Getting ready

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.

Waiting for the entry into force.

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?

Crunching numbers

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

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

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

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

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

First, who is involved in patent litigation.

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

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

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

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

Second, what patents are litigated.

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

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

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

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

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

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

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

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

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

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

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

Fourth and last, the infringement conviction rate.

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

And now a few take-away messages.

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

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

There are many possible reasons for this.

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

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

But why not also eye towards France:

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

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


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

Will case law crystallize?

Today, it is back again to one of the topics regularly addressed on this blog, namely the statute of limitations for patent nullity actions in France (but not only!).

Matthieu Dhenne was kind enough to send me a brand new decision from the Paris Tribunal de grande instance (TGI) which, once more, sheds new light on this thorny issue.

The patent at stake is the French part of EP 1455756, to Merck Sharp & Dohme Corp. (MSD). The patent was granted on July 9, 2008. It was opposed by two generic drug manufacturers. At first instance, the patent was maintained in amended form, according to a decision dated December 3, 2010. The opponents appealed, and their appeals were dismissed by the Board of appeal in a decision dated July 17, 2014. The publication of the amended patent took place on September 23, 2015.

Soon thereafter, on December 2, 2015, Ethypharm filed a nullity action with the Paris TGI, requesting that the French part of the patent should be revoked.

Quite predictably, MSD argued that the nullity action was time-barred.

If one directly applied the recent case law of the Paris Cour d’appel (discussed here), this should be a winning argument. Indeed, the Cour d’appel has proposed that the five year-limitation period be computed from the date of grant of the patent. With this in mind, in this case, the limitation period would have ended on July 9, 2013.

But you and I know that things are not that straightforward, as the Paris TGI does not follow the case law of the upper court, and generally favors an in concreto determination of the starting point for the limitation period (see a recent example here).

Yet, in today’s ruling you will not find any protracted discussion of an in concreto starting point. Instead, the issue is disposed of in just one paragraph:

[…] 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. 

I must say I have mixed feelings about this.

My initial reaction was, oh no, you must be kidding me, there is now yet another way of determining the starting point for the limitation period? This is not legal uncertainty anymore, this is legal chaos.

A few seconds later, I thought, well yes, it does make sense after all, you can’t possibly be expected to shoot at a moving target. When a patent is modified during opposition proceedings, any appeal filed at the EPO has a suspensive effect, and thus it is only once the appeal proceedings are terminated that the content of the patent is final.

A party must act within five years from the date at which they knew or should have known that the patent at stake is a possible impediment for their current or future business activities, or else be time-barred (this is more or less what I understand to be the TGI’s usual position). And how can a party know this before the patent is even its final form?

However, this ruling raises more questions than it provides answers.

What if an opposition is rejected by the opposition division and the patent thus maintained as granted instead of as amended? Should the reasoning be the same? What if an opposition is filed by a straw man (which is allowable at the EPO) and there is thus an unverifiable suspicion that the nullity claimant itself may be the true opponent, in an attempt to artificially extend the limitation period by several years?

In his message to me, Matthieu Dhenne also noted that the court’s reasoning could be applicable to other situations: limitation proceedings, but also a prior nullity suit brought forward by a third party. Taking this one step further, he observed that a patent right can in fact be modified at any time and is therefore theoretically never “stabilized” until it expires (sometimes, it can even be retroactively “stabilized” only after its expiry). He thus suggested that the full consequence of the court’s reasoning should be that the limitation period can only start running at the expiry of the patent, so that the well-identified drawbacks of this limitation period should in practice never occur.

Matthieu added that there would thus be a complete parallelism between the limitation period for infringement actions and nullity actions. Accordingly, invalid patents would not be able to unduly hinder free competition.

Definitely an interesting suggestion, but is it really what the TGI had in mind? I am quite sure we can expect more surprises in future decisions.

Apart from this, the decision is worth the read beyond the admissibility part.

