Thursday, 19 February 2015

MIP International Patent Forum: something for patent litigators too

This blogger thinks it might be a good idea to draw the attention of readers of this blog to the fact that Managing Intellectual Property magazine's International Patent Forum 2015 will take place less than a month away, on 10 and 11 March, in the elegant yet functional surroundings of London's Waldorf Hilton Hotel. In keeping with the traditions of this event, which was first held five years ago, admission is free for in-house corporate and patent counsel, academics and R & D professionals.  If you don't fall within any of these categories but are a reader of the IPKat weblog, you are entitled to the benefit of a £300 discount against the cost of registration.

From the point of view of anyone litigating patents, there are sessions on post-grant and inter partes procedures in the United States and on the new IPR courts in China and Russia, not to mention some cerebral stuff on advanced strategies for litigating patents in the new Europe.

You can see what the IPKat weblog has had to say about this event here, and about some of its speakers here.  The Forum's website, with programme, speaker and registration details, can be accessed here.  Some 200+ folk are expected to attend. This blogger suspects that many will be there because, by pure coincidence no doubt, the Managing IP Global Awards 2015 dinner takes place on the evening of 11 March in the InterContinental Hotel Park Lane.

Disclosure: this blogger is the founding editor of Managing Intellectual Property and is already looking forward to his dinner ...

Monday, 16 February 2015

US To Take Another Crack At Patent Litigation Reform?

In January, the 114th Congress arrived in Washington, D.C., with Republicans controlling both the Senate and the House of Representatives for the first time since 2006. One of the first orders of business was to restarted the patent litigation reform efforts that stalled in the last Congress.

On February 5, 2015, a group of legislators introduced a new bill, HR 9, entitled the “Innovation Act.” A copy of the bill as introduced is available HERE.

HR 9 continues recent attempts to address issues left unresolved by the Leahy-Smith America Invents Act of 2012. Very similar legislation passed the House in the last Congress, but did not advance in the Senate, apparently due to opposition from then-Senate Majority Leader Harry Reid. With Republicans now controlling the apparatus of the Senate, it appears that some form of reform legislation has a good chance of passing. HR 9 was introduced by a bipartisan group of lawmakers. In addition, the White House repeatedly has endorsed some steps to curb abusive patent litigation.

The following are some key features of HR 9:

1. Detailed Pleadings. HR 9 proposes to add a new provision to the Patent Act, 35 U.S.C. § 281A, requiring claims for patent infringement raised in a complaint, cross-claim, or counterclaim to be pleaded with significant detail, including identifying the patents and claims asserted, the specific accused products or processes, and a statement of how the product or process infringes the claim, including “with detailed specificity, how each limitation of each claim identified . . .  is met by the accused instrumentality.” The pleading also would need to include information concerning the claimant’s standing, prior litigation involving the patent, and whether the patented invention is “essential” for purposes of implementing any industry standards. If the required information is “not reasonably accessible,” the claimant would be allowed to substitute an explanation, identifying the steps taken to ascertain the information. The bill would direct the Supreme Court to eliminate Form 18 of the Federal Rules of Civil Procedure. The Federal Circuit has relied on that form in refusing to require additional factual allegations in infringement pleadings. See R+L Carriers v. Driver Tech LLC, 681 F.3d 1323 (Fed. Cir. 2012).

2. Loser Pays. HR 9 would amend 35 U.S.C. § 285 to create a loser pays system for fees and expenses incurred in any action “arising under” the Patent Act. A “prevailing party” would be entitled to an award of reasonable fees and expenses unless the court concluded that the losing party’s “position and conduct . . .  were reasonably justified in law and fact or that special circumstances (such as severe economic hardship to a named inventor) make an award unjust.” A party could move for an order requiring an opposing party to state whether it is able to pay such an award, and if it could not pay the court would be authorized to join an “interested party” and hold that entity liable for any fees and expenses awarded.

3. Discovery Stays. If the district court determines that claim construction is required, the bill would automatically stay discovery on any subject other than the meaning of the patent claims, subject to exceptions at the court’s discretion.

