Beware, drafters!

This may well be the fourth post almost in a row on a pharma case. Although pharma patent litigation is typically not hyperactive in France, each single case usually generates many interesting questions.

Today is no exception, not only from the litigation perspective but also from the viewpoint of a patent drafter. There are in fact at least two aspects in the decision of the Paris Tribunal de grande instance (TGI) which can be taken as significant warnings for patent attorneys.

The patent in suit is EP 0984957, owned by Swedish company AstraZeneca AB, and it looks quite simple and straightforward.

Claim 1 of the patent simply reads: “the magnesium salt of S-omeprazole trihydrate“.

S-omeprazole, also known as esomeprazole, is a blockbuster drug used in the treatment of gastric ailments. The patent is directed to a specific form of the drug.

Claims 2-4 further specify the form of the drug. Claims 5-8 relate to a process for the preparation of the drug. Claim 9 relates to a pharmaceutical composition comprising the drug of claim 1 and another one. Finally, claim 10 is a Swiss-type claim mentioning the treatment of a gastric acid-related condition.

In July 2011, AstraZeneca initiated infringement proceedings against Ethypharm based on this patent in view of the exploitation by this French company of generic esomeprazole.

Ethypharm of course filed a counterclaim for nullity in due time. But things did not go smoothly, and the lawsuit seemed to drag on forever.

First, an expertise was ordered so as to sort out the documents seized during an infringement seizure. Second, the parties discussed and initially agreed to the designation of another expert, as far as I understand in order to weigh on whether there was an infringement or not. Third, this expert was finally not designated, as AstraZeneca admitted that the generic esomeprazole on the market no longer infringed the patent (while maintaining that there had been infringement in the past). Fourth, AstraZeneca was compelled to file the experimental evidence based on which the above admission was made.

In summary, the judge in charge of case management certainly had her work cut out for her. And this leads us to the judgment issued by the TGI on June 23, 2017.

The first aspect of the decision that deserves a discussion is claim interpretation.

The patent proprietor stated that claim 1 covered any magnesium salt of S-omeprazole trihydrate. But, according to the defendant, claim 1 only protects a specific form of magnesium salt of S-omeprazole trihydrate.

The court went for the latter interpretation.

The court referred to article 69 EPC and the protocol on the interpretation, and remarked that “the judge must not make any interpretation if the claim is self-sufficient and should not denature the claim on the pretext of claim interpretation“.

One may wonder if the court did not do just that, i.e. interpret a claim based on the description, although the claim seemed quite self-sufficient.

At least from an EPO perspective, I have little doubt that a claim simply entitled “the magnesium salt of S-omeprazole trihydrate” would be seen as covering any magnesium salt of S-omeprazole trihydrate based on its plain wording.

But this is not the option that the court used. Instead, the court had a close look at the description of the patent and noted inter alia the following:

Since the wording of claim 1 does not comprise any determiner, one should refer to the description and drawings to interpret it, with respect to the skilled person […]. 

It is also specified that omeprazole and its salts as well as the R and S enantiomers of omeprazole and their salts are known from the art […] and that the magnesium salt of the S enantiomer of omeprazole exists in different forms. 

As mentioned in the description, the field of the invention does not relate to a “novel form of S-omeprazole” as suggested by the title of the patent, since this molecule was already identified, but a “novel form  of trihydrate of the magnesium salt of the S-omeprazole” […], which implies that it is a trihydrate form other than known from the art, with specific features such as “substantially pure” […], devoid of magnesium salts of R-omeprazole […] and devoid of other forms of magnesium salts of S-omeprazole (including the dihydrate form used for the preparation of the composition). 

This product is said to be “highly crystalline” […] since it has a larger crystallinity than any other form of magnesium salt of S-omeprazole, including trihydrate forms […]. 

This compound is characterized by an X-ray powder diffractogram [XRD] which shows main peak positions and intensities […], or by spectroscopy […]. 

Crystalline forms at their best

In support of its proposed interpretation, AstraZeneca filed an affidavit by a doctor Byrn, as well as a judgment by the New Jersey district court on a corresponding U.S. patent, per which the magnesium salt of esomeprazole trihydrate was novel at the time the invention was made and the patent was to be interpreted in a broad manner.

By the court was not convinced and noted that

the prior art previously disclosed a non-pure form a magnesium salt of S-omeprazole trihydrate, as can be derived from the laboratory tests performed on molecules recited in previous patents […]. [And] it can be deduced from the aforementioned elements in the description (notably the very title of the patent and the wording of the claims, the use of determiners in the text of the description such as “A” or “This” […] to mention the product […]) that the invention does not relate to any trihydrate of magnesium salt of S-omeprazole as suggested by AstraZeneca, but to a specific trihydrate having defined features (substantially pure, crystalline, with specific peaks) […]. 

The court repeatedly stated in the judgment that some magnesium salts of esomeprazole trihydrate were known from the art. But it does not seem to me to clearly stem from the patent itself. It is possible that the recreation of prior art esomeprazole could show that this particular salt form was already present, but isn’t this rather an issue of novelty of the claim?

Also, it is extremely striking that the court placed so much emphasis on how the description was drafted.

Here is the thing, I think. Paragraph [0009] of the patent for instance starts with: “the magnesium salt of S-omeprazole trihydrate obtained according to the present invention is substantially free from magnesium salts of R-omeprazole“. Then paragraph [0010] starts with: “the compound of the invention is characterized by the positions and intensities of the major peaks […]“.