First, it turns out that the nullity claim was held ill-founded on the merits and thus dismissed. As the patent in suit is a pharma patent, this is already quite remarkable. A majority of pharma patents which are litigated in this country are revoked one way or another.

Second, the decision tackles the very interesting issue of plausibility.

There has been a significant trend in France for patents to be revoked when they are held to be of a speculative nature. See for instance previous posts here, here and there.

In the present case, Ethypharm argued that the patent was of the speculative kind, which resulted in insufficiency of disclosure and lack of inventive step.

Now may be a good time to have a look at claim 1:

A nanoparticulate composition comprising the compound 2-(R)-(1-(R)-(3,5-bis(trifluoromethyl)phenyl)ethoxy)-3-(S)-(4-fluoro)phenyl-4-(3-(5-oxo-1H,4H-1,2,4-triazolo)methylmorpholine, or a pharmaceutically acceptable salt thereof, the compound having adsorbed on the surface thereof at least one surface stabilizer in an amount sufficient to maintain an effective average particle size of less than about 1000 nm; where “effective average particle size of less than about 1000 nm” means that at least 95% of the particles, by weight, have a particle size of less than about 1000 nm.

This drug composition is useful in the treatment of nausea and vomiting, especially those induced by a chemotherapeutic treatment. The short name of the active compound is aprepitant. According to the patent, the technical problem at stake was to improve the bioavailability of aprepitant. This is stated in the patent but no experimental test results are present, which led Ethypharm to consider that there was no evidence in the patent that the technical problem was properly solved.

Ethypharm also tried to use some of MSD’s posterior testing against them, by claiming that they proved that there were features missing in the patent which were essential for successfully implementing the invention.

The court was not convinced that there were indeed such essential features missing. The court also noted that there was a reference in the patent in suit to a prior U.S. patent disclosing the so-called “Nanocrystal” method, for making nanoparticles with a surface modifier adsorbed thereon, having an average size of less than 400 nm. This Nanocrystal patent also taught that such nanoparticles improve the bioavailability of poorly water-soluble actives.

Thus, said the court, the improvement in bioavailability provided by the nanoparticle form of aprepitant was plausible.

In such a case, the court continued, evidence which is external to the patent can indeed be taken into consideration for demonstrating that the technical problem is solved. The court then reviewed a number of articles and reports and was satisfied that the technical effect of improving bioavailability was well achieved.

In summary, this is an important decision for the fine-tuning of the appraisal of a speculative patent-type objection.

To me, the take-away message is that a reference in a patent to a prior art document disclosing a technical effect provides some plausibility that the technical effect is indeed achieved.

From drug crystals to crystal balls: could they possibly help us decipher future case law?

The patent survived other attacks of insufficiency of disclosure, extension of subject-matter and lack of inventive step. Quite remarkably, the main claim was in particular found to be non-obvious over the “Nanocrystal ” European patent of the same family as the U.S. patent mentioned above, which was used for supporting the plausibility of the technical effect.

The court held that:

[The “Nanocrystal” prior art] does not disclose chemical structures or features of drugs intended to be used by this process. It only mentions that it can be implemented with a large variety of medicinal substances, the substance having to be poorly soluble, that is less than 10 mg/mL, so that the skilled person does not know which actives […] can be tested with a reasonable expectation of success. He was all the less incited to do so that in December 2001, i.e. almost ten years after the priority date of [the Nanocrystal patent], the nanonization process, which has a number of constraints (in particular the heat released during milling may change the structure of the active substance and reduction to a very small size may create a problem of chemical and physical stability), was used on only four active substances (danazol, steroid A, compound WIN 63,394 and naproxene) with a verified effect on bioavailability […]. 

I have the uneasy feeling that there may be a contradiction here between the sufficiency and inventive step prongs of the court’s reasoning.

If the teaching of the Nanocrystal patent cannot be applied in an obvious manner to aprepitant, and if there are many technical uncertainties, why is it then not necessary for the MSD patent to contain evidence in the form of experimental tests showing that the process can in fact be effectively applied to this particular drug?