4. Customer Stays. HR 9 would automatically stay infringement actions brought against customers when the manufacturer of an accused product is named in the action and the customer and manufacturer agree to the stay. Although the customer would be bound by issues decided in litigation against the manufacturer in most cases, it could seek relief from an adverse result if the manufacturer did not defend the action through appeal or entered into a consent judgment, where the result would unreasonably prejudice the customer or be manifestly unjust.

5. Trademarks in Bankruptcy. HR 9 would amend the Bankruptcy Code, 11 U.S.C. § 101, to include trademarks, service marks and the like to the definition of “intellectual property” in the Code. This change would give some additional protection to trademark licensees when a licensor files for bankruptcy protection. 11 U.S.C. § 365(n).

6. Demand letters. The bill seeks to address, at least in part, criticisms that non-practicing entities (NPE’s) and patent assertion entities (PAE’s) engage in deceptive licensing efforts by sending generic demand letters to hundreds of potential infringers, seeking to leverage the threat of expensive litigation to extract settlement agreements. A number of states recently have enacted laws to prohibit abusive patent assertion practices. HR 9 would provide that a demand letter cannot be used to establish willful infringement unless it “identifies with particularity the asserted patent, identifies the product or process accused, identifies the ultimate parent entity of the claimant, and explains with particularity, to the extent possible following a reasonable investigation or inquiry, how the product or process infringes one or more claims of the patent.”

7. Disclosure of real party in interest. The bill would require a plaintiff to notify the USPTO, the court, and all parties of the real parties in interest in any patent infringement suit (and their ultimate parent entities), including any assignee, licensee with the right to grant sublicenses, and any other entity with a financial interest in the patent. If a party in interest is a partnership, the bill would require disclosure of all partnership interests in excess a five percent share of the partnership.

8. Discovery reforms. The bill would direct the Judicial Conference of the United States to investigate and propose procedural reforms to remedy the “asymmetries in discovery burdens and costs” in patent litigation, including the cost and burdens of document and ediscovery, sequencing and bifurcation of discovery, and case scheduling and management in patent actions.

Although HR 9 continues the momentum towards patent litigation reform that started in the last Congress, some commentators have noted that recent changes in the law, including provisions of the America Invents Act and court decisions, may be reducing the incidence of litigation by NPEs and PAEs. As a result, some groups representing patent owners may oppose the bill due to concern that the additional restrictions are unnecessary and would needlessly impair the ability of patentees to enforce their rights against infringers.

Friday, 13 February 2015

Clash of Bread Cultures

Bread and beer are reported to have been the main foodstuff in medieval France and Germany but the crafts have developed in completely different directions.

German beer is governed by the German purity law of 1516 and German brewers would never ever add anything other than water, malt and hops to their beer. German beer consumers appreciate the subtly different nuances of the taste of their Pilsner or Helles. On the other hand, French brasseries offer all kinds of beer with all sorts of natural and artificial flavours and brewed using strange ingredients.

In what concerns bakery, German shops are known to offer a large variety of bread with all sorts of cereals and other stuff in it. French bakery is governed by a sort of purity law for baguette foreclosing using ingredients other than baking flour, water and salt in their bread and yeast or leaven/sourdough for the fermentation (at least when it comes to ""pain de tradition française", "pain traditionnel français", "pain traditionnel de France" or the like to be precise). French people love to discuss the subtle differences in the crispiness and fluffiness of the baguettes of the different boulangers in their hometown.

It would therefore be just as non-obvious for the traditional French Boulanger to put stuff like bran or oatflakes into his dough as it would be non-obvious to put bananas, whiskey or other flavours into his beer.

How does this notion of obviousness, which is based on national traditions, translate into patent law?

The patent underlying the the decision T 1303/10  of the EPO's technical board of appeal relates to a recipe and to a baking mix for "pains de type français à goût levain" (Frech bread with a taste of leaven) held by a French company, which was opposed by the German bakery association "Verband der Backmittel- und Backgrundstoffhersteller e.V.  Geschäftsbereich Deutschland. The patent as granted differed from the prior art that a narrow range of dry leaven was selected from a broader range known in the prior art. The board held that this range could have been found by trial without inventive skill.

