Wednesday 29 September 2010

Contract appeal won't get to Federal Circuit where infringement is not an issue

"No infringement dispute, no appellate jurisdiction in hypothetical breach of contract claim" is the title of a note by Finnegan attorneys John J. Thuermer and Bart A. Gerstenblith which will soon be published in the Journal of Intellectual Property Law & Practice. It eplains the ruling in Laboratory Corporation of America Holdings v Metabolite Laboratories, Inc., 599 F.3d 1277 (Fed. Cir. 2010) that an issue of patent law must be disputed in a suit based on state contract law in order for the Federal Circuit to have appellate jurisdiction.

This note has been chosen as one of a small number of Current Intelligence analyses which are made available free of charge to non-subscribers on account of their general interest or importance. You can read it in full here.

Tuesday 28 September 2010

Patent dispute resolution: three current articles

In "IP litigation or ADR: costing out the decision", Journal of Intellectual Property Law & Practice (2010) 5(10): 730-735, Peter Jabaly (Rutgers Law School) writes about the cost of settling IP disputes. His abstract reads as follows:
"Legal context. It is currently appropriate to discuss alternative dispute resolution (‘ADR’), while the global economy continues to experience a deep and widespread recession. This is because businesses mired in IP disputes are increasingly reluctant to expend ever-dwindling resources on protection and enforcement of their IP rights. In a similar vein, international patent and trade mark filings in 2009 have fallen by nearly 5 and 17 per cent, respectively ...  Meanwhile, the IP field has not fully embraced ADR: the percentage of arbitrations has rapidly increased in other areas but not in IP, where it has remained stagnant ...
Practical significance. A conventional litigation is long and costly, whereas ADR is relatively inexpensive and very fast. In the USA, the average cost of patent litigation is $2M, trade mark litigation is $600K, and other types of IP litigation average between $500K and $800K. This, of course, does not include the price of an appeal, which may add another $2M to patent litigation. The time involved is possibly more astonishing: the average IP litigation lasts 2 years. Add an additional year for an appeal ... ADR can take as little as 5 or 6 months. If the time difference would come at a significant cost to your client, then consider ADR, preferably in the original contract.
ADR is cost-efficient due, in large measure, to the curtailed procedure. In the case of arbitration, an appeal is rare, only the most serious cases alleging fraud get a second-look. Furthermore, ADR is confidential. For public firms, litigation could affect their ability to raise capital or acquire lucrative contracts because of the requirement that all litigation be disclosed to shareholders or potential shareholders".
Non-subscribers to this journal can access this article by clicking here and scrolling down to Purchase Short Term Access.

The September 2010 issue of Managing Intellectual Property (MIP) carries an article entitled "Where to win: patent-friendly courts revealed" by two Finnegans authors, Michael Elmer and Stacy Lewis. This handsomely-illustrated piece provides data and commentary drawn from Finnegan's Global IP Litigation Project and, while in the case of some countries the volume of data is relatively small, the methodology is helpfully explained.  The authors add, with regard to patent litigation in China: "No objective data exists as to what percentage of wins is actually enforced in practice" -- an observation which litigants would do well to bear in mind.

Not yet published in the Journal of European Competition Law & Practice (JECLAP) is "The AstraZeneca Judgment: Implications for IP and Regulatory Strategies" by David W. Hull (Covington & Burling, Brussels).  According to the abstract,
"In a judgment issued on 1 July 2010, the General Court largely upheld the Commission's decision imposing a €60 million fine on AstraZeneca for abusing its dominant position by engaging in certain IP and regulatory strategies aimed at protecting its product against generic competition and parallel imports from other Member States".
In his concluding comments the author says:
"While the Commission has remained openly sceptical about the merits of reverse payment patent settlements in the pharmaceutical sector, it has generally adopted a cautious tone regarding possible enforcement actions involving other IP and regulatory practices that were examined in the course of the sector inquiry. The AstraZeneca judgment could lead the Commission to alter its tone and pursue a more aggressive enforcement strategy. The initial target of enforcement actions would likely be pharmaceutical companies, but companies in other industries that rely heavily on IP and regulatory strategies to protect their markets could eventually find themselves in the Commission's crosshairs".

Tuesday 21 September 2010

Post-expiry saisie-contrefaçon: only an issue in France?

A Current Intelligence note on a recent French decision, "Validity of a ‘saisie-contrefaçon’ carried out after the expiry of the patent", by Marianne Schaffner and Romain Viret (Linklaters) will be published in a forthcoming issue of the Journal of Intellectual Property Law & Practice (JIPLP). The full text of this note is available on the jiplp weblog here.  According to the authors, this ruling is applicable mutatis mutandis to any other expired IP right.

PatLit sees nothing wrong in principle with allowing any search and seizure process to take place after a patent or other IP right has expired, so long as that right was still in force at the time of the alleged infringement.  Has this issue caused any problems in other jurisdictions, and are there any countries in which the expiry of a patent right is a bar to the local equivalent of saisie-contrefaçon? Readers are invited to comment.