If my understanding is correct, it could have made a world of a difference if these paragraphs had mentioned that the compound “according to some embodiments” is substantially free from other salts, or that the compound of the invention “may be” characterized by certain positions and intensities of peaks.

Therefore, beware drafters! Even if you get what you consider a broad claim granted, it may be interpreted by a court in a much narrower manner if the description gives the impression that the invention has a number of other essential features.

Surprising? Well, with Munich eyes, certainly. But not really if you are familiar with French case law.

Today’s decision is for instance very reminiscent of the approach recently taken in the rosuvastatin case. Even electronics cases are handled in a similar manner, as illustrated here.

The TGI’s comment on dependent claims 2-4 is enlightening in this respect. Claim 2 mentions that the compound is highly crystalline. Claim 3 mentions that it is stable. Claim 4 mentions that it has a certain XRD pattern. A common way of looking at this would be to state that claim 1 is broader than claims 2-4 and thus is precisely not limited to the specific XRD pattern, or to a highly crystalline form, etc. But the court reached the exact opposite conclusion and noted that

these claims define the specific features of the compound mentioned in claim 1.

Now, one may criticize the court’s rewriting of straightforward claim 1 and the challenge this presents to legal certainty. 

But there may nevertheless be a possible justification for this bold approach.

As the patent only discloses one very specific crystalline form of trihydrate, it could be argued that the protection should be limited to this specific form and should not extend to other forms of trihydrate which were not actually made available to the public by the patent. Maybe this is what the judges had in mind.

After this section on claim interpretation, the judgment contains a section on sufficiency of disclosure and novelty.

Both grounds of nullity were discarded by the court. In fact, the objection of lack of novelty was put forward only in case the patentee’s broad interpretation prevailed – and this was not the case.

And then comes the other important point in the judgment, namely inventive step.

At this point, the patent was revoked, based on a very brief justification.

The court generally made reference to the problem and solution approach. The dihydrate form of the compound was the closest prior art. According to the patent, the new form is more stable and easier to characterize and synthesize.

But the court refused to take this statement of a technical problem into account:

Yet, beside the disclosure of the molecule on a new form (trihydrate) and the presentation of preparation and identification methods of this product, whereas the pharmaceutical industry wants to find further forms of an active, even if the properties to be expected from the new molecular forms are not known, the patent does not define any problem. It just mentions that the product is more stable, easier to synthesize and handle and identify, without however supporting this statement in the patent itself, by studies and researches and results. Thus, the patent does not mention a problem to be solved let alone demonstrate the resolution of this technical problem. 

Moreover, it is acknowledged that in front of the EPO or in litigation the patentee may refer to posterior tests, but these must consolidate results already contained in the patent […]. 

Therefore, claim 1 is invalid for lack of inventive step as it does not solve a technical problem.

To summarize: the patent does mention a technical problem solved by the invention. But in the absence of any experimental evidence in the patent that this problem is indeed solved, the problem is not taken into account. Post-published evidence is considered to the extent that it can merely supplement data already contained in the patent, but not replace it entirely.

So far so good, and the approach taken by the court seems consistent with EPO case law. See in this respect the catchword of oft-quoted T 1329/04:

The definition of an invention as being a contribution to the art, i.e. as solving a technical problem and not merely putting forward one, requires that it is at least made plausible by the disclosure in the application that its teaching solves indeed the problem it purports to solve. Therefore, even if supplementary post-published evidence may in the proper circumstances also be taken into consideration, it may not serve as the sole basis to establish that the application solves indeed the problem it purports to solve.

However, directly jumping to the conclusion that the claims lack inventive step, as the court did, is something a Board of appeal would probably not do.

Instead, they would likely reformulate the technical problem in a less ambitious manner, e.g. in this case as providing an alternative form of esomeprazole, and would then investigate whether it was obvious for the skilled person to achieve the claimed invention with this unambitious technical problem in mind.

Let’s assume for instance that it was technically difficult to make the trihydrate form. In this case, a Board could arrive at a finding of inventive step. In France, the absence of an ambitious technical problem is in itself indicative of a lack of inventive step.

This confirms that French courts are more severe in the appraisal of inventive step.

At any rate, here comes the second advice for drafters is: beware of the plausibility of the technical effects of the invention!

My understanding is that it is kind of a hot topic at the EPO these days. Well, it is an even more serious matter in this country.

And this does not just apply to “therapeutic” effects.

In this case, the alleged technical effect was not related to the treatment of an illness but rather to physical characteristics of the drug (stability, ease of handling…).

So, we are all doubly warned, I guess.


CASE REFERENCE: Tribunal de grande instance de Paris, 3ème chambre 3ème section, June 23, 2017, AstraZeneca AB v. Ethypharm, RG No. 11/11460.

The salt of the judgment

When you are in private practice, you sometimes get to work with clients who come up with very creative legal arguments. Or you get to work with clients whose competitors are unfortunately very creative. Rating the chances of success of such creative arguments can be difficult, especially when there is not yet any case law to refer to.

Let us take one example. A patent protects a molecule M1. A competitor markets a drug containing a molecule M2. When this drug is taken up in the body of the patient, molecule M2 is converted to M1. Is this a situation of contributory infringement?

