A little bit about PatLit -- and how you can help

This coming September, PatLit will be four years old. Led by a small team of regular bloggers and supplemented from time to time by guest posts, PatLit has always focused on dispute resolution issues within patent law -- mainly litigation (as the name PatLit implies) but not excluding alternative dispute resolution mechanisms where appropriate.

You too can write
for PatLit ...

PatLit is driven by enthusiastic writing, not by commercial advertising or law firm sponsorship, and always welcomes news and views on patent dispute resolution, regardless of the jurisdiction. We'd like to hear from more countries where information about patent litigation is quite a rare event, as well as from jurisdictions in which it's almost a way of life. If you have a little spare time this summer and would like to put it to good use in writing, serious weblogs -- of which PatLit is just one of a large number -- are a good place to be seen. Unlike conventional professional and academic journals, weblogs offer instant access to a readership and the chance to indulge in some interactive debate. They don't have to go through a lengthy production process which often renders them of largely historical interest by the time they're published, and they are easy for prospective readers to search and find online.

For the record, at the time this piece was prepared for posting, PatLit was read by 1,076 "opt-in" email subscribers -- that's people who request to receive it, not people who are mail-bombed against their will.  There are also over 360 RSS feeders.  So far this calendar year, PatLit's pages have also received over 30,900 visits. Visitors have come from 127 countries, the bulk being from Northern Europe, North America and India.  The blog currently hosts 563 searchable items which include case notes, reports on patent law amendment, book reviews and opinion pieces.  The side bar also contains occasional information about forthcoming conferences and events, and sometimes of special registration discounts for PatLit readers.

This summer PatLit looks forward to welcoming readers to a couple of fresh guest bloggers who, if well received, will have the chance to join the team on a permanent basis. If you'd like to try your hand at some blog writing too, please email me here, giving me some information about your patent dispute resolution background and the jurisdiction(s) with which you are familiar.

Will unified patent litigation affect the generic medicine market?

A short note in this week's PLC IT & Communications round-up drew my attention to the fact that the European Commission has published a report on its third monitoring exercise into patent settlements in the pharmaceutical sector, covering the period January to December 2011. According to this note

"... The Commission has found that the number of concluded settlements has increased over the last three years. ... [T]he vast majority (89%) are prima facie unproblematic in competition terms. However, there was an increase in potentially problematic settlements during 2011 (although the overall level remains low). The Commission considers that this shows that there is a continuing need for it to continue to examine such patent settlements ..."

The Europa press release adds this comment:

"The Commission had also recommended to introduce an EU patent and a unified specialised patent litigation system in order to improve the fragmented patent system which currently causes legal uncertainty in patent disputes all over the EU, particularly as regards medicines, thus possibly contributing to delays of generic market entry. The Commission welcomes the progress made on the creation of a unitary patent system as well as a corresponding patent court".

More information concerning the report can be found in or via the Europa press release here.

Strategic use of UK disclosure aids Danisco in EPO rulng

Via Jason Costa comes news of victory for Danisco before the European Patent Office (EPO) in its long-running dispute with Novozymes.  Both are Danish biotech businesses that are engaged in enzyme manufacture. In these proceedings Danisco revoked one of Novozymes’ European patents for coated animal feed enzymes, which had been asserted by Novozymes in Denmark, Germany, the Netherlands and the United Kingdom (with proceedings under related utility models in Finland). PatLit reported here on proceedings between the same companies in England and Wales in June of this year.


According to the information received:

"The EPO revocation was based in part on Novozymes’ own documents (obtained by disclosure in the United Kingdom and released for use in the EPO by the Patents Court for England and Wales), which undermined Novozymes’ submissions in the EPO. This revocation restores the ability of Danisco -- acquired by DuPont in May 2011 -- to engage in commercial activities in Europe and provide customers with innovative solutions in the animal feed business.

Disclosure!

