Traditionally, non-practicing entity patent infringement suits have been relatively few and far between in France.
Without the huge financial stakes of U.S. litigation, and without the lure of German bifurcation, the French legal system has, to some extent, resisted the trend so far. There are a few counter-examples, though.
Like the case discussed today, between famous Intellectual Ventures (IV) and SFR, one of the major French telecommunications companies.
Among the many patents owned by IV is EP 1304002, entitled “Arranging Data Ciphering In a Wireless Telecommuncation System” and originally filed as a PCT application by Nokia Mobile Phones Ltd, in Finland.
As you have probably already guessed, IV initiated legal proceedings in front of the Paris Tribunal de grande instance (TGI), alleging infringement of the EP’002 patent. The alleged infringement mainly relates to the WiFi technology.
You will not know who won at the end of the post, because no one did – the lawsuit is not over yet. In fact, the pleadings hearing is presently scheduled to take place on November 23, 2018. So there is still plenty of time left for you to take your morning off at the new courthouse.
The decision discussed today is only an interim order issued by the judge in charge of case management (JME in the local jargon).
Among the various defenses raised by SFR, there is a rather interesting one, which is that the EP’002 patent is a standard essential patent (SEP).
Two standards were mentioned by SFR: 3GPP TS 33.234 (a 3G standard issued by ETSI – short for European Telecommunications Standards Institute), and 802.11.2012 (a WiFi standard issued by IEEE – short for Institute of Electrical and Electronics Engineers). According to SFR, the EP’002 patent was not declared as essential by its then owner Nokia – a member of both ETSI and IEEE – although it should have been. Due to this omission, they argued, the infringement action should be deemed inadmissible.
Now, apparently SFR did not have all the necessary evidence at hand.
They thus wrote both to ETSI and IEEE and requested the “travaux préparatoires” (one of the most well-known French expressions among lawyers, ranking third after “bonjour” and “merci”) for the relevant standards, as well as relevant correspondence between Nokia and both organizations.
France-based ETSI replied that they would provide the requested documentation, but IEEE turned down SFR’s request.
Thus, SFR filed a motion with the JME, requesting a stay and further requesting that IEEE be ordered to hand down the relevant documents.
IV fought this motion.
First, IV claimed that SFR’s motion was inadmissible.
Indeed, IEEE is based in the U.S., and the French judge has no jurisdiction to directly order a third party to the litigation to hand down evidence, they argued. The only possible procedure would be the letter rogatory, i.e. the French judge should ask U.S. authorities to issue the order.
The judge closely looked at the written response made by IEEE further to SFR’s request. The first part of this response was the following:
Please be advised that it is IEEE’s policy not to provide information that may be used in litigation without a subpoena. This is to protect IEEE’s neutrality in any dispute. If that is necessary, please feel free to let me know and we can arrange the details of service.
The JME deduced from this response that IEEE was willing to hand down the evidence at stake, and that they just required a formal judicial order for doing so. The judge was happy to oblige, and the formal and cumbersome process of the letter rogatory could thus be avoided.
I note that IEEE’s response does not specify whether the requested subpoena should be specifically issued by a U.S. court, or whether any subpoena would do. It was probably the judge’s understanding that, in the absence of any specific mention, they were open to any form of subpoenaing.
As a second defense against the motion, IV argued that SFR’s request was useless and unjustified.
SFR raised the SEP argument late in the case management procedure, IV said, and only they should have the burden of providing their own evidence. Besides, the second part of IEEE’s written response to SFR reads as follows:
However, a subpoena may not be necessary in this instance as IEEE 802.11 does host a public website that contains a wide variety of working group materials. The IEEE 802.11 website is located http://www.ieee802.org/11/.
But the judge held that SFR was free to raise a new defense at any point within the case schedule (which, in case you are wondering, is nothing like the extremely tight schedule envisioned for the future UPC). Besides, SFR stated that they could not find the relevant documents on the IEEE website, and that in particular the correspondence with Nokia is not supposed to be available on this site. Finally, the supply of evidence by the standard organizations should not take long.
As a result, the judge granted SFR’s request and issued an order for IEEE to send SFR all documents and reports of the working group relating to the relevant part of IEEE 802.11, as well as the relevant correspondence with Nokia, within one month.
On the other hand, the request for stay of proceedings was dismissed – probably because this timeline is supposed to be still compatible with the planned date for the main hearing.