It is not so common for thought-provoking ideas such as this one to be actually tested in court. I was thus quite happy to hear about Shionigi & AstraZeneca v. Biogaran, thanks to Lionel Vial (the decision does not appear on the INPI database). So, if you would like to know the answer to the above question, you may directly go to the end of this post to find out about the guidance offered by the presiding judge of the Paris Tribunal de grande de instance, Marie-Christine Courboulay.

But not so fast, as other aspects of the case are very worth being reviewed.

The patent at stake is EP 0521471 owned by the Japanese pharmaceutical company Shionigi, and licensed to the Swedish group AstraZeneca. The patent covers a drug for the treatment of hypercholesterolemia, called rosuvastatin.

The patent is already relatively old, as it was filed in 1992 and claims a priority of 1991. It went unopposed and expired in 2012. But a Supplementary Protection Certificate (SPC) was granted in 2005 by the French Institut national de la propriété industrielle (INPI), extending the duration of protection until June 29, 2017. And then on top of that, a pediatric extension was granted in 2015, further extending the duration of protection till December 29, 2017.

The SPC was granted for the product simply identified as “rosuvastatin”, based on a Dutch Marketing Authorization (MA) for the drug Crestor, which contains a calcium salt of rosuvastatin.

Biogaran developed a generic version of rosuvastatin. In 2014, Biogaran warned AstraZeneca and Shionigi that they had applied for an MA for the zinc salt of rosuvastatin, and stated that this product did not infringe the SPC. AstraZeneca and Shionigi did not agree with the latter statement.

Two years later, Biogaran obtained its MA and announced that it intended to launch the generic drug in July 2016 – i.e. before the term of the extended SPC.

As a result, AstraZeneca and Shionigi filed a motion for preliminary injunction (PI) in front of the judge in charge of urgency proceedings (juge des référés) on April 26, 2016. The judge issued her order on July 4, 2016.

The criteria assessed by the juge des référés for deciding on the PI are whether infringement is likely, and whether there is any serious validity challenge.

In the present case, Ms. Courboulay deemed that there is no serious validity challenge; but that, on the other hand, infringement is not likely.

As a preliminary step in the reasoning, the claims of the patent were interpreted in view of the description. It is certainly a very good thing when a patent is construed as a first step, and thus in a consistent way for both validity and infringement.

In the present case, this preliminary interpretation step led to a result which may come as a shock to a number of foreign patent attorneys but which seems to be in keeping with the tradition of French patent law.

Claim 1 of the EP’471 patent reads as follows:

The compound (+)-7-[ 4-(4-fluorophenyl)-6-isopropyl-2-(N-methyl-N-methylsulfonylamino)pyrimidin-5-yl)-(3R,5S)dihydroxy-(E)-6-heptenoic acid or a non-toxic pharmaceutically acceptable salt thereof.

This is the full name of rosuvastatin, either in the form of an acid or of a salt – any possible salt, it would seem.

Dependent claims 2, 3 and 4 respectively and specifically relate to the acid form, to the calcium salt and to the sodium salt of rosuvastatin.

The judge referred to article 69 EPC and the interpretative protocol, and made the following comments as to which rosuvastatin salts are protected by the patent:

[The patent] is drafted as disclosing a new pharmaceutical active substance, rosuvastatin, and the pharmaceutically acceptable salts of this substance, and the cited examples are only indicative and do not limit the protection to the only cited examples. However, the description and notably paragraph 007 provides examples of pharmaceutically acceptable non-toxic salts of rosuvastatin and makes reference to two families of metallic ions which were commonly used in the formulation of tablets of statins already known at the priority date, and in particular alcaline metal ions and alcaline earth metal ions. […] Thus, the pharmaceutically acceptable non-toxic salts are in these two families […], as the patent does not give any indication to the skilled person to select a salt in another family. On the contrary, the description focuses on these salts because they were already commonly used for the formulation of statin tablets; it does not provide any other lead, so that the skilled person will select a salt in the families offered by the patent as being the only relevant families for statins. He/she will not try to select salts of other families as the patent does not teach anything in this respect. 

Therefore, only salts belonging to the cited families, namely alcaline metals like sodium or alcaline earth metals like calcium, or those which can be part of the most commonly used cations for the formulation of statin tablets are concerned by the patent. The other salt families are not mentioned and thus excluded from the scope of protection of the patent

In summary, claim 1, taken at face value, covers any pharmaceutically acceptable salts of rosuvastatin. But according to the judge, the actual scope of the patent is narrower, as only two families of salts are covered: alcaline metal salts (such as sodium) and alcaline earth metal salts (such as calcium).

So beware: the interpretation of the claims in view of the description can result not only in a broadening of the scope of protection relative to the literal wording of the claims, but also in a restriction of the scope.

Just to be clear, this finding does not seem to be related to the existence of an SPC. The (re)definition of the scope of the patent was made with respect to the patent, not the SPC. See in particular the following comment in the judgment:

Although the Crestor MA designates the calcium salt of rosuvastatin, the scope of the […] SPC extends to all forms of rosuvastatin as covered by the EP’471 patent.

A judgment to be taken with a grain of salt?

Again, the limitation of the patent devised by the judge may come as a surprise from a European perspective. But I think it is in keeping with traditional French practice. French judges have consistently had a large degree of discretion in defining the scope of protection based on the overall teaching of the patent – or spirit of the invention.