This decision sheds light on the discussions concerning the impending unitary patent in Europe, because it emphasises the importance of UK-style disclosure in determining the validity of commercially important patents. Novozymes initially refused to allow the documents to be used in the EPO.  However, the decision of the Patents Court at [2012] EWHC 696 (Pat) [this is not yet available online on BAILII] made the crucial documents available. The Patents Court and Court of Appeal initially refused to make the documents available to the EPO, but this position changed after Novozymes was held to be at fault in requesting a late adjournment of the UK trial. The decision also indicates the speed with which the EPO can decide accelerated proceedings: the patent was granted on 11 November 2009, opposed on 30 March 2010, revoked by the Opposition Division on 7 July 2011 and finally revoked by the Technical Board of Appeal on 29 June 2012 (31.5 months from grant to final revocation)".

This does not mean that the matter is at an end:

"Danisco will also seek compensation for the damage caused by a preliminary injunction originally obtained by Novozymes in Denmark. On May 25, 2012, before the Technical Board of Appeal revoked the EP'592 patent, the Eastern High Court in Copenhagen had revoked that preliminary injunction and ordered Novozymes to pay Danisco 1.5 million DKK (Danish kroner) in legal costs".

Incomplete Knowlege and Prior Use Rights

The prior use defense in patent litigation requires possession of he invention. But how much do you have to know? German Federal Supreme Court (BGH) has issued a decision (BGH Desmopressin X ZR 131/09) addressing this question.

Germany has the reputation of having an easily satisfied possession standard. In Germany, activities that constitute prior use include “use of the invention” and making “substantial arrangements to do the same.” A party asserting the defense must show actual possession of the invention. Possession of the invention means that the asserting party must have recognized the problem and its complete solution according to the invention both objectively and subjectively as well as the possibility to intentionally exploit the invention.

The case at issue in X ZR 131/09 was a utility model relating to a pharmaceutical composition containing an oxidizing agent. Claim 1 required the content of the oxidizing fall short of a certain upper threshold. According to the specification, the low content of oxidizing agent leads to an extended use-by date.

The defendant was able to prove that he had used a recipe inevitably leading to a composition falling under claim 1 but could not prove his subjective knowledge of the relation between the content of the oxidizing agent and the use-by date.

The BGH considered this sufficient. The second headnote reads (in translation):

“The subjective knowledge required for the possession of the invention exists when the activity is methodically directed to the realization of a technical teaching realizing all the features of the subject-matter of the invention (here: a certain recipe of a pharmaceutical composition). It is irrelevant whether or not the acting person has knowledge of effects being related to the realization of the subject-matter of the invention according to the specification (here: that the consideration of an upper limit for the content of oxidizing agent leads to an extended use-by date).”

In the reasons (margin number 18), the court argues that the possession of the invention can not depend on preconditions which did not become part of the technical teaching as defined in the claim. Accordingly, the knowledge of effects mentioned in the specification but not incorporated in the claim may not be decisive for the possession of the invention.

Patent professionals as expert witnesses? Not a good idea in Malaysia

An interesting issue arose recently in the Kuala Lumpur High Court, Malaysia, in Ronic Corporation v Cadware Sdn Bhd (D5-22IP-74-2010), an infringement claim and invalidity counterclaim in respect of a patent for a 'device for sensing and alarming the absence of water in a home machine for manufacturing soybean milk, watery bean curd and bean curd", the patent disclosing a circuit used for sensing and sounding an alarm when the absence of water is sensed.

The issue of invalidity was heard first and the defendant invoked as its expert witness a practising patent agent.  The expert evidence on the other side was supplied by an engineer specialising in electronics engineering and a professor specialising in the field of electrical engineering, brought in from Korea.

Holding the patent to be valid, the court expressed the view that the expert called by the defendant was not a person skilled in the art, as such a person must have a practical interest in electronic circuits in his or her day-to-day work (ie an engineer specialising in electronics or similar). A patent agent cannot be considered to have practical interest in the matter, said the court, as he or she would not have considered the invention at all, had he or she not been called as a witness in this case.

Source: "High Court upholds validity of patent and dismisses defendant's challenge", Contributed to International Law Office by Michael Soo and Wendy Lee (Shook Lin & Bok, Kuala Lumpur).

