Due Care and Annuity Reminders

The decision T942/12, which has been discussed by the IPKat here, relates to the “due care required by the circumstances to be proven when requesting restitutio in integrum.

While in the good old times, annuities have been paid (and actually had to be paid) by professional representatives, this business has now been largely conquered by specialized firms. The professional representatives then receive a notice saying “the annuities will be paid through other channels”, “you are no longer responsible for the annuities” or the like. While sending annuity reminders and actually paying the renewal fees are basically two different things, the question of reminders is rarely addressed explicitly. It is, however, generally considered to be implicit that the representative is not expected to send annuity reminders where it is clear that the payment is effected via other channels. In any case, the client would clearly not pay for such reminder services and would feel bothered and confused by receiving such reminders rather than appreciating the diligent service of his professional representative.

The above understanding is more or less common ground for reminders sent before the due date of the renewals, the situation gets complicated when it comes to official notifications indicating that the renewal fee can still be paid with surcharge and/or loss of rights communications or decisions received after the lapse of the period for payment with surcharge. The due diligence requires the representative to forward these communications unless the patentee explicitly says that he does not want this. Neither the instructions to “abandon”, to “let lapse” or to “withdraw” implies that the applicant or patentee does not wish to be kept updated on the available legal remedies for the case that the instruction was erroneous, unintentional or otherwise misconceivable. Unlike in the case of “ordinary” annuity reminders, the professional representative is expected and indeed obliged to forward official notifications drawing attention to the possibility to pay the renewal fees with surcharge or notification of a loss of right even in those cases where he thinks that the non-payment of annuities was intentional (which is often unknown to the representative) unless the client has explicitly waived the receipt of these notifications.

The duty to monitor annuity deadlines and to send reminders is considered to be transferred to the party entrusted with the effectuation of the payment whereas the duty to forward official communications and to inform available legal remedies remains with the professional representative.

The situation can of course been more complicated in cases where the ownership of the patent and/or and intermediate foreign professional representative who had sent the original instructions has changed. If the transfer of the patent is not registered, the professional representative might even have been informed about it. The waivers to receive certain information expressed by the original patentee and/or by the original foreign representative might not be valid for the new representative or patentee and might not reflect the desired services of the new patentee or representative.

Against this background, most of the patent law firms tend to forward communications received after non-payment of the annuity in case of doubt. A decision not to forward such communications would require detailed analysis of the previous instruction including the file history as described above, which would be more complicated than simply forwarding the communications by far. It is, however, difficult to charge a client for this service, in particular in cases where the responsibility for the payment of annuities has been transferred or where the right to receive this communications has been explicitly waived.

For important deadlines in general, the safe receipt of notifications of deadlines should be confirmed somehow and a series of reminders should be sent in cases of doubt.  Does this apply to cases where the professional representative is formally not responsible for the payment of annuities even if this might be perceived as bothersome in a case where the client has intentionally abandoned the protective right?  Or is the degree of due care required somehow lowered in this specific case?

The decision T942/12 has to be seen in this context. The core part of the decision goes as follows:

The renewal fee for the fifth year fell due by 31 July 2007 and was not paid. The notice drawing attention to Article 86(2) EPC dated 4 September 2007 was sent to the European representative of the applicant, Page Hargrave (PH). PH forwarded this notice to GH on 7 September 2007. GH states they have no record of ever having received this notice. PH took no further action with respect to the renewal fee as it had been instructed by letter of 9 September 2005 that it "was not required to maintain renewal fee reminder records or attend to the payment of renewal fees". ....

If a European representative is expressly instructed that he is not required to monitor the payment of renewal fees, the duty of due care does not involve that he nevertheless does so. It cannot be expected that the European representative monitors renewal fee payments at his own expense (he will not be able to charge fees for actions he is to refrain from according to his instructions). Furthermore, sending reminders against instructions may irritate the instructing party and may impair the relationship with the client. The client may have good reasons for giving such instructions, e.g. to avoid receiving reminders from different sources that will lead to additional work and expense for him. Reminders from different sources can also be a source of confusion and thus lead to mistakes. 

The present case therefore differs from the case law where it was held that even if the renewal fee was paid by someone else, the European representative remained responsible in the procedure before the EPO, and had to take the necessary steps to ensure payment (see Case Law of the Boards of Appeal, 7**(th) edition 2013, III.E.4.5.2 b)), as in none of those cases the European representative had expressly been instructed not to monitor renewal fees.

The Board therefore concludes that the duty of care of PH involved the forwarding of the notice drawing attention to Article 86(2) EPC to GH, not however checking whether GH indeed received the notice and took the appropriate action (emphasis added).

This blogger welcomes this important decision because it accounts for the complexity of real life circumstances within which professional representatives have to exercise their due care rather than imposing unrealistic requirements.

13th meeting of the UPC Preparatory Committee

The UPC Preparatory Committee has published its report on its 13th meeting on its website. Alexander Ramsay (SE), the previous Vice Chair of the Committee was elected Chair and Louise Åkerblom (LU) was elected to replace him as Vice Chair. An agreement on the Meditaion Rules was reached. According to the knowledge of this blogger, these Meditaton Rules have bot yet been published. 

A proposal for court fees and the ceiling for the recoverable costs received "favourable comments" but still needs some fine-tuning and there is "emerging consensus" on the Protocol on Privileges and Immunity of the UPC.

Further issues on the schedule for the next meeting are

• the Rules governing the Registry
• the Rules of the Advisory Committee,
• the Service Regulation and
• the design of the judicial recruitment and training process, wherein the latter will be dealt with by a working group in a highly prioritised work-stream.

The next meeting of the Committee will take place 24 & 25 February 2016.

Alexander Ramsay further shares this and some other information in an interview with Euroforum.

Unified Patent Ready to Go!

The EPO Select Committee reports on its 18th meeting held on December 15, 2015 in Munich wherein the secondary regulation framework for the Unified Patent has been adopted.

According to the press release of the EPO:

On proposal of the European Patent Office (EPO), the Select Committee which represents the EU member states participating in the new Unitary Patent, has formalised today a series of agreements into a complete secondary legal framework comprising the implementing rules, budgetary and financial rules, the level of the renewal fees and the rules concerning the distribution of the renewal fees between the EPO and the participating member states.

Welcoming these landmark decisions, EPO President Benoît Battistelli said, "This is a hugely significant occasion for the European patent system. With the adoption of these rules today, the preparations for the unitary patent are complete. We are now legally, technically and operationally ready to deliver the unitary patent. The only remaining step is the opening of the Unified Patent Court and the finalisation of the ratification process at national level. We hope this will happen in 2016 and we are convinced that it will boost innovation in Europe and will be beneficial for the European economy, especially for European SMEs."

A necessary pre-requisite for the Unitary Patent system to start will be the existence of the Unified Patent Court (UPC) in which any such Unitary Patents can be challenged or enforced. Once thirteen states, including France Germany and the UK, have ratified the Treaty establishing the UPC, both the Court and the Unitary Patent system will come to life. So far eight states, including France, have ratified, with several more expected to ratify shortly.

