Crunching numbers

In a previous post, I reported on the article that I recently co-authored with Lionel Vial and Laura Barona in Propriété industrielle, on the latest figures of French patent litigation. The focus of the post was on the validity stats, which are of course of paramount importance. But it turns out the article contained more interesting stats. Here are thus some further highlights from this work.

Basically, the further questions that the article purported to answer are the following:

  • Who is involved in patent litigation in France?
  • What patents are litigated in France?
  • What is the interplay between patent litigation and other post-grant proceedings?
  • What is the infringement conviction rate?

Once again, the methodology that we used is summarized at the end of the post.

That’s Laura, Lionel and I tallying up patents on our hexadecimal abacus.

First, who is involved in patent litigation.

We looked into this both in terms of type of parties, and in terms of geographical origin of the parties – claimants and defendants alike.

Typically, patent litigants are legal entities. Only 10% are natural persons. Among these legal entities, the vast majority are private companies. Within our sample, there are almost no universities or research institutes involved. Then, among those private companies, 68% are SMEs, 24% are large entities (or subsidiaries thereof), and only 7% are medium-sized businesses.

69% of all parties involved are French, and only 31% are foreign. Among the subgroup of foreign parties, more than a quarter are our German neighbors. Chinese and South Korean parties come in second and third (at 10% each). U.S. parties only rank fourth among foreign parties (7%). This ranking is somewhat surprising, especially if we compare it to the top nationalities of applicants for European patent applications. According to the annual report recently released by the EPO, 22% of all European patent applications filed in 2017 originated from the U.S., 18% from Japan, 16% from China, 11% from Germany and 6% from South Korea.

It should be noted that, in the sample that we studied, almost all Chinese parties were defendants in infringement suits, whereas the relatively high ranking of South Korean parties was mainly due to only two very active right holders, namely Sehyang Industrial Co. and Dae Sung Hi Tech Co.

Second, what patents are litigated.

We conducted a very rough classification of all litigated patents into three main technical fields: chemistry/biology/health sciences; electronics/IT; and mechanical engineering/construction. We realized that there is a strong imbalance here, since 81% of litigated patents relate to the latter field of mechanical engineering/construction. The other patents are almost equally distributed between chemistry/biology/health sciences and electronics/IT.

There is one area though in which biochem prevails over other fields, namely nullity actions. This is in keeping with the common practice of generic drug manufacturers to clear the way by trying to invalidate some patents before putting their products on the market.

37% of all litigated patents are French (national) patents, and 63% are European patents. French patents used to outnumber European ones, but the trend changed in 2009 as shown by Pierre Véron in his study and it has apparently remained relatively steady since then.

We also looked at how old the patents are by the time legal proceedings are initiated. The average age is 13.5 year old. Thus, mainly mature inventions give rise to litigation. Clearly, a substantial amount of time is required before a technology develops to the extent that it attracts significant infringement – or that it becomes worth it for a third party to attempt to get rid of a patent.

This is one of the reasons why our current local debate on the statute of limitations in connection with nullity claims is so sensitive.

Third, the interplay between patent litigation and other post-grant proceedings.

By post-grant proceedings is meant two different scenarios: opposition at the EPO and limitation (either at the EPO or locally at the INPI).

The rate is the same in both cases: approximately 19% of European patents litigated in France are/were subjected to opposition proceedings, and approximately 19% of litigated patents (both French and European ones) were subjected to limitation proceedings.

By way of comparison, the overall opposition rate is less than 4%, and the overall limitation rate is probably much, much lower. Of course it is no surprise that more important / valuable patents are more opposed than others. I often like to think in terms of the dog that did not bark, and in this respect it is probably more remarkable that as much as 81% of European patents litigated in France are granted unopposed. This is certainly related to the above remark that most patents are already fairly old by the time they are worth being litigated.

