Best FRAND forever

One common trait of all standard essential patent (SEP) disputes is their procedural complexity. A lawyer’s dream come true.

A few weeks ago, I reported on the IPCom v. Lenovo litigation. The apparent conclusion was that, in the context of a multidimensional and multinational lawsuit, French courts were not ready to forgo their say. This seems to be confirmed in another high profile case, brought to my attention by Denis Schertenleib.

The case pitches the Dutch giant Philips against Hong Kong-based TCL.

Philips owns a portfolio of patents declared as essential for the 3G and 4G standards with the standard-setting organization ETSI (European Telecommunications Standards Institute). According to a classical plot, Philips and TCL negotiated a patent license for this portfolio and the negotiations failed. It seems that one of the bones of contention was the scope of the license, both in terms of patents and countries.

Philips sued TCL in the UK for infringement of two patents, in October 2018.

TCL started a legal backfire by suing Philips in front of the Paris Tribunal de grande instance (TGI). By the way, have I already mentioned on this blog that the TGI has been renamed TJ (tribunal judiciaire) since January 1, 2020?

What is much less conventional in this plot is that TCL sued not only Philips, but also the ETSI itself.

As a main request TCL asked the court:

  • to declare that Philips’ essentiality declaration to the ETSI amounts to a promise to grant a FRAND license to TCL on all patents declared as essential for the 3G and 4G standards;
  • to determine FRAND conditions for the license and to enjoin Philips to grant it;
  • to enjoin the ETSI to participate in the license granting process;
  • to declare that the conditions offered by Philips are not FRAND-compliant.

At the risk of disappointing readers, we do not have the court’s ruling yet. What we do have is an interim order by the judge in charge of case management dealing with a number of preliminary objections raised by Philips.

A blogger working on his next SEP post during the lockdown.

First, Philips argued that the Paris court lacked jurisdiction.

The discussion here revolves around article 8.1 of Regulation (EU) No. 1215/2012 (known as the Brussels I bis regulation) per which “a person domiciled in a Member State may also be sued where he is one of a number of defendants, in the courts for the place where any one of them is domiciled, provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings“.

Again, Philips is a Dutch company. The ETSI, on the other hand, is located in Sophia Antipolis, on the French riviera. Philips argued that the claim against the ETSI was artificial so that the institute was not a “real defendant“. Philips further challenged that the claims against it and against the ETSI were closely related.

The judge in charge of case management disagreed:

It must be noted in this case that the claims against the ETSI on the one hand and Philips on the other hand relate to a same factual situation resulting from the fact that, according to the plaintiffs, Philips does not comply with the IP rules established by the ETSI. 

Although the legal grounds for the requests against the ETSI and Philips are different […], this is not an obstacle to the acknowledgment of an identity of legal situation, […] especially since in this case all requests are expressly subjected to French law, as provided in the rules of procedure established by the ETSI. 

The identity of legal situation supporting these requests is thus characterized. 

It must also be noted that the ETSI is endowed with legal means to ensure that IP obligations are complied with by its members, so that the claims against this institute cannot be held as artificial.

In addition, it must be noted that a decision enjoining the ETSI to participate in the grant of a license if needed by implementing the measures provided in its internal regulations, and one holding that Philips complied with its obligation to offer a license to TCL under FRAND conditions would be incompatible and not only diverging.  

Second, Philips relied on a lis pendens objection (due to the preexisting British lawsuit).

The basis for this objection is article 29 of the Brussels I bis regulation, per which “where proceedings involving the same cause of action and between the same parties are brought in the courts of different Member States, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established“.

Again, the judge disagreed:

[…] The claim in front of the High court of justice of England and Wales is based on infringement of the British part of European patents No. […]. It only concerns Philips and TCL. 

The present lawsuit concerns Philips, TCL, and also the ETSI. It consists in determining whether Philips […] offered a worldwide license on a [patent portfolio] under fair, reasonable and non-discriminatory conditions. 

As a result, the condition of triple identity of cause of action, subject-matter and parties is not met, and there is no reason to decline jurisdiction in favor of the English court.

Third, Philips relied on a related actions objection (still due to the preexisting British lawsuit).

This time, it is article 30 of the Brussels I bis regulation that comes into play:

1. Where related actions are pending in the courts of different Member States, any court other than the court first seised may stay its proceedings.

2. Where the action in the court first seised is pending at first instance, any other court may also, on the application of one of the parties, decline jurisdiction if the court first seised has jurisdiction over the actions in question and its law permits the consolidation thereof.

3. For the purposes of this Article, actions are deemed to be related where they are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings.

This objection was no more successful than the previous ones:

As mentioned by TCL, the trial on the FRAND license issue will only proceed in the UK if TCL does not renounce requesting such a license […]. No risk of irreconcilable judgments under article 30 of the Regulation is established, so that the objection based on related actions cannot be sustained and the present court does not have to decline jurisdiction. 