Auxiliary request III was more interesting by far because it proposed to add some bran to the dough (to thereby deviate from the French purity law) in order to improve the preservability and the organoleptic properties of the bread. Of course, the German bakery association submitted that adding bran to the bread is obvious for the skilled person.

A document D30 disclosed information the effects of larger amounts of bran onto the properties of bread but the amounts were such that be skilled person would have feared that the characteristic organoleptic properties of French bread would have been impaired (in other words: he would have ended up with  German bread).

The board finally found that, starting from a very specific recipe for French bread, adding 0,4 to 1 weight parts of bran was non-obvious for the person skilled in the art.

To conclude, using Bran and Sourdough in bread is obvious, but not when it comes to Baguette.

Beware of Digital Signature Folders

In the good old times, patent attorneys used to work by messing up the file, scribbling amendments into documents, dictate submissions to the offices and then letting their secretaries do the clean up and prepare the documents and present them neatly in a leather-would signature folder. The attorney would then put his glasses on, leaf through everything put his signature on the documents if everything was to his satisfaction and proceed to the tea break.

While the work distribution of messing up and cleaning up the file is basically unchanged, this blogger sometimes misses the leather-wound signature folder. The electronic equivalent is a PDF-viewer software included in the EPOline client and today's assistants have to prepare neat PDF documents for online-filing rather than writs on handmade paper. The PDF-viewer opens automatically when clicking on the "sign" button in the software and the electronic signature can be applied only after closing the viewer again and confirming that the signature shall be applied indeed. As compared with the leather-wound signature folder, the PDF-viewer is much less classy. Besides of the PDF-documents, it shows a lot of unreadable XML code and leafing through a submission with multiple attachments may be fairly bothersome.

It is therefore tempting to circumvent the clumsy PDF-viewer, have the documents presented on paper (in a leather-wound signature folder if you like) and to trust that your secretary makes sure that what is electronically signed is identical to what you have checked on paper.

This is what the attorney did in the case underlying the decision T 1101/14 available here. In this case, the secretary had been instructed to upload the document with the grounds of appeal but failed to do so. The attorney had applied the electronic signature without remarking that the grounds of appeal were missing. In the request for re-establishment of rights, it was argued that these were two isolated mistakes in an otherwise secure system.

The Technical Board of Appeal did not find the attorney's error excusable. The catchword reads:
A representative who mistakenly signs a statement of grounds of appeal having most of its pages missing must, in the absence of special circumstances which could justify the representative's mistake, be considered not to have taken all due care required by the circumstances.

What can the attorneys learn? We have to leaf through the electronic documents in the PDF-viewer before applying the electronic signature and are not entitled to blame the secretary if something is missing.

Thursday, 12 February 2015

ZTE fails in bid to reopen patent trial post-judgment but before judge seals order

Vringo Infrastructure Inc v ZTE (UK) Ltd [2015] EWHC 214 (Pat) is a 30 January decision of Mr Justice Birss, sitting in the Patents Court, England and Wales.  It's far from being the first time that these two adversaries have clashed in the courts of England and Wales [see eg earlier PatLit post here with links to earlier litigation].

This time round, ZE applied to re-open a trial at which Birss J concluded that Vringo's patent was valid, having found that the relevant prior art documents did not disclose protocol transparency. ZTE then looked for other examples of protocol transparency, finding prior art documents on which it sought to rely. Having done so, it obtained an order suspending the court's sealing of the order arising from the trial pending this application to reopen the trial.

In short, Birss J refused the application to reopen the trial. In his view

* The power to reverse a decision before the order had been drawn up existed, and was not limited to exceptional circumstances: every case depended on its circumstances and the overriding objective was the starting point [ie the court should deal with cases justly and at a proportionate cost].

* Allowing an amendment before a trial began was different from allowing it at the end of the trial to give an apparently unsuccessful defendant a chance to run a new argument, particularly where the amendment was sought after judgment,

* A party could not just wait for a judge's findings and say that he could have called more evidence on that point. If an amendment to the statements of case would not have been permitted before trial, it was unlikely to be permitted afterwards -- and, even if it were permitted, that did not mean that it should be permitted after judgment,

* In the context of patent litigation, the selection of prior art by a party challenging a patent was a matter of his own free choice and it was not open to a challenger simply to re-open the matter on the basis that a judge had not dealt with it.

