For your eyes only

No, this post has nothing to do with the famous 007 spy.

It rather deals with the restriction of the accessibility of evidence filed during patent litigation to protect trade secrets. With such an exciting topic, who needs car chases, double agents and half-naked bodies?

A while ago, I reported on the first instance judgment in the Core Wireless Licensing v. LG  litigation. As a reminder, this is an SEP (standard essential patents) infringement action brought by Core Wireless (Core) against the Korean giant LG, which was handled super fast by the Paris Tribunal de grande instance, upon the claimant’s request for accelerated proceedings. Not that it worked out for them though, as there was no finding of infringement by the court for any of the five asserted patents.

As swift as the first instance case was, I have not heard about any appeal proceedings since the judgment of April 17, 2015 – until very recently, that is. Now, owing to LG’s lawyers and via the AIPPI French group (thank you), here are tidings of Core’s appeal.

It turns out that the appeal case has been moving at a much slower pace, with already three orders on procedural motions issued by the appeal judge in charge of case management. The third order, dated October 9, 2018, is of particular interest.

First of all, the order of the judge mentions that “what is at stake in the litigation is now the determination of a FRAND royalty rate applicable to the patents in suit“.

This is somewhat surprising, since the first instance judgment dismissed all infringement claims brought by Core. I can only assume that a partial agreement between the parties must have been reached, that LG must have agreed to take a license from Core and that the only remaining contentious issue must be the royalty rate.

Now, a major difficulty in a FRAND royalty rate-setting lawsuit such as this one is how evidence relevant to the royalty rate determination should be handled.

For instance, similar license agreements granted by the right holder, or even third party license agreements may be of relevance to the determination, but these are also highly sensitive documents.

Eyeing towards the right royalty rate.

The first point addressed in the October 9 order is a dispute regarding one exhibit filed by LG, namely a license agreement between Nokia and Qualcomm.

Core’s patent portfolio was originally owned by Nokia. Nokia licensed the patents to the chip manufacturer Qualcomm. The LG devices comprise Qualcomm chipsets. As a result, LG contends that they benefit from pass-through rights under the Nokia / Qualcomm agreement (by exhaustion of the Nokia patent rights). A recurring debate in many SEP lawsuits.

LG had made repeated official requests for being granted access to the Nokia / Qualcomm agreement, to no avail. But on October 31, 2017, LG finally filed a redacted version of this agreement in front of the Paris Cour d’appel, which they apparently originally obtained from parallel proceedings in the U.S.

Core protested and stated that this filing was illegal. They argued in particular that, under article 21 of the agreement, Nokia’s consent is a prerequisite for filing the agreement in the French proceedings, and that Nokia did not consent. Core thus requested that the exhibit should be dismissed.

An interesting problem, but also one that the appeal judge did not solve. Indeed, the judge noted that it is not within her prerogatives to dismiss an exhibit. This is a matter for the three-judge court to decide. So, Core’s request was rejected – for the time being at least. It will be decided in the judgment on the merits.

As a second point addressed in the order, various requests for additional evidence were filed by both LG and Core.

LG requested that Core be ordered to file a number of contracts: 1) a purchase and sale agreement between Intellectual Property Asset Trust and Core dated 2011, 2) a royalty participant agreement between Intellectual Property Asset Trust, Core, Nokia and Microsoft dated 2011, and 3) all further agreements between Core and any third party regarding the patents at stake, and in particular an agreement of 2015 between Core and Microsoft.

The judge deemed that these agreements were indeed relevant to the determination of the FRAND royalty rate. Besides, Core did not frontally object to the submissions of these documents but requested that confidential information be protected (more on that below).

On the other hand, Core requested that LG be ordered to file license agreements between LG and Nokia, Interdigital, Ericsson and Blu Products.

LG objected, and the judge held that the LG agreements are in fact not relevant to the lawsuit because they do not relate to the patents in suit. Also, the judge did not like that this request by Core was submitted only a few days before the scheduled hearing on the parties’ motions.

As a summary, Core was ordered to file a number of agreements in relation with the patent portfolio at stake, but LG was not ordered to filed its own license agreements regarding other patents.

But the most interesting part of the order is probably that the judge made use of a brand new provision, introduced by law No. 2018-670 of July 30, 2018 into the French statute.

This is the transposition of the so-called “trade secret directive” (aka Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure).