Maybe another way to look at this would be to consider that the invention was sufficiently disclosed in the patent only for the two salt families explicitly mentioned (and exemplified) in the patent, which, as far as I understand, were the two usual salt families for other similar drugs at the priority date. Using other salts would have required further research.

Anyway, the consequence of this interpretation of the claim is that there was no direct infringement of the patent. Indeed, the Biogaran product is a zinc form of rosuvastatin, and zinc does not belong to the alcaline or alcaline earth metal families.

And now comes the last part of the judgment, which deals with an auxiliary argument by the claimants, which was articulated as follows:

Biogaran commits acts of contributory infringement because it provides essential means for implementing the invention [….]. The salt form under which rosuvastatin is administered decomposes as follows, as soon as it reaches the gastro-intestinal system of the patient. The salt is dissolved, which leads to the separation of the cation (for example the calcium or zinc ion) and of the anion (namely rosuvastatin in anionic form). Since the pH of the stomach is low (less than the pKa of the acid group of rosuvastatin), the rosuvastatin anion surrounded by H+ protons attracts them so as to make the free acid form of rosuvastatin. […] Therefore the invention is implemented in vivo, in the patient’s stomach, after the administration of the Biogaran rosuvastatin, which thus infringes the EP’471 patent by contributory infringement. 

An interesting theory, but which did not hold water for the judge:

The act of infringement in suit can only be the supply or marketing of the drug, and not the decomposition of the drug in the patient’s body. […]

Contrary to what is argued by the plaintiffs, contributory infringement does not consist in providing means allowing the decomposition of the rosuvastatin salt in anionic rosuvastatin and salt in the human body. This is a consequence of the ingestion of the drug in the body, and of its mode of action but it is not an essential means of the invention, which only relates to the formulation of the rosuvastatin tablet. […]

[Contributory infringement] cannot be relied upon in the context of an artificial auxiliary argument […] whereas the Biogaran product is a generic of Crestor and thus clearly intended for the same therapeutic indication.

Biogaran does not supply any means but a product equivalent to the one protected by the EP’471 patent and the SPC so that contributory infringement is neither established nor likely.

The reasoning is very clear. Contributory infringement is a notion intended to target suppliers of only part of an invention. It is “artificial” and therefore wrong to try to extend this notion to the situation of a drug which undergoes a chemical transformation into a patented compound only in the patient’s body.

It is remarkable, though, that the judge noted in passing that the Biogaran product is equivalent to the claimed invention. It seems that the plaintiffs did not argue infringement under the doctrine of equivalence. Would the outcome have been different if they had? Maybe we will find out with the case on the merits (assuming it proceeds to trial).


CASE REFERENCE: Tribunal de grande instance de Paris, ordonnance de référé, July 4, 2016, Shionigi Seiyaku Kabushiki Kaisha & Astrazeneca UK Ltd v. Biogaran, RG No. 16/56067.

Of employees and drugs

No, this is not a post about employees who do drugs. In fact, contrary to what the title suggests, there is nothing in common between employees and drugs in my mind, except that I would like to briefly report on two different subjects and that it is somewhat more convenient to group both in a single article.

Drugs first, with a follow-up on the sofosbuvir case which was reported on earlier on this blog.

As readers may remember, an opposition division of the EPO maintained Gilead’s patent EP 2203462 on a blockbuster drug for the treatment of HCV infection further to the oral proceedings which took place on October 4-5, 2016. Several granted claims were deleted in the amended version of the patent due to extension of subject-matter, including a claim specifically directed to sofosbuvir. One remaining claim recited a generic formula which could be interpreted either as covering both sofosbuvir and its stereoisomer, or as covering only the mixture of sofosbuvir and its stereoisomer. This left a number of observers wondering what the amended patent is really about, and more importantly whether it sill protects Gilead’s drug.

The update is that the written decision of the opposition division was issued on October 31, 2016. It can of course be downloaded from the online register.

In this decision it seems quite clear that the opposition division has chosen the second interpretation. In other terms, they believe that the main remaining claim covers a mixture of sofosbuvir and its stereoisomer. Indeed, the term “racemate” is repeatedly used in the decision when referring to the subject-matter of the claim.

This is especially clear in the section of the decision which deals with the ground of opposition of insufficiency of disclosure. It was alleged by one of the opponents that the patent did not contain enough information to make the individual stereoisomers. The opposition division rejected the objection with the following statement:

The OD considers that claim 1 is directed to a racemate i.e. a mixture of the enantiomers and not the pure enantiomers. As indicated by the Patentee it is not contested that the racemate of claim 1 can be produced. This interpretation of claim 1 means that it is not necessary to come to a decision as to whether or not the patent in suit sufficiently discloses how to isolate and characterise the enantiomers. This issue is not relevant to claim 1. The OD considers that the auxiliary request 1 meets the requirements of Art. 83 EPC.

So, if one follows the opposition division’s interpretation, it seems that the amended patent may no longer cover Gilead’s drug, which is as far as I understand a pure isomer and not a mixture. But here is the catch: national courts are not bound by the interpretation put forward by the EPO. As regards French courts, many illustrations of this have already been provided in previous posts. So, the conundrum is still there. Also, it is all but certain that multiple appeals will be filed. So, in 2 to 5 years we will be able to read the Board’s take on this issue.

But we will not have to wait that long to comment on the case again, as new interesting developments still keep coming up. In a letter dated November 3, 2016, the proprietor’s representative requested a correction of the minutes of the oral proceedings, as well as of the decision. She stated that the minutes and decision misrepresent the patentee’s position regarding the scope of claim 1.