I must say that this part of the judgment is somewhat less clear to me than the rest. I assume that what the judge meant is that the objection is premature as there is no indication at this time that the same question will be asked to the British court and the French court.

As a result, the judge rejected all objections raised by Philips, so that the litigation can proceed further.

The ETSI also requested that the claims against it should be declared inadmissible. However, this other objection needs to be examined by the full court, so that the judge in charge of case management has not ruled on it.

This interim judgment is of particular interest because the jurisdiction of the Paris TJ was acknowledged with respect to TCL’s FRAND determination requests, independently of any infringement, non-infringement or validity claims regarding any French patent or French part of a European patent.

Suing France-based ETSI as a co-defendant was what made it possible to achieve this outcome.

If this strategy continues to prove successful (which remains to see), it will mean that it can be replicated in any other 3G or 4G standard-related dispute, in other words that any IP right owner can be sued in France with respect to FRAND determination claim. So this is kind of a big deal.

On the other hand, I have read comments on this judgment according to which the decision was the first one to qualify the promise by a patent owner to grant a FRAND license under the ETSI IPR Policy as a “stipulation pour autrui”, namely a third-party beneficiary clause that creates a direct contractual relationship between the ETSI member (patent owner) and a third party (would-be licensee).

It has indeed long been proposed that an essentiality declaration with the ETSI amounted to this contractual mechanism of “stipulation pour autrui“. But I personally fail to find in the judgment any clear confirmation that the judge agreed with this qualification.

What I do find in the judgment is a mention that the ETSI agrees with this qualification; and a discussion on the legal grounds of the claims against Philips and the ETSI, the latter one being the “stipulation pour autrui“. But I do not understand this discussion as an acknowledgment that the proposed legal qualification is correct. However, it is likely that future judgments in this litigation will provide more clarity.


CASE REFERENCE: Tribunal judiciaire de Paris, 3ème chambre 1ère section, ordonnance du juge de la mise en état, February 6, 2020, SAS TCT Mobile Europe et al. v. Koninklijke Philips NV et al., RG No. 19/02085.

IPCom-tinuation

Traditionally, patent litigation has a tendency to endlessly drag on.

Think about the pravastatin case in France for example (which I am not brave enough to keep reporting on).

But some cases are really fast movers. Such is IPCom v. Lenovo. In my previous post, published a couple of weeks ago, I reported on the anti-anti-suit injunction issued by the judge in charge of emergency interim proceedings (juge des référés) on November 8, 2019.

The ink on the post was barely dry, or its pixels were barely on, or whatever the right metaphor is, that the Paris Cour d’appel issued its ruling further to Lenovo’s appeal against the November 8 judgment (first brought to my attention by Jérôme Tassi on LinkedIn).

For a detailed summary of the facts of the case, please refer to the previous post.

For the most part, the appeal judges agreed with the juge des référés.

They confirmed that she had jurisdiction over the petition filed by the would-be licensee / infringement defendant Lenovo under article 46 Code de procédure civile, as IPCom would suffer a potential harm in France if the anti-suit injunction were issued in the U.S., affecting IPCom’s right to sue in France.

They also held that the anti-suit injunction, if issued by the Californian judge, would be a manifestly unlawful disturbance, in view of the French courts’ exclusive jurisdiction on matters of infringement of patent rights on the French territory, and in view of the property rights and the right to a fair trial enshrined in the European Convention on Human Rights and in the Charter of Fundamental Rights of the European Union. This was true even if the potential anti-suit injunction was only temporary. Therefore, the juge des référés was right when she ordered Lenovo to withdraw the motion for anti-suit injunction in the U.S.

However, the court canceled the second part of the référé order, which prohibited Lenovo from filing any other similar motion in front of any foreign court. This is because there is no longer any such motion currently pending, and no indication that a similar motion would be filed again. Therefore, the above manifestly unlawful disturbance has ceased and there is no imminent threat of the same.

In summary, there is formally no more anti-anti-suit injunction in place in France. But since the court agreed with the juge des référés‘ assessment, it would probably be unwise for Lenovo to give it another try.

But this is not the only development of the case that I would like to report on.

An even more interesting twist is that, in parallel to the ongoing FRAND determination lawsuit in the U.S., IPCom sued Lenovo (et al.) for patent infringement in France based on EP 1841628 (hence, of course, the anti-suit discussion in the first place). In addition to the action on the merits, IPCom also filed a motion for preliminary injunction (PI) in front of the juge des référés (not the same one as the one who issued the anti-anti-suit injunction, mind you).

On January 20, 2020, the judge issued his judgment, rejecting IPCom’s motion for PI.