Recent experience in other political fields shows that agreement on distribution keys is not an easy task among European Countries and this blogger is relieved that the distribution of the renewal fees has not become a stumbling block.

When I founded this blog with some colleagues from Olswang LLP back in 2008, principally as a means of lobbying for reform of the England and Wales Patents County Court, I had no idea that it would still be going seven years later, with international content, over 1,500 email subscribers and nearly 900,000 pageviews. 

PatLit has been a lot of fun, and occasionally a good deal of very hard work.  Thanks so much for giving me the chance to share ideas, information and thoughts with you.

At midnight tonight I retire, leaving the running of PatLit to my colleagues. Do please give them your support. If you are interested in participating in this weblog, do please contact Michael Thesen at thesen.michael@googlemail.com and let him know.

Mock trial under UPC 18th draft Rules: this will take some pluck ...

EPLIT, the European Patent Litigation Association, is running a mock trial under the recently-published 18th draft of the Rules of Procedures for the Unified Patent Court. The details look like this:

On 22 January 2016, EPLIT will run a mock-trial under the 18th draft of the Rules of Procedure for the Unified Patent Court (UPC). The case to be tried is between Improver Corporation and Remington Consumer Products and concerns a depilatory device, better known as the "Epilady" case. This case was litigated in the late 1980s and early 1990s before various national courts in Europe with drastically different outcomes. For that reason it serves as a reminder of why further harmonization of patent litigation in Europe is a worthy cause. The mock-trial will be staged before the Local Division of the UPC in Munich.

The original Epilady

The panel of judges will consist of Prof Haedicke (Oberlandesgericht in Düsseldorf), Mr Zigann (Landgericht in Munich) and Mr Van Walderveen (District Court in The Hague). The panel has been extended with a technical judge, Mr Klein (formerly of the Boards of Appeal of the European Patent Office). The patent proprietor (Improver) will be represented by Rainer Beetz (Sonn and Partner, AT) and Leythem Wall (Finnegan Europe LLP, GB). The alleged infringing party (Remington) will be represented by Marek Lazewski (Lazewski Depo and Partners, PL) and Jan Stein (Ipracraft AB, SE).

The day will begin with a case management conference (CMC) in the morning, and the afternoon will comprise of the oral hearing. This will be followed by a questions and answers session for the audience.

The event will take place in the Sofitel Bayerpost, Bayerstrasse 12, Munich.

The admission fee is EUR 395 for EPLIT members and EUR 495 for non-EPLIT members. This will include lunch, as well as coffee and other refreshments and snacks throughout the day, and a drinks reception after the proceedings have con­cluded.

Application form here. Please email it to the EPLIT Secretariat here.

EU Observatory survey on cost of IP infringement: can you help?

The European Observatory on Infringements of Intellectual Property has let it be known that it is currently undertaking a project that is designed to assess the cost of infringement of intellectual property rights to business and government.  Presumably the cost, in this instance, includes the cost of dispute resolution and, in particular, patent infringement litigation.

The Observatory has contracted market research company GfK to carry out a survey on its behalf for this purpos.  The survey itself is a simple questionnaire which is largely comprised of multiple choice questions. It can be accessed here.  It is addressed to a sample comprising the following Member States, in their own language(s): Belgium, Denmark, Germany, Spain, France, Italy, Lithuania, Hungary, Netherlands, Austria, Poland, Portugal, Sweden and the United Kingdom.

The closing date for responding is 4 December 2015, which is not very long away.  If you, your clients or your professional representatives can be persuaded to participate, this would be much appreciated

Deciphering Huawei vs. ZTE: A Paper

The intervention of Nicolas Petit at the Training course for technical judges atthe UPC organized by the CEIPI had been discussed here some time ago. Nicolas has now published his observations on the decision Huawei vs. ZTE, which are available for download here and are interesting to read.

Among other points, Nicolas observes that upstream licensing entities are immune against the antitrust defence because he concern of the CJEU lies in the exclusion of competitors, not in the exploitation. This means that the problems of hold-up, reverse hold-up and of FRAND setting are addressed only in terms of procedural courtesy obligations among parties competing on same market and that the question of substantial pricing is left open or left to the national courts.

BGH on Patentability of Mathematical Methods - "Flugzeugzustand"

The decision BGH X ZR 1 /15 "Flugzeugzustand" relates to the patentability of a mathematical method used in the context of monitoring airplane machinery. A rough (and non-official) translation of the headnote is as follows:

a) In view of §1 par. 3. Nr. 1 PatG, mathematical methods are patentable only when they contribute to the solution of a specific technical problem with technical means.

b) A mathematical method can be considered non-technical only when it does not have, in the context of the claimed teaching, any relation to the purposeful use of natural forces.

c) A sufficient relation to the purposeful use of natural forces exists when the mathematical method is used for the purpose of obtaining more reliable information on the state of an airplane using the available measurement data to thereby influence the functioning of the system used for detecting that state. 

d) Subject-matter which is novel and based on an inventive step cannot be considered non-patentable only because it does not offer any recognizable advantage over the prior art.

The decision clarifies that the exception of §1 par. 3. Nr. 1 PatG has to be interpreted very narrow and that even a remote relation to a tangible technical device ("the purposeful use of natural forces") is sufficient.

Letter d) highlights an interesting contrast between the German case-law and the case-law of the technical boards of appeal, where a technical advantage is sometimes required.

Vringo v ZTE: inventive step and the impact of proposed changes to a standard

From Jan Pot (Brinkhof N.V., Amsterdam) comes news of a recent court battle between Vringo and ZTE, which led to a ruling late last month from the District Court of The Hague. The battlefield was Vringo’s EP 1 186 119 (“EP 119”), which the court nullified for lack of inventive step.  This decision [in Dutch here, and with an informal English translation here] contains some interesting considerations on the closest prior art and problem inventions. Jan takes up the story as follows:

Since 2012, ZTE and Vringo have been involved in litigation on a number of patents, which are part of a portfolio of ca. 500 patents which Vringo purchased from Nokia. EP 119 is one of those patents. In the Netherlands, litigation started in 2014 when the Dutch customs stopped several shipments of ZTE equipment. Vringo attached part of these goods, alleging infringement of EP 119. The preliminary relief Judge of the District Court The Hague refused to lift this attachment, inter alia because he considered the outcome of nullity proceedings on EP 119 too uncertain.

In 2007, EP 119 was upheld by the European Patent Office's Technical Board of Appeal (TBA) in opposition proceedings initiated by Qualcomm. It has also been the subject of infringement proceedings in Germany, where in 2013 the Landgericht Mannheim refused to stay the infringement proceedings pending the nullity proceedings before the Bundespatentgericht as it considered the chance of revocation insufficient.

EP 119 claims a method for transmitting a certain sequence of symbols, and is according to Vringo essential for the UMTS standard. More specifically, it pertains to the situation in which a UMTS base stations transmits so-called synchronization information on the synchronization channel when a functionality called time-switched transmit diversity, or TSTD, is in use.

