Summertime

It is this time of year when some readers of this blog may still be enjoying what is left of the summer, albeit the back-to-work frenzy is looming – and is in fact already upon a number of us.

What we need in such a moment of transition is probably a gentle reintroduction to the delights and torment of patent law.

Matthieu Dhenne, attorney at law at Cabinet Schertenleib offers us just that, as he kindly accepted to share some comments with us regarding two decisions recently discussed on the blog.

The typical year of a patent attorney.

The first decision is B/E Aerospace Inc. & B/E Aerospace Systems GmbH v. Zodiac Aerotechnics, reported here. At stake is the hotly debated question of the limitation period for patent nullity actions in France. I may have already mentioned that the recent case law on this issue has drawn a lot of criticisms. It turns out that Matthieu is one of the vocal critics of the new trend.

Having looked in detail at what the essence of a limitation period is, Matthieu writes:

The Paris Tribunal de grande instance states (once again) that the limitation period under ordinary law (i.e. 5 years) applies to an action for patent revocation.

It is an error of law. Two brief explanations hereafter.

First, it does not comply with article 2224 of the Code civil. Article 2224 provides a limitation period for both actions in personam and actions in rem. Yet the action for patent revocation is neither one nor the other. It is not based on a debt obligation (action in personam), nor on a thing (action in rem). It is based on the defense of free competition. In this regard, we should remind that a patent right, as an exclusivity to operate an invention during a certain period of time, constitutes an exception to free competition. Therefore, as an exception, this right is only justified for patentable inventions. Rather, it is not justified for non-patentable inventions. In other words: the purpose of an action for revocation is mainly to avoid unjustified patents that will negatively affect competition.

Then, the purpose of a limitation period does not apply to it. Such a deadline aims at strengthening legal certainty. Thus, a right holder must act within a strict deadline when his right is infringed. Similarly, a right may be created over time, when a defect originally affecting it disappears. For instance, a trademark can acquire distinctiveness through use. However, on the contrary, in patent law, time may only be harmful. An invention which is not novel or inventive at the date of filing will not become novel or inventive afterwards. Rather, one could discover prior art that was not discussed during the examination phase.

Eventually, a limitation period in patent nullity suits will only introduce uncertainty. On the one hand, there are still doubts concerning the starting point of the deadline. According to the case law: date of filing, date of grant or date of formal notice. There is no strict trend concerning this question. Besides, in any event, the plaintiff must prove he was unaware of the existence of the patent: the burden of proof is upon the plaintiff. On the other hand, the defect that originally affects the patent right will not disappear over time. To the contrary, one could discover after grant that a patent is void due to prior art which was not discussed during the examination phase. Therefore, legal protection is not needed and thus not justified because it strengthens situations of facts that will never comply with the legal system. Worse: potentially, a patentee will still be able to use a patent against someone else even after it is found to be invalid.

The above case law obviously deserves much more comments. But, for now, I think there is an urgent need to stress out the fundamental legal issues at stake, hoping that the Courts will quickly remedy them.

Another important decision previously discussed by my partner Aujain Eghbali on this blog is Xaga Network v. Ewalia, in which a patent was revoked because the main claim at stake was held to relate to software as such (the programming activity field not constituting a patentable technical activity), and to actually describe “an abstract scheme which does not offer any technical solution to the application management facilitation problem it pretends to solve since it is not made explicit how the proposed management system effectively helps the user”.

Aujain said he was rather impressed by how French judges seem to have taken over the typical EPO reasoning in connection with computer-implemented inventions – even if the legal basis is not the same – as he explained in his post.

Matthieu, as far as he is concerned, has three remarks:

The Court refers to the “activity of programming” to assess technicity under article 52 EPC. However, only the invention should be technical. The question whether an activity is able (or not) to give birth to an invention exclusively falls under the inventive step assessment under article 56 EPC.

The Court states that claim 1 aims at an abstract scheme which is not explained. I think it is interesting to point out that abstraction is opposed to explanation. Two lessons. On the one hand, technicity does not require a transformation of nature (i.e. material production). On the other hand, further explanations in the description could, in fine, justify technicity. In other words: French judges are bringing the requirements of technicity and sufficiency closer together.

Eventually, the Court evokes the technical effect requirement. Nonetheless, in doing so, the Court unavoidably evokes a further technical effect, to the extent that any software already produces a first technical effect in the machine (i.e. electric current).