I will skip the first part of the judgment, which deals with an alleged invalidity of the complaint – the argument did not work but is worth looking at if only to have the pleasure of reading a reference to the ordinance of Villers-Cotterêts of 1539, the oldest piece of legislation still in force in France, enacted more than 250 years before the monarchy started losing its head.

I will also skip the second part of the judgment, in which Lenovo disputed IPCom’s standing to sue, challenging the chain of transfer of the patent and the recordal of this chain of transfer with the French patent register. This objection was also rejected by the judge.

No, the real interesting part is the discussion on the merits of IPCom’s motion.

Remarkably, the judge heavily relied on the Enforcement Directive (2004/48/EC) and more specifically on the 22nd recital:

It is also essential to provide for provisional measures for the immediate termination of infringements, without awaiting a decision on the substance of the case, while observing the rights of the defence, ensuring the proportionality of the provisional measures as appropriate to the characteristics of the case in question and providing the guarantees needed to cover the costs and the injury caused to the defendant by an unjustified request. Such measures are particularly justified where any delay would cause irreparable harm to the holder of an intellectual property right.

Although the Code de la propriété intellectuelle does not explicitly mention this principle of proportionality of provisional measures, the judge considered that it does apply.

And in the present case, he considered that this proportionality principle would be breached if the preliminary injunction was ordered as requested by the patent proprietor.

Is there a proportionality issue here?

Here are a couple of important facts to bear in mind in this case.

First, the EP’628 patent was declared as essential for the UMTS (3G) standard. Therefore, it is supposed to be implemented by all laptops, mobile phones and tablets of the defendants (marketed under the brands Lenovo, ThinkPad and Yoga). The motion for PI accordingly targeted all of these devices.

Second, the EP’628 patent was set to expire on February 15, 2020. Therefore, the PI, if issued, would just last for a few weeks.

The judge stated that the PI would be justified if IPCom could demonstrate that the infringement of the patent was likely, but also that the absence of a PI would cause harm which could not be repaired by damages. The judge further stated that the negative economic consequences for the defendants should also be taken into account, and more specifically whether they could be adequately repaired if the patent were ultimately found invalid or not infringed.

IPCom argued that it would suffer irreparable harm in the absence of a PI due to the annihilation of the value of its patent portfolio.

The judge was unpersuaded, as IPCom cannot lose any market share, because it does not market any devices. The sole harm suffered by IPCom is the lack of license revenues, which can be repaired by damages to be set by the court at a later stage.

The judge further noted that a PI would have long-lasting effects on the market even after the upcoming expiry of the patent on February 15, 2020, since the public would turn away from the Motorola, Lenovo, ThinkPad and Yoga devices. The loss of income would thus be very large. In addition, a recall of products from the market would tarnish the corporate image of the defendants in the long run and significantly disrupt distribution networks. In short, the PI and recall of products from the market would result in negative economic consequences which could not be adequately repaired by damages, if IPCom were to ultimately not prevail on the merits.

The judge’s conclusion was the following:

[…] The requested measures, set to last for a few weeks in view of the expiry date of the patent of February 15, 2020, are manifestly disproportionate and may result in an imbalance in the situation of the parties conferring an undue advantage to the patentee which may then be able to impose a license not meeting with FRAND requirements. 

Frankly, I don’t really see how the judge could possibly have decided otherwise. The message is clear: SEP owners need to be more reasonable when they go to court.

In the meantime, the parties seem to be back to square one.


CASE REFERENCES:

Cour d’appel de Paris, pôle 5 chambre 16, March 3, 2020, Lenovo Inc. et al. v. IPCom GmbH & Co. KG, RG No. 19/21426.

Tribunal judiciaire de Paris, ordonnance de référé, January 20, 2020, IPCom GmbH & Co. KG v. Lenovo SAS et al., RG No. 19/60318.

OK oral

As a patent professional well used to the EPO’s way of reasoning, the aspect of French patent litigation which often strikes me as the most fascinating one is claim interpretation.

This is because there is such a significant difference between the EPO and French courts when it comes to deciding what is and what is not covered by a patent.

Today’s case, Bayer v. Ceva, provides a noteworthy example.

I have actually already talked about this case in a previous post. It is indeed one of these disputes which gives rise to a large number of procedural developments.