* The prior art relating to protocol transparency was plainly potentially relevant earlier and could have been found with reasonable diligence. It was a toss-up as to whether that prior art would have had an important influence on the trial's result, and this new evidence was entirely credible.

* Points in favour of granting ZTE's application were that neither party had acted to its detriment in reliance upon the judgment; the patent was to be effective; the case was really only about money rather than injunctive relief; and costs incurred in a retrial would be compensatable

* Points against granting the application included the facts that there was no excuse for ZTE not having used the documents before; it would lead to a trial of at least two days; and the legitimate expectation of finality following the original trial would be thwarted. The strength of ZTE's case was not so clear as to show that the patent was probably invalid, since it would merely involve an arguable piece of prior art. A party had to make careful selections of prior arts and it was incomprehensible that ZTE had overlooked this prior art earlier.

Come to Bournemouth! Free public lecture on the unitary patent and the UPC

Next week, on Thursday, 19 February, there's a public lecture that should appeal to anyone who is interested in patent litigation and is not too far from England's south coast. The title is "The Unitary Patent and the Unified Patent Court: a private international law perspective" and the speaker is the excellent Professor Paul Torremans (University of Nottingham, which is a long, long way from the seaside).

The lecture takes place in Bournemouth University; it's free -- but space is limited. Details and registration can be accessed here.

Wednesday, 11 February 2015

From hepatitis B virus antigens to wine and canapés: Biogen v Medeva revisited

The "Biogen v Medeva 20 Years On" event, organised by London-based law firm Rouse last year and cruelly postponed on account of a strike call by one of the London Underground unions, was finally held last week.  Rouseniks Mary Smillie and Catriona Smith bring us this report on one of the most influential pieces of British patent litigation to have emerged in recent decades:
Rouse invited the main protagonists in the landmark House of Lords case of Biogen v Medeva for a reunion at the Crisis London Skylight Café near Spitalfields, before an invited audience. This now famous case on a patent for hepatitis B virus antigens led to the well-known speech of Lord Hoffmann in the House of Lords and the concept of 'Biogen Insufficiency'. The event was chaired by Rouse's Diana Sternfeld who acted for Medeva. The panel was made up of those involved on the commercial side from Biogen's licensee SmithKline Beecham Biologicals (Bill Tyrrell) and Medeva (Peter Cozens) and those who ran the case for Biogen (Jim Haley, Leslie McDonell, Simon Thorley QC and Andrew Waugh QC) and for Medeva (Peter Prescott QC, Adrian Speck QC and John Ilett). We also had the experience of Medeva's expert witness, Jeff Almond and comments from The Rt Hon Professor Sir Robin Jacob and Martin Howe QC.

It was an evening of nostalgia, shared wisdom, anecdotes and fun. We remembered those who are no longer with us, notably Sir Hugh Laddie, who acted for Biogen, and the inventor, Sir Ken Murray.

The story started with the founding of Biogen in 1978 by scientists around the globe working in their home labs. Ken Murray took the lead working on the production of antigens to the hepatitis B virus, using DNA technology, at the University of Edinburgh. The patent claimed priority from 1978 and was granted in 1990. It was licensed to SmithKline Beecham Biologicals, who had developed a recombinant hepatitis B vaccine called Engerix-B which came onto the market in the late 1980s. Although SmithKline Beecham Biologicals thought Biogen's patents were initially dubious, and had (unsuccessfully) opposed the narrower patent (EP0013828 'Recombinant DNA, hosts transformed with it and polypeptides produced by the hosts') at the European Patent Office, they changed track when Medeva came along with results to indicate they had a vaccine which worked in patients who did not respond to Engerix-B. SmithKline Biologicals then lined up with Biogen to fight Medeva in the Patents Court and beyond.

The leading counsel, Hugh Laddie and Peter Prescott, were described as being at the 'height of their game'. Andrew Waugh, then a junior, recalled his anxiety at having to prepare to explain the 'smudgeograms' (the name given by Peter Prescott to auto radiographs showing experimental results) to the House of Lords without the benefit of overhead projectors or a whiteboard. Adrian Speck reflected that it was his first case and that it was a high point of his career.