Speaking of computer-implemented inventions, those interested in this topic may want to mark their calendars. Indeed, Matthieu is happy to announce that an exciting full-day seminar dedicated to this very topic and put together by the AACEIPI (Association des Anciens du Centre d’Etudes Internationales de la Propriété Intellectuelle) will take place on November 24, 2017, in the prestigious premises of the Cour de cassation.

You can inquire about the seminar and register (by November 10) with Aristide Tenan, at at@schertenleib-avocats.com. Several top speakers are announced, including professors, IP judges and last but not least my partner Patrick Trabé.

Summertime, and the livin’ is easy” – this will just be a memory by the time the seminar kicks off. A belated happy August to all readers!

Patent on respiratory support

Many patents discussed on this blog die one way or another. Who by fire, who by water, who in the sunshine, who in the nighttime…

One reason for this is that revocation verdicts often tend to be quite interesting to comment upon. For a change, the patent at stake today did not fully die. But you could say that it is on respiratory support. And how appropriate, given that the title of the patent is “a respiratory gas supply circuit for an aircraft carrying passengers“.

This patent (EP 2004294) was filed by Intertechnique in 2006 and granted in 2010. This French company has been part of the Zodiac group since 1999.

In 2011, Intertechnique sent a warning letter to B/E Aerospace Systems GmbH in which they enquired about the possible development of products by the B/E Aerospace group similar to those claimed in the patent. The official answer was that no current product infringed the patent, and that all rights were reserved regarding the development of new products as well as a possible challenge of the validity of the patent.

In October 2012, B/E Aerospace Systems GmbH filed a nullity suit against the German part of the EP’294 patent in front of the Bundespatentgericht. The German court held that the patent as granted was invalid, but that it could be maintained in amended form according to an auxiliary request. This ruling became final in March 2015.

Immediately thereafter, B/E Aerospace threatened Zodiac Aerotechnics (the new name of the patent proprietor Intertechnique) with a similar nullity suit in France, and asked them to either withdraw the French part of the European patent or to grant them a free license. Zodiac Aerotechnics refused, so that B/E Aerospace filed the French nullity suit in June 2015.

Two classical legal defenses were raised by the patent proprietor, both recently addressed on this blog: first, the nullity claim was inadmissible as the claimant did not have standing to sue, and second the nullity claim was time-barred.

Both defenses failed.

Regarding standing, the current state French case law was already summarized a few weeks ago and then again just last week. Today’s ruling is on the same page:

[…] The nullity claimant must justify that, at the time the complaint is filed, there is a sufficient interest to free an upcoming exploitation of the patented technology or a similar one, and establish that the patent at stake seriously threatens to impediment its economic activity. 

The court noted that the respective parties were competitors as they were both active in the field of in-flight oxygen supply. Most importantly, B/E Aerospace received a warning letter in connection with the EP’294 patent and did not exclude in its response that products under development may ultimately fall within the scope of the patent. B/E Aerospace also asked Zodiac Aerotechnics to forsake the French part of the patent or to grant a royalty-free license.

The court further noted that B/E Aerospace filed two French patent applications claiming a Germany priority of 2014, relating to a similar subject-matter, and in which the EP’294 was mentioned in the background section.

Said the court:

Under these circumstances, […] B/E Aerospace Inc. as well as its subsidiary B/E Aerospace GmbH not only demonstrate the existence of a competition context, but also of an objective link between the products that they develop and the EP’294 patent. 

Finally, they demonstrate that they have exploitation plans regarding devices which, although they are not necessarily already on the market nor analyzed as being within the scope of the patent, may possibly be threatened by the rights that it confers. 

Therefore, standing was acknowledged.

This makes sense, and it would actually be quite surprising if the recipient of a warning letter mentioning a certain patent, even in a different European country, had no standing to request the cancellation of that very patent.

In the unlikely event of a loss of cabin pressure, oxygen masks will automatically drop in front of you, and the front part of the aircraft will be shot forward like a bullet.Second legal defense raised by Zodiac Aerotechnics: that the action was time-barred. 

Here, again, the court’s position seems consistent with what was reported in other recent decisions, such as the Actelion case, although the outcome was different this time:

The starting point of the limitation period is appraised in concreto. Therefore, beyond any reference to publication dates which would require constant monitoring by stakeholders and which, even in a small market, seems to be hardly feasible, it should be determined at which date B/E Aerospace knew or should have known that the EP’294 patent was a threat for their economic activity, in view of their development plans and in view of their products under development. 

