Free infringement

Infringement proceedings are a thing of many possible metaphors, and one of them may be an assault course. Invalidity defenses, non-infringement arguments, burden of proof issues, procedural traps are some of the hurdles that a plaintiff has to go over along the way.

So, after climbing up so many walls, nets and ropes, it is really too bad when the plaintiff falls into a muddy pit just before the finish line. In the case at hand, the muddy pit was the assessment of damages.

Pick your track to a judicial win.

On March 20, 2014, the Paris Tribunal de grande instance (TGI) held that the two companies Carrera and Texas de France had committed acts of infringement of European patent EP 1067822 directed to a heating element for a heating or cooking apparatus, owned by Muller & Cie.

The court pronounced a permanent injunction against the defendants and ordered that they should provide accounting information regarding the infringing devices in order to make it possible to compute damages.

This judgment was confirmed by the Paris Cour d’appel on September 6, 2016. In the meantime, in view of the accounting information filed by the defendants, the TGI issued a second judgment dated January 14, 2016, in which Carrera and Texas de France were condemned to pay Muller damages of respectively 327,733 euros and 280,130 euros for Muller’s commercial prejudice, plus 100,000 euros for its moral prejudice.

The defendants appealed, which leads us to today’s judgment, issued on December 9, 2016.

In short, the appeal judges set aside the decision of January 14, 2016 and set the total amount of damages to… zero euro. How is this even possible, since acts of infringement were indeed committed?

The answer is that the legal basis for Muller’s computation of damages was held to be incorrect, and no alternative, legally correct computation seems to have been proposed by the plaintiff.

The method for the computation of damages is set in article L. 615-7 Code de la propriété intellectuelle:

In order to set damages, the court separately takes into account:

1° Negative economic consequences of the infringement, including lost profits and losses suffered by the harmed party;

2° Moral prejudice inflicted to said party;

3° And profits made by the infringer, including savings on intellectual, material and promotional investments made owing to the infringement.

However, the court may, alternatively and upon request of the harmed party, grant a lump sum in terms of damages. This lump sum is higher than the amount of royalties or rights which would have been due if the infringer had asked for the authorization to use the right that it infringed. This sum does not exclude the further indemnification of the moral prejudice of the harmed party.  

The current wording of the article derives from the implementation of the enforcement directive 2004/48/EC, with a later modification in 2014. And it is not really crystal clear.

Computation of damages based on the “negative economic consequences” of the infringement is a conventional and well-delineated exercise.

On the other hand, how “profits made by the infringer” are to be “taken into account” by the court is not self-evident. It is also not so clear whether the plaintiff has full discretion to rely on the alternative lump sum calculation, or whether, in some circumstances, it is mandatory to rely on one assessment method or the other.

If we focus first on the issue of how infringer’s profits are to be “taken into account“, one way to interpret this provision would be to consider that the infringer’s profits may be awarded to the claimant as an alternative to loss profits damages. Another way would be to consider that the infringer’s profits are merely a modulating factor in the assessment of loss profits.

In the present case, Muller put forward a radical theory – successfully so in first instance, i.e. that the entire infringer’s profits should be awarded to the patent proprietor. However, this method was fully discarded at the appeal stage.

The Cour d’appel noted that Muller did not personally exploit the patent. The patent was exploited through six licensed subsidiaries, which tried to intervene in the infringement proceedings. However, the respective license agreements were not registered with the French patent register, so that they were not enforceable against third parties. Accordingly, the claims brought by the six licensees were previously held inadmissible in the initial 2014 judgment – and the unregistered licensees did not appeal.

In this particular context, the Cour d’appel deemed that the sole proper methodology for assessing damages was the so-called indemnifying royalty provided in the last paragraph of article L.615-7:

[Muller] does not claim the payment of the indemnifying royalty which was however rightly mentioned by the appellant, but this mode of compensation should be applied in this case. This royalty indeed corresponds to the percentage of the turnover that Muller could have claimed from the two companies sued for infringement, if the authorization to exploit the patent that it owns had been requested, with an additional penalty to take into account the existence of the wrongful acts committed against it. 