Indeed, the opposition division reported that the patentee had stressed that claim 1 “does not embrace individual stereoisomers“; whereas in fact, says the representative’s letter, the patentee always expressed the view that individual stereoisomers are “within the scope of claim 1” but that claim 1 “does not particularize individual stereoisomers“.

Even if the opposition division were to correct the decision and the minutes as requested by the patentee (which could be a long shot), the opposition division’s own assessment of the scope of claim 1 would remain unaltered. But the patentee’s actual statements during the oral proceedings might possibly be of relevance in front of a judge, which is the reason for this pre-appeal move.

Interestingly, the representative asked for new oral proceedings if the request for correction were to be rejected. So, make sure to grab your bucket of popcorn and to watch the comments section below for any update on this matter – all the more so that one of the opponents also made a (different) request for correction. The opposition division’s job is certainly not an easy one in such a high profile case.

As a side note, the decision of the opposition division contains a number of other interesting aspects. Entitlement to priority was challenged, which gave rise to a review of U.S. law in relation to assignments. There is also a long discussion on the public availability of a document D5 which is a university thesis. The opposition division came to the conclusion that the document was not part of the prior art because, on the balance of probabilities, there seems to have been a bar on access to the document at the relevant period of time.

The inventive step section is also noteworthy. Several starting points were taken into consideration by the opposition division, and the surviving claims were found inventive over all starting points, the technical problem being the provision of alternative HCV inhibitors.

Now, here comes the “employees” part of the post which, as I warned, is truly unrelated to the first part.

A device for employees' drug screening
A device for employees’ drug screening

The French patent and trademark office (INPI) has recently released an extensive study on compensation policy for employees’ inventions.

According to French law, all inventions made by employees in the context of a task assigned to them by their employer (be it a general task assigned in the employment agreement or a specific task assigned during the course of employment) belong to the employer. But the employer must pay a bonus to the employees – or “rémunération supplémentaire“.

The core of the INPI’s study is a survey on how businesses deal with this legal requirement. This is quite enlightening as the statute does not provide many details and leaves it open how the compensation should be calculated and when it should be paid. Case law on this topic has provided some guidelines without however setting any generally applicable rules.

There are many interesting questions in the survey, but I picked a few ones which I found particularly blog worthy:

First, the form of the compensation. 60.5% of companies offer a lump sum-only compensation. Only 1.2% provide a compensation which is entirely dependent on whether/how the invention is exploited. The rest of the surveyed rely on a combination of both. Lump sum-only systems are certainly easier to implement (and potentially cheaper). But compensation systems which somehow take into account the exploitation of the invention might be more resistant to a court challenge.

Second, the points in time at which the compensation is paid. There are many different possibilities here, and in some companies several installments are paid over time. Thus, bonuses are typically paid when the initial patent application is filed (76.5% of respondents); when patent applications are filed abroad (33.3%); when a patent is granted at the EPO or abroad (34.6%); during exploitation of the invention (33.3%); etc. Interestingly, 8.6% of the surveyed said an installment is paid as soon as the employer becomes aware of the invention.

Third, the amount of the compensation. This is of course a key aspect. The study makes a distinction between lump sum-only compensation systems and mixed compensation systems (wherein the exploitation of the invention is partly taken into account):

  • In lump sum-only systems, the median value of the minimum awarded bonus is 500 €, while the median value of the maximum awarded bonus is 2,000 €. The maximum amount reported in the entire survey is 11,000 €.
  • In mixed systems, the median value of the minimum awarded bonus is 400 €, while the median value of the maximum awarded bonus is 15,000 €. The maximum amount reported in the entire survey is 105,000 €.

In summary, the span is broader in mixed systems, with a shift towards higher compensations. I assume that the higher bonuses must be rare: they must correspond to exceptionally valuable inventions.

The study also contains a breakdown of lump sum installments, depending on the point of time at which they are paid. For instance, in the majority of cases, the bonus for the initial patent application filing is between 500 and 1,000 €. But foreign filing bonuses and patent grant bonuses are somewhat higher, with a majority of cases between 1,000 € and 2,500 €.

Fourth, the frequency of disputes between an employer and its inventors. Fortunately, 67.2% of those surveyed reported no dispute. In 10.1% of cases, the employer received at least one complaint from an inventor. In 10.1% of cases, a dispute had to be handled by the national conciliation commission (CNIS, Commission nationale des inventions de salariés). In 6.3% of cases, a dispute went as far as a lawsuit in front of the Tribunal de grande instance (TGI).

If we add the CNIS and TGI cases, this is 16.4%, which seems to me like a relatively high dispute rate.

The study contains a number of other interesting data. It offers a comparison with a similar study performed in 2008. It provides practical examples of compensation systems set up by a number of companies, such as Air Liquide. This should be most useful for those businesses which still need to set up their own compensation system. In this respect, 7.4% of those surveyed still do not have a compensation system in place, although this is required by the law. My guess is that among those not surveyed, including many IP-unaware SMEs, the proportion could be significantly higher.

The study also provides a comparison of the French legal framework with other systems abroad.