As a reminder, the limitation period is 5 years. Zodiac Aerotechnics argued that the starting point for this limitation period was either the publication of the PCT application on which the patent was based (namely October 25, 2007) or the formal publication date of the application at the EPO (namely December 24, 2008). In both cases of course, the action filed in June 2015 would be time-barred.

However, in accordance with the principles recalled above, the court refused to take either of these publication dates as an automatic starting point for the limitation period. The court noted that B/E Aerospace may have been unaware of the application at these publication dates. Also, there was no evidence that there was any product related to this patent under development at that time.

The court rather decided that the starting point was September 2, 2011, i.e. the day on which B/E Aerospace received the warning letter: 

This letter must be analyzed as the cause for B/E Aerospace’s standing to file an action for nullity of the patent at stake, since it is at this stage that they became aware on the one hand of the existence of the patent and on the other hand of the fact that it could lead Zodiac Aerotechnics to possibly assert the EP’294 patent against them, based on the information that they had. 

In summary, the court thus considered both issues of standing and limitation period in combination.

The day on which a party acquires standing is also the starting point for the limitation period. 

Another possible take-away message is that the sending of a warning letter is likely to grant standing to sue to the recipient and to start the time-bar clock.

Of course, the circumstances of each case are unique, and this may not always be true, but at least this can be a reasonable prima facie assumption.

As a result of both legal defenses being discarded, the court reviewed all claims and came to the conclusion that claims 1 to 6 lacked inventive step. However, dependent claims 7 to 9 were found to be valid. It is not apparent from the decision whether the auxiliary request based on which the patent was maintained in amended form in Germany corresponds to the subject-matter of one of these claims 7 to 9 or not.

Anyway, a few years ago, it was commonly thought that only the main claim mattered in nullity proceedings, and that if this main claim fell, then all dependent claims would be only superficially examined and would be very likely to get stroke out as well.

I don’t know if this thought used to be correct, but at least it is probably not correct anymore, as today’s ruling, just like the decision discussed last week, illustrate that French courts now provide detailed reasons as to why each and every claim is or is not valid.


CASE REFERENCE: Tribunal de grande instance de Paris, 3ème chambre 3ème section, April 28, 2017, B/E Aerospace Inc. & B/E Aerospace Systems GmbH v. Zodiac Aerotechnics, RG No. 15/09770.

Two down, two to go

The Paris Tribunal de grande instance (TGI) has recently handed down an unusually long judgment. But I will refrain from commenting on all 64 pages that the decision comprises. Instead, I will focus on the initial portion.

No, not so much out of laziness – who said that?

But mainly because this initial portion addresses the very important issue of standing in a patent nullity suit, which was already discussed here not long ago.

As usual, a word of context first – which, as usual again, is not so straightforward.

Pellenc is a French agricultural company, which has been marketing an electrical pruner since 1988. From 1989 to 2014, they were involved in commercial and cooperation agreements with Switzerland-based group Felco, which is active in the same field. In particular, Pellenc supplied Felco with batteries for some of their electrical pruners. At some point, Felco drastically reduced the volume of its orders to Pellenc and then introduced a new tool that they had developed.

However, Pellenc had six patents in store: two French patents and four European ones.

Felco, in a bold preemptive strike, filed a nullity suit in France in July 2012 against all six patents.

One of the European patent was revoked in opposition proceedings at the EPO, and the revocation was confirmed by the Board of appeal.

The French part of another European patent was definitively forsaken at the French patent office (presumably to avoid substitution of the original French patent).

All of that left the court with two French patents and two European patents to deal with.

But, in order not to make things easier, Pellenc filed requests for limitation of these four patents. The requests for limitation of the two French patents were accepted by the Institut National de la Propriété Industrielle (INPI) in May 2015. The EPO, on the other hand, initially rejected the central requests for limitation of the two European patents, in June and November 2015.

In view of these lingering limitation proceedings, the case management judge separated the case into two: a first sub-case concerned with the nullity claim regarding the two limited French patents; and a second sub-case concerned with the nullity claim regarding the two European patents still in limbo. Obviously, the first sub-case progressed quicker than the second one, which leads us to the decision at stake.

Let’s not maintain the suspense for too long: the two French patents were revoked in full.