Sunday 19 September 2010

When the sweet taste of victory turns to ashes: post-appeal remittal

This tale has just reached PatLit from a reader who practises before the European Patent Office:
"I recently got an Appeal Board Decision entirely in my favour, the Examining Division being slapped down rather brusquely for not having properly considered our detailed submissions or given reasons for their decision.  The appeal fee was refunded (which is rare). I’d be in a good mood you might think. I was -- briefly.
The Examining Division didn’t do a full examination.  Accordingly the Appeal Board wasn’t in a position to pronounce on the case and it got remitted to the first instance. So my client now has two weeks before the 1 October deadline to decide whether to spend about £10,000 to file a divisional as a precaution, and we now wait to see if they do a proper job this time round -- and wait to see what happens for another few years.
The EPO practice of charging applicants for storing a file ever-increasing amounts while it fails to progress prosecution is somewhat inequitable and the need for backdated annuities on divisionals, whereby one is charged what the EPO would have charged to store it had you filed it earlier, is even more so.  In the past, when one filed at the end of the procedure when at least one knew what had happened first time round it wasn’t so bad. But now, having to pay a premium to file simply against the event the EPO doesn’t do what one might expect in examination seems much more painful. All round the world clients faced with the divisional deadline are experiencing this; my case -- where an Appeal slam dunk win was made entirely meaningless by the rule change -- just brings it home harder.
Somehow the balance at the EPO doesn’t feel quite right these days".
PatLit is happy to hear comments from practitioners, and indeed from the EPO itself, on this issue.

Thursday 16 September 2010

Patently eligible for $130,000

PatLit does not often repeat material found on other weblogs, but it notes an attractive proposition which it has just spotted on the excellent Patently-O under the title "Stanford and Samsung offer $130,000 in Prize Money for Articles on Patent Remedies". Dennis Crouch adds: "All Patently-O readers are eligible". It seems, on a casual inspection, that PatLit readers are eligible too. Go for it!

Tuesday 14 September 2010

Yesterday's answers today: Court of Justice nails Akzo privilege claim

Akzo Nobel NV, the world’s largest manufacturer of paints, lost an appeal today over its assertion that it was entitled to attorney-client privilege in a case that could have curtailed the investigative powers of European Union antitrust regulators.  In Case 550/07 P Akzo Nobel Chemicals Ltd. and Akcros Chemicals Ltd. v the Commission of the European Communities, the Court of Justice of the European Union rejected Akzo’s bid to have legal privilege extended to in-house company lawyers during antitrust raids. The crucial statement of the Court appears in paras 47 to 49 of today's ruling:
"47 Notwithstanding the professional regime applicable in the present case in accordance with the specific provisions of Dutch law, an in-house lawyer cannot, whatever guarantees he has in the exercise of his profession, be treated in the same way as an external lawyer, because he occupies the position of an employee which, by its very nature, does not allow him to ignore the commercial strategies pursued by his employer, and thereby affects his ability to exercise professional independence.

48 It must be added that, under the terms of his contract of employment, an in-house lawyer may be required to carry out other tasks, namely, as in the present case, the task of competition law coordinator, which may have an effect on the commercial policy of the undertaking. Such functions cannot but reinforce the close ties between the lawyer and his employer.

49 It follows, both from the in-house lawyer’s economic dependence and the close ties with his employer, that he does not enjoy a level of professional independence comparable to that of an external lawyer".(emphases added)
This actions was triggered after Commission officials, back in 2003, seized documents, including emails, notes and memos, which Akzo said were privileged communications. While this action did not specifically relate to patents, the ruling will affect the client-attorney relationship which had been presumed to exist between employers and in-house patent attorneys who, by the very nature of the patent grant, are in a position to affect the scope of their employer's market position and conduct in respect of it.

The Confederation of British Industry has swiftly condemned the ruling, which has predictably been welcomed by the competition authorities.

Thanks are due to David Kuper (Forsyth Simpson) and Stephanie Bodoni (Bloomberg) for information provided.

Sunday 12 September 2010

Software savvy patent attorneys, where are you?

From Chris Torrero comes this link to "A Statistical Analysis of the Patent Bar: Where are the Software-Savvy Patent Attorneys?", a 46-page academic study with profound practical implications.  The triumvirate of authors consists of Ralph D. Clifford (University of Massachusetts School of Law at Dartmouth), plus Thomas G. Field Jr. and Jon R. Cavicchi from the University of New Hampshire School of Law -- the rebranded version of the Franklin Pierce Law Center.