But again, Muller did specifically not claim an indemnifying royalty. Muller argued that the words “upon request of the harmed party” in article L. 615-7 meant that this mode of calculation was not mandatory. The court concurred and stated that it “could not validly impose such a mode of compensation of its economical prejudice” on Muller. But this turned out to be a self-inflicted wound, as the sole mode of compensation put forward by Muller was not acceptable according to the court, for the two following reasons:

  • first, Muller did not personally suffer any lost profits;
  • second, the infringer’s profits may not be claimed by the plaintiff in the absence of lost profits.

As to the first reason, Muller argued that, although it had not directly suffered lost profits, there were lost profits for the overall Muller group. The court replied that Muller could not possibly claim lost profits suffered by other companies, namely the six licensees, which are distinct legal entities (in fact, it seems that it was not even properly demonstrated that they were part of the same group as Muller). The licensees’ claims were held inadmissible by the TGI, and they did not appeal. Thus, only Muller’s personal lost profits could possibly be compensated.

Yet, no lost royalties were claimed by Muller. On the one hand, the six licenses were apparently royalty-less, so that Muller did not personally lose money due to the licensees’ possible lost sales. On the other hand, Muller could have relied on a depreciation of the invention’s value due to the infringement, but did not do so. Here, the court cruelly noted: “again, it is not the court’s task to compensate an item of prejudice in the absence of a claim from the owner of the right in this respect“.

Then comes the second point on the infringer’s profits. Says the court:

In addition, it is true that the law of October 29, 2007, transposing the 2004/48 directive, provides that the judge should take into account the “profits made by the infringer”. But it did not introduce a possibility to confiscate them into the statute. Said taking into account is limited to the part which may remain, once the losses related to the exploitation have been assessed, in order to achieve a full compensation of the prejudice. 

In other words, according to this court, the infringer’s profits can only be taken into account in the context of the assessment of a commercial prejudice. The confiscation of the infringer’s profits is not an alternative option which would be available to the plaintiff instead of claiming the compensation of a commercial prejudice.

Consequently, Muller’s claim for damages was simply rejected. The court noted in passing that the permanent injunction, which remains in place, is a proper sanction in this case anyway.

The last nail in the coffin was the rejection of Muller’s claim based on the moral prejudice which was said to be insufficiently substantiated.

All in all, this is a tough decision for the patentee, although we can have a feeling that the court was irritated by its behavior. For instance, there is a remark that the patentee obtained evidence of the infringement as soon as July 2009 owing to a bailiff’s report but waited until May 2011 to file its complaint.

It remains to be seen whether the Cour de cassation will have to rule on the Cour d’appel’s interpretation of the legal provision on the apportionment of the infringer’s profits.

In the meantime, one take-away message can be that the best practice for a patent proprietor is certainly to claim an indemnifying royalty, if only as an auxiliary request. Indeed, this should always be a possible option. Better safe than sorry.

CASE REFERENCE: Cour d’appel de Paris, pôle 5 chambre 2, December 9, 2016, SARL Carrera & SAS Texas de France v. SA Muller et Cie, RG No. 16/02891.

Sunset for Cynrise

Easter always brings back chocolaty memories. The question as a child growing up in the Northeastern part of France on Easter morning was whether eggs had been brought by the Easter bunny. And the question as a child also growing up in the Southeastern part of France was whether eggs had been brought by the Easter bells.

It has been a while since the Easter bunny and the Easter bells stopped feeding me with chocolate. But this year there was an even better surprise on Sunday morning, in the form of an SPC-related guest post by Lionel Vial. And as all readers will probably acknowledge, SPCs are a delicacy of their own.

Rush of nostalgia: Easter eggs are no longer what they used to be.

Here is to Lionel.

The case discussed on this Easter day relates to a ruling of the Paris Cour d’appel dated January 20, 2017 which upheld a decision of the French patent and trademark office (INPI) to reject an application for a supplementary protection certificate (SPC) for a biological medicinal product.