The court made a very thorough job of deciding on the interpretation of a number of contested claim terms, and then reviewed each claim (yes, including all dependent ones) in great detail, finding them all deprived of novelty or inventive step. Hence the lengthy judgment.

Sometimes, patents are like dominos: when you start toppling one…

But most interesting is how the court handled the defense that the nullity complaint was inadmissible due to lack of standing.

In the decision, the court recalled the principles to be applied for assessing whether a nullity claimant has standing to sue:

Therefore, a competitor can file an action for nullity of a patent if they can demonstrate the existence of sufficient interest to free an upcoming exploitation of the patented technology or a similar one: nullity actions are open to an industrialist willing to free a market. 

More specifically, it must be established that the claims which are sought to be nullified “are or may be an impediment to their economic activity, because they have or plan to have an activity in the field of the patented invention“.

The court also made it clear that the claimant does not need to establish the existence or imminence of an infringement of any particular claims of the patents at stake. But it should be explained “how the patent may get in the way of their activity“.

In my previous post on the topic, which was in the pharma field, we could see that the court examined the evidence as to whether the patent stood in the claimant’s way in a very thorough and severe manner. In fact, standing was acknowledged for some of the patent claims but not others.

Now, in the present case, it seems that the analysis was overall easier and more straightforward. 

The court first noted that there it was undisputed that Felco and Pellenc were competitors in France, since both make and market electrical pruners. In fact, it was mentioned in Pellenc’s submissions themselves that the recent tool developed by Felco was in competition with their tools.

The interesting point is that the competing tool was put on the market in France in May 2013, i.e. ten months after the nullity complaint was filed. The court concluded that, even if there was no competition on the day the complaint was filed, there was competition at least thereafter, so that the inadmissibility defense could no longer be relied upon.

In other terms, the relevant date for the assessment of standing in a patent nullity suit is the day on which the court decides on the inadmissibility defense, and not the day on which the complaint is filed – in keeping with the general rules of civil procedure in this country.

The court further remarked that Pellenc sued the Felco companies in Switzerland for unfair competition. It seems that Pellenc claimed in the Swiss lawsuit that Felco had taken unfair advantage of Pellenc’s patented and non-patented know-how which was transmitted to them over the course of their longstanding relationship. This was seen as further confirmation of Felco’s proper standing.

Yet another factor taken into account by the court was that Pellenc opposed two European patents owned by Felco. Frankly, I think this is a very indirect factor. It is more a possible indication of Pellenc’s activity being impeded by Felco’s IP than the other way around.

Apparently, there was also a dispute as to the legal consequences of the agreement between Felco and Pellenc on Felco’s standing. It was probably an exciting one, at that, as both parties filed consultations by renowned legal experts, respectively Prof. Reboul and Prof. Galloux. But the decision does not say much as to which arguments were made. It is simply stated that:

Regarding the contractual relationships which existed between the parties, it should be noted that they have ceased; besides, the existence of contractual relationships does not deprive the contracting party of their right to seek the invalidation of the patents, and does not render standing illegitimate per se. 

Indeed, if the patents were to be held invalid, the standing of [Felco] would be legitimized and Pellenc would have illegitimately asserted worthless patents against their co-contracting party. 

Therefore, the existence of contractual relationships cannot make a contracting party’s standing to seek nullity of patents belonging to the other contracting party illegitimate. 

It is unclear whether the agreement explicitly contained a provision prohibiting Felco from seeking revocation of the patents, or whether the argument was that the agreement indirectly or implicitly prevented Felco from pursuing this course of action. Probably the latter.

But at any rate, the principle seems to be clearly established in this judgment that an agreement cannot restrict a party’s right to seek invalidation of a patent, and in particular cannot annihilate said party’s standing to sue. This is in addition to the serious concerns that non-challenge clauses may raise under competition law.

Good to know!

At that point, the court rejected Pellenc’s defense and, as mentioned above, held all claims of both French patents invalid, after carefully reviewing them one by one.

With two of Pellenc’s patents down, there are two more to go – namely the two European ones, which were also sought to be limited.

I checked on the European patent register, and it turns out that both patents were finally limited at the EPO, in June 2016. So, unless the parties settle, these patents should soon also be subjected to the firing squad of the TGI’s third chamber. Stay tuned.


CASE REFERENCE: Tribunal de grande instance de Paris, 3ème chambre, 1ère section, March 2, 2017, Felco SA et al. v. SA Pellenc, RG No. 12/15393.