CASE REFERENCE: Tribunal de grande instance de Paris, 3ème chambre 2ème section, January 26, 2018, Ethypharm SAS v. Merck Sharp & Dohme Corp., RG No. 16/01225.

Should you do it?

In the case reported on today, two of the plaintiffs, namely one Korean company and its French subsidiary, are called I Do It. This a great name, which immediately suggested a title to me but also a guideline for this post: today’s question is indeed, if they do it, should you do it too?

European patent No. EP 1930982, relating to a “Horn array antenna for dual linear polarization“, was granted in 2010 to two individuals, Mr. Joon Im and Mr. Wan Ryu. In December, 2015, the patent was assigned to their company, I Do It (the Korean one).

Before the assignment, in October 2013, the French I Do It company commissioned a bailiff’s report in an exhibition. In June 2015, both the French and Korean companies filed a patent infringement lawsuit against Alden, a company based in Alsace, in front of the Paris Tribunal de grande instance (TGI).

The first interesting issue in the decision issued by the TGI relates to the admissibility of the infringement complaint. When the complaint was filed, in June 2015, I Do It did not yet hold any rights on the patent at stake.

The assignment was only executed in December 2015, and published at the French patent register in February 2016. What is more, the 2015 assignment did not contain any provision authorizing the assignee to sue for infringement acts performed before the assignment.

I assume that this point was raised by Alden during the written proceedings, which led the original patent owners and I Do It to execute an addendum to the assignment in February 2017, granting I Do It the missing authorization to sue for past infringement acts.

In view of article 126 of the Code de procédure civile, the court held that the complaint was admissible, since this legal provision makes it possible for an initially inadmissible complaint to be regularized up to the day the judgment is issued.

So, should yo do it too? Well I would certainly advise against initiating patent infringement proceedings on behalf of a company not holding any current or past right on the relevant IP. But, for once, French law appears to be quite flexible and little demanding in this respect.

For those who like to do it themselves: here is a patent application directed to an item comprising a piece of coal and an instruction manual. I quote: the benefit to the purchaser is the fun in reading the manual, and imagining that they can turn the coal into a diamond like one of the pictured ideas presented in the manual.

Second interesting issue, the bailiff’s report of October 2013. The important point here is that we are talking about a standard bailiff’s report, and not about a seizure (saisie-contrefaçon), which is the usual measure taken at the onset of patent litigation in this country.

The French company I Do It filed a request in front of the Bobigny Tribunal de commerce and obtained an order from this court authorizing a bailiff to go to an exhibition, verify whether an allegedly infringing antenna was presented by Alden there, inquire about the pricing and origin of the product, etc. The order was granted and the report drawn up by the bailiff accordingly.

The legal basis for the request and order was article 145 of the Code de procédure civile, which is a very general provision per which “if there is a legitimate reason, prior to any litigation, for preserving or establishing the evidence of facts on which the outcome of litigation could depend, legally admissible measures of taking evidence may be ordered upon request of any interested party, ex parte or in urgency proceedings“.

Alden argued that the inspection of the exhibition by the bailiff was in fact a saisie-contrefaçon and should thus have been requested under the special provisions of article L. 615-5 of the Code de la propriété intellectuelle. They thus requested the cancellation of the bailiff’s report.

The court held that “the mission [of the bailiff] did not comprise any measure relating to a saisie-contrefaçon, and besides the bailiff did not accomplish any investigations exceeding the scope of a report“. Therefore, the 2013 bailiff’s report was not canceled.

I must say that I am quite surprised by this part of the decision. Going to an exhibition, checking whether an allegedly infringing product is present, inquiring about the price and origin of the product… These are very typical steps taken during a saisie-contrefaçon.

Had the judges seen things this way, then it seems highly doubtful that they would have found that resorting to a bailiff’s report under the general provision of article 145 is a possible alternative to a true saisie-contrefaçon.