The case was difficult, as witnessed by the time it took in the Court of Appeal (18 days) and the Lords (14 days) partly because of the nature of the science. While genetic engineering was a fast developing field, there had been a voluntary moratorium on further work by scientists because of concern about the safety of genetically modified bacteria in use. This meant that, while ideas were there and developing at speed, research had halted, leaving the theoretical methods available to reach desired end-points undeveloped. The skills of the expert witnesses in the case were praised and some details of the difficulties of undertaking the research were shared by Jim Haley, who still has the original court transcripts. Examples included the difficulties of working on microscopic cells through clumsy glove boxes.

Jim Haley pointed to an analogy given by Lord Hoffman to the invention by the Wright brothers: 'The idea of making HBV antigens by recombinant DNA technology was shared by everyone at the Geneva meeting of Biogen in February 1978 and no doubt by others working in the field, just as the idea of flying in an heavier-than-air machine had existed for centuries before the Wright brothers. The problem which required invention was to find a way of doing it.'

The analogy had resonated with Mr Haley, as his firm at the time (Fish & Neave of New York) had successfully defended a patent for the Wright brothers at an early point in their history.

This was the first time the House of Lords had considered the validity of a product made by genetic engineering, yet the issue decided in Biogen v Medeva is still a live issue today. As Robin Jacob commented, the width of a claim, and what is meant by enabling an invention across the width of that claim, is still a challenge. The Biogen insufficiency test works for a patent claiming a chemical class; you have to be able to make all the chemicals in that class. In other cases the test will not work, and in yet others, Biogen Insufficiency will ride again. Robin Jacob concluded that Sir Hugh put up a great fight, and duly lost. The panel concurred that Biogen had won at first instance because of Sir Hugh's closing speech.

The case was heard before judgment transcripts were made available in advance. When Diana Sternfeld heard the opening words of Aldous J's judgment, that 'The patent is valid and infringed' she needed 30 seconds to compose herself before speaking to the clients sitting in the public gallery. She left the courtroom and bumped into Hugh Laddie, also on the other side of the double doors, who said to her 'now, that is a turn up for the books'.

The idea of sides getting together after the end of such litigation to debate the issues was much praised, preferably before 20 years have elapsed. The two sides commented repeatedly that meeting each other face to face in a friendly environment was an occasion to be celebrated after such a hard fought case.

The evening was rounded off by wine and canapés and lively conversation.

Tuesday, 10 February 2015

Getting the balance right: when not to transfer a patent suit to a cost-capped forum

In Canon Kabushiki Kaisha v Badger Office Supplies Ltd and others, a Patents Court, England and Wales, ruling of Mr Justice Arnold last Friday, the court had to consider an application by the three defendants to transfer
a patent infringement claim from the Patents Court to the Intellectual Property Enterprise Court (the IPEC -- technically, like the Patents Court, part of the High Court but which, for all functional purposes, is a lower court and the successor to the Patents County Court). This application failed since the infringement claim was of some complexity and would be difficult to try within the two-day framework allowed for the IPEC. To address the defendants' concerns as to costs if the costs regime of the High Court were to apply instead of the cost-capping regime of the IPEC, the Patents Court would however exercise firm costs management. On that basis, Arnold J directed that a hearing take place so as to enable the parties could prepare for trial in a proportionate manner, adding that to try an infringement claim of some complexity, and an attack on validity on the basis of three items of prior art, in a two-day trial would be difficult.

This decision, which was delivered extempore, was picked up by the Lawtel subscription-only service, which also gave a brief summary of the salient facts.  In financial terms the defendants argued that the cost of a High Court patent action, estimated at £500,000, was disproportionate to the claim's value, while Canon -- the patentee  -- argued that the patent protected sales of products worth approximately €70 million per annum, and had 12 years to run, so that the claim's value greatly exceeded the £1 million identified as a guideline threshold in the IPEC guide. Canon also objected that it was unfair to subject it to the cost-capping regime in the IPEC where the defendants had not asserted that they could not afford to litigate in the High Court.