ZTE advanced several nullity grounds, including lack of novelty, lack of inventive step and added matter. The Court only dealt with inventive step. It found the patent obvious, starting from the latest draft for the UMTS standard published before the priority date, referred to as TS 25.211 V2.1.0, as closest prior art, in combination with a document referred to as TSGR1#5(99)677. This document, which was published by one of the working groups working on the UMTS standard at the time, proposed changes to the draft standard. The Court held that the skilled person would read these two documents together, and in doing so would be confronted with the problem for which the patent aims to provide a solution.

Vringo argued that EP 119 was in essence a problem invention. However, the Court held that Vringo failed to make sufficiently clear why that would be the case. A number of factors were only first advanced by Vringo during the hearing, while the same number of factors were only briefly touched upon in a rather difficult to follow declaration by its expert, Dr. Moulsley. Neither the patent nor Vringo’s Statement of Defence mentioned these ‘pieces of the puzzle’ as joint causes of a problem. What’s more, the District Court did not find these arguments persuasive when looking at other prior art publications and an e-mail exchange between several technical experts who already discussed the issue. Although Vringo disputed that interpretation of the e-mail exchange, it did not provide any convincing explanation as to what they would then be discussing. Finally, the Court stated that restraint must be observed in assuming the existence of a problem invention, referring to TBA case law (T 971/92).

The Court then concluded that ZTE had rightly argued that there were essentially two options to solve the problem, both of which were obvious to the skilled person. On this issue the Court disagreed with the TBA, which had held that there were multiple options. The viability of those other options was discussed before the Court by ZTE and Vringo. In the end and having heard both parties’ experts, the Court was of the opinion that the other options were either not viable or less obvious. In other words, the Court was convinced that the two options mentioned by ZTE were the “natural” solution to redress the problem with which the skilled person was confronted due to the change made by TSGR1#5(99)677. The Court concluded that the choice for the one of the two obvious solutions is not inventive and that no pointer to either one is required.

Brinkhof, through a team consisting of Ruprecht Hermans, Richard Ebbink, Gaëlle Béquet and Jan Pot, represented ZTE in these proceedings.  This summary is based solely on the decision itself and not on information from the file not reflected in the decision.

Toy beads in court: attempt to get judge to examine merits in interim proceedings fails

Epoch Co. Ltd v Character Options is a decision of the England and Wales Intellectual Property Enterprise Court (IPEC) of 29 October, courtesy of Judge Hacon. Being extempore, the judgment has not been uploaded to BAILII but was potted by the subscription-only Lawtel service.

This dispute revolved around Epoch's patent for a fusible bead toy in which beads could be first arranged and then fused together to form a specific design. CO, a company that imported bead toys from Australia and sold them on the UK market, placed a new type of bead toy on the market which, Epoch said, infringed its patent. Epoch sued for infringement and sought an interim injunction against CO, who alleged that the patent was invalid.

CO, relying on Series 5 Software Ltd v Clarke [here], submitted as a preliminary point that the court should investigate the merits of the case as a whole on the evidence available at the interim hearing. No, said Epoch: there was a serious issue to be tried and it would suffer irreparable harm without the injunction. This was because

• the lifespan of individual product designs was short, so CO's products were likely to cut short any interest in Epoch's; 
• one of CO's products had been under scrutiny in 2007 for containing harmful chemicals; if its products remained on the market there would be a risk of them damaging the reputation of that type of product generally; 
• there was brand loyalty for Epoch's products, and if Epoch succeeded at trial and the CO's products came off the market, customers would buy Epoch's beads but could not match the colours to what they had left of CO's, thereby damaging the image of Epoch's products.

Judge Hacon refused the application for interim injunctive relief. In his view

* The approach adopted in Series 5 Software had not been endorsed by other courts. While the American Cyanamid principle [which requires the court to look at the balance of convenience, or relative inconvenience, of the parties ahead of the full trial] did not prevent some weight being given to the merits, there should not be a mini-trial, especially where interim relief could influence the commercial outcome. The court would therefore apply American Cyanamid in the usual way.

* There was a serious issue to be tried as to whether Epoch's patent was valid, either because it lacked an inventive step or was unpatentable as a merely an aesthetic creation under the Patents Act 1977 s.1. The court would not however take a view at the interim stage in the absence of full legal argument on the meaning of "aesthetic creation".

* The likelihood of irreparable harm being caused to Eppoch if no injunction was ordered was low, as

• there was no evidence of overlap in the designs, and it was somewhat speculative to suggest that the lifespan of a popular Epoch design would be cut short by CO's activities, although it was possible; 
• there was no evidence that CO's products were dangerous; CO's evidence was that the beads were now formulated with a bitter taste to prevent their being swallowed; the evidence showed that there was a lively interest in the products; any damage to Epoch's reputation had occurred in 2007 but had disappeared; 
• even if there were difficulties in matching the beads as suggested, customers would recognise that it was due to the difference in brands -- there would be no damage to the image of Epoch's products. If there was brand loyalty, on its face that was a reason for not granting an injunction, This was because, if an injunction was granted but CO succeeded at trial, it was liable to find it difficult to re-enter the market. 

* There were only two parties on the market in the UK, and there was a strong inference that, to the extent that CO sold its products, Epoch lost sales on a 1:1 basis. Therefore if no injunction were granted and Epoch succeeded at trial, it should be able to assess its lost sales and calculate appropriate damages with reasonable precision. The balance of irreparable harm favoured not granting the injunction.

Rigorous and fruitful? The UPC's 18th, and almost final, draft Rules

The Unified Patent Court website carries a notice that reads like this:

At its last meeting [the most recent meeting, for sure, but this blogger is certain that it isn't going to be the last] the UPC Preparatory Committee adopted the Rules of Procedure of the Unified Patent Court, subject to some further adaptations once the Committee has decided on the court fees. This is a major milestone in the progress of the Committee's work.

The agreed text is draft no. 18 which shows that the text has undergone a rigorous process of development and testing. The Rules of Procedure are the result of a successful and fruitful collaboration between the Preparatory Committee's Legal working group and the Drafting Committee. This will underpin the Court's framework and functioning. The work has benefitted strongly from comments from stakeholders submitted during the written consultation and the oral hearing.

The Rules will be an essential element in the future training of judges of the Court and the decision of the Committee will ensure a smooth transition from the development to the active planning of such training.

Those interested in the Court's operation should familiarise themselves with the text. The UPC-Rules-of-Procedure.pdf is available.

The draft, inclusive of a brief summary of the events leading up to it and a couple of attractive flow charts at the end, runs to 142 pages, so do remember to load up your printer and check your cartridge before you print it out.  The rules end at no.382, but there are more than 382 rules since some rules are already bearing letters in addition to numbers.  The fees are of course still blank.

