This blog has now been around long enough for the same case to make it to a post several times, when new developments come up.
The present post is thus a sequel to my earlier comments on the litigation between Airbus Helicopters and Bell Helicopter Textron Inc.
As a reminder, the Paris Cour d’appel found Bell guilty of infringement of French patent No. FR 2749561 directed to a landing gear with skids.
Bell filed an appeal on points of law, and the Cour de cassation has now issued its judgment rejecting the appeal. Many different legal points were raised by Bell, but certainly the most interesting one relates to the finding of infringement concerning the so-called first version of helicopter Bell 429. This first version was a prototype, which was:
included in Bell’s catalogue;
shown in September 2005, which was reported on the website of a helicopter enthusiast (although Bell argued that this was a confidential presentation);
and put up on the website of Rotor & Aircraft, Bell’s distributor in France.
Bell’s defense was that this first version of the helicopter was not yet approved for sale. But the appeal judges noted that:
Offering for sale extends to any material operation aiming at putting a product in contact with potential customers, at preparing a commercial launch, even if said product, which in the present case was not yet approved, could not be marketed.
The “prototype” defense was raised again by Bell in front of the Cour de cassation, according to the seven following points.
A mere prototype [was presented] in a private context and within a narrow circle of specialists; the prototype had not yet flown, and was later subjected to several modifications; in the absence of any prior certification, it could not be marketed; [this] cannot correspond to putting on the market nor even to a preparatory act for such putting on the market.
As a result, said Bell, the court breached the statute, by deciding that an offer for sale could relate to a product which could not be marketed.
The cour de cassation replied that the standard applied by the Cour d’appel was the right one, in particular because “the presentation of the product as a prototype can divert part of the clients of the patented product“.
Second, the presentation of the first version of the landing gear was quickly followed by the marketing of the second version of the gear. Also, the certification of the second version was based on tests performed on the first version. Thus, the presentation was at best a preparation for the sale of the second version, and not an offer for sale of the first version.
The supreme court judges disagreed. In fact, the Cour d’appel had held that Bell intended to market the first version of the landing gear at the time it was presented.
Third, Bell blamed the appeal judges for relying on acts committed outside of France: an offer for sale abroad in a catalogue, and presentations in exhibitions in the U.S. and Canada. They said that only acts committed in France could possibly constitute an infringement.
However, for the Cour de cassation, the Cour d’appel did not hold any acts committed abroad as acts of infringement. They simply noted that the presentation in France had been preceded by offers for sale abroad. As I understand it, it is therefore OK to refer to acts committed abroad in order to characterize the overall context.
Fourth, Bell submitted that the report of the first version on a website owned by a helicopter enthusiast was an act committed in a private and non-commercial context – which is an exception to infringement.
Fifth, regarding the presentation of the helicopter on Rotor & Aircraft’s website, Bell argued that the landing gear could not be identified on the pictures appearing on the website.
Sixth, there was no evidence of the presentation of the first version in the Paris air show, since the bailiff’s report did not precisely describe the landing gear.
The Cour de cassation did not provide a detailed answer and simply referred to the appeal judges’ discretionary power for appraising the available evidence.
Seventh, the Cour d’appel refused to acknowledge that the acts committed related to the statutory experimental exception, because no test and no act of research were performed when the first version of the landing gear was presented. However, Bell said, the sole use of the landing gear could by itself aim at studying its behavior and therefore relate to the experimental exception.
But the cassation judges decided that the absence of evidence of any experimental testing was sufficient to reject the experimental exception.
Many other grounds were raised, regarding the validity of the patent, the validity of the infringement seizure report and the infringement by equivalence of the second version of the landing gear. They were all discarded.
One rather enjoyable part of the discussion relates to the way the bailiff drafted the infringement seizure report. The bailiff used in some instances the word “we” instead of “I“, so that it could not be determined, Bell said, what the bailiff had actually personally done or witnessed. The court replied that the use of the pronoun “we” was commonplace and could not be relied on to deduce that the bailiff had not carried out the seizure himself.
I wonder whether the pronoun “we” is that commonly used to designate a single individual. It is rather a specificity shared mainly by royalties and bailiffs, I would say.
