UK Blocks the Unified Patent Court

The Financial Times reports that the "patent deal" which was supposed to be agreed upon at the EU summit today was blocked by the UK.

The constant criticism of the experts in the field, which had found their way into the report of the UK Scrutiny Commitee, appear to finally have reached Mr. Cameron, who surprisingly made a gleam of reason shine in this discussion. As the FT reports:

Mr Cameron offered to withdraw his call for the court to be in London if the European Court of Justice – the EU’s highest court – were stripped of ultimate jurisdiction over Europe’s reformed patent system.

This offer was preceded by van Rompuy's proposal to split the court into three parts - the central division being located in Paris and two other divisions in London and Munich respectively and by a Franco-German deal to cut out London, which was allegedly agreed by Mr Hollande and Ms Merkel on Wednesday night (see the FT article).

Latest News: As reported on the IPKat and here (via the reliable german press ageny DPA), van Rompuy's compromise has now been adopted. Further, according to this source, the London branch will deal with the administrative matters and the substantive jurisdiction will be distributed based on the technical field over the 3 cities.

Oral Proceedings before the EPO: event for fledglings

"Oral Proceedings at the European Patent Office" is the title of Management Forum's forthcoming course on that very subject, to be held at the Rembrandt Hotel, London, on 9 and 10 July. As the organisers explain:

The course has been designed for people who are facing their first EPO Oral Proceedings and are rather apprehensive about it, and also for people who have done it before but would like to learn how to do it better. After some tuition and guidance all the delegates are given a patent and have to prepare and present their case (defence and attack) in a court setting, and also experience what it’s like to sit on the Board.

Not surprisingly, participants feel that it’s much better to try out their fledgling advocacy skills for the first time in a safe environment, and without clients’ money at stake! The seminar leaders are Dr George Woods, formerly of the EPO, and William Chandler, a current EPO Appeal Board Member.

Management Forum have kindly offered a 15% discount on the course fee to readers of the IPKat weblog, but the Kat thinks it is more likely to benefit readers of PatLit -- particularly those who are involved in the cut-and-thrust of oppositions and have to deal with real live protagonists as well as the Board itself.  If you want to know more about the programme you can find further details from Management Forum's website here.  To get the benefit of the IPKat readers' discount, please quote code JL30 and be prepared to go "miaow" if challenged.

Mediation, expansion of Opinion service, are open for consultation

Fiction: the disputants are angry,
the mediator is happy. Reality?
The mediator can get fairly
frazzled too ...

There's a new consultation on plans to expand the UK Intellectual Property Office's Patent Opinions service -- a reasonably priced, good quality and surprisingly little used means of getting an expert opinion on the validity of a patent or its scope of protection which can assist greatly in the decision to bring an action -- or to defend one.

There are two sets of proposals on the table: one is for the expansion of the Patent Opinion service to cover supplementary protection certificates (SPCs) for pharma and agrichemical patents. While it seems quite illogical to exclude them, I doubt that the availability of this service would  make much difference in practice to whether SPC-related litigation was launched or not.  The other set of proposals relates to an SME-directed Mediation Service.  According to the BIS web page:

"The Intellectual Property Office (IPO) ... set out proposals to expand its Patent Opinions Service and is seeking views from business on how to improve its Mediation Service.

The Government is committed to providing SMEs with the economic environment and framework they need to grow. The Hargreaves Review identified a number of barriers facing SMEs trying to making the most of their Intellectual Property. One of these was the cost of managing IP, in particular resolving disputes surrounding the enforcement of their own IP rights and defending themselves against allegations of infringement made by others.

...  The IPO’s Patent Opinions Service allows individuals or companies to request an opinion on the validity or infringement of a patent and is well used. A review of this service demonstrated a high desire from users for expansion of the service to aid resolution of further patent disputes. Government is now consulting on the following proposal:

• expanding the questions relating to patent validity that can be the subject of an opinion; 

• expanding the service to offer opinions as to whether a Supplementary Protection Certificate ('SPC') is valid or is infringed; 

• giving the IPO the power to consider revoking a patent following issue of an opinion which concludes it is invalid.

The IPO provides a Mediation Service to any parties involved in an IP dispute who wish to resolve matters without resorting to the Courts. However, uptake of this service is low and the IPO is therefore seeking comments and supporting evidence from key stakeholders and IP right holders on the reasons for this. This will be used to determine what service, if any, the IPO should be offering to support speedier and lower cost dispute resolution".