It is not only these Rules which will govern the outcome of litigation since, in some cases, the Rules of the Court of Justice of the European Union will be brought to bear. Thus:

Rule 266 – Preliminary references to the Court of Justice of the European Union

1. At any stage of the proceedings where a question is raised before the Court and the Court considers that a decision on the question by the Court of Justice of the European Union (“CJEU”) is necessary before the Court can give judgment, the Court of First Instance may and the Court of Appeal shall request the CJEU to give a ruling thereon.

2. The Court shall in requesting a ruling follow the procedure set out in the Rules of the CJEU.

3. If the Court requests the CJEU to apply its expedited procedure the request shall in addition set out:

(a) the matters of fact and law which establish its urgency; and

(b) the reasons why an expedited ruling is appropriate.

4. The Registrar shall as soon as practicable forward the request and any request to apply the expedited procedure to the Registrar of the CJEU.

5. The Court may stay the proceedings. Where it does not stay proceedings, it shall not give judgement until the CJEU has given a ruling on the question.

Given the short life expectancy of patents and the length of time a reference to the CJEU can take, one hopes that the expedited procedure will be the norm in cases where the litigated patent has not already expired or lapsed.

New EPO Guidelines - Common General Knowledge is Back

The EPO's new Guidelines for Examination applicable as of next week (November 1, 2015) have been published and it is time for practitioners to check out what is in for them.

 Section H IV 2.2 defining the basic principle  of allowability of amendments under Art. 123(2) EPC, i.e. the content of the documents of originally filed, has been amended as follows:

Under Art. 123(2), it is impermissible to add to a European application subject-matter which the skilled person cannot derive directly and unambiguously, using common general knowledge, is not directly and unambiguously derivable from the disclosure of the invention as filed.

Hence, the use of common general knowledge has been added. It is true that EPO examiners (or opponents) sometimes forgot that the person skilled in the art does not switch off his common general knowledge when reading patent documents and this blogger appreciates this clarification.

Did any of our readers find other points of practical interest in the amendments? PatLit would be pleased to share your observations.

Michael Thesen

Arbitrariness is not fair - T0595/11 – underpayment of appeal fee

What may we legitimately expect from the
formalities officers in this building?

We have all experienced that judgments appear sometimes unfair, in particular for the underlying party. In my experience, this entirely subjective impression is less likely to arise in cases where the tangible interests of human, warm blooded parties are balanced against each other but rather in cases where the interest of one party is balanced against the interests of faceless and anonymous "third parties" or an undefined “public” whom nobody has ever met in person. This is the case e.g. for the payment of fees or legal remedies where the legal certainty for the third parties has to be established as soon as possible.

The rules of law are generally meant to strike the right balance between the interest and fundamental rights of the parties involved. In the case of an unintended loss of rights or the failure to use a legal remedy, the system of time limits for re-establishment of rights as laid down e.g. in Rule 136 EPC has been developed for this purpose, wherein in particular the time limit of one year of expiry of the unobserved time limit is meant to be fairly absolute as it insures legal certainty for third-parties.
In many cases where procedural fees are not paid or paid in an insufficient amount, the EPO or the national intellectual property office will issue a corresponding notification that the right has been lost ("loss of rights") and that it is possible to file a request for re-establishment of rights under the pertinent rules of law. While such a notification is likely to be considered sufficient to remove the cause of non-compliance with the period as it draws the applicant’s attention to this fact, the failure of the office to send out such a notification is, according to the case law, not as such sufficient to render the absolute one-year time limit for re-establishment of rights ineffective. It is the very purpose of this time-limit to create legal certainty for the public even in cases where the loss of rights has not come to the attention of the former right holder.

In view of this, the decision T0595/11 comes as a real surprise. The appellant, having its seat in Switzerland, has filed a notice of appeal in Dutch language and paid an appeal fee reduced by 20 % eight days prior to the expiry to the time limit to file the appeal. Swiss parties are supposed to understand German or French and are therefore not entitled to a reduction of the appeal fee. The amount was insufficient. However, this had not been remarked by anybody for four years until some months prior to the Oral Proceedings, when the one-year time limit according to Rule 137 (1) EPC to file a request for re-establishment of rights has long passed.


Would anybody of the experienced practitioners among our readers have expected the formalities section of the EPO board of a appeal to issue a notification

1. within the 8 days between the payment of the appeal fees and the due date? or
2. within the 1-year time-limit for re-establishment?

However the answer may be, I think that most of our readers would presume that the appeal would be dismissed as inadmissible.

Surprisingly, the board decided to the contrary, by referring to the “principle of good faith” and the “principle of the protection of legitimate expectations”, the board examines if a legitimate expectation of the appellant existed that the EPO should have warned him significantly earlier of the deficiency. The Board derives from Rule 101 EPC that the duty of the office to examine the correct fee payment, including the entitlement for fee reduction exists and that this check has to be done “with a reasonable time frame”, without, however exactly defining this time frame.

According to point 1.7 of the reasons “the argument that any time frame should be such that a warning can be expected in time for the appellant to file a request for re-establishment of rights, appears persuasive. However, the issue need not be decided now as the board is confident that whatever this expected time frame it might be, it is certainly shorter than the 4 whole years that have passed in the present case between the expiry of the time limit for filing the appeal (and for paying the full appeal fee) and the time when the office first made the appellant aware of this issue.” The board than considers “that an objective observer relying on the duty of the office to act as explained above would have concluded that the appeal has been examined for such formalities as the appeal fee" and “that the legitimate expectations of the appellant (and possibly other parties) that the fee payment was in good order and would no longer be objected to, where indeed established”. After having noted that not nearly the legitimate interests of the appellant must be protected in an inter partes case, the board says that it “can only strive to find with it considers to be an equitable balance of the consequences to either party.” And says that “the board must choose between a possible and certain adverse effect, where it also must consider that the possible, but nevertheless conjectural adverse effect is the prevention of an immediate success of the respondent's case (i.e. the revocation becoming final), while the certain adverse effect is the immediate loss of the appeal”. Weighing up the legitimated interest of both sides and also that of third-parties, the Board finds that “it is equitable that the office's failure is made good and the error is now allowed to be remedied as far as possible" and finally judges that the appeal is allowable (The remaining 20 % of the appeal fees had meanwhile been paid).
The core part of the judgement goes as follows:

[1.13] Weighing up the legitimate interests of both sides and also that of third parties, and considering the overall circumstances of the present case, the Board concludes that the original error might have had serious and inequitable consequences through the Office's failure to discover it. Therefore, it is equitable that the Office' failure is made good and the error is now allowed to be remedied, as far as possible. Seeing that some adverse effect is inevitable, the Board considers that the possibility of a real, but otherwise in itself not necessarily decisive setback (here the non-occurrence of an immediate success) for a party is more preferable than a certain decisive loss of all rights for another party, in particular given the fact that for a long time none of the parties did expect the latter. Put differently, a merely possible injury obviously is less serious than certain death. Therefore in the present case the Board accepts, through the application of the principle of protection of legitimate expectations, that the appeal fee has been timely and fully paid. The Board considers that in this manner overall, least harm is done to all parties. The Office has not suffered any loss either, as the fees were eventually paid in full. It is also satisfactory that in the end the appeal can be decided on its merits.