Among others, this law created a new article L. 153-1 in the Code de commerce, which reads as follows (my own translation):

When, in civil or commercial proceedings relating to a motion for taking of evidence before a trial on the merits or during litigation on the merits, the communication or supply of an exhibit is relied upon or requested, and a party or a third party contends, or it has been held, that it may breach a trade secret, the judge can, on his/her own motion or upon the request of a party or a third party, if the protection of this secret cannot be otherwise safeguarded and without prejudice of the rights of the defendants: 

1. Read the exhibit alone and, if deemed necessary, order an expertise and ask for the opinion, for each party, of a person authorized to assist or represent them, in order to decide whether the protection measures provided in the present article should be applied; 

2. Decide to limit the communication and supply of this exhibit to some elements only, order the communication or supply in the form of a summary, or restrict access, for each party, to at most one person and another person authorized to assist or represent them; 

3. Decide that the debates will take place and the decision will be handed out in private; 

4. Adapt the reasons of the decision and modalities of publication thereof to the necessities of protecting trade secrets. 

The judge thus decided that the documents at stake should be first communicated for LG’s attorneys’ eyes only. The attorneys of both parties should then tell the judge which parts of the documents may or may not infringe a trade secret, in their view. The judge will then, if necessary, issue another order to implement some of the measures under 2, 3 and 4 above.

I think it is very positive that the range of options to preserve trade secrets during litigation has been broadened by the transposition of the trade secret directive. This will hopefully make it easier for judges to order relevant evidence to be communicated – knowing that guarantees can be put in place in order to prevent the misuse of such evidence, if it is highly confidential and sensitive. This is essential in the French system which does not provide for a broad discovery / disclosure procedure.

Turning back to this Core v. LG case, I personally hope that the judge will not issue an order under paragraph 3 of article L. 153-1, and will make moderate use of paragraph 4. This is because the judiciary determination of the FRAND royalty rate in a case such as this one will be of major interest to all stakeholders in the industry, as it could provide some eagerly awaited general guidance.


Cour d’appel de Paris, pôle 5 chambre 1, October 9, 2018, Core Wireless Licensing SARL v. LG Electronics France SAS & LG Electronics Inc., RG No. 15/17037.

Cutting the limitation period

The statute of limitations for nullity suits is probably one of the worst aspects of French patent law.

But as a blogger, I have to confess that I am grateful for it. If it weren’t for this odd aspect of our statute, the supply of notable French judgments to comment on would be much sparser. Sometimes it is even all there is to talk about. Like in this recent decision E. Leclerc v. Bilz Werkzeugfabrik, where it is in fact the sole topic addressed by the court.

In this case, two German companies, which I will call Innovat and Bilz (but which in truth have much longer names) filed a European patent application in 2000, on a device for clamping tools. The patent was granted in January 2003. It was opposed, and the opposition was rejected by the EPO in February 2007.

In June 2017, the French company E. Leclerc initiated nullity proceedings in connection with this patent. In case French readers are wondering, this company is said to be specialized in making, purchasing and selling cutting tools: it thus appears that it has nothing to do with the famous eponymous supermarkets.

Cutting-edge cutting tools.

The patent proprietors raised a limitation defense, and this objection was addressed in a preliminary judgment after a first hearing.

E. Leclerc’s first line of argumentation against this defense was that the statute of limitations does not apply to patent nullity claims.

A long shot for sure, as many other litigants have made such contentions before, to no avail. But, interestingly, E. Leclerc came up with a number of reasons in support for this position, some of which I have not come across before.

For instance, the nullity plaintiff contended that applying a limitation period to a nullity action would run contrary to Regulation (EU) No. 316/2014 relating to technology transfer agreements.

This regulation defines a limited exemption for technology transfer agreements from the general prohibition of anti-competitive practice under article 101 of the Treaty on the Functioning of the European Union. Article 5 of the regulation specifies that the exemption does however not apply to “any direct or indirect obligation on a party not to challenge the validity of intellectual property rights which the other party holds in the Union, without prejudice to the possibility, in the case of an exclusive licence, of providing for termination of the technology transfer agreement in the event that the licensee challenges the validity of any of the licensed technology rights“.

Quite creative, but beside the point for the court, which noted that the regulation only applies to agreements in which a licensor allows a licensee to exploit a technology, which is not the case here.