Here is the context, in quite a few bullet points:

  • Bayer Intellectual Property GmbH owns European patent EP 2164496 (EP’496), granted in April 2017, on “Formulations containing triazinones and iron”.
  • Bayer Animal Health GmbH, a licensee, developed a veterinary product named Baycox Iron®. The product is an injectable formulation of a combination of toltrazuril and a dextran iron (III) complex. The veterinary indication is the treatment of coccidiosis in piglets.
  • In parallel, Ceva Santé Animale developed a similar veterinary product, called Forceris®.
  • Ceva contacted Bayer in November 2017 to let them know about their intention to market Forceris®. Ceva argued that their product was out of the scope of the EP’496 patent.
  • Ceva filed an opposition against the patent. The opposition was rejected by the EPO in a decision dated July 16, 2019. An appeal is pending.
  • Bayer disagreed and filed a petition for preliminary injunction against Ceva in France, in December 2017.
  • Ceva Santé Animale filed an opposition against EP’496 in January 2018.
  • In parallel, Ceva filed an action for a declaration of non-infringement in France, in January 2018. As far as I understand, this action is still pending.
  • In April 2018, the judge in charge of urgency proceedings rejected Bayer’s request for preliminary injunction, because Ceva’s letter of November 2017 was not enough to represent an imminent threat, and because there were serious doubts as to the scope of the patent.
  • In February 2019, Ceva obtained its marketing authorization for Forceris®.
  • Ceva started marketing Forceris® in France in April 2019.
  • In May 2019, Bayer obtained its marketing authorization for Baycox Iron®. The product started being marketed in France a few weeks thereafter.
  • Still in May 2019, the oral proceedings of the opposition against EP’496 took place, and the opposition was rejected (the written decision was issued on July 16, 2019; an appeal is pending).
  • On the same day, a cease and desist letter was sent by Bayer to Ceva.
  • An infringement seizure was carried out at Ceva’s French premises a few days later.
  • Ceva countered by requesting that the seized evidence be placed under seal. In a judgment dated June 7, 2019 (commented upon in my previous post), the judge rejected most of Ceva’s requests.
  • On June 20, 2019, Bayer filed a second petition for preliminary injunction against Ceva.
  • Petitions for preliminary injunctions have also been filed at least in Italy, Denmark, Spain and the Netherlands. It seems that Bayer prevailed at least in Spain, an ex parte injunction having been issued on July 17, 2019.

Not a straightforward case indeed.

A first interesting question is why Bayer filed a second petition for preliminary injunction (PI) in June 2019, after having lost its first petition for PI in April 2018.

This is probably an easy one: the main reason for the April 2018 decision was that it was not established at that time that there was an imminent infringement threat. Obviously, the situation had changed once Ceva had obtained its marketing authorization and started marketing its product.

However, there was a second reason for the April 2018 ruling, which was the existence of doubts as to the validity and scope of the patent. Bayer probably took a gamble on the fact that the rejection of the opposition which took place in May 2019 would be a game changer and would lift all doubts that French judges could have regarding the validity of the patent.

But the gamble was lost.

The court in charge of urgency proceedings (unusually a full panel, and not a single judge) quickly agreed that there was indeed an imminent threat this time.

But when they turned to the issue of the likelihood of infringement, things got trickier.

Claim 1 of EP’496 is directed to a formulation containing triazinones of formulas (I) or (II) (let me spare you the details), as well as polynuclear iron (III)-polysaccharide complexes.

Ceva’s argument was that the scope of the patent was limited to formulations for an oral administration. Remember that Forceris® (just like Bayer’s Baycox Iron®) is an injectable formulation, not an oral formulation.

Ready for oral administration?

In front of the EPO, especially when looking at novelty and inventive step, I think that there would never be the slightest doubt that claim 1 of EP’496 covers all formulations, whether oral, injectable or other.

This was actually confirmed by the opposition division in its written decision.

In fact, claim 13 is directed to the use of the formulation for making a drug. And dependent claim 15 adds that the drug is for oral administration. This can be viewed as further confirmation that claim 13 and hence claim 1 are not limited to an oral administration.

But national courts, and especially French courts, can be much more creative when it comes to claim interpretation.

Making reference to article 69 EPC and its protocol, the court performed a detailed analysis of the description of the patent. They noted that all examples relate to oral formulations, and that the general part of the description is also very much concerned with the provision of oral formulations. The technical effects of the claimed combination were also demonstrated in the context of oral formulations. The technical problem was thus formulated in relation with an oral administration, and the court was persuaded by Ceva’s argument that the same technical problem did not arise in connection with injectable formulations.

To put it otherwise, the inventive step of the claimed invention seems to be closely related to the oral mode of administration.

Here are some relevant excerpts of the decision:

The technical problem described by the patent is thus the absence of formulations available in the prior art for treating piglets simultaneously against coccidiosis and anemia, which the skilled person would be dissuaded from doing because the appropriate administration timing of each treatment to ensure efficacy is not the same. If an administration by injection is contemplated, this problem does not arise in the same terms since, as mentioned in the description, this iron compound is then efficiently absorbed and can be administered on day 3 at the same time as toltrazuril. 