Time’s up

Previously, in Actelion v. Icos Corporation (as they say in TV shows): Actelion filed a nullity suit against the French part of European patent EP’092 owned by Icos Corporation (belonging to the Eli Lilly group) and relating to a particular formulation of the blockbuster drug tadalafil. Icos disputed Actelion’s standing. Actelion prevailed, except regarding some dependent claims relating to therapeutic uses of the formulation unrelated to Actelion’s business.

Today’s episode is dedicated to the second legal defense brought by Icos, based on the French statute of limitations. Icos argued that Actelion’s action was time-barred – successfully so.

A few years ago, the statute of limitations was never brought up as a legal defense in nullity suits in France. In fact, the Code de la propriété intellectuelle does not contain any specific limitation provision regarding nullity claims – contrary to, e.g., infringement claims.

Everything changed further to the reform of the Code civil enacted in 2008. Amended article 2264 now provides that “personal or real actions are time-barred five years from the day when the owner of a right knew or should have known the facts making the action possible“.

In other terms, the general limitation period in ordinary civil law is five years. Numerous exceptions are provided in specific areas of the law, but as mentioned above, no exception is provided for nullity patent suits. On the other hand, before the 2008 reform, the general limitation period was 30 years. Therefore, whether or not the general limitation period applied to patent nullity claims was irrelevant since it exceeded whatever time was needed by nullity plaintiffs anyway.

But a few years after the reform, litigants started to realize that the new statute of limitations had become a thorny issue in patent invalidity lawsuits. If I recall correctly, I was skeptical the first time I heard about it, because it intuitively seemed wrong that a patent nullity claim could possibly be time-barred. But soon enough, everyone had to acknowledge that the 2008 reform had had unintended but far-reaching consequences in patent law, and that nullity claims could now be time-barred.

As an important side note, this does not mean that defendants in infringement suits are now unable to fend off a claim based on an invalid patent. It is always possible to raise invalidity as a defense (or exception) to an infringement claim. But a revocation counterclaim may be time-barred. In such a case, the invalidity of the patent may be acknowledged by the court without any erga omnes revocation.

As far as direct nullity actions are concerned, they are of course fully impacted, as they may be held entirely inadmissible if time-barred.

Not only is this situation unsatisfactory, but a major problem is then the determination of the starting point of the limitation period. In this respect, court decisions over the past few years have been all over the place.

We do not know for sure whether the Actelion ruling will be held in the future as representative of “established case law” or whether it will be reversed or ignored. But since it is probably the most recent judgment on this sensitive question, I view it as of today as a reasonable reference for predicting future cases.

It is now time to go back to the particulars of the case.

Freakier than the Donnie Darko rabbit: the time-bar moose.

A first argument raised by Actelion was that the abovementioned article 2264 of the Code civil is not applicable to patent nullity claims. This argument failed, in keeping with previous rulings. The court held that the nullity action was a “personal” action under article 2264 and thus subject to the limitation period:

Like a tort action (which it is admittedly not), a [patent nullity action] has a function of cessation of the unlawful, in the competition relationship between the parties (said unlawful being here made up of a legal act the validity conditions of which are not fulfilled), and it is thus appended to a relationship of quasi-tort obligation. In this sole respect it pertains to the category of personal actions. This category is in fact broad as it is the category of ordinary law, whereas real actions are in a determined number. 

The court rejected further arguments that the action serves a general interest and should therefore not be subject to the limitation period:

The fact that nullity, with its erga omnes effect, incidentally serves a general interest does not legally imply that the action should not be subjected to a limitation period. Neither does the fact that it is open to all, as it is not limited to a certain person, contradict its personal character, as the plaintiff must justify its personal standing and only pursues a personal interest with its action. 

Then comes the central issue of the starting point of the limitation period. Many propositions have been made in this respect: publication date of the application, grant of the patent, actual knowledge of the patent, etc.

Here is how this panel of the Paris Tribunal de grande instance saw it:

The starting point of the limitation period must thus be set to the day, which is determined in concreto, when [Actelion] knew or should have known, in view of the progress of their research and of the seriousness of their project […], that the EP’092 patent could possibly thwart said project. Therefore, neither the publication of the grant of the patent (which would in fact require an unrealistic watch for market players and is unrelated to the development of the project conferring standing), nor the knowledge of the grounds of nullity of the title (which may be significantly before the knowledge of the facts and economic considerations giving rise to standing and in practice goes back to the publication of grant) are appropriate starting points. 