The reason why the appropriate legal basis for the investigation at the exhibition is so important is that the special rules of the saisie-contrefaçon are very different from the general rules of an article 145 measure. To name a few examples:

  • If I Do It had gone for a saisie-contrefaçon, they would have needed to place their request with a specialized IP judge in the Paris TGI, instead of a suburban court fully inexperienced in patent matters.
  • A request for saisie-contrefaçon would certainly have been denied by the specialized IP judge based on the facts at hand, as I Do It apparently did not hold any rights to the patent back in 2013.
  • Assuming that a saisie-contrefaçon had been performed, I Do It would then have had approximately 1 month to file a patent infringement lawsuit, or else the seizure (including the bailiff’s report) would have been automatically void. In contrast, by resorting to an article 145 investigation, I Do It was able to wait for almost 2 years before filing suit.

In summary, although the saisie-contrefaçon is often viewed as a powerful tool for patent rights holders to collect evidence, it also offers a number of guarantees to the defendant, which are not all necessarily present in an article 145 investigation.

So, should you do it too, i.e. should you consider an article 145 investigation as a creative alternative to the usual saisie-contrefaçon when faced with suspected patent infringement?

Well, this option is certainly worth considering. But I would certainly recommend extreme caution, as today’s decision is somewhat surprising and does not necessarily set a strong precedent.

Third and last interesting point: the assessment of infringement. Here, again, the case was unusual.

The plaintiffs’ argument was that Alden bought antennas from an Austrian distributor of I Do It’s products, made minor modifications and then marketed the antennas under their brand name. “Therefore“, I Do It argued, Alden’s antennas exactly corresponded to the product protected by EP’982; and exhaustion of rights did not apply as the products marketed by the defendant no longer exactly corresponded to those put on the market with the consent of I Do It.

Unsurprisingly, the TGI dismissed the infringement claim, as there was no demonstration of the implementation of the claimed subject-matter by the allegedly infringing antennas.

It is certainly not sufficient for a patent proprietor to assert that its own products are covered by a patent. Even this assertion, assuming it is relevant in a particular case, needs to be precisely demonstrated, claimed feature by claimed feature.

So here the conclusion is pretty clear: no you should not do it, i.e. you should never consider as a patent owner that you can do without a thorough, detailed, technical demonstration that the products at stake fall within the scope of a patent.

Before, concluding this post, I would like to say a few words about an exciting upcoming conference regarding the French statute of limitations for nullity actions in IP law.

Frequent readers of this blog know of course that this is a very hot topic these days.

The date is March 15, 2018, the time is 1:30 pm to 6 pm, and the venue is Paris, Assemblée nationale – no less. Here is a link to the program of the conference as well as the necessary information for signing up.

Should you do it, i.e. attend this event? Yes indeed, and as I will unfortunately be unable to be present, I would be most grateful if any attendee could provide us with the highlights of this afternoon.


CASE REFERENCE: Tribunal de grande instance de Paris, 3ème chambre 3ème section, November 10, 2017, Seung Joon Im, SARL I Do It & I Do It Company Ltd v. SAS Alden, RG No. 15/10320.

One-two-three

Still warm from the press and courtesy of Matthieu Dhenne, come tidings of the fall of another important pharma IP, namely the Atripla SPC (Supplementary Protection Certificate).

Atripla is marketed as a pink tablet with “123” impressed on one side. It contains a combination of three anti-HIV drugs, namely efavirenz, emtricitabine and tenofovir.

The U.S. pharmaceutical giant Merck Sharp & Dohme Corp. (MSD) owns European patent No. EP 0582455, entitled “benzoxazinones as inhibitors of HIV reverse transcriptase“. The patent was filed on August 3, 1993.