Access to evidence can be challenging in this country especially in the absence of discovery / disclosure. French judges are often reluctant to order a taking of evidence, such as the provision of documents. But in a case such as this one, it does seem rather fair that a defendant should be allowed to explore a particular line of defense by requesting third party-held documents.
We will thus stay tuned, and I am sure the decision on the merits will be most interesting to read – if the lawsuit goes all the way of course.
Some pharma cases are somewhat delicate to discuss in a blog post.
Case in point, if I provide the commercial name of the drug at stake in today’s litigation, I am afraid that this post may be classified as a spam and may thus never reach my email subscribers.
You see, it is the sort of drug which is prescribed for the treatment of erectile dysfunction, and which keeps coming up in these pestering unsolicited email messages that you may receive on a daily basis.
Just to be clear, today’s drug-which-must-not-be-named is not the famous one that starts with a V (containing sildenafil as an active compound), but the other famous one that starts with a C (containing tadalafil as an active compound).
Icos Corporation (of the Eli Lilly group) is the owner of a number of European patents in connection with the C. drug.
First, there is EP 0740668, which was the basic patent for a French Supplementary Protection Certificate (SPC No. FR 03C0017), which expired in November 2017. Second, there are EP 1173181 and EP 1200092, designated as “secondary patents” by the Paris Tribunal de grande instance (TGI).
In November 2014, generic drug company Mylan obtained a marketing authorization (MA) related to the C. drug. In January 2016, Mylan initiated nullity proceedings with respect to the EP’181 and EP’092 patents in front of the Paris TGI. The parties later reached a settlement agreement with respect to EP’092, so that only the fate of EP’181 remained to be decided upon. Icos Corporation and the French distributor Lilly France counterclaimed for infringement of EP’181. The first instance judgment was issued in May 2018.
EP’181 or equivalents thereof were or are also litigated in other countries. According to the summary provided by the court, the patents were revoked in Germany, the United Kingdom, Canada and Japan. It may thus come as little surprising that the same outcome was achieved in this country. On the other hand, the ground for nullity that the TGI took into consideration is relatively unexpected, as will be apparent below.
But before getting there, let’s first look at the statute of limitations defense raised by Icos.
Mylan argued that the statute of limitations is not applicable to patent nullity suits. This argument was rejected by the court, in keeping with earlier decisions.
Turning to the determination of the starting point for the limitation period, the court recalled its now established principle of an in concreto determination.
The court thus explained that the grant of the EP’181 patent was not the starting point for the limitation period. The general principle is the following:
The starting point for the limitation period must thus be set at the date, determined in concreto, at which Mylan was or should have been aware of EP’181, due to its intent to market a generic of the drug [C.], which led to the MA obtained on November 21, 2014, since this patent is an impediment to its exploitation.
In this case, a determining factor to be taken into account was the date at which Icos obtained its own MA:
In this case, the first MA for [C.] was granted in November 2002. By way of application of article R. 5121-28 of the Code de la santé publique, the generic company can only apply for an MA as from the eighth year after the grant of the originator’s MA, and cannot be granted one before the tenth year. Therefore, Mylan could not file an MA application before November 2010.
This reasoning is fully consistent with that applied in another recent case which already involved Mylan.
However, this is not the end of the story here. The court further held:
In this case, an additional fact should be taken into account in the in concreto analysis of standing and the starting point for the limitation period. […] [Namely, Icos corporation] filed a request for limitation of the EP’181 patent on February 14, 2014 with the European patent office, and the limitation of the patent was published on March 25, 2015.
Thus the patent enforceable against Mylan could only be known on this date, so that the starting point for the limitation period is March 25, 2015.
In another recent case, the starting point of the limitation period was postponed by a court to the date of the decision of the Board of appeal of the EPO in the opposition appeal regarding the patent at stake. The relevant paragraph of this decision may be worth quoting again here:
[…] It is only on [July, 7, 2014, i.e. the date of the Board of appeal’s decision] that the drafting of the patent which is sought to be revoked was stabilized and that Ethypharm was able to precisely know the content of the claims of said patent as well as all the facts making it possible for them to act, so that the action is not time-barred and is admissible.
We now have a confirmation that limitation proceedings, just like opposition proceedings, may result in a postponement of the limitation period for nullity actions.