[…]

Therefore, the purpose of the formulations of the patent is to efficiently treat piglets against coccidiosis and iron deficiency with a single operation and with an oral administration. It is indeed either the absence of a common treatment window, or the difference in mode of administration, which did not suggest to couple the two active substances at stake in a single formulation.

[…]

Beyond this particular context of oral administration [Bayer] does not demonstrate – and does not in fact claim – that its combination formulation would be more efficient than the separate intake of the two products.

[…]

It is only this surprising effect obtained in the context of an oral administration, and not of an injection (the alternative use of which on the third day is known and is clearly not encouraged), which is shown and that the patent intended to protect.

Most interestingly, the court also made reference to statements made by Bayer during prosecution of foreign patent applications.

This is a form of unofficial file wrapper estoppel which I would say is quite uncommon in French decisions. But I think the court only made reference to foreign prosecution in this particular case because it nicely confirmed their understanding of what the invention is about:

[…] This scope of protection was claimed by Bayer in the context of examination proceedings of the same patent in front of the Canadian patent office. On June 9, 2015, Bayer mentioned in its response to the examiner’s report that “the present formulation is related to addressing two problems simultaneously. One of which is to arrive at an orally administrable formulation, the other being that this formulation thereby allows for the treatment of anemia in animals that are affected by coccidiosis even via the oral route (being biased in the prior art per se to be the less reliable route even in otherwise healthy animals – see D5 above)”.

It is also emphasized that “the presently claimed invention does provide a non-obvious formulation over the art cited. Moreover, as it is clear from pages 10 and 11 of the application, providing an oral formulation that can be used to address both anemia and coccidiosis is clearly advantageous over problems associated with the monotherapy, such as the use of non-oral formulations and divided administration times” […]. The Canadian version of the granted patent is directed to “an oral formulation” […]. 

In front of the Indian patent office, it was also stated that the invention provided “means to simultaneously treat iron deficiency and coccidiosis by an (oral) mode of administration”.

As a result, the court rejected Bayer’s second petition for PI.

For other striking instances of narrow claim interpretations by French courts, see for instance this post, or this one, or this one.

I do find some merit in this way of looking at things. Assuming that the court was indeed right in finding that the actual contribution of the invention to the art was limited to an oral administration (which I have not formed an opinion on), it then seems only fair that the scope of protection should be limited to this contribution. One major issue is legal uncertainty, though: the more the scope of protection may differ from the literal wording of the claims, the more difficult it is for all stakeholders to know where they stand.

Another possible way to handle this situation would be to accept that claim 1 of the above patent is broad and covers all kinds of modes of administration, but that it may then lack inventive step over the entire scope of the claim, if indeed only the oral administration is truly inventive.

Yet, again, I do not believe that this would be a typical EPO-approved approach. When a combination of compounds provides a certain technical effect in a very specific context, in my experience the EPO generally allows a claim to the combination per se, without any restriction to the specific context in which the technical effect actually arises. But could this tradition in fact be too generous?

** Update (Sept. 30, 2019) **

Amandine Métier, counsel for Ceva, has kindly informed me that, in the parallel European lawsuits, a request for PI filed by Bayer in the Netherlands was also rejected on September 17, 2019, due to a serious doubt as to the existence of an inventive step. The Dutch judge analyzed the opposition division’s decision of rejection of the opposition and came to the conclusion that there is a reasonable chance that it will be overturned by the technical Board of appeal.

Amandine has also confirmed that an ex parte PI was issued in Spain. The inter partes hearing will take place next November.

Finally, an ex parte PI was also issued in Germany, which was then confirmed inter partes. The grounds for the decision are not yet known, and an appeal is pending.

Many thanks for this information! As always, pan-European litigation is a roller-coaster for litigants.


CASE REFERENCE: Tribunal de grande instance de Paris, September 11, 2019, Bayer Intellectual Property GmbH & Bayer Animal Health GmbH v. SA Ceva Santé Animale, RG No. 19/56082.

Araxxe wields the axe

Never put all your eggs in the same basket” is probably a truism in many contexts. Including the one of patent rights.

Case in point: Araxxe, a French company, owns European patent No. EP 2087720. The patent gets opposed, gets killed by the opposition division of the EPO, and does not get resurrected by the Board of appeal. But it turns out that Araxxe had another egg in its basket, namely French national patent No. FR 2908572 – originating from the priority application. And the Paris Tribunal de grande instance (TGI) held that the patent was valid and infringed.

Let’s take a few steps back to look more precisely at what happened.

The French patent FR’572 was granted in March 2009. A couple of months later, Araxxe sent a warning letter to the Belgian company Meucci Solutions. Since the exchanges between the two firms did not lead to a resolution, Araxxe filed a complaint in front of the Paris TGI in December 2009. At that time, the European application claiming priority from FR’572 was still pending at the EPO. This led the TGI to issue a stay of proceedings in May 2011. Such a stay is ordered as of right, since the French part of the European patent substitutes for the French patent when it is definitely granted. By “definitely” is meant that a possible opposition should be taken into account.