Two SCPs were filed and granted in France based on the EP’455 patent, and on two successive marketing authorizations (MAs):

  • The first one, FR01C0012, was filed on April 10, 2001 and granted on May 18, 2001. It protected the active efavirenz per se. This SPC expired on November 20, 2013.
  • The second one, FR08C0021, was filed on May 27, 2008 and granted on November 20, 2009. It protects the triple therapy combination of efavirenz, emtricitabine and tenofovir (marketed as Atripla) and is set to expire on August 2, 2018.

On September 20, 2016, Mylan initiated legal proceedings against MSD in France, claiming that the FR’021 SPC is invalid. The Paris Tribunal de grande instance (TGI) issued its judgment on November 30, 2017.

The judgment is interesting both regarding the admissibility of the action and  the merits.

As far as admissibility is concerned, the nullity defendant claimed that Mylan was time-barred from requesting the nullity of the SPC.

As a first line of response, Mylan argued that the general statute of limitations in our Code civil, which provides a five-year limitation period for “personal or movable actions“, is not applicable to actions for nullity of an IP right. Unsurprisingly, the court disagreed, in keeping with recent case law at the first instance and appeal levels. The TGI made in particular reference to a trademark ruling by the Cour de cassation dated June 8, 2017. For the court, applying this ruling by analogy leads to the conclusion that an action for revocation of an SPC is indeed subject to the limitation period under ordinary law.

That being said, the real interesting point is the determination of the starting point for the five-year limitation period. Although there has been a lot of discussion (including on this blog) concerning the starting period for patent nullity cases, there has been no clear guidance for SPC nullity actions, as far as I am aware of.

MSD’s case was that the starting point for the limitation period was the publication of the SPC application. The court disagreed and set the following principles.

The starting point for the limitation period must be set to the day, determined in concreto, when Mylan knew or should have known, because it intended to market a generic version of the drug which received an MA on December 13 [2007], for the combination of [the] three actives, which is protected by the SPC, which represents an impediment for its business.

So, we all get the idea there – although a couple of words may be missing, which happens from time to time when your sentences are too long, and this is probably why my blog software keeps blaming me for using more than the recommended threshold of 25% of sentences containing more than 20 words.

The general principle of an in concreto assessment is in keeping with the TGI’s previous decisions in patent revocation cases. The court went on:

[…] Only the SPC matters as an impediment, and not the patent. 

One should not refer to the date of grant of the patent, since the validity of the patent is not challenged by Mylan, which acknowledges that the efavirenz active compound is the subject-matter of the invention protected by the EP’455 patent and then by the [FR’012] SPC which expired on November 20, 2013. 

Only the validity of the [FR’021] SPC […] is challenged […]. 

Thus the publication of the grant of the patent cannot be set as the starting point for the limitation period, as it would in fact require an unrealistic watch from stakeholders and is unrelated to the development of the project which gives standing to sue. 

Mylan’s standing does not derive from the publication of the title, be it the patent or the SPC, but from its concrete intent to market the same drug. 

In this case, they have to check that this intent to market the product does not infringe any IP, and if this is the case, to seek its revocation before launching. 

Watching patent or SPC registers cannot be required from stakeholders before they intend to develop a competing product. 

[…] In the present case, the first MA for Atripla […] was granted on December 13, 2007. In view of article R. 5121-28 of the Code de la santé publique, the generic company can only apply for an MA starting from the eighth year after the grant of the MA for the original drug, and cannot be granted one before ten years. 

Therefore, Mylan could not apply for an MA before December 13, 2015, and could not obtain it before December 13, 2017. As a consequence, the date at which Mylan’s standing can be taken into account is December 13, 2015, which is the date starting from which it could apply for an MA. Thus, Mylan is not time-barred as it had until December 13, 2020 to start legal action.

What is somewhat paradoxical is that the TGI calls for an in concreto appraisal but then defines what could possibly be a general rule for SPC cases, namely that the starting point for the limitation period is the date at which third parties may start applying for their own MAs.

We will need to wait for further cases to know for sure whether this is indeed a general rule or not.

