Araxxe wields the axe

Never put all your eggs in the same basket” is probably a truism in many contexts. Including the one of patent rights.

Case in point: Araxxe, a French company, owns European patent No. EP 2087720. The patent gets opposed, gets killed by the opposition division of the EPO, and does not get resurrected by the Board of appeal. But it turns out that Araxxe had another egg in its basket, namely French national patent No. FR 2908572 – originating from the priority application. And the Paris Tribunal de grande instance (TGI) held that the patent was valid and infringed.

Let’s take a few steps back to look more precisely at what happened.

The French patent FR’572 was granted in March 2009. A couple of months later, Araxxe sent a warning letter to the Belgian company Meucci Solutions. Since the exchanges between the two firms did not lead to a resolution, Araxxe filed a complaint in front of the Paris TGI in December 2009. At that time, the European application claiming priority from FR’572 was still pending at the EPO. This led the TGI to issue a stay of proceedings in May 2011. Such a stay is ordered as of right, since the French part of the European patent substitutes for the French patent when it is definitely granted. By “definitely” is meant that a possible opposition should be taken into account.

In this case, Meucci Solutions (later renamed Sigos), did file an opposition against EP’720 after grant, in 2013. The opposition division revoked the patent, and the Board of appeal confirmed this revocation in November 2016 (case T1645/15).

Araxxe could have withdrawn the French designation of the European application in order to try to avoid such a long stay of proceedings. Indeed, the European application as filed contained the same claims as the French patent as granted. Therefore, it was extremely unlikely that the European patent would end up having a broader scope of protection than the French patent. But they did not do so.

Thus, the case resumed after the termination of the EP proceedings, with no EP-FR substitution having taken place due to the demise of the European patent.

Interestingly, Araxxe asserted only claim 8 of the French patent.

One basket, different eggs.

Here is claim 1:

A method for generating scheduled communication operations over one or more communication networks from an information system and verifying their correct invoicing, comprising:
– allocating resources within said information system for a call campaign over a predetermined period of time,
– managing communication equipment in shared time, 
– executing communication or transaction operations, in response to execution orders received from a call scheduling site, 
– collecting invoicing data produced by the operator, and
– automatic data correlation allowing anomaly identification,
characterized in that the method is simultaneously implemented for a plurality of communication operators, the allocated resources being shared, each communication operator being able to issue communication or transaction operation execution orders.

Here is now claim 8:

Application of the method of any one of claims 1 to 6, for the purpose of detecting traffic bypass operations by third parties, said method implementing a comparison of theoretically expected caller identifiers with identifiers actually recorded by the call receiving robot. 

The defendant not only challenged the validity of claim 8, but also that of claim 1, since claim 8 makes reference to claim 1. But the court refused to consider the attack against claim 1, because claim 8 is independent from claim 1, they said.

Under French practice, invalidity counterclaims are in principle only examined when they relate to the claims alleged to be infringed – regrettably so, I would say. This part of the decision is thus relatively unsurprising. As to whether claim 8 can truly be termed an independent claim, I have some doubts. Any dependent claim could actually be termed independent, in that case. Not that this categorization really matters in the end anyway.

As a result, 17 pages of the defendant’s written submissions on invalidity were disregarded. Also, the defendant’s arguments that the patentee had “agreed” that its claims were invalid since they had been modified in front of the EPO, did not fly. The court stated that:

Amending claims during examination or opposition proceedings, in view of remarks made in search reports or observations from the patent offices, is a usual and common practice which cannot be considered as an agreement by the applicant that its right is invalid. 

That is a relief for all patent attorneys I guess.

The remaining validity points to be addressed were inventive step and sufficiency of disclosure.

As an important note, EP’720 was revoked for extension of subject-matter. But the claims of the European patent as granted were different from those of the French patent. Most importantly, the French patent claims were identical to those of the European application as filed. As a result, there was no way the objections entertained by the EPO could apply similarly to the French patent.

Concerning inventive step, the court noted that the claims of the European application were initially held to be obvious during examination. But then the patent was granted, and the opposition division viewed the granted claims as inventive in the preliminary opinion annexed to the summons to oral proceedings. I would say that this is largely irrelevant, again because the European claims as granted were different. Anyhow, the court then looked at the prior art relied upon by the defendant and was not able to find any lack of obviousness.

Concerning sufficiency of disclosure, things unfortunately got somewhat murky in the judgment.

The defendant argued that the European claims had to be restricted to recite a “plurality of robots” – which led to the extension of subject-matter trap; and that this was an essential feature without which the invention could not be implemented. The court replied that claim 8 refers to claim 1, which recites “a plurality of robots“, so that there is no issue. Except that I cannot find this phrase in claim 1. Maybe another claim feature was considered as synonymous or equivalent, but the court did not provide any detailed explanation.

It gets worse at the next sentence, when the court remarked that the European patent was granted anyway. This overlooks the defendant’s whole point, which was that the European claims had to be modified in order to be overcome a serious objection.

And it gets more than worse (I would go as far as saying “worserer”) in the following sentence:

The later revocation of this European patent does not have any impact on the validity of the French patent since said revocation was based on a ground which is specific to the EPC (extension of subject-matter), which has no equivalent in French law. 

Readers will be excused if they have fallen from their seats at this point. Extension of subject-matter, of course, has nothing to do with insufficiency of disclosure, and both are fine grounds of nullity under French law.

I am not saying that the insufficiency attack was very serious, or that the court’s decision to uphold the patent was erroneous – I have no personal opinion at this point. But some parts of the judgment seem to have been drafted too hastily. This is most unfortunate at a time when there is a perception of global increase in the quality of French judgments in patent matters.

In the rest of the decision, Sigos’ challenge against the infringement seizure at a data center owned by a third party failed. As did their challenge against a bailiff report on a website dated December 2009 but filed in court only in November 2017, as a reaction to Sigos’ argumentation.

The court then turned to the analysis of infringement. I will not go into a feature by feature analysis, as the main interesting point in my view was the issue of territoriality. Indeed, Sigos argued that it performed most of its activities abroad.

The court replied:

The infringement seizure report, but also the bailiff internet report and the screenshots prove the use or the offer to use of an allegedly infringing process, by Sigos, in France. Therefore, it cannot be denied that the alleged harm takes place in France. It is irrelevant whether the means to control and handle the supposedly involved robots are in Belgium, where Sigos states its global platform […] and its main assets are located, or whether the correlation operations are performed abroad, since it appears […] that they are active in France with the main French phone companies. 

If my understanding of the above paragraph is correct, the court found it irrelevant that part of the steps of the claimed method may be implemented abroad. In that case, this would be a major departure from the traditional view that the use or purported use of a process has to be implemented in France (period) in order to be infringing.

As a consequence, the TGI issued an injunction against Sigos and awarded damages amounting to 378,000 euros and attorney’s fees amounting to 50,000 euros to Araxxe.

I don’t know if an appeal is pending or not, but some points in the decision would deserve to be further clarified.

At any rate, and going back to my initial comments at the beginning of this post, it is always useful for a right holder to have several different patents or applications in its basket especially for important cases, and this will certainly remain true even if/when the UPC comes into force.


CASE REFERENCE: Tribunal de grande instance de Paris, 3ème chambre, 3ème section, February 1, 2019, Araxxe SAS v. Sigos NV, RG No. 15/15784.

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