It remains to be seen how general this principle is and in particular whether it extends e.g. to the impact of other lawsuits involving third parties.
Turning now to the merits of the case, claim 1 of EP’181 as limited reads as follows:
A pharmaceutical unit dosage composition comprising 1 to 5 mg of [tadalafil], said unit dosage form suitable for oral administration up to a maximum total dose of 5 mg per day.
Independent claim 10 is a Swiss-type claim containing similar features.
Mylan raised all classical grounds for nullity, but the court focused on insufficiency of disclosure.
After reviewing the description of the patent, the court noted the following facts:
There are several molecules belonging to the class of type 5 phosphodiesterase (PDE5) inhibitors.
Among them, particular reference may be made to sildenafil, the active compound of V., marketed at the priority date of the patent in doses of 25, 50 and 100 mg.
However, sildenafil generates a number of side effects, such as facial red patches, or a lowering of blood pressure.
The invention thus relates to a low dosage of the known alternative drug tadalafil, in order to provide an effective treatment of erectile dysfunction without the side effects associated with sildenafil.
The patent also contains a number of examples showing the efficacy and the absence of side effects of low dosage forms of tadalafil.
The court was apparently quite puzzled by the patent as a whole:
The problem expressed in the description of the patent is to provide a principle which avoids the issues of red patches and side effects of sildenafil by a particular dosage of tadalafil.
Indeed, and as rightly noted by Mylan, no side effect associated with tadalafil is mentioned in the patent, so that the dosage suggested for tadalafil curiously addresses a problem associated with another active compound.
The court then referred to a standard mentioned in the so-called “finasteride” judgment of December 6, 2017 by the Cour de cassation, commented on this blog:
[…] When a claim relates to a [second] therapeutic application of a substance or composition, obtaining this therapeutic effect is a functional technical feature of the claim. Therefore, in order to meet the requirement of sufficiency of disclosure, it is not necessary to clinically demonstrate this technical effect; but the patent application must directly and unambiguously reflect the claimed therapeutic application, so that the skilled person can understand, based on commonly accepted models, that the results reflect this therapeutic application.
The court then came back to the technical problem presented in the patent:
Icos Corporation and Eli Lilly do not dispute that no prior art document describes any side effect related to the use of tadalafil.
And they cannot validly argue that the absence of documentation in this respect does not amount to the absence of a problem, because the onus is on them to show that there was a problem to be solved and that it is solved by the teaching of the patent.
It thus appears that the problem described in the patent relates to sildenafil and not tadalafil, and it cannot be extrapolated that both active compounds have the same side effects, unless one were to admit the resolution of artificial or speculative problems.
In fact, the examples cited in the patent demonstrate that the dosage mentioned in the patent does not address the listed “problems”.
In summary, the problem to be solved cannot be considered as the reduction in the side effects of tadalafil, because such side effects were not known in the prior art – only side effects of sildenafil were known.
Most of the examples of the patent also do not demonstrate the existence of side effects of tadalafil associated with higher dosages, so that these were held not to “reflect” the alleged therapeutic application (using the wording of the Cour de cassation).
The conclusion reached by the three-judge panel will not doubt cause a stir, as the invention recited in claim 1 was found not to be sufficiently disclosed in the patent.
The finasteride case related to a second therapeutic application invention, for a known molecule. It is well accepted both at the EPO and in French national courts that the new therapeutic application has to be demonstrated in a plausible manner in the patent, otherwise the patent is insufficient.
Yet, in the present case, claim 1 is a classical product claim, with no functional feature. According to EPO case law, there should be no problem of insufficiency of disclosure, because the skilled person is able to manufacture the composition containing the active substance at stake in the claimed dosage range. The question of whether said claimed dosage range provides any technical benefit or not only pertains to the appraisal of inventive step.
Now, as regular readers of this blog are well aware, the French approach to validity is much more fluid than the EPO’s.
If a court is convinced that an invention does not properly solve the alleged technical problem, or that the technical problem is artificial, this can give rise to a number of invalidity objections, including insufficiency of disclosure. My understanding is that the technical problem tends to be viewed by French courts as an integral part of the claimed invention itself.
But there is yet another cause for controversy in the judgment.
