place in patent law globally under the regime of multinational corporations - and India’s central role in its development - Dr. Rao and Dr. Manjula Guru’s analysis focuses on the patenting of substances arising out of advances in biotechnology, genetically engineered products, and computer-related devices. But they do not neglect the practical details of application, registration, and proceedings as constituted under the amended law; in fact, this book is the most detailed and insightful procedural and practice guide to the subject we have".
The publishers conclude with the following boast:
"No legal, administrative, or business professional in any of the many areas touched by patent law - not only in India, and elsewhere - can afford to bypass this deeply-informed study of a topic of huge global significance. Corporate counsel seeking an Indian patent will find no better guide".
It is plain from the book's content that the authors are more highly focused on issues such as policy regarding what should be patentable and how patented matter should be made more widely available under mechanisms such as TRIPS than on the detail of procedural matters and patent litigation itself.  Once the large amount of comparative material, looking at US and UK/EU law and practice, is stripped out, it would appear from this volume that Indian patent law has much less substance to it than a reader of SPICY IP might imagine.  This reviewer does not feel that this book matches the claims made for it and hopes that, when a second edition is published, both the title and the publisher's blurb more closely match its contents.

The eight-times-a-year Journal of Business Law (JBL), published by Sweet & Maxwell, carries an interesting article entitled "Arbitration of Patent Disputes in Turkey" by Armagan Ebru Bozkurt Yüksel. This piece looks at public policy, jurisdictional and procedural issues and will be handy for anyone facing a contentious patent matter to settle in Turkey.  The author's critical appraisal of patent arbitration rules and their operation in Turkey is likely to leave readers with the strong impression that, unless the matter is a simple one and the parties can keep firm control of costs, logistics and enforcement, litigation before the courts (Turkey's Decree-Law No. 551 on the Protection of Patent Rights, in force from June 27, 1995, provides for special courts for the resolution of patent disputes).

Wednesday 24 November 2010

Solvay cross-border injunction dispute heads for Court of Justice ruling

Via Paul England (Simmons & Simmons) comes news of a reference to the Court of Justice of the European Union (CJEU) for a preliminary ruling on the controversial question of cross-border injunctions in cases of patent infringement.  As Paul explains:
"An important reference has been made ... by the District Court of The Hague in the Netherlands. It essentially asks whether the District Court can issue cross-border injunctions for patent infringement under the provisions of Regulation 44/2001 on the Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters.

Details of the judgment are yet to emerge in English, and the exact questions to be referred to the EUCJ have not been decided. However, if the CJEU agrees with the District Court, certain consequences may follow:
• Forum shopping could again become a feature of European patent litigation, in particular:
-- The Dutch ‘spider-in-the-web doctrine’, seeking cross-border injunctions in the Dutch courts, may be alive and well as a strategy;
-- So-called ‘Torpedo’ actions, where suits are strategically filed in countries with slow proceedings, may again become popular and
-- The complexity of European patent litigation may actually be reduced in some circumstances, because of the ability to obtain an injunction covering a number of European countries in one court. 
Whatever the exact scope of the referred questions, the Opinion of the Advocate General and then the implications of the decision of the CJEU on this issue is likely to be deliberated upon for many years to come.
The Background
The referral arises from Solvay v Honeywell Fluorine Products Europe (Case No. 09-2275). It concerns Solvay's patent for a method of preparing 1,1,1,3,3-pentafluoropropane, in force in a number of countries. Solvay alleges that its patents to this method are infringed in several countries by three Honeywell companies. Two of these companies are Dutch and one is Belgian.
In respect of the Belgian defendant, Solway argues that, because the Defendant infringes in more than one country, all infringements should be dealt with by the District Court to avoid irreconcilable decisions between the courts of various jurisdictions (further to Article 6(1) of the Regulation). 
The District Court agrees. It has decided that a further Article of the Regulation, Article 2, gives it the jurisdiction to rule on a defendant that is based in the Netherlands (the Dutch Honeywell company) and also to rule on the infringement of foreign patents by that defendant. Therefore, in order to avoid irreconcilable decisions under Article 6(1), the District Court says it follows that it must also be able to rule on the infringement of the same foreign patents by a foreign defendant (in this case the Belgian Honeywell company).
Hadn’t Roche v Primus settled this issue already?
Not according to the judgment of the District Court. In outline, in Roche v Primus (Case C-539/03, noted here by the IPKat) the Defendants were infringing patents in their respective jurisdictions only. Therefore, the ECJ (so named at the time) held that, further to Article 6(1) of the Regulation, the infringements must be litigated separately, in those respective jurisidictions. Whilst decisions on infringement of parallel patents in respective countries might be different, they would not be ruling on the same infringement with exactly the same facts, as would be the case here. In Roche v Primus there was therefore not the same risk of irreconcilable decisions".
Many thanks, Paul, for this information.  We look forward to further news as it arrives.