Matching of expert evidence to a patent's hypothetical addressees

Yesterday's ruling of Mr Justice Arnold (Patents Court, England and Wales) in Generics [UK] Ltd (t/a Mylan) v Yeda Research and Development Co Ltd & Another [2012] EWHC 1848 (Pat) is a lengthy but well-structured decision with three pages of contents to help the reader navigate its contents. A short note on it can be found on the IPKat here.

This post just picks up one small point: the treatment of expert witnesses. In this trial, as in many, a great deal of attention was paid to the nature of the addressee of the patent of which the validity was in contention and to the expert evidence that was to establish their state of knowledge and understanding.  Arnold J handled these issues like this at [81] to [82]:

"... there is no fundamental dispute as to the identity of the skilled team to whom the Patent is addressed, but there are certain differences as to the level of expertise of some members. Broadly speaking, it is agreed that the skilled team would comprise the following:

i) Someone with an interest in the treatment of MS. This person is likely to be a clinician by training, although a clinical qualification may not be essential.  ...

ii) Someone with experience in assessing the adverse effects of drugs in both in vivo tests such as the mouse lethality assay and in vitro tests .... This person is likely to be a toxicologist by training, although a toxicological qualification may not be essential. ...

iii) A synthetic chemist with expertise in synthesising polydisperse polymers.

iv) An analytical chemist with expertise in amino acid analysis.

v) An analytical chemist with expertise in SEC".

Regarding the experts put forward by the parties the judge observed at [85] to [86]:

"The expert witnesses called by the parties do not precisely correspond to the five disciplines I have identified as comprising the skilled team [ahead of trial it might not be fully possible for the judge to identify with certainty the components of a skilled team but, in an ideal world, it would be great if the parties could go away and choose their experts in accordance with a list of disciplines identified before trial, at the case management stage]. Furthermore, there is not a precise correspondence between Mylan's witnesses and the Defendants' witnesses, in particular since one of the Defendants' witnesses did double duty as discussed below. Yet further, there is some overlap between some of Mylan's witnesses. Still further, both counsel submitted that a witness called by the other side possessed greater expertise on a topic than another witness called by that side. Nevertheless, for convenience I will put the experts into pairs based on the skilled team....

... a general point which is convenient to note here is that a number of the experts had previously given evidence in the US proceedings. Both counsel submitted that the other side's witnesses who had done so had become entrenched in their views as a result. I think that there is some truth in this, and I have borne this factor in mind in assessing the relevant witnesses' evidence [again, in an ideal world, it would be good if both parties had to share a single expert on each issue that required expert evidence, as happens in some other areas of civil litigation, but it is generally insisted by patent lawyers that this is both impossible and workable. It would be good to revisit this issue]".

Unitary patent: discussion to resume this autumn

No more Parliamentary discussion
till the leaves begin to fall ...

Micaela Modiano (Modiano & Partners) has kindly forwarded to PatLit this link to the press release relating to yesterday's meeting of the Legal Affairs Committee of the European Parliament regarding the proposal to delete certain articles of the draft regulation on the creation of the unitary patent so as to avoid certain referrals to the Court of Justice of the European Union.

 As Micaela observes, the outcome is that "The committee will discuss the issue with Parliament's legal service again after the summer recess, possibly in September" -- a further delay.

PatLit is of the opinion that each delay, postponement and rethink is most likely to result in more focused thinking on the problems which the proposed solutions appear to be causing.  It's just a pity that the early stages were, relatively speaking, so rushed and that they paid so little attention to the accumulated experience of a large number of practitioners.

Trials and timing: the need to be realistic

This week's ruling by Mr Justice Floyd (Patents Court, England and Wales) in HTC Europe Co Ltd v Apple Inc [2012] EWHC 1789 (Pat) has attracted a good deal of attention (there's an excellent analysis of it by David Brophy here on the IPKat). This post seeks to draw the attention of PatLit readers to just one issue: .  Said Floyd J, towards the end of his epic judgment:

"360. At one point the present trial was estimated at 6-8 days [it eventually required 14 days in court]. This was, or became, a seriously inaccurate estimate on any basis. There were four patents in issue, all of obvious commercial importance to both parties. HTC, for their part, were relying on several documentary prior art citations per patent, as well as attacks based on prior use and the common general knowledge alone. The technology involved was not all entirely straightforward. Apple, for their part, were relying on independent validity of multiple sub-claims. Both parties filed voluminous expert evidence, generally three reports from each of three pairs of independent experts. The parties wished to cross-examine the opposing experts on this extensive material. The parties also estimated that the court could get on top of this material in two days, later collapsed to a day and a half because of a need for an expert to return to the United States. This time estimate was also completely unrealistic. A longer time estimate for reading does not cost the parties anything [not in terms of the trial -- but the real cost is arguably in the marketplace, where the speedier conclusion of invalidity or infringement proceedings can have financial repercussions both for the litigants and for third parties]. In the result the trial had to be interrupted to allow me more time to read and understand this material. This is highly disruptive.

361. The court will always be sympathetic to attempts by parties to resolve patent disputes with strict limits as to the number of citations and claims, the evidence which may be adduced, and the time which is to be taken in court with cross examination and speeches. Very careful consideration needs to be given to match reading time estimates and trial estimates to the way in which the case is in fact being conducted.

362. Finally, this is a case where there should plainly have been a pre-trial review in accordance with the guidance in the Chancery Guide. The guidance in paragraph 3.20 is only mandatory in the case of cases lasting more than 10 days, but applies in other cases where the circumstances warrant it. The parties should have appreciated that the present case would last 10 days or more. Moreover, and in any event, the circumstances of the present case plainly warranted a pre-trial review [this blogger is a great believer in the virtues of rigorous pre-trial review, firm case management and anything which can make the current system more efficient and less expensive without the need for law reform]".

ACTA: Not yet born and already gone

As the European Parliament web pages informes (here):

The Anti-Counterfeiting Trade Agreement (ACTA) was rejected by the European Parliament on 4 July 2012, by 478 votes to 39, with 165 abstentions. Parliament could not amend the ACTA, but only approve or reject it. Its rejection means that neither the EU nor its individual member states can join the agreement.

Reasons for rejection mentioned:

"In so doing, it followed its International Trade Committee, which recommended on 21 June, by 19 votes to 12 with no abstentions, that Parliament should indeed reject it.

Four other committees had also delivered opinions suggesting that ACTA should be rejected : the Industry, Research and Energy Committee (rapporteur Amelia Andersdotter, Greens, SE), the Legal Affairs Committee (rapporteur Evelyn Regner S&D, AT), the Civil Liberties, Justice and Home Affairs Committee (rapporteur Dimitrios Droutsas S&D, EL) and the Development Committee (rapporteur Eva Joly, Greens, FR).

On 19 June the Petitions Committee debated 5 petitions from citizens calling on MEPs to reject ACTA, one signed by over 2.8 million people from all over the world. The 5 petitions were kept open, meaning that citizens will continue to have a clear means to appeal if they feel that ACTA does not comply with EU law.

On 25 April 2012 David Martin, the MEP responsible for steering ACTA dossier through Parliament, presented his recommendation for the European Parliament to reject ACTA. He referred to concerns of unintended consequences of the ACTA, text specifically on individual criminalisation, the definition of “commercial scale”, the role of internet service providers and possible interruptions in the supply of generic medicines.

"The intended benefits of this international agreement are far outweighed by the potential threats to civil liberties. Given the vagueness of certain aspects of the text and the uncertainty over its interpretation, the European Parliament cannot guarantee adequate protection for citizens' rights in the future under ACTA. Your rapporteur therefore recommends that the European Parliament declines to give consent to ACTA", he said".

As Jeremy pointed out a couple years ago (here) “ACTA is a good deal less radical, and much less sinister, than had at first been feared in result of the exclusionary and secret manner in which it was initiated and originally drafted”. Why has then been rejected? I would say that the secrecy in its creation has driven to this result. ACTA final version here European Parliament Press release here

More details on the "EU Patents Package"

Laurent Teyssèdre, editor of Le Blog du Droit Européen des Brevets was the first to report more details on the “EU Patents Package”. Here is the portion of the decision of the European Council which is the most interesting for us:

3. Heads of State or Government of the participating Member States agreed on the solution for the last outstanding issue of the patents package, namely the seat of the Central Division of the Court of First Instance of the Unified Patent Court (UPC). That seat, along with the office of the President of the Court of First Instance, will be located in Paris. The first President of the Court of First Instance should come from the Member State hosting the central division.