With all compassion for the appellant, this blogger finds this decision highly questionable as it tries to arbitrarily find a fair balance between the interests of the parties while disregarding the rules of law. Most importantly, the under-payment of the appeal fee was not the result of the office's negligence. If the board really thinks that the Formalities section should have notified the appellant within one year, the opportunity lost by the appellant due to the office's error would have been the lost opportunity fo file a request for re-establishment of rights. The board should therefore not have immediately considered the appeal as admissible but rather have examined an eventual request for re-establishment of rights to be filed by the appellant and whether or not the appellant has exercised all due care required by the circumstances at the time of filing the appeal.

The latter approach would have been the solution of the German courts, according to the theory developed by the BGH in "Crimpwerkzeug III" , a re-establishment maybe requested even after expiry of the one-year term for re-establishment of rights in cases where “the reasons for the failure to comply with the time limit are to be assigned to the court/office” and not to the appellant 
A decision balancing the legitimate expectations of a party with legal security for thirds parties was issued by the 10th senate of the Budespatentgericht in 2012 and has been discussed here. Following the "Crimpwerkzeug" theory, the senate judges that re-establishment may be requested even after expiry of the one-year-term

"in specific exceptional cases for reasons of ensuring an effectice legal protection and the right to be heard, in particular when the reasons for the failure to comply with the time-limit do not lie in the sphere of the party but are rather to be assigned to the court/office".

The decision T0595/11 as it stands is a clear case of arbitrariness where the explicit rules of law are overruled by fairness arguments shot from the hip.  It risks to entail attempts to circumvent the one-year time-limit for re-establishment in other cases and does poor service to the legal certainty in our field.

Slide to Unlock Image Patent-eligible but Not Inventive - BGH Entsperrbild

In the case X ZR 110/13 "Entsperrbild", the BGH had do decide on a patent relating to the unlocking of a mobile phone. The key feature is that an icon (unlock image - the arrow on grey background in the figure on the rhs) is moved together with the finger when executing the unlock gesture.

The Bundespatentgericht had disregarded the icon in the assessment of inventive step and judged that it did not contribute to the solution of a technical problem.

The BGH did not agree. According to the headnote, features relating to the conveying of information in a patent claim need to be subject to a special treatment (unofficial translation by the author of this note):

1. Statements relating to the conveying of certain information contents and hence aim at having impact onto the human imagination or intellectual power are, as such, disregarded in the assessment of inventive step. Statements relating to information which shall be conveyed according to the technical teaching of the invention are apt to support the patentability in view of inventive step only insofar as they determine or at least influence the solution of a technical problem by technical means.
2. Information-related features of a patent claim are to be examined as to whether the information to be conveyed is, at the same time, an embodiment of a means for a technical solution, which must not already be indicated as such elsewhere in the patent claim. In such a case, the means for the technical solution as to be considered in the assessment of inventive step.

The interesting piece here is the not already indicated elsewhere portion. The BGH bases its analysis on a fairness argument. According to the senate, "it would not be justified to exclude the technical effects of the conveying of information from the assessment of inventive step only because these are claimed, in the patent claim, merely in the form of the presentation of certain information."

I presume this can be interpreted as follows: In the case at issue, the unlock image was supposed to solve the technical problem of providing optical feedback to the user. Had the patentee claimed "means for providing optical feedback" covering both tangible technical means as well as the presentation of certain information, this broader "means for providing optical feedback" would have had been clearly considered in the assessment of inventive step. The Fact that the patentee claims a narrower, more specific solution, it would not be justified to exclude this from the assessment of inventive step. If, however, the broader "means" is already claimed elsewhere (and therefore contributes to inventive step), the additional information-related features would not entail any further technical contribution and can be disregarded.

In the case at issue, the feature of using a "movable" image for providing optical feedback was, in contrast to the analysis of the Bundespatentgericht, considered to be an information-related feature contributing to solution of a technical problem relevant for inventive step.

This finding was clearly a progress in our case-law but a phyrric victory for Apple: The feature was considered but found to be obvious over the art.


 

This year's IP Summit: what's in it for the patent litigation fraternity?

Premier Cercle's annual IP Summit, now in its 10th edition, takes place on 3 and 4 December of this year in the Hilton Berlin. This is a big event, with at least 600 participants and registrants attending.  The event is addressed to a broad range of patent-related skills and interests, and the programme is divided into streams, enabling those who attend to pursue their IP specialities via workshop sessions.

As might be imagined, given the topicality of patent litigation at present, the programme has a considerable amount to offer those who decide whether to litigate as well as those who do the donkey-work.  Topics relating to patent litigation include

• the future of injunctive relief in increasingly harmonised European Union
• availability of injunctive relief for infringement of FRAND patents
• more IP rights or better enforcement?
• the impact of the Unified Patent Court on European jurisdictions

Click here for the list of confirmed speakers. You can check out the programme and all other details of this event via the Premier Cercle website here. 

Blocked passages are no passages – OLG Düsseldorf 15 U 139/14

The OLG Düsseldorf had to deal with a motion for preliminary injunction based on a patent relating to a boiler with a combustion chamber provided with a flame defection component deflecting the flame into a space between a flame tube and a heat exchanger. A combustion chamber is surrounded by an exhaust gas chamber and separated therefrom by a heat exchanger surface provided with passages.

According to claim 1 of the patent in suit, these passages for hot combustion gases are provided over the entire length of the combustion chamber.

The defendant had been sentenced for an infringement in earlier proceedings and then came up with a modified version of the boiler were some of the passages in the metallic heat exchanger body were closed with some sort of plastic matter. As a result, only 85 % of the lengths of the combustion chamber were provided with (open) passages and the rest was clogged.

The plaintiff argued that the passages would still exist despite of being clogged by plastics and that the plastics would degraded and burned after a while such that the passages would be open. Export evidence on the last point was contradictory such that the court concluded that the allegedly infringing product as it was presented did not show passages provided over the entire length of the combustion chamber. Once the passages are clogged, they do no longer qualify as passages in the sense of the patent.

Turning to infringement by equivalent means, the board re-emphasizes that the finding of equivalence requires that the considerations of the skilled person are oriented on the technical teaching of the claim and that the claim is not only the starting point but rather the essential basis for the consideration of the person skilled in the art (BGH Pumpeneinrichtung). At the same time, the patentee is limited to the technical teaching he has requested to be protected (BGH Kunststoffurteil). According to the court, the technical teaching given by the patent has to be accepted by the person skilled in the art as sensible and must not be questioned in its technical justification when searching for an equivalent means as a replacement of a feature in the claim.

In the case at issue, the claim teaches that the cylindrical surface of the heat exchanger provided for exchanging heat can be and should be used in its entirety. Accordingly, the required uniform heat transmission onto the heat exchanger can be achieved only when the passages are provided over the entire length of the surface of the heat exchanger which separates the combustion chamber from the exhaust gas chamber.