In other terms, the court rejected any automatic starting point such as the patent grant, as was argued by the patentee as a first line of defense (or worse, the publication of the application, as was suggested in earlier decisions). This would of course make the determination much easier but would be illogical as you could then be time-barred before even acquiring standing to sue…

Instead, a full appraisal of the facts and circumstances of each case is necessary. In this respect, a strong parallel was made between the appraisal of standing and the starting point of the limitation period.

The way I understand the judgment, the limitation period starts running when the party acquires standing to sue.

This has the advantage of ensuring overall consistency in the assessment of the admissibility of a nullity action.

On the other hand, on a practical standpoint, I think this approach makes it extremely difficult for a party to determine whether they are time-barred from starting a contemplated nullity suit. Indeed, as explained in the previous post, the appraisal of standing is complex and seems to rely on converging lines of evidence depending on the plaintiff’s research and commercial projects. It is already hard to guess in advance whether the court will be satisfied that the projects are sufficiently precise and advanced for standing to be acknowledged. But determining when exactly the party’s projects became sufficiently precise and advanced looks like a game of roulette to me.

Another drawback of the court’s approach in Actelion is that the knowledge of the grounds of nullity was explicitly not taken into account. But in order to decide whether to claim the revocation of a patent, you not only must have an interest in putting this claim forward, but you also need to find actual reasons why the patent should be revoked. Most of the time, a careful review of the patent and a full prior art search should make it possible for a diligent party to determine such reasons. But there are certainly more complex situations, where the existence of a ground of nullity may be incidentally revealed, e.g. by way of a testimony, experimental tests or the like, at a certain time which may be too late for launching a nullity suit.

Let’s now examine how the court applied the general principles set forth above to the present case.

Icos relied on four facts which they claimed demonstrated that the action was time-barred (bearing in mind that the complaint was filed in June 2015):

  • an article submitted by Actelion’s researchers in 2005 to a scientific journal on the combination of the drugs bosentan and sildenafil (a drug having the same function as tadalafil, the one claimed in the patent at stake) for the treatment of pulmonary hypertension (PHTN);
  • an annual report dated 2010 mentioning a phase IV clinical trial on the above drug combination for the treatment of PHTN;
  • a patent application filed in 2007 by Actelion on drug combinations for the treatment of PHTN, which in particular mentioned tadalafil in claim 3;
  • a marketing authorization (MA) for Adcirca granted to the Eli Lilly group on October 1, 2008 (Adcirca apparently corresponding to the formulation of tadalafil protected in EP’092, for the treatment of PHTN).

The court considered the 2005 article as “too early to characterize a real business interest of the plaintiffs“, but on the other hand as indicative of a “real scientific interest for this type of combination therapy“. The court further noted that the 2010 annual report confirmed that there was continuing research in this field.

The patent application of 2007 was seen as evidence that tadalafil had been identified as an interesting compound for combination PHTN therapy and had been the subject-matter of serious research.

But the fact held to be the most determining one was the marketing of Adcirca by the Eli Lilly group. Said the court:

[…] Actelion, as a leader in the treatment of PHTN, and using tadalafil in the combination therapy which had been under development for more than 3 years, could not possibly ignore the marketing of a directly competing drug, and see in it, and therefore in the patent that the drug implemented, a serious threat for its economic activity. 

In their submissions, Actelion argued that the limitation period could not start running until their development projects became sufficiently specific in order for the EP’092 to be identified as an obstacle. But the court rejected this argument, noting that this requirement was not taken into account for the appraisal of standing and thus could not be taken into account either for the appraisal of the limitation period. The limitation period could thus start running even before potential R&D on the formulation claimed in EP’092 – and in addition there was no evidence that such specific R&D was indeed conducted at a later stage, according to the court.

Again, consistency between the two admissibility requirements was given a paramount importance in the court’s reasoning. In particular, the court found that there was a contradiction in the claimants’ position since, on the one hand, they presented their combination therapy trials as relevant to characterize their standing, and on the other hand they deemed that their 2007 patent application claiming tadalafil in a combination therapy was not representative of a serious business interest.

Consequently, the court held that on October 1, 2008 at the latest (i.e. on the day Eli Lilly was granted the Adcirca MA):

the plaintiffs knew or should have known that the EP’092 patent could represent an impediment to their business and could be asserted against them by the patentee. 

The action was thus deemed inadmissible.