I mentioned above that most of the examples of the patent do not demonstrate the existence of side effects of tadalafil associated with higher dosages. That said, there is one example, namely example 7, which does analyze in detail the occurrence of various side effects depending on the dosage of tadalafil. The table of results is in fact even reproduced in the judgment. The court first remarked that some side effects are not present at all at any dosage. So far so good. But, regarding those side effects which are indeed shown to be less frequent in the claimed dosage range than at a higher dosage, the court noted:
Regarding headache, back pain and myalgia […], the reasoning is the same because these effects were never previously observed.
This part of the judgment seems to imply that, at least in the context of drug dosage patents, the existence of the technical problem to be solved must be acknowledged in the prior art, and cannot be demonstrated for the first time in the patent itself.
The invention can thus not be a so-called “problem invention“.
Things should be put into perspective, though, and the present case may not necessarily be generalized. Maybe the court did not believe that example 7 was convincing at all. At the very least, the fact that the dosage originally claimed in the patent, namely from 1 to 20 mg, had to be later restricted to 1 to 5 mg, due to some relevant prior art, certainly contributed to the court’s perception of the patent being invalid.
In fact, the court reviewed all the following claims and concluded that they suffered from the same deficiencies as claim 1, mentioning a lack of inventive step in passing for some of them. Fluidity of the grounds for nullity indeed.
As a final note, this is probably one of the last judgments penned by Ms. Courboulay, who, given her seniority and her involvement in many conferences and events, was often considered as the leading judge in the 3rd (IP) chamber of the Paris TGI.
Ms. Courboulay has now officially retired; but given the large number of important rulings which she authored, there is little doubt that her influence will continue to be felt in the coming years.
The burden of proof. A concept with a well-deserved name.
It can indeed be a real burden for a patent proprietor to find clear and convincing evidence that a patent is infringed; or for a defendant to find clear and convincing evidence that the invention was disclosed by the proprietor before the filing date.
The case discussed today illustrates both situations.
In this case, all litigants are from the Toulouse area. Construction Machines Automatiques Spéciales (CMAS) owns French patent No. FR 2755655, filed in 1996, which expired during litigation. The patent relates to a carton making machine.
The main defendants are: LB Pack, a company created in 2012 a few kilometers away from CMAS; and two ex-employees of CMAS, who also happen to be the founders of LB Pack.
CMAS filed claims of patent infringement and unfair competition against these three defendants. The defendants counterclaimed inter alia for patent nullity.
The first notable question raised in this case is whether the nullity counterclaim was time-barred.
As reported last week, the statute of limitations will no longer be applicable to any patent nullity claim if and when the UPC Agreement enters into force. But in the meantime we have to continue dealing with it and the legal uncertainty that it entails.
Quite surprisingly, the court disposed of this issue in a short paragraph, briefly noting, as if it were self-evident, that the statute of limitations is not applicable to nullity claims when they are raised as counterclaims.
An interesting development indeed, as it was previously held in other cases that nullity counterclaims are to be treated in the same manner as direct nullity claims – with the caveat that, if a defendant is time-barred, nullity can always be raised as a defense (exception) to the effect that the patent should not be enforceable against them, even if the patent is not formally revoked.
Stay tuned to check whether this new approach will hold.
The main invalidity argument raised by LB Pack et al. was that CMAS (formerly CMA) had disclosed the invention before filing by showing and selling so-called Minicompact machines.
By way of an interesting strategy, the defendants requested and obtained an ex parte order from a judge allowing them to perform an inspection by a bailiff with a third party, the company Stendhal, that had bought a Minicompact machine in 1995.
The bailiff’s report proved the acquisition of the machine before the filing date of the patent. But the court was not convinced that this machine anticipated the patent claims. The main reason for this was that the machine was subjected to several servicing operations since 1995, including an important compliance operation in 2004, performed by CMAS. In other terms, the court believed that the machine may have been altered, and that the copy inspected by the bailiff during litigation may not be representative of the machine bought in 1995. Thus, the benefit of the doubt was given to the patent proprietor – who was apparently not required to demonstrate that they had indeed modified the machine in a way which would be relevant to the patent in suit.
The patent was thus declared valid.
Turning now to infringement, the shoe was on the the other foot.
An infringement seizure report had been drawn up by a bailiff. This proved that LB Pack had sold one machine to a third party, Sicaf. But the issue was the description of the allegedly infringing machine.