Consequently, the allegedly infringing embodiment was found not to infringe the patent by equivalent means.

 

The German Text of the Judgement can be found here.

Omitted Inventors May Have Standing To Sue for Patent Correction Based On Injury to Reputation

The U.S. Court of Appeals for the Federal Circuit recently ruled that a plaintiff not named as a joint inventor on several patents and pending patent applications has standing to maintain an action to correct inventorship under 35 U.S.C. § 256, despite the fact that he previously assigned all rights in the patented inventions to his former employer. Shukh v. Seagate Technology, LLC, Case No. 2014-1406 (Fed. Cir. Oct. 2, 2015). The decision recognizes for the first time that an omitted co-inventor may have an enforceable interest in correcting inventorship based on evidence that the correction would enhance the inventor’s reputation. A copy of the decision is HERE. 

The plaintiff in Shukh was a solid state physics research scientist at defendant Seagate Technology, LLC. At the outset of his employment, he signed Seagate’s standard “inventions agreement,” which prohibited him from filing a patent application without permission from Seagate, and included a present assignment to Seagate of all future inventions made during his term of employment. Subsequently, Shukh contended that Seagate failed to name him as a co-inventor on six patents and four pending patent applications covering subject matter that he had allegedly contributed. Seagate terminated him in 2009, in part due to his confrontational manner and reputation for claiming credit for discoveries made by other Seagate researchers. He then filed suit seeking to correct inventorship of the patents under § 256 and asserting several state-law tort and breach of contract claims.

At the motion to dismiss stage, the U.S. District Court for the District of Minnesota ruled that Shukh lacked any ownership or financial interest in the patents and applications based on his assignment of all rights to Seagate. The district court also granted summary judgment on the § 256 claim on the ground that the plaintiff lacked standing.

On appeal, the Federal Circuit vacated and remanded on the § 256 claim, and affirmed the district court’s other rulings. The appeals court declined to revisit the effect of the Seagate inventions agreement, stating that the district court’s ruling that Shukh lacked any ownership or financial interest in the patents was supported by binding precedent. Filmtec Corp. v. Allied-Signal, Inc., 939 F.2d 1568 (Fed. Cir. 1991). 

Although the Federal Circuit vacated and remanded the district court’s grant of summary judgment, it did rule that Shukh demonstrated standing to pursue its claim to correct inventorship. The court announced that in some situations, an inventor may have a reputational interest in being properly designated as the co-inventor on a patent:

Today, we hold that concrete and particularized reputational injury can give rise to Article III standing. As we noted in [Chou v. Univ. of Chi., 254 F.3d 1347, 1357 (Fed. Cir. 2001)], “being considered an inventor of important subject matter is a mark of success in one’s field, comparable to being an author of an important scientific paper.” 254 F.3d at 1359. We reasoned that “[p]ecuniary consequences may well flow from being designated as an inventor.” Id. This is particularly true when the claimed inventor is employed or seeks to be employed in the field of his or her claimed invention. For example, if the claimed inventor can show that being named as an inventor on a patent would affect his employment, the alleged reputational injury likely has an economic component sufficient to demonstrate Article III standing.

Slip op. at 7.

In addition, the court found that Shukh presented enough evidence of a specific reputational injury to create a triable issue on his claim to correct inventorship. First, evidence and expert testimony established that being a named inventor on patents was a significant factor in the professional reputation and stature of scientists in Shukh’s field. In particular, Seagate itself recognized issued patents as an indicator of good performance. Although the district court observed that the plaintiff already had an excellent reputation as an inventor, the Federal Circuit noted that the evidence suggested that his reputation would be enhanced had he been named on multiple additional patents and applications. The court also noted that being named on the additional patents could have rehabilitated Shukh’s bad reputation for claiming credit for Seagate innovations, since it would tend to validate his role as a co-inventor. Finally, Shukh presented evidence that his bad reputation was a factor in his inability to find employment after termination from Seagate. The Federal Circuit found that a jury could infer that his status as a co-inventor on additional Seagate patents would rehabilitate his reputation, which would improve his employment prospects and have a direct financial impact.

No stay of liability issue, but prospect of some sort of stay of relief remains

Fontem Holdings 1BV and another v Ten Motives Ltd and another; Nicocigs Ltd v Fontem Holdings 1BV and another [2015] EWHC 2752 (Pat), is 2 October 2015 ruling by Mr Justice Norris, in the Patents Court, England and Wales.

In short, this was an application by the defendant -- the alleged infringer -- for summary judgment on infringement of a patent for an e-cigarette, or in the alternative an application to stay the action pending the outcome of European Patent Office (EPO) opposition proceedings. In a pretty short judgment for a patent case (just 46 paragraphs in length) Norris J summarised the law, considered the issue of infringement and briefly set out the particular circumstances of the new and rapidly-growing market for e-cigarettes.

Given the nature and speed of change in the marketplace, he said, there was a clear need for a much earlier determination of the validity and infringement issues in the national litigation than the earliest possible date for completion of the EPO's opposition proceedings. If however infringement were proven at trial, there remained the possibility of some sort of stay when it came to sorting out the appropriate relief.

T2201/10 Do not Destroy the Foundations of your Argument

The decision T 2201/10 deals with the proper application of the problem-and-solution approach.

Our readers will know that inventiveness can usually be disproven (some say that the "unless" in Art. 56 EPC means that there is a legal presumption of inventiveness) but not proven.  The defender of a patent or application has to rely on secondary indicia and is otherwise limited to criticise the arguments of his challenger.

This decision in very precious in that it establishes a positive test for inventive step and does this in a very clear and definitive way.

A rough translation of the an excerpt of item 5.1.3 if the decision from the French is as follows (emphasis added):

The problem-solution approach ... further leads to the rejection of any analysis according to which the person skilled in the art would have modified the closest prior art in a way which would be in conflict with its reason of existence unless its very quality as "closest prior art" originally accepted for that document would be negated.

In other words, the finding that the invention as claimed departs from the disclosure of a document of the prior art in what are - in view of the objectives at which that prior art aims - the foundations of the latter, is as such sufficient to conclude that an inventive step of the invention vis-à-vis this prior art exists.

In the case at issue, if D1 is kept as the closest prior art, the skilled person would have excluded every modification going against the aim of the assembly which is described therein, i.e. every modification which would result in a reductions of exchange within the refrigerating fluid.

Breaking News: Protocol to the UPC Agreement In Force

The News of the day comes from the UPC preparatory committee:

Today, October 1st 2015, a protocol to the UPC Agreement has been signed by representatives of member states in the margins on the Competitiveness Council meeting. This protocol will allow some parts of the UPC Agreement to be applied early. This includes final decisions on the practical set up of the Court, for example, the recruitment of judges and testing of IT systems. The provisional application phase will also be used to allow for early registration of opt-out demands.

This is the latest step towards bringing the Unified Patent Court into operation. In practice there is no immediate impact on business, however, the Preparatory Committee aims to complete its work by June 2016 with a view to the UPC opening at the start of 2017.