E. Leclerc also relied on the UPC agreement, which, they said, excludes any statute of limitations for patent nullity actions. The argument was easily dismissed by the court since, as we all know, the agreement is not yet in force.

They also relied on the executive order of May 9, 2018 (presented here) which is bound to eliminate the limitation period for patent nullity suits. But unfortunately, this order is not currently in force either. It is scheduled to enter into force together with the UPC agreement, precisely.

E. Leclerc also stated that, since the claims of a patent are never stabilized as they can always be limited, the limitation period never starts running.

This notion of “stabilization” of the claims derives from a couple of judgments in which it was held that, when the claims are modified in opposition or limitation proceedings, this postpones the start of the limitation period, because the claims are not stabilized before the date of modification. See previous discussions here and there.

Some have thus taken this logic as far as suggesting that claims are in fact never stabilized because there is always the possibility that the patentee may amend them any time by way of limitation proceedings. Ergo, the limitation period may well exist but it can never start running, problem solved.

The court did not buy this theory:

Finally, even if the claims of a patent may change, this mere likelihood cannot prevent the implementation of a rule of limitations.  

At the end of the day, the court thus once again confirmed that the statute of limitations does apply to nullity actions.

Caramba, encore raté” as Hergé famously wrote in his classic Tintin comic books.

Then the next step, as always, is to determine the starting point for the limitation period. Here, the Paris Tribunal de grande instance (TGI) once again stuck to its in concreto appraisal – although appeal judges seem to be on a different page, as already discussed several times on this blog.

In particular, the court noted that the grant of a patent cannot trigger the time bar. Otherwise, an undue monitoring of published patents would be required from all stakeholders.

Interestingly, the court also added that the rejection of the opposition against the patent by the EPO in February 2007 could not be taken as a starting point either, for the same reason“. In one of the other cases already recalled above, it was decided that the starting point was the decision of a Board of appeal to maintain the patent in amended form, in opposition proceedings. So, as most of us suspected, this earlier decision cannot be extrapolated to some sort of automatic rule.

For the court, the fact that E. Leclerc already marketed many types of spindles in 2010, or that they filed a patent application in 2011 for a cutter for composite materials, was not taken into account by the court either, as “it does not imply that they were aware at that time of all patents granted to competitors concerning devices for clamping and releasing tools“.

The decisive fact in the case was rather a cease and desist letter sent by Innovat and Bilz’s attorney to E. Leclerc in May 2014. E. Leclerc was also targeted by an infringement suit in the Landgericht of Mannheim, but based on a different, national German patent, which led to a judgment in March 2016.

The judges thus held that the starting point for the 5-year limitation period was this cease and desist letter of May 2014. E. Leclerc’s action was thus not time-barred. As a result, the lawsuit will now proceed on the merits.

I have mixed feelings about this ruling.

On the one hand, the outcome makes a lot of sense to me. If we have to live with this statute of limitations for patent nullity suits – which we do – then some formal correspondence between the parties regarding possible infringement of the patent at stake seems to be a very reasonable place to start from in order to apply the rule.

On the other hand, I wonder how this ruling can be reconciled with other similar recent judgments.

Take MEP v. Raccords & Plastiques Nicoll for instance, where the Cour d’appel reached the exact opposite conclusion, by taking the grant of the patent and not a cease and desist letter as the starting point. Is there a blatant contradiction here? Or was MEP v. Raccords & Plastiques Nicoll special because in this case the nullity plaintiff worked in a highly specialized area and had business relationships with the other party?

Then take LuK v. Valeo Embrayages, a judgment by the same section of the Paris TGI as today’s decision. In this case, like in others, the court performed a thorough analysis of the business projets of the nullity plaintiff and determined when so-called “points of contact” between their technology and the patent at stake occurred. There is no such detailed analysis in today’s decision.

As always, I don’t think we should read too much into a seemingly different approach from one judgment to the next. The way the parties do or do not argue in their submissions is certainly a major factor in the court’s reasoning.

Now, my two cents, for what it is worth – and it is quite a subjective one.

I have the impression that the courts (at least the first instance courts, from which we have a larger sample of judgments to digest) make a moderate and measured application of the statute of limitations; and that a relatively heavy burden is placed on the nullity defendant to convincingly show that, for some specific reasons, the plaintiff was or should have been aware of the patent more than 5 years before the complaint was filed.

In other terms, it could be worse!