In this case, Meucci Solutions (later renamed Sigos), did file an opposition against EP’720 after grant, in 2013. The opposition division revoked the patent, and the Board of appeal confirmed this revocation in November 2016 (case T1645/15).

Araxxe could have withdrawn the French designation of the European application in order to try to avoid such a long stay of proceedings. Indeed, the European application as filed contained the same claims as the French patent as granted. Therefore, it was extremely unlikely that the European patent would end up having a broader scope of protection than the French patent. But they did not do so.

Thus, the case resumed after the termination of the EP proceedings, with no EP-FR substitution having taken place due to the demise of the European patent.

Interestingly, Araxxe asserted only claim 8 of the French patent.

One basket, different eggs.

Here is claim 1:

A method for generating scheduled communication operations over one or more communication networks from an information system and verifying their correct invoicing, comprising:
– allocating resources within said information system for a call campaign over a predetermined period of time,
– managing communication equipment in shared time, 
– executing communication or transaction operations, in response to execution orders received from a call scheduling site, 
– collecting invoicing data produced by the operator, and
– automatic data correlation allowing anomaly identification,
characterized in that the method is simultaneously implemented for a plurality of communication operators, the allocated resources being shared, each communication operator being able to issue communication or transaction operation execution orders.

Here is now claim 8:

Application of the method of any one of claims 1 to 6, for the purpose of detecting traffic bypass operations by third parties, said method implementing a comparison of theoretically expected caller identifiers with identifiers actually recorded by the call receiving robot. 

The defendant not only challenged the validity of claim 8, but also that of claim 1, since claim 8 makes reference to claim 1. But the court refused to consider the attack against claim 1, because claim 8 is independent from claim 1, they said.

Under French practice, invalidity counterclaims are in principle only examined when they relate to the claims alleged to be infringed – regrettably so, I would say. This part of the decision is thus relatively unsurprising. As to whether claim 8 can truly be termed an independent claim, I have some doubts. Any dependent claim could actually be termed independent, in that case. Not that this categorization really matters in the end anyway.

As a result, 17 pages of the defendant’s written submissions on invalidity were disregarded. Also, the defendant’s arguments that the patentee had “agreed” that its claims were invalid since they had been modified in front of the EPO, did not fly. The court stated that:

Amending claims during examination or opposition proceedings, in view of remarks made in search reports or observations from the patent offices, is a usual and common practice which cannot be considered as an agreement by the applicant that its right is invalid. 

That is a relief for all patent attorneys I guess.

The remaining validity points to be addressed were inventive step and sufficiency of disclosure.

As an important note, EP’720 was revoked for extension of subject-matter. But the claims of the European patent as granted were different from those of the French patent. Most importantly, the French patent claims were identical to those of the European application as filed. As a result, there was no way the objections entertained by the EPO could apply similarly to the French patent.

Concerning inventive step, the court noted that the claims of the European application were initially held to be obvious during examination. But then the patent was granted, and the opposition division viewed the granted claims as inventive in the preliminary opinion annexed to the summons to oral proceedings. I would say that this is largely irrelevant, again because the European claims as granted were different. Anyhow, the court then looked at the prior art relied upon by the defendant and was not able to find any lack of obviousness.

Concerning sufficiency of disclosure, things unfortunately got somewhat murky in the judgment.

The defendant argued that the European claims had to be restricted to recite a “plurality of robots” – which led to the extension of subject-matter trap; and that this was an essential feature without which the invention could not be implemented. The court replied that claim 8 refers to claim 1, which recites “a plurality of robots“, so that there is no issue. Except that I cannot find this phrase in claim 1. Maybe another claim feature was considered as synonymous or equivalent, but the court did not provide any detailed explanation.

It gets worse at the next sentence, when the court remarked that the European patent was granted anyway. This overlooks the defendant’s whole point, which was that the European claims had to be modified in order to be overcome a serious objection.

And it gets more than worse (I would go as far as saying “worserer”) in the following sentence:

The later revocation of this European patent does not have any impact on the validity of the French patent since said revocation was based on a ground which is specific to the EPC (extension of subject-matter), which has no equivalent in French law. 

Readers will be excused if they have fallen from their seats at this point. Extension of subject-matter, of course, has nothing to do with insufficiency of disclosure, and both are fine grounds of nullity under French law.

I am not saying that the insufficiency attack was very serious, or that the court’s decision to uphold the patent was erroneous – I have no personal opinion at this point. But some parts of the judgment seem to have been drafted too hastily. This is most unfortunate at a time when there is a perception of global increase in the quality of French judgments in patent matters.