A copy of the protocol is available.

Federal Circuit Holds That Laches is Defense To Equitable Relief and Pre-Filing Damages In Patent Infringement Actions

In a recent en banc decision, the U.S. Court of Appeals for the Federal Circuit ruled that laches resulting from a delay in filing suit for patent infringement is a statutory defense, and may bar a patentee from obtaining injunctive relief or an award of pre-suit damages. SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, Case No. 2013-1564 (Fed. Cir. Sept. 18, 2015). The court distinguished the Supreme Court’s 2014 Petrella decision, which held that laches is not available as a defense under the Copyright Act. See Petrella v. MetroGoldwyn-Mayer, Inc., 134 S. Ct. 1962 (2014). In addition, the Federal Circuit ruled that although a laches defense may preclude injunctive relief or an award for pre-suit damages, it only will bar a patentee’s right to continuing royalties for post-trial infringement in “extraordinary circumstances.”  A copy of the decision is HERE.

Petrella Calls Into Question Federal Circuit’s Previous Laches Rulings

The Federal Circuit has long recognized laches as a defense when an unexcused delay occurs between the time a patentee/plaintiff knows (or should know) of an infringement and the filing of an infringement action. See A.C. Aukerman Co. v. R.L. Chaides Construction Co., 960 F.2d 1020 (Fed. Cir. 1992) (en banc). The Aukerman court established that:

Two elements underlie the defense of laches: (a) the patentee’s delay in bringing suit was unreasonable and inexcusable, and (b) the alleged infringer suffered material prejudice attributable to the delay. The district court should consider these factors and all of the evidence and other circumstances to determine whether equity should intercede to bar prefiling damages.

Slip op. at 10-11. In addition, the appeals court ruled that “[a] presumption of laches arises where a patentee delays bringing suit for more than six years after the date the patentee knew or should have known of the alleged infringer’s activity.” Id.

In Petrella, the Supreme Court ruled that laches is not available as an equitable defense to a statutory cause of action for copyright infringement when the federal statute itself provides a statute of limitations. Petrella was a copyright case involving the 1980 film Raging Bull, but the Court noted that its decision might affect the Federal Circuit’s application of laches in patent infringement cases, although it had no “occasion to review the Federal Circuit’s position” in its decision. 134 S. Ct. at 1974 n.15.

Federal Circuit Holds That Laches Is A Statutory Defense Under Patent Act

The Federal Circuit ordered rehearing en banc in SCA Hygiene to consider the impact of Petrella on the laches defense in patent cases. The Federal Circuit distinguished Petrella and held that the laches defense is available under the Patent Act even though 35 U.S.C. § 286 provides a temporal limitation on the availability of damages for patent infringement, concluding that “[i]n the 1952 Patent Act, Congress settled that laches and a time limitation on the recovery of damages can coexist in patent law.” Slip op. at 5.

Chief Judge Sharon Prost wrote the majority opinion, which the entire court joined on the question whether laches is a defense to patent infringement. The court noted that, unlike the Copyright Act, the current Patent Act incorporates laches as a statutory defense. Although 35 USC § 282 does not explicitly refer to laches, it states that defenses to patent infringement claims “include noninfringement, absence of liability for infringement or unenforceability.” 35 U.S.C. § 282(b)(1) The court observed that it long had recognized that laches was codified in this provision. Moreover, the court relied on a detailed commentary on the Patent Act written by Pasquale J. Federico, the USPTO’s unofficial “historian” and principal author of the legislation that became the 1952 Patent Act. P.J. Federico, Commentary on the New Patent Act, reprinted in 75 J. Pat. & Trademark Off. Soc'y 161 (1993). The court noted that it and other courts have cited Federico’s commentary as “an invaluable insight into the intentions of the drafters of the Act.” Symbol Techs., Inc. v. Lemelson Med., 277 F.3d 1361 (Fed. Cir. 2002). According to Federico’s commentary, Congress intended § 282(b)(1) to “include the defenses such as that the patented invention has not been made, used or sold by the defendant; license; and equitable defenses such as laches, estoppel and unclean hands.”

Because the Federal Circuit found that the Patent Act includes laches as a statutory defense, the Supreme Court’s rationale for excluding laches as a defense under the Copyright Act is not applicable to patent infringement actions. In fact, the Petrella Court recognized that Congress could provide a statutory basis for laches, as it did in the Lanham Act. See 134 S. Ct. at 1974 n.15. Furthermore, the Federal Circuit observed that § 286 is a “damages limitation,” not a statute of limitations, stating that, “By its terms, § 286 is a damages limitation. The statute does not preclude bringing a claim—instead, it limits a patentee’s damages recovery to compensation for only the last six years of infringement.” Slip op. at 17. It ruled, however, that the distinction is irrelevant to the question whether the laches defense is available.

Laches Affects Injunctions And Bars Pre-Filing Damages

The Federal Circuit next evaluated the effect of laches on the remedies available in an infringement action. First, the judges unanimously agreed that laches continues to be a factor in a court’s decision to award injunctive relief. The Federal Circuit  noted that the circumstances giving rise to laches are considerations that “[f]all under the balance of the hardships factor” that a court must consider in considering requests for injunctive relief under eBay Inc. v. MercExchange, LLC, 547 U.S. 388 (2006).

In addition, the majority (six of eleven judges) observed that pre-1952 cases consistently applied laches to bar recovery for monetary damages. See, e.g., Banker v. Ford Motor Co., 69 F.2d 665 (3d Cir. 1934). The court presumed that in enacting the Patent Act, Congress was aware of pre-1952 cases applying laches as a defense to legal claims. Thus by enacting § 282 without commenting on the common law rule, the statute “codified whatever laches doctrine existed” at the time, including the bar to pre-filing damages. Slip op. at 32. Five circuit judges dissented from the court’s ruling that laches is available as a defense for damage claims under the Patent Act. They argued that the question should be governed by the Supreme Court’s general interpretation of laches as a defense, and that the Federal Circuit should not adopt “special rules” for patent cases.

Finally, although the Federal Circuit ruled that Petrella did not require the abrogation of laches as a defense, it did require an adjustment of the defense’s impact on continuing damages. Laches may be a bar to recovering damages arising during a period of unexcused delay, but it is not a forfeiture of rights to the patent itself. This result is one important difference between laches and estoppel. See Menendez v. Holt, 128 U.S. 514 (1888) (“Delay in bringing suit there was, and such delay as to preclude recovery of damages for prior infringement; but there was neither conduct nor negligence which could be held to destroy the right to prevention of further injury.”). As a result, the Federal Circuit held that a “patentee guilty of laches typically does not surrender its right to an ongoing royalty.” Slip op. at 40-41.

This may not be the last word on the issue. The Supreme Court may be asked to review SCA Hygiene and decide whether the Federal Circuit was correct to keep the laches defense as part of patent law.