French SPC application No. 11C0054 was filed on December 14, 2011 by Laboratoire Français du Fractionnement et des Biotechnologies (hereafter LFB), a French company specializing in medicinal products purified from human blood. The SPC application was based on French patent No. 2722992 filed on July 28, 1994, which claimed a method for the manufacture of a C1-esterase inhibitor concentrate (claim 1), as well as the concentrate obtained by the method (claim 11).

The SPC application was further based on marketing authorization (MA) No. EU/1/11/688/001 for Cinryze® comprising “C1 inhibitor, human (INN)” as active ingredient.

For those whose curiosity goes beyond patent law, C1 is one of the proteins forming the complement system, which itself is part of the innate (i.e. non-adaptive) immune system. The C1 inhibitor is a natural protein, found in blood, the role of which is to regulate the activation of the complement system. The C1 inhibitor is especially useful for individuals suffering from a rare autosomal dominant disease, caused by a deficiency of functional endogenous C1 inhibitor, which manifests itself in the form of angioedema attacks.

The SPC application was rejected on December 22, 2014 by the INPI for not complying with Article 3(d) of Regulation (EC) No. 469/2009 (hereafter the SPC regulation), i.e. the MA for Cinrize® was considered not to be the first authorization to place the product on the market as a medicinal product.

This was because a prior MA had been issued on June 28, 1999 for Esterasine comprising “human C1 esterase inhibitor” as active ingredient.

LFB lodged an appeal against the decision of the INPI before the Paris Cour d’appel and essentially argued that the human C1 inhibitors of Cinrize® and Esterasine were in fact two different products.

The precise arguments used by LFB are not very clearly summarized in the decision.

But it appears that LFB stressed that the way biological medicinal products, such as Cinrize®, are manufactured has an impact on their molecular structure, which, in the present case, was evidenced by a half-life of 56 hours for Cinrize® vs. 30 hours for Esterasine.

This did not convince the Cour d’appel which considered that:

The regulation relating to SPCs does not provide for exceptions to the definitions of a “product” and a first MA for biological medicinal products or blood products which would allow defining them as a function of their methods of manufacture or under their commercial names; it is therefore irrelevant that the SPC application is based on an MA for the “Cinryze” drug since the product protected by the basic patent is “the C1 inhibitor, human”; [besides] if LFB, after having initially claimed the latter, has amended the application by claiming “the C1 esterase inhibitor of the Cinryze drug”, this limitation made after the objections of the INPI cannot be effective since either the patent or the MA only relate to the “C1 inhibitor” as active ingredient of the Cinryze drug. 

To put it more clearly, the Cour d’appel took a very formal approach of Article 3(d) of the SPC regulation and simply considered that, if the names of the active ingredients mentioned in two different MAs are the same, then both MAs in fact relate to the same product, without further consideration as to the true physicochemical identity between the two products, as in the case of biological medicinal products obtained by different methods of manufacture.

LFB also argued that, in the assessment report of the European Medicines Agency (EMA) which led to the MA, the purified and concentrated C1 INH (i.e. C1 inhibitor) after pasteurization and nanofiltration is considered as the active substance.

The Cour d’appel responded that

the subject matter of this report was a marketing authorization application for Cinryse, so that, if [the report] specifies what its active ingredient is, it does not conclude that it would be a new product, the novelty of the medicinal product being different from that of its active ingredient; accordingly this does not contradict the decision of the INPI.

Moreover, the Cour d’appel noted that this latter argument was not submitted to the INPI which, therefore, could not do otherwise than decide that the MA for the drug Cinryze was not the first one for the active ingredient which is the “C1 inhibitor, human”.

It is to be noted that the latter argument was however decisive in overcoming the objection of the Dutch patent office based on Article 3(d) of the SPC regulation for the corresponding SPC application in that country (NL SPC application No. 300510), thereby securing the grant of an SPC.

It is therefore tempting to imagine that the fate of the French SPC application could have been changed for the best had the attention of the INPI examiner been drawn to the definition of the active substance in the assessment report of the EMA.