In the rest of the decision, Sigos’ challenge against the infringement seizure at a data center owned by a third party failed. As did their challenge against a bailiff report on a website dated December 2009 but filed in court only in November 2017, as a reaction to Sigos’ argumentation.

The court then turned to the analysis of infringement. I will not go into a feature by feature analysis, as the main interesting point in my view was the issue of territoriality. Indeed, Sigos argued that it performed most of its activities abroad.

The court replied:

The infringement seizure report, but also the bailiff internet report and the screenshots prove the use or the offer to use of an allegedly infringing process, by Sigos, in France. Therefore, it cannot be denied that the alleged harm takes place in France. It is irrelevant whether the means to control and handle the supposedly involved robots are in Belgium, where Sigos states its global platform […] and its main assets are located, or whether the correlation operations are performed abroad, since it appears […] that they are active in France with the main French phone companies. 

If my understanding of the above paragraph is correct, the court found it irrelevant that part of the steps of the claimed method may be implemented abroad. In that case, this would be a major departure from the traditional view that the use or purported use of a process has to be implemented in France (period) in order to be infringing.

As a consequence, the TGI issued an injunction against Sigos and awarded damages amounting to 378,000 euros and attorney’s fees amounting to 50,000 euros to Araxxe.

I don’t know if an appeal is pending or not, but some points in the decision would deserve to be further clarified.

At any rate, and going back to my initial comments at the beginning of this post, it is always useful for a right holder to have several different patents or applications in its basket especially for important cases, and this will certainly remain true even if/when the UPC comes into force.


CASE REFERENCE: Tribunal de grande instance de Paris, 3ème chambre, 3ème section, February 1, 2019, Araxxe SAS v. Sigos NV, RG No. 15/15784.

Dolce vita for Amgevita®

Judgments on preliminary injunctions are uncommon, and thus particularly interesting.

So are judgments on prior user rights. Thus, when a case combines both aspects, things get truly exciting.

Fresenius Kabi Deutschland acquired the biosimilars activity of Merck KgaA in April 2017. European patent application No. EP 3145487, filed in May 2015, was part of the deal. The patent was later granted, on August 22, 2018.

The patent relates to a pharmaceutical composition which is a biosimilar of the drug Humira®, based on the antibody adalimumab as an active ingredient.

Humira® is what people call a blockbuster drug. It has a number of therapeutic indications, including rheumatoid arthritis, psoriasis, Crohn’s disease and other inflammatory conditions.

Humira® was developed by Abbott and, according to the court, the SPC which protected the originator’s product expired in France on October 16, 2018.

Several biosimilar drugs were developed and obtained a marketing authorization (MA) from the European Medicines Agency (EMA), including the Californian group Amgen. See here for a news report on the Humira® biosimilar landscape. Amgen’s drug is called Amgevita®. It was the first biosimilar approved by the EMA in March 2017. Its price was set in France the day after the expiry of the Humira® SPC, and my understanding is that Amgevita® was then immediately placed on the market.

Meanwhile, as mentioned above, the EP’487 patent was granted to Fresenius on August 22, 2018. Fresenius was really on the starting blocks with this patent: looking at the EPO file wrapper, the communication under R. 71(3) EPC on the intent to grant was dated July 6, 2018, and the applicant replied by paying the prescribed fee and filing the claim translations… on July 6! This is as responsive as you can be.

But Fresenius’ impatience was quite understandable, in view of the imminent expiry of the Humira® monopoly; and because they were of the opinion that Amgevita® infringed EP’487.

A number of exchanges between Fresenius and Amgen took place in October-November 2018. And since Amgen would not bend, Fresenius initiated infringement proceedings in front of the Juge des référés, i.e. the judge in charge of urgency proceedings in the Paris Tribunal de grande instance, on November 14, 2018. Fresenius notably requested a preliminary injunction (PI) against Amgen.

In parallel, Amgen filed an opposition against the patent at the EPO in December 2018.

The French hearing took place on January 14, 2019, and the judge issued her decision one month later – ruling in Amgen’s favor.

Tutto bene per Amgen.

Amgen challenged Fresenius’ request for PI by stating that such a measure would be unwarranted given that Fresenius itself does not have a product on the market; and by arguing that the patent is invalid and that there is no infringement.

In the decision, the judge first summarized the standard to be applied as follows:

[The judge] must rule on the challenges raised by the defendant, including regarding the validity of the patent itself. She must appraise the seriousness of the challenges, and at any rate should assess the proportion between the requested measures and the infringement alleged by the claimant and take the decision to ban the marketing of the infringing product or not, in view of the risks taken on one side and the other. 

A few years ago, there was a controversy regarding the standard to be applied with respect to validity challenges to PIs. Was a “manifest” invalidity the only acceptable defense to a request for PI? Recent case law is much more defendant-friendly (and probably much more reasonable, for that matter), as the above quote shows, in particular with the reference to a control of the proportionality of the requested measures.