The Mediation consultation will run for six weeks, ending on 24 July 2012 and your response should ne emailed here.  The Patent Opinions Service consultation will run for 12 weeks and concludes on 4 September 2012. Please send your comments here.

Inspection of redacted documents in patent trials

Don't ask for a copy of this extempore judgment, since it's not on BAILII and you'd need to be a Lawtel subscriber to read the Marten Walsh Cherer computer-aided transcript, but Danisco A/S v Novozymes A/S [2012] EWHC 1641 (Pat) is an interesting little Patents Court, England and Wales, judgment from Mr Justice Arnold (yes, he can produce short judgments too: this one covers just four sides). The topic is a delicate one: disclosure of documents and the inspection of redacted [i.e. censored] parts of them.

In short, Daniusco applied for specific disclosure and/or inspection of certain documents in the possession of Novozymes, this being in the course of Danisco's application to revoke a Novozymes patent, there being parallel proceedings in respect of the same patent before the European Patent Office (EPO). One of the documents, a May 2009 report, had been redacted for disclosure but Novozymes' solicitors let Danisco's solicitors inspect it.  Inspection of further redacted monthly reports was also sought. In Danisco's view was that disclosure of the document  was necessary in order to help it understand documents already disclosed; that the redacted parts of the May 2009 report should not have been redacted in the first place and that they were in any event relevant to the dispute; and that the redacted parts of the further monthly reports were relevant to Novozymes' evidence of its production capacity in 2004/5.

Arnold J allowed the application in part. In his opinion:

• The document in question set out the statistical method which was referred to by a number of disclosed documents.  Danisco was not just speculatively fishing when seeking it, but it still had to be asked whether it was actually relevant to the dispute which was the subject of the litigation.
  
• The document was actually necessary in order to understand the figures in another document that had already been disclosed -- though ultimately it might not possess any evidential weight.
  
• Disclosure of that document would not place any substantial burden on Novozymes, nor was it unfair to ask Novozymes to disclose it with the EPO hearing being just two weeks away. In any event, Novozymes could have disclosed the document earlier and, regarding the EPO hearing, the EPO would not allow Novozymes to be prejudiced by this disclosure.
  
•  As to the redacted parts of the May 2009 report, inspection would be ordered.  The report was sufficiently relevant to be able to support Danisco's case or undermine Novozymes'.  If this wasn't a patent trial, disclosure would have been ordered, the problem here only being that Danisco's application for inspection was made outside the four-year window for disclosure in patent cases. Again, no burden would be placed on Novozymes in complying with the inspection request.
  
• Disclosure of the redacted parts of the further monthly reports would not be ordered: they post-dated the issues to which Danisco claimed they were relevant by one-and-a-half to two years.

Federal Circuit Rules That Standard For Pleading Patent Infringement Less Demanding Than Other Civil Actions

The U.S. Court of Appeals for the Federal Circuit recently considered the standard for pleading direct patent infringement in light of several recent Supreme Court cases that increased the amount of factual allegations necessary to state a claim in a civil action. R+L Carriers, Inc. v. DriverTech LLC (In re Bill of Lading Transmission and Processing System Patent Litigation), Case No. 2010-1493 et al., (Fed. Cir. June 7, 2012). Traditionally, civil claims in U.S. federal courts were scrutinized under a relatively generous "notice pleading" standard, which required only that the allegations fairly notify the defendant of the claim. In two cases, Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009), the Supreme Court chipped away at the concept of notice pleading, requiring that a pleading allege sufficient facts so that the allegations, taken as true, stated a claim for relief that is plausible on its face.

In R+L Carriers, the district court dismissed a 100-page complaint alleging direct and indirect patent infringement for failure to plead a claim under Fed. R. Civ. P. 8(a)(2). The Federal Circuit reversed the dismissal of the direct infringement claim. The appeals court noted that the appendix to the Federal Rules includes Form 18, which is a form patent infringement complaint. That complaint only alleges: “(1) an allegation of jurisdiction; (2) a statement that the plaintiff owns the patent; (3) a statement that defendant has been infringing the patent ‘by making, selling, and using [the device] embodying the patent’; (4) a statement that the plaintiff has given the defendant notice of its infringement; and (5) a demand for an injunction and damages.” R+L at 14, quoting McZeal v. Sprint Nextel Corp., 501 F.3d 1354, 1357 (Fed. Cir. 2007). The court noted that under Fed. R. Civ. P. 84, the forms accompanying the Federal Rules “suffice under these rules and illustrate the simplicity and brevity that these rules contemplate.”