Some of the annexes are also useful. One of them provides a list of bonuses awarded by the CNIS between 2011 and 2015. The amount awarded by invention ranges from 333 € to 50,000 €, with a total amount (for all inventions in dispute) ranging from 1,000 € to 300,000 €. This broad range certainly corresponds to a large variety of inventions, from useless ones to extremely profitable ones.

Another annex provides a list of damages awarded to employees by courts of law (as a compensation for unpaid invention bonuses) in the past few years. Again, the span is broad. However, the highest amount on the table (more than 1,000,000 € for two inventions) was in fact in a case where the inventions were not made in the context of a task assigned to the employee and therefore pertained to a different legal regime – one where the employer has a right on the invention but must buy the invention from the employee.

In summary, this is a must-read in particular for in-house patent attorneys and more generally for all involved in employees’ inventions in this country.

The sofosbuvir conundrum

Few patents get famous enough to make it to the headlines of the general press. Some Apple patents are among them, such as those nicknamed “slide-to-unlock” or “rubber-banding” – especially thanks to the world war waged against Samsung. Other patent celebs include those on blockbuster pharmaceutical drugs.

In this latter category, one patent family in particular has attracted some fuss over the past few years. It is the one which covers the drug sofosbuvir, marketed under the name Sovaldi.

Blockbuster drug patents can beat even patents on blockbusters.
Blockbuster drug patents can even beat patents on blockbusters.

Sofosbuvir has markedly improved the treatment of hepatitis C virus (HCV) infection. But in many countries, in the absence of any generic version of the drug, the price of HCV treatment has skyrocketed as a result. This has aroused vocal protests by a number of NGOs (see e.g. here).

In Europe, the sofosbuvir patent (or at least one sofosbuvir patent) is EP 2203462, owned by Gilead. It was opposed after grant by ten different parties, including the NGO Médecins du monde, a number of generic manufacturers, and a number of straw men. Oral proceedings took place on October 4-5 in Munich. The only public information available as of today on the online register is that the patent was maintained in amended form. The minutes of the oral proceedings and the written decision of the opposition division have not been issued yet.

Tufty the Cat has recently made assumptions on his blog regarding the claims which were uphed by the opposition division. I have now received a confirmation by someone who attended the oral proceedings that Tufty got the claim amendment right.

But there seems to be some confusion, to say the least, after these oral proceedings. Indeed, Gilead and its opponents seem to have different views as to whether the amended patent still covers sofosbuvir or not.

In order to understand how there can be such a controversy, it is necessary to go back to some basic notions of stereochemistry.

There are many examples of chemical compounds having different 3D atom configurations although they share the same 2D chemical formula. These different configurations are referred to as stereochemical forms, or diastereomers, of a given compound.

In the pharmaceutical field, identifying the different stereochemical forms of a compound is of prime importance, as diastereomers often have different pharmacological effects. By way of example, the so-called (S) stereochemical form of ibuprofen is a hundred times more active than the so-called (R) stereochemical form.

Besides, such chemical compounds are generally not synthesized as stereochemically pure compounds, but as a mixture of diastereomers. It is often necessary to further purify this mixture in order to isolate the most active diastereomer.

Gilead’s patent as granted contains six claims, including three independent claims 1 to 3. For once, let’s start with claim 2.

Claim 2 is directed to a compound of the following formula:

sofos-claim-2

This is sofosbuvir.

Then claim 3 is directed to another compound of the following formula:

sofos-claim-3

This other compound looks very much like sofosbuvir, since it is its diastereomer. The difference between the two compounds is highlighted in yellow. In the sofosbuvir formula, the P-O bond is shaded in black and the P-N bond is hatched, which means that, in 3D, the oxygen atom is in front of the phosphorus atom, while the nitrogen atom is behind. It is exactly the opposite in the diastereomer of claim 3.

Now, here is the formula of the compound of claim 1:

sofos-claim-1

In this formula, the relevant P-N and P-O bonds are depicted as simple lines, which means that the 3D configuration is not specified.

Claims 4-6 simply recite a composition comprising the compound of one of respective claims 1-3 and a pharmaceutically acceptable medium.

According to my source, claims 2, 3, 5 and 6 were found by the opposition division to extend beyond the contents of the application as filed. As a result, the patent proprietor filed an auxiliary request in which these claims were deleted, and only granted claims 1 and 4 remained. The opposition division came to the conclusion that this auxiliary request meets all the requirements of the EPC, and made the interlocutory decision of maintaining the patent in this amended form.

The decision should soon be issued in writing, and will be open to appeal by all parties.

And now, here comes the conundrum.

The patent as amended during first instance opposition proceedings no longer contains claims 2 and 5 which were specifically directed to the sofosbuvir compound and the sofosbuvir-containing medicament. The question is whether the remaining claims 1 and 4 still protect sofosbuvir and sofosbuvir-based drugs.

One possible interpretation is that claim 1 is a generic claim which protects both diastereomers. It is broader than claim 2, and therefore the scope of the patent remains completely intact. Quite frankly, I think this is the interpretation that most patent attorneys would consider as the most logical one.

However, another possible interpretation is that claim 1 is directed to a diastereomeric mixture, i.e. a mixture of the compounds of claims 2 and 3 as granted. Arguments in favor of this interpretation could be that: claim 1 does show a 3D configuration in other parts of the molecule; thus, the absence of 3D information around the phosphorous atom means that such information cannot be provided, because both forms are present in the compound; furthermore, granted claims 2 and 3 are independent claims and do not depend on claim 1 which confirms that they are not particular embodiments of claim 1.