As a final note, this case reminds us of the ruling of the Paris Cour d’appel of April 12, 2016 which upheld the decision of the INPI to reject SPC application No. 08C0003 covering Cervarix®(GlaxoSmithKline Biologicals) which was discussed here.

In that case also the Cour d’appel refused to take into account the impact of the manufacturing process of biological products (production in yeast cells vs. insect cells) on their structure, sticking to the definition of the product given in the MA.

One can wonder if this literal approach, which has the advantage of simplifying examination of SPC applications, is in keeping with the fundamental objective of the SPC regulation which is to make up for the insufficiency of the period of effective protection of a medicinal product under a patent to cover the investment put into pharmaceutical research as recalled by the CJEU in C‑130/11 (Neurim).

Indeed, in the present case, it appears from the assessment report of the EMA that new clinical data was produced for the C1 inhibitor of Cynrize® in support of the MA application. This is probably because the C1 inhibitor of Cynrize® is a biological product the structure of which depends on the manufacturing process, thereby making it impossible to rely on clinical data obtained with previous C1 inhibitors.

It is generally considered that clinical trials amount for the larger part of investment in drug development. It could therefore be considered that the active ingredient of Cynrize® is a new product the development of which necessitated investment entitling it to SPC protection.

As such, when assessing conformity with Article 3(d) of the SPC regulation, perhaps the necessity to generate specific clinical data in order to obtain an MA for a biological product should be the primary criterion for determining if an MA is the first one to place the biological product on the market, rather than simply determining if the name of the active ingredient is the same one as that of a prior MA.

Thank you Lionel. Easter being about resurrection even more than about chocolate eggs, it remains to be seen whether this SPC application may come back to life on cassation appeal.

CASE REFERENCE: Cour d’appel de Paris, pôle 5 chambre 2, January 20, 2017, SA Laboratoire Français du Fractionnement et des Biotechnologies v. Directeur général de l’INPI, RG No. 16/08814.

Copy and paste

What is new in today’s post? Well, strictly nothing. Nope, nothing new under the sun. 

In fact, the recent ruling by the Cour d’appel de Paris in Avery Dennison RIS France & Avery Dennison Sytèmes d’étiquetage France v. Directeur général de l’INPI is pretty much a copy and paste of Free & Freebox v. Directeur général de l’INPI issued a few months ago and already reported on here.

So is there really a need to discuss it? After all, case law is more interesting when it tackles new issues or when it features a change in practice.

But the point is, sometimes even established case law can be somewhat questionable from a practitioner’s perspective. And in this case, I must say I struggle with fully understanding the court’s reiterated rationale.

Copying an IP judgment – a paradox?

The issue at stake is the limitation of a patent in front of the INPI (which is the French patent and trademark office), and which options are available to third parties to challenge this limitation. Appeals against decisions issued by the INPI are generally supposed to be lodged with the Paris Cour d’appel. Accordingly, a number of third parties have tried to challenge decisions of limitation of patents in front of the Cour d’appel, by directly appealing these decisions – oftentimes parallel to ongoing litigation. And they have lost, their appeals being deemed inadmissible. The present case is no exception.

In particular, the Paris Cour d’appel (with the support of the Cour de cassation in Teisseire v. Directeur général de l’INPI) has consistently held that challenges against the limited claims must be brought in the context of a nullity lawsuit. This means that such challenges have to be brought in front of the Paris Tribunal de grande instance (TGI), not the Cour d’appel.

But here is the thing. Grounds for nullity are supposed to be listed in a limitative manner in the law, be it in article L. 613-25 Code de la propriété intellectuelle (CPI) for French patents, or in article L. 614-12 CPI together with article 138 of the European patent convention (EPC) as far as French parts of European patents are concerned. These grounds of nullity notably comprise lack of novelty, lack of inventive step, insufficiency of disclosure, extension of subject-matter beyond the contents of the application as filed and extension of the scope of protection after grant.

What the statutory grounds for nullity do not comprise is lack of compliance with article 84 EPC (or its equivalent in the CPI), per which the claims “shall be clear and concise and be supported by the description” is not a ground for nullity. Just like a lack of clarity is not a ground for opposition at the EPO either.