Given the highly specialised nature of patent litigation and the need to maintain high quality standards, thematic clusters will be created in two sections of the Central Division, one in London (chemistry, including pharmaceuticals, classification C, human necessities,classification A), the other in Munich (mechanical engineering, classification F).

Concerning actions to be brought to the central division, it was agreed that parties will have the choice to bring an infringement action before the central division if the defendant is domiciled outside the European Union. Furthermore if a revocation action is already pending before the central division the patent holder should have the possibility to bring an infringement action to the central division. There will be no possibility for the defendant to request a transfer of an infringement case from a local division to the central division if the defendant is domiciled within the European Union.

We suggest that Articles 6 to 8 of the Regulation implementing enhanced cooperation in the area of the creation of unitary patent protection to be adopted by the Council and the European Parliament be deleted.

I think that it is in particular the last paragraph that will cause a collective sigh of relief in the community. Finally, the constant criticism by the experts in the field (see e.g. Professor Krasser's opinion and Sir Robin Jacob's opinion) has been successful despite of the deplorable lack of transparency (see J. Pagenberg's letter here). While I think that the role of the blogosphere is still small, I think that the great efforts of the AmeriKat Annsley Merelle Ward to keep us infromed might have contributed to this late turn of events. Thanks a lot for this!

Laurent also gives details on the time schedule. The new system shall be up and running on April 1, 2014 ;-)

Disapplying the costs cap

An expensive cap ...

A recent Patents County Court for England and Wales (PCC) decision of Judge Birss QC which has not yet reached the BAILII case law database is the subject of a short but informative newsletter from Hogarth Chambers. The case is Polymer v D S Smith, in which Richard Davis of Hogarth Chambers appeared for the claimant. According to the newsletter

"... the claimant sued for patent infringement and the defendant counterclaimed for invalidity. The patent in issue had previously been granted a certificate of contested validity by the Comptroller, and the question arose as to what, if any, impact this had on the PCC cost cap.

Section 65 of the Patents Act 1977 (“the 1977 Act”) sets out that where a certificate of contested validity has been granted by “the court or the comptroller” following proceedings where the patent was held to be valid or partially valid, then if the validity of the patent is again challenged in subsequent proceedings, the party relying on the validity of the patent is entitled to his costs on an indemnity basis.

CPR 45.41(2) [note for first-timers and non-British readers: CPR stands for Civil Procedure Rules] disapplies the cost cap in the PCC where (a) the court considers that a party has behaved in a manner which amounts to an abuse of the court’s process; or (b) the claim concerns the infringement or revocation of a patent or registered design, the validity of which, has been certified by a court in earlier proceedings.

HHJ Birss QC held that the term “a court” is to be interpreted liberally, i.e. the exclusion in rule 45.41(2)(b) applies where the certificate of contested validity was granted after invalidity proceedings either before a court or the comptroller.

Furthermore ..., as regards the implication of costs, the exclusion in rule 45.41(2)(b) regarding the costs cap and scale fees applies to the costs of both the patentee and the defendant. The judge did not accept the claimant’s contention that the rule should be interpreted purposively for the benefit of the patentee who has already succeeded in a previous invalidity challenge to his patent.

The judge held that the rule is to be interpreted such that there is no costs cap on either party. This did not deprive the party having such a certificate of any benefit litigating in the PCC since it would still have the advantage of the PCC’s procedural approach. Moreover, as in the High Court, the patentee can recover indemnity costs pursuant to s.65 of the 1997 Act.

... HHJ Birss QC made clear that his court was not a small claims court and it was appropriate for medium sized business to litigate before it".

This is just one of a number of recent decisions focusing on curbing the cost of IP litigation in England and Wales. The same newsletter also brings news of rulings relating to copyright and trade mark infringement proceedings.