The limitation rate of 19% shows how popular this tool has proven as a defense against nullity claims or counterclaims since its introduction into French law in 2008. In fact, the proportion of limited patents goes up to 27% if we consider only appeal decisions.

On the other hand, on a validity standpoint, we have not noted a better survival rate of limited patents relative to non-limited patents in our sample.

Fourth and last, the infringement conviction rate.

Here, the magic number is 35%. That is, 35% of infringement claims are successful (which means that the patent at stake is not found invalid, and is found to be infringed).

And now a few take-away messages.

There are of course some high profile patent lawsuits in this country, for instance in the pharma field. However, most typically, patent litigation in France involves domestic SMEs and concerns mechanical engineering.

This is a sign that French patent litigation might be underrated and overlooked among a number of stakeholders, and first and foremost foreign companies.

There are many possible reasons for this.

Admittedly, many patents are invalidated by French courts, as regularly illustrated on this blog. However, this trend does not seem any worse than in other major European markets, such as the U.K., where courts are well-known to be quite strict on a validity standpoint, but also Germany, as explained in my previous post. Besides, the infringement conviction rate of 35% seems reasonably high (bearing in mind that the large number of cases which are settled before a written decision is issued are not taken into account in any statistical study).

Perhaps the main reason is thus more cultural than anything else. Multinational companies tend to eye towards the U.K., for linguistic reasons and also because of the perception that local judges are extremely skilled; and towards Germany, as it is renowned for its quick decisions, its patentee-friendly bifurcated system and its Demogorgon – I mean, the much envied and much dreaded injunction gap.

But why not also eye towards France:

  • because of the saisie-contrefaçon, which is a powerful tool in the hands of right holders to gather evidence of infringement;
  • because, overall, the likelihood of success seems to be similar here to neighboring countries;
  • because it can be relatively cheap (no expensive disclosure, expert testimony and lengthy hearings like in the U.K., no court fees like in Germany);
  • because we have a large pool of good practitioners, both attorneys at law and patent attorneys, who are fully proficient in English.

And I have not even yet begun to tell you about the food and those beautiful farmhouses in the Luberon waiting to be bought and renovated.


METHODOLOGY: the study was based on a review of all judgments on the merits issued between January 1, 2016 and July 31, 2017, both at first instance and on appeal, in which at least one issue of patent validity or patent infringement was decided upon. The sample of judgments was obtained from the Darts-ip database. They were manually analyzed by us. Interim orders as well as orders from a case management judge were excluded. Judgments from the Cour de cassation, as well as judgments concerned with other issues (computation of damages, employees’ inventions, etc.) were also excluded. The final sample contained 100 decisions, representing a total of 118 litigated patents.

Not sailing to victory

Thanks to Jérôme Tassi, I was made aware of a new French decision revoking a patent due to extension of subject-matter.

As I mentioned no earlier than in last week’s post, this is a ground for nullity that needs to be taken very seriously nowadays. There may previously have been a perception that added matter objections were deemed to fail in front of a court of law, and that painstaking dissections of the exact wording originally used in patent applications should be reserved for hearings taking place at Erhardtstrasse. But if so, this perception is no longer accurate.

The patent at stake is EP 2179917 to the Swiss company Createx SA.

This patent (EP’917) was filed as a divisional application stemming from EP 1531979, itself originally filed as a PCT application published under No. WO 2004/005009.

The technical field is the manufacture of fabric for sails. Yes, as in sailing boats. This is about as exotic as you can get when dealing with patent case law.

On December 31, 2015, Createx and its licensee, the U.S. company North Sails Group LLC, filed a patent infringement complaint against the French companies Incidences La Rochelle and Incidences Technologies.

On August 22, 2016, Createx filed a request for limitation of the French part of EP’917 with the INPI. It can be assumed that this was a reaction to some invalidity arguments brought forward by the defendants. The limitation was granted by the INPI on September 27, 2016.