CASE REFERENCE: Tribunal de grande instance de Paris, 3ème chambre 1ère section, SA E. Leclerc v. Bilz Werkzeugfabrik GmbH & Co. KG & Innovat Gesellschaft für Sondermaschinenbau, Mess-und Steuerungstechnik mbHRG No. 17/09311.

All eyes are on the Court of justice

A tout seigneur tout honneur, today’s decision, being about SPCs, was first reported on the SPC blog.

However, I would like to talk about it as well because, unlike British courts, it is not every day that the Paris Cour d’appel refers questions to the CJEU.

The case relates to a European patent owned by Santen, a pharmaceutical company specialized in ophthalmology.

Claim 1 of the patent is directed to a particular type of oil-in-water emulsion. According to a dependent claim, the emulsion may contain an active ingredient. According to another dependent claim, the active ingredient is cyclosporine A. Finally, another claim relates to the use of the emulsion for the preparation of an ophthalmic composition for the treatment of ocular diseases such as notably keratitis.

Santen obtained a Marketing authorization (MA) for the drug Ikervis®, which is an emulsion containing cyclosporine as an active ingredient and is indicated for the treatment of severe keratitis.

On June 3, 2015, Santen filed an SPC application at the French patent office (INPI) for “cyclosporine emulsion eye drops”. The SPC application was later amended to rename the product as “cyclosporine for its use in the treatment of keratitis”.

On October 6, 2017, the SPC application was finally refused by the INPI. The reason for the refusal was the existence of a prior MA dating back to 1983, for the drug Sandimmum®.

This drug is in the form of a drinkable solution, in which the active ingredient is also cyclosporine. The therapeutic indications range from the prevention of transplant rejection, to the treatment of endogenous uveitis (which is another ocular disease).

In the SPC business, you gotta always keep an eye out for the next CJEU case law.

Santen appealed the refusal in front of the Paris Cour d’appel. Instead of deciding on the merits of the case, the court referred some questions to the CJEU regarding the interpretation of article 3 (d) of regulation (EC) No 469/2009, nicknamed the “SPC regulation”.

Article 3 (d) lays down one of the conditions for obtaining an SPC, namely that the MA referred to in the SPC application should be the first authorization “to place the product on the market as a medicinal product”.

The most important ruling from the CJEU regarding the interpretation of this article is Neurim (C-130/11) of July 11, 2012.

According to this ruling, the existence of an earlier MA obtained for a veterinary medicinal product does not preclude the grant of an SPC for a different application of the same product for which the MA has been granted, provided that the application is within the limits of the protection conferred by the basic patent relied upon for the purposes of the application for the SPC.

In Neurim, an SPC application for a formulation of melatonin useful for the treatment of insomnia had been initially refused due to the existence of an earlier MA for melatonin in a veterinary product (more precisely for the regulation of seasonal breeding activity in sheep). The Court of justice clarified that, in such a situation, the SPC application should not have been refused for this reason.

However, with the Luxembourg Court, most clarifications usually raise additional questions.

Case in point, Neurim was widely interpreted as a reversal of earlier case law (in particular Pharmacia Italia C-31/03 and Yissum C-205/05) but the Court of justice did not say a word about this in the judgment. More importantly, people wondered how far the principle set out in Neurim should extend. That is, how should the expression of the Court “a different application of the same product for which [an MA] has been granted” be interpreted?

Does the expression refer to veterinary vs. human use only, like in the facts underlying the Neurim judgment? Or does it extend to the treatment of different human diseases? Or to different formulations or modes of administration?

In the Santen case, the INPI noted that there are various interpretations of Neurim across Europe. The French administration’s current position is that Neurim should be applied in a “measured” manner.

The INPI believes in particular that there are two reasons why Neurim does not apply to Santen’s SPC application:

  • First, the scope of the basic patent should correspond to that of the MA which is relied upon, like in the Neurim case (cf. the proviso that “the application is within the limits of the protection conferred by the basic patent” in the order of Neurim). This is not the case here, said the INPI, because the basic patent mainly relates to a particular emulsion. Keratitis is only one of the diseases that can be treated according to the patent. Uveitis (i.e. one of the diseases treated by the former drug Sandimmum®) is also mentioned in the dependent Swiss-type claim of the patent.
  • Second, the MA which is relied upon should relate to “a new therapeutic field”, i.e. a new medical specialty, or a drug, the active ingredient of which should have a different mode of action from that exerted in the drug of the previous MA. Again, this is not the case here, the INPI argued, since both MAs relate to the treatment of inflammations of the human eye, by the same mode of action of the same substance (cyclosporine). Thus, a new medical use is not sufficiently demonstrated. The INPI’s position seems to be that a “new medical use” in this context has to be appraised in a stricter manner than in the context of a patentability appraisal.