According to this second interpretation, a generic sofosbuvir drug would arguably no longer infringe the patent – as the drug would not contain a diastereomeric mixture.

It seems that the description of the patent does not fully clearly support one interpretation over the other.

I could very well see a French court coming to the conclusion that since the claim specifically directed to sofosbuvir was deleted, the patent may not possibly protect this molecule any longer. Maybe the written decision of the opposition division will contain a position as to what claim 1 means. But then, maybe not. And anyway, any position that they may have taken is not binding on national courts.

With that in mind, I would certainly not bet my life on either interpretation. Would readers be keen on taking a vote?

I would like to thank my source for this hot information. I have also been told that a number of interesting topics were discussed during the opposition proceedings, in connection with extension of subject-matter, priority and inventive step. So we should watch for the written decision of the opposition division when it is issued.


CASE REFERENCE: ongoing opposition proceedings against EP 2203462 to Gilead Pharmasset LLC.

Terminal lawsuit

Standard-essential patent (SEP) litigation is something of a venture, as already illustrated in a previous post. The “terminal lawsuit” reported in today’s post provides yet further illustration. In fact, not only was this a lawsuit on a terminal, namely an electronic payment terminal, but it also turned out to be terminal for the patent proprietor’s business strategy.

The story begins, as always in such a case, with licence negotiations between a patent proprietor, Koninklijke KPN NV, which I will be happy to simply refer to as KPN, and another big player, France-based Ingenico Group. The standard at stake is the EMV standard, which stands for Europay, Mastercard, Visa. Self-understandably, this is a standard relating to payment cards, payment terminals, and the protocols according to which they interact together.

KPN owns European patent EP 0873554. Ingenico manufactures and markets EMV-compliant payment terminals and KPN argued that the patent is implemented by the EMV standard. KPN sued Ingenico for infringement in front of the Paris Tribunal de grande instance after the licence negotiations failed.

In short, KPN lost. For the long story, we need to refer to the very detailed judgment which is dated April 14, 2016.

A key part of the discussion relates to the determination of the scope of protection of the patent. The judgment contains a number of interesting (albeit sometimes controversial) statements in this respect.

Here is claim 1 of the patent. Not exactly an easy read, but we have seen worse, haven’t we:

Method of protectedly performing a transaction using an electronic payment means and a payment station, the method comprising:

– an initial step, in which:

– the payment station transfers a first random value to the payment means,

– the payment means, in response to said first random value, transfers a first authentication code to the payment station, which authentication code is determined on the basis of at least a first start value, a first random value and first transaction data of the payment means using a predetermined process, the process further producing a first end value,

– a further step, in which:

– the payment station transfers a second random value to the payment means,

– the payment means transfers a second authentication code to the payment station, which authentication code is determined on the basis of at least a second start value, the second random value and second transaction data of the payment means using said process, the second start value being based on the first end value.

The scope of claim 1 was in dispute. Claim 1 generically mentions an “electronic payment means”. But the defendant argued that the term should be construed as only covering a card containing units to be debited, and not other electronic cards such as bank cards.

This claim construction was of course vigorously fought by the plaintiff, since the allegedly infringing payment terminals were used with bank cards. Said KPN:

[…] The embodiment mentioned in the description concerning prepayment electronic cards does not restrict the scope of the invention, which relates to any payment mode using a chip card such as a bank card. The transfer of the balance can be omitted or replaced by an acknowledgment receipt or by a card authentication. […] In the claims as well as the description and drawings, in particular Figure 1 which shows a chip card used to make a payment in a shop and connected to the card carrier’s bank and the shopkeeper’s bank, the expression “electronic payment means” encompasses any type of chip card and not only a prepaid, rechargeable card. This expression, […] just like the terms “chip card” or “smart card”, covers any type of payment card, including bank cards. 

The court started with making a few general remarks on claim interpretation. The following passage in particular, on claim drafting, caught my attention and might leave some patent attorneys flabbergasted:

[…] The structure of the claim is essential for determining the […] scope of protection afforded by the right. The claim preamble sets forth the state of the art, whereas the characterizing part, introduced by the words “characterized in that”, sets out the elements which make up the invention, namely the novel and inventive means taken in their form and function, which apply to the object comprised in the state of the art and benefit from exclusive protection. The characterizing part is only considered “in relation” with the preamble because the latter is the support for the former, and because the means for which protection is claimed apply to the product described in the preamble. This relation, just like the interpretation which is made in the light of the description and drawings, does not result in an extension of protection to elements which cannot benefit from a monopoly for they are comprised in the state of the art; but it identifies the concrete subject-matter of the means which make up the invention. The violation of the exclusive right is in fact characterized not by the reproduction of elements in the preamble but by that of the means claimed in the characterizing part

Many professionals (including myself) are uncomfortable with the idea that the interpretation of a claim should depend on where in the claim the “characterized in that” phrase is placed. The division of the claim into two parts may not necessarily accurately reflect the contribution of the invention to the art: only one piece of prior art is usually taken into account when drafting a two-part claim; the applicant may not agree with the characterizing portion demanded by the examiner but may not have a lot of leeway to challenge his/her position; etc.

Although it makes perfect sense for the court to focus on what the invention is really about, relying on the two-part form to perform this analysis could lead to unfair outcomes.