The defendants counterclaimed for nullity of the EP’917 patent and as announced at the beginning of this post, the Paris Tribunal de grande instance (TGI) did in fact hold the patent invalid for extension of subject-matter beyond the content of the parent application as filed.

The patent as limited contains two independent claims, namely claim 1 directed to a fabric and claim 13 directed to a sail. Let’s focus on claim 1 only:

A fabric comprising:

a plurality of strips, each of the strips being formed from a plurality of substantially parallel reinforcing elements formed of threads arranged in a unidirectional manner, the threads being made of thousands of filaments distributed over the width of each strip, each of the substantially parallel reinforcing elements comprising said substantially parallel filaments; and an activated resin encasing the filaments to form a fabric;

wherein part of each strip is disposed on the juxtaposed strips; 

wherein at least some of the plurality of strips partially overlap adjacent strips, at least some of the strips substantially overlap over a length of each strip, at least some of the strips are arranged in parallel, so that a first end of a strip substantially overlap with a first end of another strip. 

Some sails look more threatening than others.

The key issue here is that the parent application as filed did not contain any claim directed to such a fabric or to a sail as recited in claim 13. All original claims related to a method of manufacturing a fabric, using a particular system.

Here is original claim 1 by way of comparison with the limited claim in the divisional patent:

A method of manufacturing shaped and reinforced fabrics, characterized in that it consists in making a fabric made of a membrane which encases continuous alternated reinforcing elements in a press which comprises an upper vessel the lower part of which is made of a supple element and a lower vessel the upper part of which is made of a supple element, the upper vessel comprising a shaping lath the shape of which can be adjusted by setting rods and the adjusting shape of which causes the three-dimensional elastic deformation of the supple elements and thus of the membrane and reinforcing elements within the press, into an active position in which the lath has a shape and an inactive position in which the shaping lath is inactive and does not cause any deformation of the membrane and reinforcing elements which are pressed flat, in that the portions of the membrane and of reinforcing elements are prepared before pressing on a conveyor belt which is disposed on a preparation table which then places these portions under the press with pressure and heat, and in that the portions of membrane and reinforcing elements overlap during the preparation so that they make a homogeneous fabric at the outlet of the press, which comprises flat portions and three-dimensional-shaped portions according to multiple shapes determined by the setting of the shaping lath upon pressing each membrane portion and reinforcing elements, the length of which is determined by the width of the press and preparation table. 

Here is the court’s take on this:

Through this rule [of the prohibition of extension of added matter], it is to be ensured that the patent proprietor cannot improve its position by adding elements that are not disclosed in the application as filed, which would be such as to confer an undue advantage by obtaining a different monopoly from the one initially claimed, which may harm legal certainty for third parties who rely on the content of the initial application.

In this case, the [parent] application as filed […] is exclusively directed to an invention which relates to a manufacturing method […]. It thus clearly derives from this initial application that the subject-matter of the protection does not relate to the product “fabric”. The EP’917 patent […] is no longer directed to a manufacturing method but expressly to products, and more particularly a “fabric” […] and a sail […]. 

[…] By altering the subject-matter of the patent […], the patent proprietor may now have a protection on any identical product independently of its manufacturing method. 

Thus, the patent proprietor necessarily increased the scope of protection initially requested, since this patent makes it possible to include within the scope of the patent products why may be obtained by different methods than the one claimed in the initial application. It is further noted that this modification also led the proprietor to encompass within the scope of protection of the patent […] a product which was not explicitly mentioned in the initial application, namely a “sail”, which cannot be entirely assimilated to [a fabric] and which was not within the subject-matter of the initial invention except through a mere reference to the prior art, which is not sufficient to include it within the perimeter of protection. 

The content of the (parent) application as filed has to be considered as a whole, including the claims, description and drawings. Due to some of the words used by the court in the above quote, there could be a suspicion that the court really focused on the claims only and confused extension of subject-matter with extension of scope of protection. But I doubt that this suspicion would be well-founded.