Again, on a practical standpoint, this outcome is very unfortunate, as nullity actions are a useful tool of economic regulation, skimming legally unfounded monopolies. And on a theoretical standpoint, several points in the judgment are surely open to criticism.

But the worst part of it all is probably the legal uncertainty entailed by such a complex and fuzzy appraisal of both standing and the starting point of the limitation period. This is not good news for decision makers.

So, we will have to watch out for further decisions on this topic. An amendment of the statute opening the door more broadly again to nullity claims might in fact be the best way forward, but I do not think that this is in store.


CASE REFERENCE: Tribunal de grande instance de Paris, 3ème chambre, 1ère section, March 16, 2017, Actelion Pharmaceuticals Ltd. & Actelion Pharmaceuticals France v. Icos Corporation, RG No. 15/07920. 

Where we stand

When it comes to nullity actions in France, there are two topics which have been ultra hot for a few years, and which I think have not yet been addressed on this blog. Maybe precisely because they were too burning hot.

The first topic is standing, and the second one is the statute of limitations. Both are major stumbling blocks on a third party’s way to a preemptive strike.

A recent judgment by the Paris Tribunal de grande instance (TGI) in a pharma case addresses both topics, head-on. Therefore, now seems to be a good time to finally venture into these hazardous waters.

In the case at hand, Actelion Pharmaceuticals filed a nullity suit against the French part of European patent No. EP 1200092 (EP’092) to Icos Corporation (a company of the Eli Lilly group) in June 2015. The patent proprietor challenged the admissibility of the action because they said (1) the claimant did not have standing and (2) the action was time-barred.

So, where do we stand on standing?

Since a famous Barilla case a few years ago, courts seem to have gotten tougher on the appraisal of the standing of nullity claimants, and much ink has been spilled on this topic.

In this context, it is interesting to extensively quote the court’s general remarks on the issue in Actelion, as they are rather complete and enlightening:

[…] The standing to file an action for nullity of a French patent or of the French part of a European patent must be appraised under the requirements of ordinary law and therefore must be personal, legitimate, actual and current on the day the complaint is filed. However, posterior evidence can enlighten the court on the situation at this date or even enable a regularization […]. 

This latter point is interesting. It suggests that even in the absence of standing on the day the complaint is filed, the action may still be admissible if standing can later be acknowledged. By way of example, it is conceivable that the patentee’s behavior after the filing of the complaint may legitimize the lawsuit.

The court’s general guidance then goes on as follows:

The existence of the claimants’ standing must be appraised in view of the object and purpose of the action for nullity of the patent […]. The grant of the patent, whether it is a reward for an investment and a creative effort of the inventor, or for the disclosure of an invention, confers an advantageous monopoly to its owner which is legitimate and admissible in a context of free competition and free innovation only to the extent that its validity requirements are met. A nullity suit thus aims, for a competitor, at retroactively clearing the market of an unjustified obstacle and […] benefits to all when it is filed as a main action and is successful. In this context, the nullity standing must be assessed in concreto and in a flexible manner, in view of the general interest which the action serves: it must be acknowledged for any person who, personally, has an economic activity in the field of the invention which is effectively, or potentially but certainly, impeded by the claims the nullity of which is requested.  

In this respect, the nullity plaintiff must establish the existence of an actual and serious project which may be hampered by the patent, but does not have to establish effective marketing acts, let alone the existence of infringement in advance, claim by claim, by disclosing all of its technical advances;  the advantage conferred by the nullity action […], namely the improvement of the legal situation of the plaintiff, lies in the certainty that they will be able, once their project is set, to engage in costly research necessary for the manufacture and marketing of a product which may compete with the invention, without risking being sued by the patent proprietor and without waiting for this to happen. In particular in the pharmaceutical field, standing borders a prevention interest which is objectively substantiated, as there is no justification for punishing a cautious competitor. 

In other terms a balance has to be struck.

Unlike oppositions at the EPO, a nullity action may not be filed by any person. The claimant must have an actual and objective interest in the patented invention which must be clearly demonstrated, and this is to be appraised on a case by case basis. On the other hand, nullity suits are not exclusively reserved to actual infringers. There must be an incentive for competitors willing to clear their way before actually working the claimed invention or even before spending “costly research” to this end.

At this point, it is probably time to have a look at the patent at stake, which relates to the drug tadalafil, the active substance in the famous drug Cialis for the treatment of erectile dysfunction.