Santen challenged this position, and stated that the conditions demanded by the INPI cannot be derived from the Neurim judgment. Santen insisted on the fact that Sandimmum® and Ikervis® have different therapeutic indications, and treat different diseases in different parts of the eye. Their respective formulations, dosages and modes of administration also differ.

The court considered both positions and came to the conclusion that “when reading the Neurim judgment it is not possible to interpret this notion of different application, which is essential for deciding the case, with any certainty”.

Thus, the Cour d’appel stayed the proceedings and referred the two following questions to the Court of justice:

1. Should the notion of different application under the CJEU Neurim judgment C-130/11 of July 19, 2012:

– be understood in a strict manner, namely be limited to the sole case of a human application following a veterinary application;

– or relate to an indication pertaining to a new therapeutic field, namely a new medical specialty, relative to the previous MA, or to a drug in which the active ingredient has a different action from the one it has in the drug of the first MA;

– or more generally, in view of the purposes of Regulation (EC) No. 469/2009 aiming at setting up a balanced system taking into account all the interests at stake, including those of public health, be appraised according to more demanding criteria than those applied for appraising patentability of the invention;

– or on the contrary be understood in an extensive manner, i.e. as including not only different therapeutic indications and diseases, but also different formulations, dosages and/or modes of administration.

2. Does the notion of application within the limits of the protection conferred by the basic patent under the CJEU Neurim judgment C-130/11 of July 19, 2012 imply that the scope of the basic patent should correspond to that of the MA relied upon, and consequently be limited to the new medical use corresponding to the therapeutic indication of said MA?

In other words, some very precise and extensive questioning of the scope of article 3 (d) of the SPC Regulation. That said, the likelihood that the Court of justice will clearly answer by yes or no as to whether Neurim applies to different diseases, different formulations, etc. is probably close to zero. It is much more likely that the Luxembourg judges will offer a new general test which will still leave room for interpretation. This is indeed the game that has been played quite extensively in the past few years.

The other thing is that there is also another referral pending on the interpretation of Neurim, namely the Abraxis case (C-443/17).

Unsurprisingly, this is a referral by the High Court in the UK. The question asked is the following:

Is Article 3(d) of the SPC Regulation to be interpreted as permitting the grant of an SPC where the MA referred to in Article 3(b) is the first authorization within the scope of the basic patent to place the product on the market as a medicinal product and where the product is a new formulation of an old active ingredient?

In Abraxis, an SPC application was filed based on an MA for paclitaxel bound to albumin nanoparticles, but the issue was the existence of an earlier MA for solvent-based paclitaxel.

The Advocate General’s opinion in Abraxis is expected to be released on October 25, 2018. Will the Santen referral remain useful or relevant once Abraxis is decided?

As always with the SPC saga, to be continued.


CASE REFERENCE: Cour d’appel de Paris, pôle 5 chambre 1, October 9, 2018, SAS Santen v. Directeur Général de l’INPI, RG No. 17/19934.

Suspect suspicions

What are the top three traits of the French system that foreign companies like best? 

Good transportation infrastructure? Maybe. L’art de vivre? Very probably. But first and foremost: the saisie-contrefaçon. OK, there may be some patent attorney bias here.

As readers of this blog are surely aware, the saisie-contrefaçon (infringement seizure) is a special tool in the hands of patent right holders, in the form of an ex parte order for an unannounced inspection at a third party’s premises in order to gather evidence of possible infringement.

Traditionally, the order for seizure has been viewed as straightforward to obtain.

Basically, you show up in front of a judge; you show your patent, the status of the renewal fees, an excerpt from the patent register; then you explain what kind of evidence you want to get and where. And you’re pretty much good to go.

But from time to time, a court decision takes a different approach and makes this traditional view entirely derail.

Such is the judgment recently issued by the Paris Cour d’appel in Arconic v. Constellium Issoire.

Arconic owns European patent No. EP 1392878 on a process to produce sheets of aluminum.