Thus, the Federal Circuit concluded that Rule 84 and Form 18 govern the sufficiency of a patent infringement allegation, and that standard can be changed only through the established procedure for promulgating and amending rules, not by court decision (although, somewhat ironically, Supreme Court approval is one step in the amendment process). The appeals court concluded that, “[T]o the extent the parties argue that Twombly and its progeny conflict with the Forms and create differing pleading requirements, the Forms control.” R+L at 15.

As a result, the Federal Circuit’s standard for pleading patent infringement is arguably more generous than the standard established by the Supreme Court in Twombly and Iqbal for other civil claims.  For example, the Federal Circuit held that R+L’s complaint was adequate even though it did not identify a single customer who purchased and used the accused product. In addition, the pleading did not require specific factual allegations concerning how the elements of the asserted claims were infringed, or even which claims the plaintiff was asserting.

Notably, the court held that Form 18 only applies to pleadings alleging direct infringement under 35 U.S.C. § 271(a). Allegations of indirect infringement, such as contributory infringement under 35 U.S.C. § 271(c) or active inducement under § 271(b) continue to be governed by Twombly.

Judge Posner Changes Mind, Orders Injunction Hearing

In his preliminary order dismissing the Apple v. Motorola patent case, Judge Richard A. Posner cautioned that he might change his mind before issuing a final decision.  Now he apparently has, although the change does not necessarily reverse his view that a right to damages or injunctive relief is an essential element of a patentee's infringement claim.  On June 13, Posner issued a one-paragraph order requiring the parties to appear on June 20 for an evidentiary "eBay" hearing where "[e]ach party may argue that it would be entitled to injunctive relief as to its patent or patents were the other party found to have infringed."  Stay tuned for more twists and turns in this case.

Judge Posner Suggests That Damages Required For Viable Infringement Claim

U.S. Circuit Court Judge Richard A. Posner, a very influential jurist who sits on the U.S. Court of Appeals for the Seventh Circuit, is sitting as the trial judge by designation in the contentious patent infringement litigation between Apple Inc. and Motorola Mobility, Inc. (subsequently acquired by Google, Inc.) pending in the Northern District of Illinois (Case No. 1:11 cv08540). In that lawsuit, Apple and Motorola each assert that the other company infringes multiple patents relating to smartphone technology, including operating systems and touchscreen technology. Recently, practically on the eve of trial, Posner issued a two-page preliminary order cancelling the trial and indicating that he intends to dismiss all pending claims with prejudice.

Although he stated that he would explain his rationale more fully in a forthcoming written decision, Posner suggested that dismissal was required because neither side could prove a right to damages or injunctive relief. In light of his prior evidentiary rulings rejecting the proposed expert damages testimony of both sides, including for failure to meet the standard of technical reliability established in Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993), Posner concluded that neither side was able to prove infringement damages. Thus, he noted cryptically, that failure of proof meant that each claimant failed to create a genuine issue of fact for trial, and all infringement claims would be dismissed on summary judgment.

In addition, Posner noted that although neither company could prove damages, they both contended that damages were adequate to remedy infringement of their patents, so no injunctive relief was available. See eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006). Furthermore, he noted that an injunction was not available because “injunctive relief would impose costs disproportionate to the harm to the patentee and the benefit of the alleged infringement to the alleged infringer and would be contrary to the public interest[.]” He also declined to enter declaratory relief.

Thus, it appears that Posner views an entitlement to actual damages, or at least a right to injunctive relief, to be essential for a viable infringement claim, despite the language of 35 U.S.C. § 271(a) (“whoever without authority [practices] any patented invention during the term of the patent therefor, infringes the patent.”). Finally, although Posner noted that a full decision would be issued shortly, he cautioned that in the course of preparing that decision, “I may change my mind.”

TRIPS and trade winds:Spanish injunctions and chemical-pharmaceutical patents

From Fidel Porcuna de la Rosa (Senior Associate, Bird & Bird's Madrid office) comes this fascinating note about the efforts that have been made to delineate the scope of patent protection for chemical and pharmaceutical compounds under pre-TRIPS era Spanish patent law. Fidel writes as follows:

"New winds blow for chemical-pharmaceutical patents in Spain

For almost the past two years, the Supreme Court has been repeatedly reversing the Spanish PTO's dismissal decisions to admit and advertise new revised translations of old --but still in force-- EP pharmaceutical patents so as to include product claims. The decisions, regarding a number of active ingredients (voriconazole, sildenafil, tolterodine, ziprasidone, racemic atorvastatin, etc.), were based on the Supreme Court's interpretation by which the direct applicability of the TRIPS Agreement, in force in Spain as of January 1 1996, anticipated the derogation of the prohibition to protect chemical and pharmaceutical compounds under the old Spanish patent law. Although the prohibition was derogated by the time Spain joined the European Community and the European Patent Convention Treaty in 1986, its effects were extended to patents filed up till October 7 1992 following a temporal reservation introduced by the Spanish Kingdom. For the owners of such patents, this would mean in practice that they had no exclusive right over the chemical or pharmaceutical compound, but just to the method to obtain it.