Turning to the merits of the case, the discussion and the ultimate reasoning of the court are extremely similar to what can be found in the recent decision on Truvada, also reported on this blog a few weeks ago. 

Truvada is another anti-HIV drug based on the combination of tenofovir and emtricitabine. The SPC at stake in today’s decision relates to the combination of the same compounds, plus a third one, efavirenz. And the problems raised by this other combination are analogous.

According to article 3(a) of the SPC regulation (regulation (EC) No. 469/2009 of the European Parliament and of the Council), an SPC “shall be granted if, […] (a) the product is protected by a basic patent in force“.

How to determine whether a product can be considered as being “protected” by a basic patent has been the subject of intense litigation and numerous rulings from the CJEU, which are mentioned in the TGI’s judgment. Again, readers of this blog can refer to the Truvada post, which contains a short summary of the most important CJEU case law prepared by Lionel Vial.

CJEU case law on the interpretation of the SPC regulation: each ruling always leads to more referrals.

In the present case, none of the claims of EP’455 explicitly recites the combination of the three active compounds of the combination. Instead:

  • efavirenz is covered by a generic formula in claims 1 and 5 and is singled out in claims 2 and 12 (as well as in claims 8 and 9 but in combination with other drugs different from tenofovir and emtricitabine);
  • tenofovir and emtricitabine are not cited in the patent;
  • claims 7 and 16 relate to the combination of a generic formula (covering efavirenz), or of efavirenz specifically, together with a nucleoside analog;
  • tenofovir and emtricitabine belong to this category of nucleoside analogs.

According to the court, this is insufficient to consider that the combination of the three active compounds is protected by the EP’455 patent pursuant to article 3(a).

Says the court:

It turns out that the description never explicitly cites either tenofovir or emtricitabine which are not identified in the EP’455 patent, be it individually or collectively in a composition. And in addition the specific combination claimed as an active product “efavirenz + emtricitabine + tenofovir” is not implicitly but necessarily and specifically taught in the description, and no indication makes it possible for the skilled person to select emtricitabine and tenofovir as nucleoside analogs. 

In fact, if I understand correctly, emtricitabine and tenofovir were not even identified and known yet as anti-HIV drugs at the filing date of the EP’455 patent.

Furthermore, the court refused to consider the claims relied upon by MSD (reciting nucleoside analogs) as “functional claims” because “they do not describe the structure which should be present nor the function that the second and third products should have in this structure“.

For the sake of completeness, the court stated that even if the claims were considered as functional, the four-step test established by the Dutch patent office would then not be satisfied. Again, this same test was discussed in the previous Truvada post, so I will not describe it again here.

As a consequence, the SPC was found to be invalid under article 3(a).

By way of overkilling, the court added that the SPC was also invalid in view of article 3(c) of the SPC regulation, per which an SPC “shall be granted if, […] (c) the product has not already been the subject of a certificate“.

In this case, another SPC had been granted based on the same EP’455 patent, namely the efavirenz SPC. MDS relied on the Georgetown CJEU decision (C 484/12). According to this decision, article 3(c) does not preclude the grant of one SPC for a combination of active ingredients, and another SPC for a single active ingredient, based on the same patent.

Nevertheless, according to the TGI, Georgetown is only applicable if the mono and combo products are separate inventions.

In one brief paragraph, the court then held that:

the combination of efavirenz with emtricitabine and tenofovir does not represent a separate invention which may give the right to a second SPC. For this second reason, SPC [FR’021] is invalid under article 3(c) of the regulation. 

Those readers in favor of pan-European consistency (which probably means most readers of this blog) will be happy to know that the TGI’s decision mirrors a similar ruling in the UK handed down on March 21, 2017, per which the corresponding UK SPC was declared invalid by Mr. Justice Arnold.


CASE REFERENCE: Tribunal de grande instance de Paris, 3ème chambre 1ère section, November 30, 2017, Mylan SAS v. Merck Sharp Dohme Corp., RG No. 16/14466.