Indeed, not only did the original set of claims not contain any claim to a fabric or a sail, but also the original description did not recite a fabric or a sail as such as subject-matter of the invention.

Thus, it was considered that the shift in scope of protection could not be expected by third parties relying on the original application documents, which offended legal certainty. This is reminiscent of a Nestec decision already discussed on this blog.

In this earlier case, a claim to a device for the extraction of a capsule plus the capsule itself, in combination, was found to offend article 123(2) EPC because this category of product was not originally claimed, and could only be indirectly derived from the application based on how the capsule interacted with the device in operation.

I must say that, upon reading the claims of EP’917 (even before the French national limitation) and comparing them with the parent PCT as filed, I was curious about the examination process. Indeed, it seems that the divisional claims were completely drafted from scratch, combining pieces of wording from several passages of the original disclosure. This is not to say that such thorough redrafting necessarily adds matter. It may be allowable in some cases. But in my experience the EPO almost always at least requires detailed justifications that the skilled person would indeed directly and unambiguously derive the new claims from the original disclosure, which must not be treated as a reservoir from which you are allowed to pick and choose any combination of features.

To my surprise, it seems that the applicant did not submit any indication of a support for the claimed features when filing the divisional application, and that the examiner did not ask any questions and directly agreed to grant a patent.

So I wonder what happened here, and why the applicant was not even asked for any clarification by the EPO. This took place in 2009-2010, which is not that long ago.


CASE REFERENCE: Tribunal de grande instance de Paris, 3ème chambre 2ème section, February 9, 2018, Createx & North Sails Group LLC v. Incidences Technologies & Incidences SailsRG No. 16/00023.

Some valid figures

Lionel Vial, Laura Barona and I have recently published an article in “the orange journal. For those readers who are not overly familiar with the French patent scene, this is the nickname of LexisNexis’ Propriété Industrielle.

This article looks at key figures of French patent litigation, based on a sample of recent decisions which were manually reviewed. In this post, I will present some highlights from this work.

As the devil is in the detail, especially when stats are concerned, the methodology that we used will be summarized at the end of the post.

The main takeaway message from our study is probably that the recent overall patent invalidation rate in France is high, at approximately 56%.

This invalidation rate conflates both patents subjected to nullity actions and patents subjected to infringement actions in which a nullity counterclaim was filed.

Now, before all patent holder readers start fleeing our country out of desperation, let me immediately add that this comes with a number of caveats.

First, we have only studied court decisions on the merits. 

However, many patent lawsuits are settled before going to trial, so that a decision on the merits is never issued. It can be postulated that patents that give rise to settlement may on average be stronger than patents that get to be actually ruled on by a court – although there are of course many different factors that come into play when a party decides whether to settle or not. Anyway, the overall invalidation rate may not reflect the actual strength of all patents that are litigated.

Second, the 56% invalidation rate corresponds to patents of which at least one claim was declared invalid by a court.

Admittedly, in the vast majority of cases, when one independent claim is declared invalid, all dependent claims that are reviewed by the court are also declared invalid (what I would call the “throwing the baby out with the bathwater” approach). On the other hand, some dependent claims of the patents in suit are frequently not examined at all, simply because their validity is not challenged (which generally means that these claims are not asserted against a defendant). As a result, even when a patent is counted as invalid in the above figure, it may in fact contain some valid claims (although, again, this is usually not apparent from the decision).

Third, the 56% figure is based only on patents the validity of which was challenged.

But not all litigated patents go through a validity review by the court. In fact, 27% of all patents mentioned in the sample that we looked at did not give rise to any validity challenge. This is significant proportion.

It is possible that these other, non-reviewed patents are stronger on average. But other explanations are possible as well. For instance, these cases may correspond to infringement defendants who have less money to spend on litigation.