Nevertheless, when the INPI examines a request for limitation, they are supposed to check whether the claims as limited are clear and concise and supported by the description. See article L. 613-45 CPI together with article L. 612-6 CPI.

The question is whether and how third parties may challenge the result of this part of the examination conducted by the INPI.

If we turn to the parallel situation of limitation proceedings at the EPO, the answer is clear. Only parties to the proceedings can file an appeal against a decision issued by the EPO. A third party, as its name indicates, is not a party to the limitation proceedings and thus cannot appeal the decision of limitation, even if they deem that the limited claims are e.g. unclear.

In France, third party appeals are not ruled out as a matter of principle. By way of example, it is relatively common for a third party to challenge a decision of restoration of a patent by the INPI. See an example here.

But when it comes to decisions of limitation, third party appeals are usually stroke out in view of the arguments raised by the appellant.

In the present case, the French part of a European patent was limited by Gemalto, parallel to ongoing patent infringement proceedings against two companies of the Avery Dennison group. Avery Dennison appealed the decision of limitation and argued (among others) that the claims as limited are unclear.

The Cour d’appel rejected the appeal as inadmissible and held in particular that: 

[…] The arguments by Avery Dennison supporting their request for cancellation of the decision of the general director of the INPI, per which the claims as limited are not clear and not supported by the description, are analyzed as arguments of invalidity of the patent enforced against them in the framework of the infringement suit. These arguments, which put into question the limitation itself, i.e. whether the modified claims comply with the law, pertain to the jurisdiction of the judge in charge of assessing the validity of the patent. In this case, there is a counterclaim for nullity of the claims of the […] patent pending in front of this judge. His jurisdiction extends to all patent validity challenges, be it arguments of extension of an absence of limitation or arguments of a lack of clarity of the claims or a lack of support in the description, which are indeed exceptions which can lead to the nullity of a patent

Just to be very clear on this: I perfectly understand that it may make a lot of sense for the same court (the TGI) to be in charge of assessing all challenges against the patent claims.

What I do not understand is the last sentence in the above quote. In other terms, why does the Cour d’appel deem that a lack of clarity of the claims or a lack of support in the description, can lead to the nullity of the patent? 

I can come up with three possible explanations. 

Option 1: the court simply did not (does not) understand that not all conditions to be examined before granting limited claims can be challenged after the limitation, based on the listed grounds of nullity. I think this is unlikely, because the point has certainly been explained to the court time and time again in this case and previous similar ones.

Admittedly, it is probably easy to confuse a lack of support in the description (not a ground for nullity) with insufficiency of disclosure (ground for nullity). Both concepts are quite close, as explained in section F-IV, 6.4 of the EPO guidelines for examination. Actually, lack of support can also be easily confused with extension of subject-matter.

But lack of clarity on the other hand is quite clearly different from insufficiency of disclosure, or any other ground for nullity for that matter.

Option 2: the court deems that judges have such a large discretion in examining the actual grounds for nullity, such as insufficiency of disclosure or even lack of novelty, that they can very well revoke a patent under one of these statutory grounds if there is a lack of clarity in the claims.

This would be a pragmatic approach but not a satisfactory one on the legal standpoint. The legislator purposefully set out a number of distinct requirements to be handled differently. So why should judges be allowed to blur the lines between them?

Option 3: the court believes that all statutory conditions may be examined in the context of a nullity claim or counterclaim, including clarity and conciseness mentioned in article 84 EPC or article L. 612-6 CPI.

This would be a very bold position, since, at least as far as European patents are concerned, article 138 EPC provides that “a European patent may be revoked with effect for a Contracting State only on the grounds that“, and then comes a list of grounds which does not contain lack of clarity and conciseness.

But let’s explore option 3 a little bit more.

If this is indeed what the court has in mind, is this situation specific to limited patents? Does it also extend to patents modified in opposition at the EPO? Or has lack of clarity now also become a ground for nullity for all patents, even those which were not modified after grant?