It may be useful to copy here claim 1 of the patent, as a reference:

A process for producing a sheet or plate product comprising:
(a) providing an aluminium alloy consisting of 0.5 to 1.8% Si, 0.5 to 1.5% Mg, up to 1.2% Cu; up to 1% Mn, up to 1% Zn, up to 0.4% Cr, up to 0.5% Ag, up to 0.3% Sc, up to 0.2% V, up to 0.2% Hf, up to 0.2% Zr, the balance being aluminium and incidental impurities;
(b) heating the alloy;
(c) hot rolling the alloy to reduce its thickness by at least 30%;
(d) thermally treating the alloy hot rolled in (c) at 543°C (1010°F) or more;
(e) further hot rolling the alloy to further reduce its thickness;
(f) solution heat treating the alloy at 543°C (1010°F) or higher;
(g) quenching the alloy.

On October 4, 2017, Arconic requested and obtained an order for performing a seizure in the premises of Constellium Issoire, which belongs to the Constellium group. Arconic and Constellium are direct competitors as they both manufacture aluminum plate products, notably for Airbus’ A380 aircraft.

The seizure took place on October 10, 2017. On October 26, Constellium filed a motion to obtain the cancellation of the order for seizure. The judge in charge of urgency proceedings granted Constellium’s motion and issued an order on December 22, 2017 canceling the order for seizure.

Arconic appealed, but its appeal has now been dismissed by the Paris Cour d’appel.

So what was the problem with the initial order for seizure, and why did it deserve to be canceled, according to the appeal judges?

The focus of the discussion was Arconic’s statement in its initial request that they had reasons to suspect that Constellium infringed the patent at stake.

Arconic provided evidence for this suspicion, and the court performed a thorough review of said evidence.

The evidence comprised in particular a scientific article from three Constellium employees, a specification from Airbus, a standard and a publication on aluminum alloys, and an excerpt from Constellium’s website.

Based on this evidence, the court concluded that:

  • Arconic’s aluminum alloy is designated as 6013 while Constellium’s is designated as 6156.
  • Both alloys, based on Airbus’ specification, are made by lamination and a so-called T4 thermal treatment.

But the court then stated that this was insufficient to infer that most features of claim 1 of the patent at stake were implemented by Constellium.

In particular, the fact that the 6156 alloy is made by lamination and thermal treatment is perfectly conventional. Claim 1 of EP’878, on the other hand, requires a precise sequence of process steps, including the application of a certain temperature, a defined reduction of thickness of the alloy, etc. Thus, the court said, Arconic in fact did not know which process is used by Constellium.

Admittedly, the composition of the alloy itself, which is also recited in the form of elemental weight ranges in claim 1 of the patent, does cover the 6156 alloy. But the claimed ranges are sufficiently general to also cover further competitors’ products of the same category (the 6061 and 6082 alloys). Besides, it is clear when reading the patent that the invention is about a manufacturing process, not about a new alloy, added the court.

The tin man – which alloy is he made of?

Another reason for Arconic’s infringement suspicion was that, according to them, the mechanical properties of the plates made by Constellium could only be obtained with the patented manufacturing process.

The court accepted that Constellium’s 6156 plates seem to have very similar properties to Arconic’s 6013 plates, since both products are used by Airbus for the A380 aircraft.

But, the court continued, this does not imply that Constellium’s plates are necessarily made with the patented process, since different processes can of course lead to the same product.

As a further remark, the court noted that Constellium itself owns a later patent (EP 1809779) for a process of making 6056 or 6156 aluminum alloy products, and asserts that their industrial process is based on this patent.

As a conclusion, the court held:

Thus, the reasons set out in support of the request [for seizure] turn out to be wrong. More particularly, it cannot be derived therefrom any “suspicion” of infringement, nor “good reasons to assume” that the alloy plates supplied by Constellium would infringe Arconic’s patent. 

The final part of the judgment contains a more legal discussion. Arconic argued that its right to a seizure

only depends on the demonstration that the right at stake exists, without any further requirement of evidence concerning infringement itself.

As I said in the beginning, at the risk of oversimplifying, this is indeed probably the general opinion among the French patent profession.

Arconic in particular pointed to the so-called “enforcement directive” No. 2004/48/EC. Article 7 of the directive begins like this:

Member States shall ensure that, even before the commencement of proceedings on the merits of the case, the competent judicial authorities may, on application by a party who has presented reasonably available evidence to support his claims that his intellectual property right has been infringed or is about to be infringed, order prompt and effective provisional measures to preserve relevant evidence in respect of the alleged infringement, subject to the protection of confidential information.