The judge then turned to the assessment of Amgen’s non-infringement defense, which, as mentioned in the introduction, was based on a prior user right. Or rather, on a “prior personal possession” of the invention, as it is known under French law.

The judge summarized the conditions to be met for such a defense to be effective:

          • the possession [of the invention must be] before the filing date of the patent or its priority date;
          • the possessed technology [must be] identical with the patented invention; 
          • the possession [must be] on the French territory; 
          • those claiming such possession [must have acted] in good faith.

The judge also clarified that, based on longstanding case law, the possession of the invention does not require a commercial exploitation of the invention. Possession, in this context, rather corresponds to the knowledge of the invention.

Let’s now turn to claim 1 of Fresenius’ patent:

An aqueous pharmaceutical composition comprising:
(a) adalimumab;
(b) an acetate buffering agent (or acetate buffer system);
(c) a sugar stabiliser, wherein the sugar stabiliser is a non-reducing disaccharide selected from the group including trehalose and sucrose; and
(d) polysorbate 80; and
wherein the composition:
• has a pH between 5.0 and 5.5;
• is either free of arginine or comprises arginine in a concentration of at most 0.1 mM;
• is either free of phosphate buffering agents or comprises a phosphate buffer system in a concentration of at most 0.1 mM;
• is either free of amino acids or comprises one or more amino acids in a (collective) concentration of at most 0.1 mM; and
• is either free of surfactants, with the exception of polysorbate 80, or comprises one or more of surfactants excluding polysorbate 80 in a collective concentration of at most 0.001 mM.

The other claims depend on or otherwise indirectly refer to claim 1.

Amgen Inc. had applied for an authorization to run clinical trials on the product designated as ABP 501, in front of the Agence Nationale de Sécurité du Médicament et des Produits de Santé (ANSM), and the authorization was granted on August 13, 2013. This was before the priority date of EP’487.

The ABP 501 formulation was described in the request for authorization as adalimumab “at 50 mg/ml […] formulated with 10 mM sodium acetate, 9.0% (weight/volume) sucrose, 0.1% (w/v) polysorbate 80, pH 5.2“.

The judge noted that those are the essential features of the claimed invention – which seems to be a reasonable conclusion to draw; and that Amgen’s good faith did not appear to be questionable.

Thus, the only remaining point to be discussed, which in my view was the most tricky one, was whether the possession was “personal” and had taken place on the French territory.

This is potentially a major stumbling block to a prior user right defense in this country, especially in large group of companies. Under French law, a very strict distinction is usually applied between various companies, even if they are affiliated. Therefore, if company A “possessed” the invention, this does not necessarily imply that its affiliate B also “possessed” it. Even more so if A is a foreign company, and B a French one.

In this case, the request for authorization to run clinical trials was filed by the U.S. company Amgen, Inc. But the defendant to the lawsuit was a different company, namely the French subsidiary Amgen SAS.

Here is how Amgen passed the hurdle:

In view of the specific organization of the Amgen group, it is reasonable to consider (especially in urgency proceedings) that Amgen SAS, like the other European subsidiaries of the group, had direct access to the document relating to the clinical trials, and thus to the formulation of the biosimilar product ABP501, owing to the “EPIC” platform of the group, as early as March 2013. In fact, part of the clinical trials were performed in France. It must therefore be held that the possession of the formulation which is identical to the patented one, although originating from the U.S., was realized in France. 

Thus, the judge concluded that the prior user right defense raised by Amgen was a serious challenge to the likelihood of infringement.

By way of overkilling, the judge noted that the lack of novelty argument based on prior art document US 2014/0086930 was also serious.

Consequently, Fresenius’ request for PI was dismissed.

I often conclude my posts by stating how much I look forward to the next developments in the litigation (judgment on the merits, appeal…). But in this particular instance, I don’t think there is anything to look forward to, really.

Indeed, we can see on the online European patent register that Amgen withdrew its opposition a few days ago on May 8, 2019. This certainly means that a settlement has been reached. We thus likely will not hear about this dispute anymore.

By the way, the 9-month opposition time limit has not expired yet – it will on May 22. I’m somewhat curious to know whether others will oppose.

One take-away message from this ruling is that the sharing of information between the various companies of the Amgen group via a dedicated platform was crucial in securing the French affiliate’s right to use the invention despite the patent. This may be a point to keep in mind for other multinational companies.

Although on the other hand it may also be difficult to put into place as a general rule, in view of the necessity to actively protect trade secrets.


CASE REFERENCE: Tribunal de grande instance de Paris, ordonnance de référé, February 14, 2019, Fresenius Kabi Deutschland GmbH v. Amgen SAS, RG No. 19/50489.