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.

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.