Anyway, the take-away message from this important ruling remains that the presentation of a prototype can be considered as an offer for sale and thus an act of infringement, even if the product at stake is not yet marketable.
It seems that whatever patent-related news breaks in the UK often sets the tone for discussions throughout Europe – it remains to be seen if the Brexit will make any difference.
Take for example the doctrine of equivalents: this topic has become trendy again since the issuance of the Eli Lilly decision of the UK Supreme Court a few months ago. The excitement brought about by the decision is in fact quite understandable as the Supreme Court offered a new test for the appraisal of equivalents.
In France, on the other hand, much less is new under the sun in this respect.
The standard for assessing equivalents has been confirmed many times by the Cour de cassation, and all recent decisions dealing with this issue consistently rely on this standard (see notably here, here and there).
However, a recent ruling by the Paris Cour d’appel seems to have shed a new light on the nuts and bolts of the doctrine.
French medical company Produits Dentaires Pierre Rolland (PDPR) owns French patent No. FR 2983398 on a “canula and adapter for a multifunction syringe“. In October 2013, PDPR initiated infringement proceedings against Itena Clinical, claiming that the marketing of the canula known as “Aireo Universel” infringed the patent (claims 1 and 6).
In April 2015, the Paris Tribunal de grande instance (TGI) confirmed that claims 1 and 6 of the patent are valid, and found Itena guilty of infringement. Itena appealed, which led to a second ruling issued in June 2017.
The validity part of the first instance judgment was upheld, but the appeal judges overturned the infringement part and found in favor of the defendant.
Here is claim 1 of the patent:
A canula for a multifunction dental syringe, the canula comprising a fastener bushing that is defined by a circular opening, an end wall, and a side wall comprising a circular cylinder, the canula also including at least two channels enabling fluids to be conveyed separately or together from said end wall to fluid projection orifices, the two channels beginning in said end wall beside each other, the canula being characterized in that the circular cylinder presents a cutout in the thickness of its wall, which cutout comprises, going from the opening: at least one segment extending in a direction other than the axial direction of the cylinder; followed by a longitudinal segment extending towards the end wall.
The Cour d’appel first recalled the standard for appraising infringement, taking into account equivalents. As mentioned above, this standard was defined a long time ago:
The scope of the patent extends from the technique which is expressly claimed to any variant combining in the same manner different means performing the same function. The function of a means in an application is defined as the first technical effect achieved by the implementation of this means, making it possible to obtain the result. And two means are equivalent when, although they are of a different form, they perform a same function for a result of a same nature, if not of the same degree.
In this case, the court found that all the features of claim 1 were literally reproduced by the defendant’s “Aireo” product – except one:
The examination of the Aireo product shows that it has a cutout in the internal part of the canula, made of a single longitudinal segment oriented towards the end wall of the canula, which is identical to [what is claimed]. However, the cutout of the Aireo product does not comprise a segment having a direction other than the direction of the axis of the cylinder (transversal segment) [as claimed], so that the cutout is not made of the two segments defined in the characterizing portion of claim 1.
In such a situation, the function of the feature which is not literally reproduced must be established, and then it must be determined whether another feature in the alleged infringement provides the same function or not.
The relevant discussion in the appeal judgment is the following:
PDPR argues that the collar on the canula, which forms a translation stop, makes it possible to rotate the canula on the adapter up to the longitudinal segment where, subsequently, the lug of the adapter slides in the groove of the Aireo product, which thus generates a longitudinal translation of the canula.
However, the alleged function of mechanical guiding by the collar present on the Aireo product is not of the same quality as that of the PDPR invention. Indeed, in the PDPR invention, when the canula and the adapter are assembled, the lug of the adapter is immediately inserted into the transversal segment of the cutout of the canula where it is mechanically directed into the longitudinal segment of this cutout, whereas such guiding is not ensured with the same efficacy by the collar of the Aireo product due to is planar and smooth surface.
In other terms, according to the claimant, the same function of mechanical guiding was present both in the claim and in the alleged infringement.
But the court did not accept this, since this function was not achieved with the same efficiency in both cases. This is related to the part of the equivalents’ test that reads: “a same function for a result of a same nature, if not of the same degree“.