In fact, the bailiff was only able to inspect an unfinished machine, not yet operational, and with some parts not yet assembled. But, said the court, analyzing whether the characterizing portion of the main claim of the patent was implemented by LB Pack could only be done based on a fully assembled machine.
The other documents and evidence found by CMAS did not make it possible to know whether the subject-matter of the patent claims was implemented or not.
As a result, the infringement claim was rejected.
That said, the defendants were not off the hook, as they were found guilty of unfair competition.
It turns out that the bailiff conducting the infringement seizure found evidence that the two ex-employees who founded LB Pack had extensively copied business and technical information belonging to CMAS before leaving. Also, at the time they left the company, they had accessed and taken advantage of one CAD license belonging to CMAS.
The assessment of the court as to the consequences of these illegal actions was then the following:
Even if it is not demonstrated that LB Pack makes and markets machines which infringe CMAS’ patent, it remains that all the saved technical data belonging to CMAS necessarily and unjustifiably made it easier to create new machines which could be very quickly put on the market by LB Pack as from 2013, on the same market, which conferred them an undue competitive advantage.
Finally, it can be derived from the invoices annexed to the infringement seizure report that, owing to the customer and prospect files copied on the laptop of Mr. […], it was easier for LB Pack to solicit customers and thus market its machine more easily notably with Schneider and Durlin which were already customers of CMAS. The misappropriation of customers is thus demonstrated and is an act of unfair competition and free-riding. In view of the invoices from LB Pack seized by the bailiff, the court knows that 3 machines were sold starting from July 2013 for an amount of 235,000 euros, notably to Sicaf, which was a prospect of CMAS, and that maintenance services were also sold to Schneider and Durlin, customers of CMAS.
Therefore, the acts of unfair competition and free-riding are serious and repeated and the compensation for the harm caused should be set to 80,000 euros.
One remark here is that an infringement seizure is a procedure specifically intended to gather evidence of patent infringement. However, even in the absence of patent infringement, the evidence found during the seizure can be used against the defendant with respect to other claims, notably in relation with unfair competition.
Little by little, everything seems to finally come into place for the kick off of the UPC – pending the outcome of the constitutional complaint in Germany.
A major step has now been taken in France, with a modification of the Code de la propriété intellectuelle (CPI) to make national law ready for the UPC, by way of an executive order dated May 9.
And one of the most important amendments thus introduced… well in fact has little do with the UPC, and everything to do with this very French debate on the statute of limitations applicable to patent nullity actions.
Indeed, a new article L. 615-8-1 is introduced, per which the statute of imitations is simply not applicable to patent nullity actions. So, back to the situation that everyone took for granted ten years ago, and back into line with the practice of other European countries. Very good news indeed.
But, there is a but, or actually two.
First, this new provision will only come into force when the UPC agreement comes into force – since the overall purpose of the order is the application of the UPC agreement. Second, the new provision will not be applicable to nullity actions which are already time-barred at the time the provision comes into force.
So you can still expect a lot of discussion for a few more years on how the statute of limitations should be applied and how the limitation period should be computed, before this really becomes history.
Now, back to the other, truly UPC-related provisions. One important aspect is how double protection by a French patent and a European patent for the same invention is handled.
The current situation is that, when a French patent and a European patent granted to the same inventor or successor in title cover the same invention and have the same priority date, the French patent ceases to be in force at the expiry of the 9-month European opposition period (if no opposition is filed) or when the opposition proceedings are closed, the patent being “maintained” (either in amended form or as granted).
Under the new version of article L 614-13 CPI, this remains the case, but only for European patents that have been opted out from the exclusive competence of the UPC (under article 83 of the Agreement). For non-opted out European patents (including of course unitary patents) on the contrary, there will no longer be any such so-called substitution. Thus, applicants will be able to secure both a national patent, enforceable in front of our national courts, and a European patent enforceable in front of the UPC, for the same invention. This is of course primarily of interest for French applicants who do their first filings at the INPI and then file at the EPO. But of course foreign applicants could also use this tool, for super-important inventions, by filing at the EPO and then in France, or simultaneously at the EPO and in France.
Now, what happens if a European patent is opted out at a late stage, for instance after the 9-month opposition period? The answer provided in the new law is that double protection then ends at the time of the opt out, i.e. the French patent ceases to be in force on the date of the opt out.