The article is published in the North Carolina Journal of Law & Technology, Vol. 11, p. 223, 2010, and its abstract runs like this:
"Among the many factors that impact the declining quality of U.S. patents is the increasing disconnect between the technological education patent bar members have and the fields in which patents are being written. Based on an empirical study, the authors show that too few patent attorneys and agents have relevant experience in the most often patented areas today, such as computer science. An examination of the qualification practices of the U.S. Patent and Trademark Office (“PTO”) suggests that an institutional bias exists within the PTO that prevents software-savvy individuals from registering with the Office. The paper concludes with suggestions of how the identified problems can be corrected".
While the data, the cases and the reasoning is directed exclusively to the United States, there are plenty of messages for other jurisdictions too.  However, it is inevitable that a disconnect will exist not just in software patent writing but wherever new technologies are discovered (I seem to recollect a similar phenomenon in the pioneering days of biotech and gene science).  In terms of timing, people who write patents and people who examine them should ideally be possessed of the same skills at the same time.  So far as litigation lawyers go, however, there can be a time-lag which enables an element of catch-up -- the examination and grant process must be completed before infringement litigation makes its own demands.

NB  Free downloads of the article are available here.

Thursday 2 September 2010

CIPA, the Belgian Presidency and the European patent litigation debate

The IPKat has already commented here on today's press release from the Chartered Institute of Patent Attorneys (CIPA) concerning the Advocate Generals' negative response to the proposals for the European and European Union Patents Court (noted briefly on PatLit here). Coincidentally, today has seen this piece on Science Business on the determination of the EU's Belgian Presidency to press on, echoing CIPA's positive take on the fact that the proposal is not actually positively excluded by EU law.

It seems to PatLit that the Belgian position itself is indicative of the fact that, while there is a strong political and institutional will to drive the proposal off the drawing board and into reality, there are still a lot of nuts-and-bolts issues that have to be resolved.  The important thing to understand is this: Every issue which is the subject of legal fudge and diplomatic compromise on the path to the introduction of the proposed system is an issue which is the subject of dispute, uncertainty and potential litigation after it has been introduced.  If proof is needed, consider the fact that, getting on for 20 years after the laying of the foundations of the Community trade mark system -- a far simpler task -- basic issues relating to control of the granting office, its relationship with national offices and whether use of a mark in one EU Member State is 'genuine use' within the Community remain painfully and ludicrously unresolved.  If discussion and a considered resolution before the event are eschewed, can we expect a better after-the-event result via a decision of the Court of Justice?

Reopening of oral proceedings? Not if the Court can help it!

There aren't many areas of patent law that end up before the Court of Justice of the European Union for the very good reason that, up till now, most European patent law is either dictated by the terms of the European Patent Convention (which is not a European Union document) or guided by national law and therefore within the sole purview of national courts. The extension of the life of a patent through the mechanism of the supplementary patent certificate (SPC) is however one area in which the Court of Justice can be, and indeed is increasingly, involved since it is governed by Community law.

Today's decision in Case C-66/09 Kirin Amgen Inc. v Lietuvos Respublikos valstybinis patentų biuras, Amgen Europe BV, a reference for a preliminary ruling from the Lietuvos Aukščiausiasis Teismas (Lithuania), has already been written up from the point of view of the discretion of newly-joined Member States to adjust transitional provisions to their specific conditions (click here if you like SPCs enough to want to read further ...). There was however an interesting little procedural point, which litigators may wish to bear in mind.

The usual practice in cases referred to the Court of Justice for a preliminary ruling is that there will be a brief oral hearing, following which the Advocate General -- who is a member of the Court -- will give a considered Opinion. This opinion is not binding on the court, but will be accepted to a greater or lesser extent in around 80% of cases. Here, Kirin Amgen was unhappy with the Advocate General's analysis and wished to have a second bite at the cherry. As the court explains:
"17 By letter of 30 June 2010, Kirin Amgen requested the reopening of the oral procedure, stating essentially that the view taken in the Advocate General’s Opinion is incorrect and that new arguments ... have been expounded there. In support of its request, Kirin Amgen pleads the right to adversarial proceedings, in accordance with Article 6 of the European Convention for the Protection of Human Rights and Fundamental Freedoms ....

18 Bearing in mind the very purpose of an adversarial procedure, which is to prevent the Court from being influenced by arguments which the parties have been unable to discuss, the Court may of its own motion, on a proposal from the Advocate General or at the request of the parties, order that the oral procedure be reopened, in accordance with Article 61 of its Rules of Procedure, if it considers that it lacks sufficient information or that the case must be dealt with on the basis of an argument which has not been debated between the parties (citations omitted).

19 In the present case, however, the Court, having heard the Advocate General, takes the view that it has all the material necessary to answer the questions referred and that the observations submitted before it related to that material.

20 Consequently, the request that the oral procedure be reopened must be rejected".

Wednesday 1 September 2010

Are communications with Indian patent agents privileged?

"Are communications with Indian 'Patent Agents' privileged under the Evidence Act, 1872?" That's the title of a very recent post on SPICY IP by Prashant Reddy. For perfectly understandable reasons he declines to answer the question. What he does, however, is to assemble a good deal of hyperlinked materials that will enable the reader to draw his own conclusions.

Given the boom in patent-related activity in India, that country's increasingly significant presence on the international stage -- both on the side of generic manufacture and in support of its own R&D -- and given the attention that WIPO is giving to the subject of client-patent advisor privilege, this post is well worth a read if you or your Indian partner or subsidiary are currently dealing with, or against, Indian enterprises.