So, the court did stick to the classic test, but applied it in a fairly unusual manner. It is not everyday that equivalents are discarded because the common function is partly achieved but not with the same degree of efficacy as in the patent.
Now, for the sake of completeness, there were other reasons for the court not to accept the suggested equivalence:
Besides, the alleged function of mechanical guiding is admittedly possible but absolutely not necessary, contrary to the device recited in claim 1 of the patent, nor even useful. Indeed, the user of the Aireo product wanting to fix the canula onto the adapter can easily match the lug of the adapter with the groove (longitudinal segment) of the canula, and therefore achieve a translation of the canula owing to its longitudinal segment by simply making a visual (not mechanical) alignment, without needing to resort to a rotative motion involving the planar and smooth surface of the collar, whereas the user of the canula according to the PDPR patent, in order to attach it to the adapter, must necessarily impart a rotation using the transversal segment of the canula, followed by a translation using the longitudinal segment of the canula (mechanical guiding).
So, the function was not necessary nor useful in the defendant’s product. This can probably be translated into: the common function argued by the plaintiff is in fact an artificial one.
Finally, the plaintiff’s case also failed on another prong of the equivalents’ test, which is whether the function could be protected or not in view of the prior art. The court found that the function (in the same context) was in fact known from the prior art, so that the scope of the claim could not validly be extended to the alleged equivalent:
Anyway, infringement by equivalence is not present if the means of the allegedly infringing product are of a different form relative to those which are claimed, and the function performed by these means, identical to that performed by the means of the claimed invention, is known from the prior art.
In this case, the function of mechanical guiding attributed by PDPR to the surface of the collar of the Aireo product combined with the cutout in the internal part of the canula of a longitudinal segment oriented towards the end wall of the canula is known from the prior art. It is notably disclosed in the abovementioned Saurou document (WO 92/04878). […]
Some interesting fine-tuning of the doctrine indeed!
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 […].
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  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  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.
As a change from GMOs and mathematical methods, today’s patent is about a toilet paper dispenser. Rest assured that I heroically resisted the urge to come up with an introductory pun closely related to the invention at stake – lest this blog be rated by readers as not classy enough.
That said, a relatively simple technical field does not necessarily entail a straightforward ruling. In fact, today’s decision addresses the complex issue of contributory infringement heads on.
SCA Tissue France was originally a subsidiary of the US group Georgia Pacific, a world leader in cellulose-based products. Think Lotus toilet paper. This business has now been acquired by the Swedish group SCA. Tissue France owns European patent No. EP 1799083, on a toilet paper dispenser, and markets the so-called SmartOne dispenser, together with matching toilet paper.
In March 2011, Tissue France started infringement proceedings based on the EP’083 patent against Sipinco and Global Hygiène. An opposition was filed against the patent in parallel. The patent was upheld as granted both by the opposition division and by the board of appeal.
In parallel, the Paris Tribunal de grande instance revoked the French part of EP’083 for insufficiency of disclosure, in March 2013 and therefore rejected Tissue France’s infringement claim.
However, on appeal, the first instance judgment was set aside and the patent was acknowledged as valid.
Tissue France had raised two infringement claims:
The defendants had committed direct infringement by putting on the market a toilet paper dispenser as well as toilet paper within the scope of EP’083.
The defendants had also committed contributory infringement by marketing toilet paper intended to be used with the patented SmartOne dispensers.
The appeal judges sided with the patentee on the first count but rejected the claim based on the second count. See the ruling dated November 25, 2014.
The patent proprietor did not give up on the contributory infringement count and filed an appeal on points of law. We can imagine that whether contributory infringement is established or not may have a significant impact on the computation of damages.
They did well, as the Cour de cassation has now vacated the appeal judgment and remitted the case back to the Cour d’appel, ordering them to examine again the question of contributory infringement.