By the way, any substitution is irreversible. If a European patent is invalidated or lapses or if the opt out is withdrawn after a substitution has taken place, the corresponding French patent does not come back to life.
Another amendment relates to the prohibition to transfer, or to grant rights on, a French patent or application independently from a European patent or application, for the same invention, having the same priority date, and filed by the same inventor or successor in title.
This prohibition remains in place for all non-opted out European patents (including unitary patents), as well as opted out European patents (before the substitution takes place). In addition, the recordal of a transfer at the French national patent register is only effective if a parallel recordal has taken place at the European national patent register.
Next topic, a particular procedural rule in connection with patent litigation.
Currently, if a French patent is asserted and there is a corresponding European patent or application, the court stays the proceedings as of right until the substitution takes place, or until the European patent or application disappears (by way of a withdrawal, refusal, revocation, etc.) before any substitution takes place. This rule will remain in place but solely for opted out European patents. When a non-opted out European patent / application is present, an action based on the French patent will be able to proceed independently of the fate of the European patent / application. It remains to be seen how this will play out in practice. The court will still have the possibility to order a stay anyway, under the general rules of civil procedure, if they deem that a stay is appropriate for a good administration of justice.
On a few other aspects, French law has been harmonized with the UPC Agreement.
This is especially the case regarding the wording used to define the acts of infringement and exhaustion of rights. Besides, non-exclusive licensees will now be allowed to assert a patent if this is expressly authorized by the license agreement, and provided that the patent proprietor is given prior notice. This is a new possibility under French law, which mirrors article 47(3) of the UPC Agreement.
The limitation period for infringement damages remains five years but the starting point will now be the date on which the applicant became aware, or had reasonable grounds to become aware, of the last fact justifying the action, in keeping with article 72 of the Agreement. In the current version of article L. 615-8 CPI, the starting point is “the facts” on which the action is based. The effect of this significant modification will be twofold: right holders will in some cases be able to claim more damages; and more complex debates regarding the determination of the starting point of the limitation period can be expected, as the new definition is more fuzzy than the traditional one.
Last but not least, new article L. 615-18 CPI clarifies that the UPC shall have exclusive jurisdiction over unitary patents and non-opted out traditional European patents.
So, now that the rules of the game are known, all readers can start looking for potential loopholes or ambiguities, and imagining unusual scenarios. Isn’t this what new laws are primarily for?
In a previous post, I reported on the article that I recently co-authored with Lionel Vial and Laura Barona in Propriété industrielle, on the latest figures of French patent litigation. The focus of the post was on the validity stats, which are of course of paramount importance. But it turns out the article contained more interesting stats. Here are thus some further highlights from this work.
Basically, the further questions that the article purported to answer are the following:
Who is involved in patent litigation in France?
What patents are litigated in France?
What is the interplay between patent litigation and other post-grant proceedings?
What is the infringement conviction rate?
Once again, the methodology that we used is summarized at the end of the post.
First, who is involved in patent litigation.
We looked into this both in terms of type of parties, and in terms of geographical origin of the parties – claimants and defendants alike.
Typically, patent litigants are legal entities. Only 10% are natural persons. Among these legal entities, the vast majority are private companies. Within our sample, there are almost no universities or research institutes involved. Then, among those private companies, 68% are SMEs, 24% are large entities (or subsidiaries thereof), and only 7% are medium-sized businesses.
69% of all parties involved are French, and only 31% are foreign. Among the subgroup of foreign parties, more than a quarter are our German neighbors. Chinese and South Korean parties come in second and third (at 10% each). U.S. parties only rank fourth among foreign parties (7%). This ranking is somewhat surprising, especially if we compare it to the top nationalities of applicants for European patent applications. According to the annual report recently released by the EPO, 22% of all European patent applications filed in 2017 originated from the U.S., 18% from Japan, 16% from China, 11% from Germany and 6% from South Korea.
It should be noted that, in the sample that we studied, almost all Chinese parties were defendants in infringement suits, whereas the relatively high ranking of South Korean parties was mainly due to only two very active right holders, namely Sehyang Industrial Co. and Dae Sung Hi Tech Co.
Second, what patents are litigated.
We conducted a very rough classification of all litigated patents into three main technical fields: chemistry/biology/health sciences; electronics/IT; and mechanical engineering/construction. We realized that there is a strong imbalance here, since 81% of litigated patents relate to the latter field of mechanical engineering/construction. The other patents are almost equally distributed between chemistry/biology/health sciences and electronics/IT.