Dear readers, please feel free to provide more information or to speculate as to yet further possibilities not contemplated here…

One other argument which – as far as I understand – was raised in the appeal, was that the modified claims were not a limitation. Here, the court’s position seems to be that modified claims necessarily lead to a limitation of the scope (and thus are allowable) or to an extension of the scope (and thus can be revoked in a nullity challenge).

But aren’t there yet other situations in which the modified claims could result neither in a limited scope nor in an extended scope? What about for example claims which are modified only to provide some clarification? In such a scenario, shouldn’t a third party be allowed to challenge the decision of limitation per se? After all, the INPI is supposed to only grant actual limitations, not clarifications. And if no extension of scope results from the modification, it should not be possible to challenge it in a nullity suit, oder?

I must admit that this latter question is trickier. But at least the main point raised above really needs to be clarified once and for all.

CASE REFERENCE: Cour d’appel de Paris, pôle 5 chambre 2, February 10, 2017, Avery Dennison RIS France & Avery Dennison Systèmes d’Etiquetage France v. Directeur général de l’INPI, RG No.15/25007.

A warning against warnings

Today is April 3. Too late for an April fools’ post this year, sorry. My enthusiasm for pranks may have somewhat dwindled lately – maybe a side effect of the overdose of the “fake news” debate that has been going on lately.

As a result, this post will be as unfunny as can possibly be. In fact, the main topic of today – warning letters –  ranks second only to computation of damages, in terms of starkness. You have been warned.

In the case at hand, UK-based Becton Ltd. was the owner of European patent No. EP 1836111 directed to an “apparatus for storing and for independent dispensing of a plurality of packages, in fact a robot for the dispensing of drugs in a pharmacy.

A pharmacy robot training for dispensing drugs.

Back in 2011, Becton sued three French companies, Mekapharm, Phi-Concept and Automatic Logistic, for infringement of the French part of the EP’111 patent, after two initial saisies-contrefaçon (infringement seizures). This was in fact before the patent was even granted, in 2012.

Mekapharm filed an opposition against the patent at the EPO, and requested a stay of the infringement proceedings together with the two other defendants, in view of the opposition. The case was withdrawn from the court’s records in 2013 – probably because Becton did not reply to the request for stay. In February 2014, the opposition division revoked the EP’111 patent. The patent proprietor appealed. In 2015, Becton filed submissions in front of the Tribunal de grande instance (TGI) in order to reinstate the case. They did so on the last possible day before the proceedings would definitively expire.

This also turned out to take place just a few weeks before the oral proceedings in front of the Board of appeal. Unfortunately for the plaintiff, the revocation of the patent was confirmed by the Board. This led Mekapharm and its co-defendants to file a number of counterclaims in front of the TGI.

The first counterclaim concerned the validity of the infringement seizures, and was easily dealt with: due to the retroactive revocation of the patent, the infringement seizures were necessarily invalid and the seized evidence had to be returned to the defendants.

As a second counterclaim, the defendants requested damages because Becton had sent warning letters to their customers. The warning letters were sent by Becton’s patent attorney a few weeks after the infringement seizures. The recipients of the warning letters were the customers identified in Mekapharm’s database, that Becton had had access to owing to one of the seizures.

The court issued its judgment on January 13, 2017. It started by reminding that, pursuant to article L. 615-1 Code de la propriété intellectuelle, infringement acts committed by someone else than a manufacturer of the claimed product only give rise to liability if the infringer is aware of the infringement. This is the usual justification for allowing warning letters in French practice.

On the other hand the court also made it clear that the sender of a warning letter can be held liable if the letter “is sent in a wrongful manner, notably in case of bad faith or obvious abuse“.

Here is now the court’s analysis of the patent proprietor’s behavior:

[…] Further to the infringement seizure conducted on July 22, 2011 at the headquarters of Mekapharm, Becton Ltd. seized Mekapharm’s customer database and sent a […] letter to all of them on September 19, 2011, […] mentioning in particular [the EP’111 application]. The French translation of the claims was enclosed. The recipients’ attention was drawn to article L.615-1 Code de la propriété intellectuelle, the letter being a warning letter under this article. The letter was concluded by an invitation to check whether the equipment of the recipients’ establishment did not infringe the patent rights defined by the apparatus and method claims based on which the EPO intended to grant a European patent. 