Training for UPC technical judges - Antitrust Law

On the last day of the first block of the CEIPI Training Program for Future Technical Judges of the UPC, Nicolas Petit (Univ. Liège) gave a very dynamic and lively talk about the interface between competition law and IP rights. He expects that the UPC will have to establish case-law on antitrust-based defences in patent litigation (FRAND, Standard essential patents ...) as explicitly laid down in Art. 32(1) UPCA.

Prof. Petit

The question whether or not, in case of dubious settlements between the parties, the court will have a duty to raise a motion on breach of competition, was answered by analogy to what is considered to be applicable to mediation procedures: Such a duty exists only where the breach is very glaring and manifest.

He further emphasizes that a source of misunderstanding between lawers and scholars on both fields lies in the different use of the word "monopoly" in IP and antitrust law. While patents are permanently qualified as "monopolies" by IP lawyers, this is not true based on the understanding of this expression in the world of antitrust law. Actually, the patent alone does not confer the sufficient market power to the patentee because there may be lots of competing technologies around. "The patent grants an exclusive right to use a technology but typically does not exclude third parties market" (roughly Quoted from Hovenkamp).

The case law of the FRAND defence is put in analogy to the "essential facilities" case law in the field of antitrust law because the CJEU qualifies intellectual property merely as yet another kind of "raw material" to be processed in secondary markets. Requirement of the admissibility of such a defence would be that the parties are competing in at least a secondary market, which is not the case for Non-Practicing Entities in dispute with potential licensees of their patents. In other words, the FRAND defence will never be applicable to "trolls".

CEUJ Judgement July 2015 (Huawei / CTE C‑170/13) develops a sort of "good faith" test for the behavoir of both the holder of the standard essential patent (SEP) and the implementer who have to respect "certain conditions" in the course of negotiations and when bringing an action to the court.  These new conditions will replace the BGH Orange Book Standard in the future case-law and will be discussed in a separate post.

CEIPI Training Program for Future Technical Judges of the UPC

CEIPI Training Program for Future Technical Judges of the UPC is currently taking place in Strasbourg with an completely incredible lineup of speakers including the Who-is-Who of the UPC experts.

This blogger is most impressed about the enthusiasm of the speakers and the audience.

The first session on thursday started with welcoming words of Yves Lapierre (INPI), Max Brunner (French Ministry of Justice) and Cristophe Geiger (Ceipi) to continue with a resume of the long history of the UPC by Margot Fröhlinger (EPI) sharing some tiny bits of her knowledge on what happened behind the scenes in the course of the negotiations. Patlit hopes that she will someday publish an autobiography with even more of that ...

Alain Giradet and Sir Robin Jacob then shared their thoughts on Judicial Ethics and Independence (and on a lot of other issues of course) and gave most interesting insights on what it means to be a judge.

A brief summary of the second and third session will follow.

Splitting trial between IPO and court "unsatisfactory and wasteful"

Angle Ring Ltd v ASD Westok Ltd is an extempore ruling of Judge Richard Hacon, sitting earlier this week in the Intellectual Property Enterprise Court (IPEC), England and Wales. The decision is briefly noted on the Lawtel subscriber-only service.

This was an dispute involving the ownership and validity of three patents in which the defendant Westok applied for summary judgment in respect of Angle's patent ownership claim.  Angle, the first claimant, asserted that Westok had never been the true inventors of the patents and had at all times known, or had reasonable grounds to know, that the second claimant was the true inventor. Although the IPEC would be able to deal with lack of inventive step or novelty at trial, the claimants failed to make a pro forma application to the UK Intellectual Property Office (the IPO, which has the initial jurisdiction to deal with claims relating to ownership of patents and patent applications) to have the matter transferred to the IPEC, leaving an issue as to whether the court had jurisdiction to deal with entitlement.

Westok submitted that there were no reasonable grounds for it to have known that the second claimant was the true inventor, and that the court should determine that there was no real prospect of concluding that it must have known that it was not entitled to the patents.

Richard Hacon refused the application. In his view:

* The allegation that Westok had had reasonable grounds for knowing that the second claimant was the true inventor was irrelevant. It was fair to infer from the pleading that the claimants had alleged that Westok had known that it was not entitled to the patents, and the court would have to determine whether Westok knew that it was not so entitled.

* It was not appropriate to go through the evidence in a mini-trial of whether the claimants' case was unarguable; it had been pleaded sufficiently and should go to trial.

* The claimants would find it difficult to adduce further evidence if it turned out that the existing evidence did not support its case that Westok had had the relevant knowledge, and Westok would therefore succeed at trial on that point.

* The court ought to exercise its inherent jurisdiction in order to deal with entitlement at trial. It was artificial to distinguish the matter of lack of inventive step or novelty and leave entitlement to the IPO. That would be unsatisfactory and wasteful.

Intellectual Property Prevails over Banking Secrecy

The ECJ decision C-580/13 (Coty Germany GmbH/Sparkasse Magdeburg) of July 16 relates to the interesting question to what extend banking secrecy can prevail over intellectual property rights.

As reported here, the Ist Senate of the BGH (responsible for trademark matters) has referred an interesting question to the ECJ:

Is Art. 8 par. 3 Lit. e of the directive 2004/48/EG to be interpreted such that this provision is in conflict with a national regulation enabling a banking institute in a case as the one as issue to deny access information on the name and address of the owner of an account according Art. 8 par. 1 lit. c of this directive with reference to the banking secrecy?

(referring decision: "Davidoff Hot Water" (I ZR 51/12),

In the case at issue, counterfeit products were sold via e-bay and the payments were received on an account kept by a bank which was sued by the trademark owner to provide information on the account holder, which the bank refused.

The ECJ asserts that (par. 33, emphasis added):

The present request for a preliminary ruling thus raises the question of the need to reconcile the requirements of the protection of different fundamental rights, namely the right to an effective remedy and the right to intellectual property, on the one hand, and the right to protection of personal data, on the other (see, to that effect, judgment in Promusicae, C‑275/06, EU:C:2008:54, paragraph 65).

And finds that (par. 39 and 40)

... unlimited and unconditional authorisation to invoke banking secrecy is such as to prevent the procedures laid down by Directive 2004/48 and the measures taken by the competent national authorities, in particular when they seek to order the disclosure of necessary information under Article 8(1) of that directive, from taking due account of the specific characteristics of each intellectual property right and, where appropriate, the intentional or unintentional character of the infringement. 

 It follows that an authorisation of that kind is capable of seriously impairing, in the context of Article 8 of Directive 2004/48, the effective exercise of the fundamental right to intellectual property — to the benefit of the right of persons covered by Article 8(1) of Directive 2004/48 to the protection of personal data concerning them — as a result of the obligation, for a banking institution, to respect banking secrecy. 

The task to find "any other means or remedies" (par. 42) or to establish criteria are to be applied for striking the right balance between the right to intellectual property, on the one hand, and the right to protection of personal data is left to the referring court. The repeated reference to recital 17 of the Directive 2004/48 implies that the intentional or unintentional character of the infringement should play a role.