The directive thus refers to the presentation of “reasonably available evidence” as a prerequisite for obtaining e.g. an order for seizure. But, Arconic remarked, this notion was not transposed in the relevant provision of the Code de la propriété intellectuelle, namely article L. 615-5. Since article 2 of the directive makes it possible for Member States to provide means which are more favorable to right holders, this must be interpreted to the effect that French law does specifically not require “reasonably available evidence” as a precondition for an order for seizure.

The court did not frontally disagree, but replied as follows.

[…] The property right conferred by a patent is neither absolute nor discretionary, and is still subject, in the case of a request for seizure, to the appraisal of its merits by the judge […], notably when, as is the case here, the reasons set forth in its support turn out to be wrong. 

Besides, article 3 of the [enforcement directive] requires that proceedings which are necessary to ensure that IP rights are respected must be fair and proportionate. In the present case, as there is no tangible suspicion of infringement, the court can only remark that the requested seizure measure would, as a main consequence, allow Arconic to know about Constellium’s aluminum alloy product manufacturing process. As these two companies are direct competitors regarding this products in front of companies in the aeronautic business, such as Airbus, Constellium can rightly fear that manufacturing secrets could detrimentally be disclosed, or even that its credibility with common customers could be harmed. Lastly, the court is surprised that it is only on October 4, 2017 that Arconic decided to initiate infringement seizure proceedings, although this direct competition with respect to Airbus dates back to 2004. 

Matthieu Dhenne, whose firm represented the patent proprietor in this case, wrote to me that there are a number of reasons why he believes the decision was wrongly decided.

First, he says the proportionality principle does not apply to an infringement seizure which remains an exceptional measure and is disproportionate by nature. He states that the travaux préparatoires concerning the transposition of the directive show that the proportionality principle was voluntarily not introduced into our statute. As a result, the court’s line of reasoning compromises legal certainty and jeopardizes the entire balance of the system. He also insists that a seizure is intended for gathering evidence, not appraising infringement. Matthieu adds that the court’s suspicion of the patentee was unwarranted and that it cannot be possibly demanded from the patentee that they should search for patents owned by the defendant. Whether any other, especially later, patent is indeed implemented or not by the defendant is irrelevant to the possible infringement of the main patent at stake, he argues.

I agree that there are a number of statements in the two above paragraphs quoted from the judgment which are controversial.

It is true that a seizure can result in business secrets being disclosed to a competitor. But the usual way to prevent this is for the seized party to request that the seized information and documents be sealed, and that an expert be appointed by the court to sort out the evidence, so that only information directly relevant to the demonstration of infringement be communicated to the right holder.

As for the fear that the defendant’s reputation be harmed, it seems irrelevant here, as the seizure was performed in Constellium’s premises, not at a third party’s.

The fact that Arconic waited a lot before initiating legal proceedings should probably not come into play either. Indeed, a patentee’s right to sue for infringement is never time-barred.

That said, I am not sure I am fully comfortable with the notion that a patentee’s right to a seizure should be automatic.

It does make sense for the court to carefully look at the specifics of each case before deciding whether this right can be exerted in the circumstances at hand or not.

In this particular case, it seems to me that what the court really did not like was that the “suspicions” of infringement mentioned in the original request for seizure, were not actual or legitimate suspicions, based on the evidence offered.

Would the outcome have been favorable if the plaintiff had played it differently, for example by (1) not mentioning suspicions of infringement but explaining that a seizure is the only possible way for them to determine whether there is any infringement; and (2) immediately offering that the seized evidence be sealed by default so as to be later remitted to a court-appointed expert?

I guess we will never know and can only have suspicions in this respect.


CASE REFERENCE: Cour d’appel de Paris, pôle 5 chambre 1, September 11, 2018, Arconic Inc. v. SAS Constellium Issoire, RG 18/01099.

Standard or not standard?

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).

Can you believe there are actually patent applications on methods for identifying patent troll activity? Do some of them get acquired by NPEs, just for the irony of it?

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.


CASE REFERENCE: Tribunal de grande instance de Paris, 3ème chambre 4ème section, ordonnance du juge de la mise en état, June 7, 2018, Intellectual Ventures LLC v. Société française du radiotéléphone, RG No. 16/16346.