The court regretted that, in the present case, “the structure of claim 1 does not comply with the implementing regulations since it does not comprise a clearly stated characterizing part“. The court seems to have overlooked that R. 43 EPC explicitly provides that the two-part form should be used “wherever appropriate“, as opposed to in all circumstances. The Guidelines for examination provide a number of examples in which it is not appropriate to use the two-part form.

Actually, after reading this judgment, I think it is certainly advisable to avoid casting a claim into a two-part form whenever possible since this may unduly restrict claim interpretation in subsequent litigation.

The court then turned to a detailed analysis of the contents of the description of the patent.

In passing, the court noted that the file wrapper should not be taken into account in the claim construction process:

[…] Examination proceedings and potential variations between the application and the granted patent are irrelevant in the context of analyzing the scope of the patent, which is solely made considering the latter, because on the one hand it defines the protection from the publication under article 64 of the Convention (since the protection conferred by article 67 to the patent application is only temporary) and on the other hand legal certainty explicitly mentioned in the interpretative protocol of article 69 demands that third parties can determine the extent of protection solely based on reading the patent without having to embark on uncertain interpretation of the applicant’s intent in view of modifications made since filing. 

Makes sense. Although, shouldn’t a distinction be made between statements made by patentees during prosecution that third parties may want to rely on vs. self-serving statements?

Anyway, back to the (complex) analysis of the description and drawings.

The court came to the conclusion that the invention is about a closed dialogue between the card and the terminal, as opposed to one which would include a bank server – as would be the case if the electronic payment means were a bank card.

One of the main arguments raised by the patent proprietor was probably that Fig.1 of the patent does schematically show the interaction of the card and terminal with respective banks. Here is what the court had to say about the drawing:

[Fig. 1] is not explained an the dotted line between the card or terminal and the bank is not defined. The association between the card and the bank and the one between the terminal and the bank are not understandable. The only exchanges described are those between the card and the terminal and then between the banks, which take place respectively during and after the transaction phase […]. And, the sentence “During a transaction there basically does not take place communication between the payment station and the payment institution in question (so-called offline system)” means that there is absolutely no exchange between the card or terminal and the bank, not only because it is defined by the expression between brackets, but also because the sentence is a reminder of the risks of abuse attributable to this lack of communication […].  

And so here is the overall conclusion:

Thus the sole payment means contemplated in claim 1 […] is a card comprising a balance of units to be debited or credited and not a bank card. The fact that the latter is also a payment means and is designated under this generic name in the EMV specifications is irrelevant. The transaction data transferred to the terminal is restricted (with the exception of authentication codes) to the balance on the card. Consequently, the protection of the process does not extend to securing bank card transactions, which necessitates an open and more complex dialogue.  

So all of this did not bode well for the patentee’s infringement claim, since Ingenico’s terminals are meant to be used for payments via bank cards.

They did preserve the patent though, as Ingenico’s counterclaim for invalidity was unsuccessful.

Among others, an auxiliary objection of extension of subject-matter was raised in case the court were to retain a broad interpretation of claim 1. That is a “squeeze“-type, either-I-am-not-infringing-the-patent-or-there-was-some-extension-of-subject-matter-but-you-cannot-have-it-both-ways-type of argument. The court bought the narrow claim interpretation and accordingly rejected the auxiliary objection.

Credit card: the nightmare of teleshopping addicts.
Suggestion for a crosswords definition of electronic payment means: the nightmare of teleshopping addicts.

A few more words on the infringement part of the judgment. First, the court noted a technical difference between the subject-matter of claim 1 and the EMV standard – which I am not going to comment on.

Second, and more interestingly, the court held that there was no contributory infringement anyway, irrespective of whether the patent was implemented in the standard.

The court stated that the statutory provisions on contributory infringement need to be appraised in a very strict manner. In particular, there can only be contributory infringement if “means for implementing the invention […], relating to an essential element thereof” are supplied by the alleged infringer.

Ingenico is accused of selling payment terminals compliant to standards which implement the patented process. […] The essential element [of the invention] lies in the dependence between the second authentication code and the first one. It is the sole novel and inventive element which provides the desired security. And it is exclusively performed by the undefined and unclaimed function of the card. […] The role of the terminal is limited to sending the card a random value to initiate the authentication step. This phase was known from the prior art and is not novel. 

It is true that the first final value is calculated partly based on this random value. But the essential element does not lie in this use but in the conservation of the cryptographic residue from the processing as a first final value, which is the basis for the second code. The terminal is not involved in this process. The fact that it is mentioned in claim 1 (in the part which should actually have been the preamble) is irrelevant. 

The invention covered by claim 1 is implemented by the function of the card, which is the subject-matter of product claims. It is not implemented by the terminal […]. 

Therefore, no matter whether the claims are reproduced (literally or by equivalence) by the EMV standards, the means supplied by Ingenico, i.e. the terminal, cannot generate the result of the invention and does not relate to a constitutive element thereof. 

The way I understand French case law, very schematically, contributory infringement applies if an invention is made of two interacting parts, for instance the wipers discussed here. But if the novel and inventive features of the invention lie in one element only, and if someone then supplies another element to be used with the former, there is no infringement.

I think the case law is clear in this respect, which is certainly a very good thing.


CASE REFERENCE: Tribunal de grande instance de Paris, 3ème chambre 1ère section, April 14, 2016, Koninklijke KPN NV v. SA Ingenico Group, RG No. 14/11998.