The wording of the letter is objective and moderate and therefore does not by itself entail any wrongdoing. However, the premature sending of the letter before the grant of the patent […] and the systematic sending to all of Mekapharm’s customers, whose addresses were obtained a little bit more than one month before, owing to the seizure (these customers being asked to check if the equipment that they acquired from Mekapharm infringed a not yet granted patent) are two circumstances which constitute a dishonest behavior towards Mekapharm, its main competitor on this segment, or at least wrongful negligence

Among the two incriminating circumstances mentioned by the court, one is certainly much more serious than the other. In fact, the sending of warning letters based on a patent application should probably not be considered as misconduct by itself. Indeed, rights can be derived from a patent application: this is called provisional protection; as a result, it should be lawful to make non-manufacturing infringers aware of such protection, in particular so that damages can start accruing.

On the other hand, the use of the seized customer database for the sending of warning letters was clearly questionable. More generally, it is probably fair to say that any use of seized evidence for any purpose other than what is strictly necessary for the demonstration of infringement raises a risk of abuse.

Mekapharm claimed 1,386,000 euros of damages of lost profits, and its co-defendant Phi-Concept claimed 277,000 euros.

The amounts awarded by the TGI were much lower, but certainly not insignificant: 335,000 euros to Mekapharm and 72,600 euros to Phi-Concept.

Mekapharm filed three affidavits from different pharmacies proving that their owners had given up on buying Mekapharm’s robots further to Becton’s warning campaign. The court was therefore convinced that Mekapharm suffered a loss because of the warning letters.

The court also relied on an analysis of sales between 2009 and 2016, showing that Mekapharm’s sales decreased in 2013 and 2014. The judges came to the conclusion that those were lost sales. As the sales picked up again in the following years, no further lost sales were acknowledged.

The figure of 335,000 euros was computed based on Mekapharm’s margin applied to the turnover that should have been generated by the lost sales. Phi-Concept on the other had was the company in charge of marketing Mekapharm’s robots. Its lost profits corresponded to the percentage of the lost sales’ turnover which was specified in the agreement between the two companies.

As a complement, Mekapharm was awarded 20,000 euros for the harm done to its image. On the other hand no abuse of proceedings was acknowledged by the court.

All in all, this judgment is probably a warning letter of its own to patent proprietors, who should always be very careful when they exercise their rights.

CASE REFERENCE: Tribunal de grande instance de Paris, 3ème chambre 2ème section, January 13, 2017, Becton Dickinson Dispensing UK Ltd. v. Mekapharm et al., RG No. 15/03165.

The trend extends

Usual readers of this blog will certainly get the impression that the author sometimes repeats himself. And they will be right.

On a number of occasions, I expressed the view that French courts have gotten very strict on added matter (i.e. extension of subject-matter beyond the content of the application as filed) over the past few years. I mean “strict” as in “EPO strict“. And this trend seems to be further confirmed based on two recent decisions by the Paris Cour d’appel.

First of all, in a previous post, I reported on a first instance judgment in Jean Chéreau v. Frappa, in which two European patents were revoked for added matter. One patent fell because of a number of intermediate generalizations. The other one fell because the term “roughly longitudinally movable” was replaced by “longitudinally movable” – which was interpreted as having a fundamentally different technical meaning.

The patent proprietor appealed, but to no avail, as the initial judgment was confirmed on appeal, in a ruling dated February 28, 2017.

Second of all, another patent was revoked by the Paris Cour d’appel on the same ground of nullity on January 24, 2017.

Extension patents are OK but patent extensions are not.

Here are the basic facts of the case. Mr. Damour owns a French patent No. FR 2943699 filed on March 31, 2009, directed to a fire resistant sandwiched panel for doors. An exclusive license was granted to the Compagnie de Fabrication Industrielle de Menuiserie (COFIM).