This third caveat is also probably the reason why the above figure markedly differs from the lower and often-quoted invalidation rate of 27% found by Pierre Véron in a famous study. Pierre Véron’s sample was much larger than ours, but is now an older one (as it covered the period of 2000-2009). Sabine Agé recently presented additional figures for the period of 2010-2016. She said the invalidation rate varied between 21% and 42% depending on the years.

However, as far as we understand, in these studies, patents that were not challenged on a validity standpoint were counted as valid; whereas such patents are excluded from the sample on which our own figure is based.

Lucky numbers in litigation.

That being said, how does this French figure of 56% invalidation compare with other European jurisdictions?

Well, it is particularly instructive to look at the situation in Germany, since this country attracts the vast majority of the European patent litigation “market” due to its perceived patent-friendliness.

Believe it or not, but it seems (based on figures released in 2016) that the partial or total patent invalidation rate at the Bundespatentgericht and the Bundesgerichtshof is approximately 80%. More precisely, there is a 44% rate of total invalidation, whereas 36% of patents are maintained in amended form. Only 20% of patents survive a nullity challenge in their granted form.

Now, the French figure and the German one cannot be directly compared, due to differences between the two systems. Indeed, there is no claim amendment in front of a French court. Besides, frequently, some dependent claims in a patent are never actually looked at by French judges, for the reasons recalled above.

But it is anyway quite doubtful that patents fare much better in Germany than in France, on a validity standpoint. Actually the opposite could be true.

Another striking conclusion of course is that, whatever the jurisdiction, a significant proportion of granted patent claims which ultimately go to trial are found invalid. This may be an important fact to bear in mind, at the time the EPO has just released its annual report, with the usual emphasis on quality.

The quality of the work done by a patent office is certainly extremely complex to assess. But maybe more attention should be paid to court decisions in this connection. After all, European judges are those who have the last say on what a “good” or “bad” patent is.

A couple more figures before you go, especially on the distinction between French and European patents, and on the various grounds for nullity.

Approximately one third of patents litigated in France are French national patents, while two thirds are French parts of European patents.

It turns out there is a significant discrepancy between the invalidation rates for these two categories, namely: 41% for European patents and 78% for French patents.

The conclusion is pretty straightforward: European patents are stronger than French patents. This is not surprising. Since the INPI does not perform a complete examination of French patent applications, the granted claims in a French patent are usually the sole responsibility of the applicant. It is therefore always tempting to pursue overly broad claims in a French national patent, which makes them more prone to a nullity challenge.

As to the various grounds for nullity leading to the invalidation of patent claims, we found the following breakdown:

  • Lack of novelty: 15%;
  • Lack of inventive step: 54%;
  • Extension of subject-matter: 10%;
  • Insufficiency of disclosure: 15%;
  • Others (non-patentability…): 6%.

So, most patent claims are revoked for lack of inventive step. The 54% figure that we found is in full agreement with Sabine Agé’s recent presentation, based on a larger sample of decisions.

The relatively large number of patent claims which are deemed to lack inventive step certainly reflects a national take on this issue which is much more flexible than the EPO’s problem-and-solution somewhat rigid framework.

Other, maybe less known, notable facts include a recent surge in added matter-based invalidations, as French case law tends to align on EPO case law in this respect; as well as a relatively large number of insufficiency-related invalidations. My personal view is that French courts tend to be more severe than the EPO on the appraisal of sufficiency.


METHODOLOGY: this study was based on a review of all judgments on the merits issued between January 1, 2016 and July 31, 2017, both at first instance and on appeal, in which at least one issue of patent validity or patent infringement was decided upon. The sample of judgments was obtained from the Darts-ip database. They were manually analyzed by us. Interim orders as well as orders from a case management judge were excluded. Judgments from the Cour de cassation, as well as judgments concerned with other issues (computation of damages, employees’ inventions, etc.) were also excluded. The final sample contained 100 decisions, representing a total of 118 litigated patents.