These judicial decisions seemed to provide new enforceable patent rights over old EP patents for pharmaceutical companies which were then able to seek injunctions and damages derived from marketing of generic drugs that would fall under the restored scope of such rights. This has had a quite negative impact in the generic drug industry, as well as causing legal uncertainty. Indeed the Barcelona Commercial Court no. 7 granted preliminary injunctions against generic companies under the above legal grounds (Judgment 21 Feb 2012 31 Pfizer Inc. and Pfizer SLU v Kern Pharma, S.L. and others JUR2012/82689).

However, a recent decision of the Barcelona Commercial Court no. 4 (Judgment 7 May 2012, no. 130/2012) offers a fresh interpretation which, while in principle not incompatible with the Supreme Court decisions, could force innovative laboratories to step aside. The judgment dismissed an application for a preliminary injunction sought by H.Lundbeck A/S, Lundbeck España S.A. and Almirall S.A. against the use of Escitalopram by Sandoz Farmaceútica, S.A.. Bexal Faramcéutica, S.A., Cinfa, S.A., Laboratorios Stada, S.L., Actavis Spain, S.A. and many other generic drug laboratories.

The facts are essentially as follows: In 2 February 1995 Lundbeck obtained the EP 347066 on Escitalopram, which expired on 1 June 2009 but for which a SPC was granted until 1 June 2014. Lundbeck's EP 347066 consisted of three different set of claims corresponding to three different groups of the Contracting states designated in the application. While in the first group (AT, BE, CH, DE, FR, GB, IT, LI, LU, NL, SE) Lundbeck protected product claims, in the second (ES) and third group (GR) it obtained method claims. This was due to Spain and Greece's reservations to the European Patent Convention Treaty against patentability of chemical and pharmaceutical compounds. In 30 March 1995 Lundbeck validated the EP in Spain by filing along with the corresponding petition a translation into Spanish of the process claims just granted by the EPO. More than a decade later (24 August 2006), convinced that the derogation of the prohibition to protect chemical and pharmaceutical compounds under the old Spanish patent law was anticipated by the TRIPS Agreement, Lundbeck petitioned to the Spanish PTO to advertise a new translation into Spanish of the EP 347066. This time it was about the set of claims granted for the first group of Contracting states. After much to-ing and fro-ing with the Spanish PTO and the Administrative Courts, the Supreme Court approved the petition and the new product claims were advertised. Lundbeck then addressed the now unauthorized use of Escitalopram products and filed preliminary injunctions before the Barcelona Court against the above companies, some of which would have by then have been marketing Escitalopram products for some time.

The Barcelona Court considered that Lundbeck's manoeuvre failed. The Court noted that the Spanish set of claims was narrower than the set of claims of the first group of Contracting states because it only contained method claims, and not product claims, and so was the subject matter of the validation of the EP 347066 in Spain. It added that Lundbeck requested the Spanish PTO, after several years of the patent being granted, to admit and advertise a new translation of the EP 347066 including product claims which corresponded to the original set of claims for the first group of Contracting states. In the view of the Court, seeking protection for such product claims would extent the original scope of the Spanish portion of the EP. For such translation to be valid, Lundbeck should have first requested the EPO to extent the scope of the set of claims granted for Spain. But the Court reminded that neither the EPO nor national patent office can extend the scope of the EP claims. In particular they can't extend the scope of any of the original set of claims corresponding to each group of Contracting states. This being so, the translation was no more than a circumvention leading to to a dead-end. Additionally, whether the Supreme Court accepted such new translation to be admitted and advertised in the Spanish official gazette, that would not mean to be enforceable for the new translation could never be considered narrower than the original version of the Spanish set of claims, and hence these --composed only by method claims -- would always prevail as the authentic text (section 11 Implementing regulation no. 2424/1986 of the European Patent Convention Treaty in Spain)".