On July 31, 2012, Mr. Damour and COFIM sued a French woodworking company called Breheret for infringement of the patent. However, in a judgment dated December 4, 2014, the Paris Tribunal de grande instance revoked all claims asserted against the defendant, for lack of inventive step.

The plaintiffs appealed and filed a request for limitation of the patent in parallel, which was granted by the INPI (French patent and trademark office) on July 22, 2015.

The Cour d’appel reviewed the limited claims, and came to the conclusion that they were invalid, but this time due to extension of subject-matter.

Here is a working translation of claim 1, with revision marks relative to claim 1 as granted:

A fire-resistant sandwich panel, [in particular] for the production of doors integrated into fire-block units or facades of fire-resistant technical ducts or for the production of fire hatch covers, said panel consisting of at least one core (1) having a density greater than 400 kg/m3, sandwiched between two wood fiber-based facings (2) having a thickness comprised between 1.5 and 50 mmboth facings being assembled to said core (1) by means of a binder preferably by gluing, characterized in combination

– in that the core (1) extends up to the edge of the panel so that there is no need for the use of bands, and a reliable stability of the fixation means is obtained, 

– in that the core (1) consists of a fiber reinforced silicate material having a density greater than 700 kg/m3,

– and in that said core has a thickness comprised between 6 and 30 mm. 

Ironically, among these various changes, the court focused on the recitation that the core extends up to the edge of the panel and concluded that this represented… an extension of subject-matter.

Here is the relevant part of the ruling:

According to lines 20-24 on page 5 of the patent application as filed, which disclose an example of panel of the invention: “the mechanical features of the core 1 and the facings 2 make it possible to avoid the provision of bands. The core 1, which is made of a hard material, provides strength up to the periphery of the panel, which is sufficient to obtain a good hardness of the edges and a reliable stability of the fixation means (such as hinges, espagnoles, brackets or the like)”. These lines, the drafting of which is ambiguous, must be read in the light of the description of the invention presented from line 14 on page 2 to line 5 on page 3, from which it can be derived that it is the use of the core, the material of which is chosen for its high fire resistance, sandwiched between two wood fiber facings, and not the fact that it extends to the edge taken as such, which makes it possible, on the one hand to obtain a hard edge which is not friable over time, and on the other hand to provide the panel with mechanical resistance qualities which are sufficient to afford a good stability of the fixation elements. 

Claim 1 as limited thus adds a technical effect which extends the scope of the patent in that it indicates that it is the fact that the core extends to the edge which affords a better fixation of the ironwork. 

On page 4, lines 7-9 of the application as filed, it is specified that “the drawing shows that the core 1 extends up to the edge 3, therefore illustrating that the use of bands is unnecessary”. This relates to figure 1 showing an embodiment of the invention, and only makes a connection with the fact that the core extends to the edge and that bands are unnecessary. 

It results from the above that claim 1 as limited must be revoked as extending beyond the content of the patent application as filed.  

To put it otherwise, when looking closely at the application, it seems that the patent proprietor mixed language from two passages of the application. In the first passage it is mentioned that the core extends up to the edge and that the use of bands is unnecessary. In the second passage, it is mentioned that the mechanical features of the core and facings make it possible to avoid the use of bands; and that the core, made of a hard material, provides strength to the periphery and thus a reliable stability of the fixation means.

What neither passage explicitly mentions is that the extension of the core up to the edge results in a reliable stability of the fixation means. This technical effect seems to be rather related to the nature of the core material.

The gold standard applied at the EPO for appraising the allowability of an amendment is whether the amendment can be directly and unambiguously derived from the application as filed as a whole. Here, the court noted that the drafting was “ambiguous“. Therefore, the outcome seems to be in keeping with the doctrine of the Boards of appeal.

It should also come as a warning for patent proprietors who limit their claims in an attempt to overcome first instance revocation grounds. This is a very common strategy, but also one which may sometimes lead them somewhere between Scylla and Charybdis.

CASE REFERENCE: Cour d’appel de Paris, pôle 5 chambre 1, January 24, 2017, COFIM & Vincent Damour v. Breheret, RG No. 15/03652.