Tadalafil is an inhibitor of an enzyme called phosphodiesterase type 5 (PDE-5). It turns out that this active is also useful for the treatment of pulmonary hypertension (PHTN).

Stop killing rhinos! There is no tadalafil in the horn.

The EP’092 patent more specifically claims a particular formulation of the drug tadalafil, in a specific particulate form, as well as a method of manufacture. Claim 12 relates to this drug formulation for use in (any) method of treatment. Claims 13 to 19 are Swiss-type claims directed to the treatment of various sexual dysfunctions.

Actelion is active in the field of the treatment of PHTN, one of the illnesses against which tadalafil is useful – and one which is of course different from sexual dysfunction. The court immediately noted that tadalafil may thus be an interesting molecule for Actelion; and that Actelion and Icos / Eli Lilly are competitors in the treatment of PHTN.

But the court did not limit itself to this basic finding and examined in much more detail the evidence pointing to an actual interest by Actelion in the subject-matter of the patent. 

In this respect, the court found it significant that, in the context of parallel nullity proceedings in the UK, Eli Lilly filed a counterclaim for infringement of the British part of the EP’092 patent. Although this counterclaim does not concern the French territory, the court stated that:

This position implies the existence of a threat which may be carried out in France and above all an objective link between the economic activity of the claimants and the French part of the EP’092 patent.

Then, the court reviewed four different aspects of Actelion’s development activities: 

  • a clinical study conducted in 2012 on the treatment of PHTN by a combination of macitentan with a PDE-5 inhibitor;
  • a clinical study published in 2015, on the treatment of PHTN by a combination of selexipag with a PDE-5 inhibitor;
  • an ongoing multinational clinical trial aiming at comparing a triple combination therapy based on macitentan, tadalafil and selexipag with a double combination therapy based on macitentan and tadalafil, for naive patients recently diagnosed with PHTN; and
  • an ongoing French clinical trial on a double combination therapy based on macitentan and tadalafil, as first-line treatment of PHTN.

The two first studies in the list did not specifically involve tadalafil, but since tadalafil is a particular PDE-5 inhibitor, the court concluded that they were relevant. As for the two last trials in the list, they relied on the use of tadalafil and were therefore directly relevant. Interestingly, these two trials were initiated after the nullity complaint was filed. But the court found that they were nevertheless indicative of R&D work already initiated before that date and could therefore be taken into account for assessing standing.

The next comment by the court probably deserves to be extensively quoted:

Contrary to Actelion’s […] submissions, each of these different elements in isolation is not sufficient to characterize their standing. But their combination demonstrates that the parties are indeed in a situation of competition on the market of the PHTN treatment, and that the latter may rely on the use of tadalafil and pertains to the technical field of the EP’092 patent, which is a second therapeutic use patent not limited to the treatment of sexual dysfunction, and that the combination [of tadalafil] with products which they market is the subject of research authorized in France. To this objective link with the EP’092 patent one must add the actuality and seriousness of the claimants’ plans in France, which do not require a prior commercialization nor a perfect correspondence with the patent’s claims and notably with the specific particle size which is claimed; as well as the threat against them which materialized in the UK.

As a result, Actelion was found to have standing to request the revocation of claims 1 to 12 of the patent. However, regarding claims 13 to 19, the court concluded that there was no standing, as these claims specifically concerned the treatment of sexual dysfunction, and this was not a pathology field covered by Actelion. 

In summary, the court’s position on standing is the following: 

  • standing is appraised in concreto, and a very detailed demonstration by the nullity plaintiff is requested;
  • the plaintiff does not need to demonstrate that they implement or want to implement the various claim features (this is lucky I would say);
  • on the other hand, evidence is required that the plaintiff works in the narrow technical field of the patent at stake;
  • in this respect, one isolated piece of evidence does not seem to be enough, several converging lines of evidence are required.

All in all, the appraisal appears to be extremely strict and it certainly does not encourage preventive nullity suits in any way, although those may be the most rational and effective way to settle a dispute before infringement actually occurs and damages may be incurred.

In a next post, I will try to address the second aspect of the judgment, namely the statute of limitations – the aspect on which Actelion actually lost the case.


CASE REFERENCE: Tribunal de grande instance de Paris, 3ème chambre, 1ère section, March 16, 2017, Actelion Pharmaceuticals Ltd. & Actelion Pharmaceuticals France v. Icos Corporation, RG No. 15/07920.