There is one area though in which biochem prevails over other fields, namely nullity actions. This is in keeping with the common practice of generic drug manufacturers to clear the way by trying to invalidate some patents before putting their products on the market.
37% of all litigated patents are French (national) patents, and 63% are European patents. French patents used to outnumber European ones, but the trend changed in 2009 as shown by Pierre Véron in his study and it has apparently remained relatively steady since then.
We also looked at how old the patents are by the time legal proceedings are initiated. The average age is 13.5 year old. Thus, mainly mature inventions give rise to litigation. Clearly, a substantial amount of time is required before a technology develops to the extent that it attracts significant infringement – or that it becomes worth it for a third party to attempt to get rid of a patent.
This is one of the reasons why our current local debate on the statute of limitations in connection with nullity claims is so sensitive.
Third, the interplay between patent litigation and other post-grant proceedings.
By post-grant proceedings is meant two different scenarios: opposition at the EPO and limitation (either at the EPO or locally at the INPI).
The rate is the same in both cases: approximately 19% of European patents litigated in France are/were subjected to opposition proceedings, and approximately 19% of litigated patents (both French and European ones) were subjected to limitation proceedings.
By way of comparison, the overall opposition rate is less than 4%, and the overall limitation rate is probably much, much lower. Of course it is no surprise that more important / valuable patents are more opposed than others. I often like to think in terms of the dog that did not bark, and in this respect it is probably more remarkable that as much as 81% of European patents litigated in France are granted unopposed. This is certainly related to the above remark that most patents are already fairly old by the time they are worth being litigated.
The limitation rate of 19% shows how popular this tool has proven as a defense against nullity claims or counterclaims since its introduction into French law in 2008. In fact, the proportion of limited patents goes up to 27% if we consider only appeal decisions.
On the other hand, on a validity standpoint, we have not noted a better survival rate of limited patents relative to non-limited patents in our sample.
Fourth and last, the infringement conviction rate.
Here, the magic number is 35%. That is, 35% of infringement claims are successful (which means that the patent at stake is not found invalid, and is found to be infringed).
And now a few take-away messages.
There are of course some high profile patent lawsuits in this country, for instance in the pharma field. However, most typically, patent litigation in France involves domestic SMEs and concerns mechanical engineering.
This is a sign that French patent litigation might be underrated and overlooked among a number of stakeholders, and first and foremost foreign companies.
There are many possible reasons for this.
Admittedly, many patents are invalidated by French courts, as regularly illustrated on this blog. However, this trend does not seem any worse than in other major European markets, such as the U.K., where courts are well-known to be quite strict on a validity standpoint, but also Germany, as explained in my previous post. Besides, the infringement conviction rate of 35% seems reasonably high (bearing in mind that the large number of cases which are settled before a written decision is issued are not taken into account in any statistical study).
Perhaps the main reason is thus more cultural than anything else. Multinational companies tend to eye towards the U.K., for linguistic reasons and also because of the perception that local judges are extremely skilled; and towards Germany, as it is renowned for its quick decisions, its patentee-friendly bifurcated system and its Demogorgon – I mean, the much envied and much dreaded injunction gap.
But why not also eye towards France:
because of the saisie-contrefaçon, which is a powerful tool in the hands of right holders to gather evidence of infringement;
because, overall, the likelihood of success seems to be similar here to neighboring countries;
because it can be relatively cheap (no expensive disclosure, expert testimony and lengthy hearings like in the U.K., no court fees like in Germany);
because we have a large pool of good practitioners, both attorneys at law and patent attorneys, who are fully proficient in English.
And I have not even yet begun to tell you about the food and those beautiful farmhouses in the Luberon waiting to be bought and renovated.
METHODOLOGY: the study was based on a review of all judgments on the merits issued between January 1, 2016 and July 31, 2017, both at first instance and on appeal, in which at least one issue of patent validity or patent infringement was decided upon. The sample of judgments was obtained from the Darts-ip database. They were manually analyzed by us. Interim orders as well as orders from a case management judge were excluded. Judgments from the Cour de cassation, as well as judgments concerned with other issues (computation of damages, employees’ inventions, etc.) were also excluded. The final sample contained 100 decisions, representing a total of 118 litigated patents.