In order to understand this whole discussion, it is certainly useful to have a look at the main claim of the patent:
Paper dispenser, comprising a housing in which a roll of a paper strip is housed, which comprises precuts transverse to the strip and defining rectangular paper sheets, of which the width is transverse and the length is longitudinal, the housing comprising a dispensing orifice through which the paper strip is unwound, the width of a sheet being between 125 mm and 180 mm and the ratio of the width of a sheet to its length being between 0.45 and 1, preferably between 0.5 and 0.65, characterized in that the said paper is a toilet paper and the said dispenser comprises a nozzle with the said dispensing orifice, the said nozzle and the said roll of paper being designed so that the paper sheets are unwound one at a time and emerge with less crumpling at the outlet of the nozzle, the paper being consumed in an optimum and pleasant manner.
In other terms, the claimed subject-matter is a paper dispenser which comprises a number of features (notably a housing and a nozzle) as well as a roll of paper strip in the housing.
Now, here is the relevant legal provision which defines contributory infringement under French law, namely article L.613-4 Code de la propriété intellectuelle, first paragraph:
Unless the patent proprietor consents, the supply or offer to supply, on the French territory, to another person than those entitled to work the patented invention, of means for implementing this invention on this territory, in relation with an essential element thereof, is also prohibited, when the third party knows or circumstances make it obvious that these means are suitable and intended for this implementation.
The supreme court judges found that the Cour d’appel erred in three different respects.
First, the original appeal judgment held the following:
[…] Regarding the existence of acts of indirect, contributory infringement […], according to Tissue France […] itself, its invention lies in a new combination between, on the one hand, a specific toilet paper, and on the other hand, the use of a nozzle for dispensing sheets associated with a specific precut paper strop, in order to achieve a dispensing of sheets one at a time, with less crumpling at the outlet of the nozzle […].
[…] Therefore this is a combination invention which lies in the association of means (toilet paper and nozzle) which cooperate, notably due to their particular arrangement as described in the patent, for a common result (dispensing of the sheets one at a time, with little crumpling). Only the arrangement of the means which cooperate together for a common result is protected by the patent.
[…] In such a case, the means in relation with an essential element of the patented invention under article L. 613-4 cannot only consist in one of the combined means, just because this means (here, the paper roll) is part of the constitution of the invention and contributes to the result that it provides.
The Cour de cassation disagreed and held that this was a breach of article L. 613-4, because:
[…] contributory infringement of an invention consisting in a combination of means can result from the supply of a means relating to an essential element thereof […] even if it is a constitutive element thereof.
By the way, don’t look for more detailed explanations in the ruling. There are none. It is the unfortunate tradition of cassation judgments that they have to be drafted as concisely and cryptically as possible. Basically, the cassation judges just cite relevant parts of the appeal judgment and state: “this is wrong“. Period. Sometimes, the statement of cassation appeal which is annexed to the decision provides useful additional information. But not so much in this case.
That said, I think what can be taken from this part of the ruling is that article L. 613-4 should apply in a similar manner to combination inventions and non-combinations inventions. No distinction between these two types of inventions is made in the statute.
As far as I understand, combination inventions are those where the contribution of the invention to the art lies in special features present in two different means which cooperate together. Here, the toilet paper is specially adapted to the dispenser, and the dispenser is specially adapted to the toilet paper.
To my mind, this clarification by the Cour de cassation is rather well in line with previous case law on this matter.
For instance, in at least two distinct cases related to an invention associating a dispenser with plastic bags, it was held that the supply of plastic bags was an act of contributory infringement: see Publi Embal v. Coprimaand Simahee v. MultyPack. In another case where the invention related to the association of special fixing means on a digger with a special bucket intended to be placed on the fixing means, the supply of buckets was also viewed as an act of contributory infringement: see Morin v. Magsi.
The important point for contributory infringement to be established always seems to be that the means which is supplied should play an important role in how the invention works.
In contrast, if the invention lies entirely elsewhere than in the supplied means, there should be no contributory infringement. See Calor v. Filtech for an example of a demineralizing cartridge for an iron.
The second passage of the appeal judgment that the Cour de cassation did not like was the following:
[…] Besides, there can be no contributory infringement when the means which are supplied are, as in the present case, consumables which are to be integrated to the patented device, which exists independently of the consumables.
The Cour de cassation noted that
it does not matter whether the means may consist in consumables, if they have an essential character.
Again, it seems that the Cour d’appel imposed another criterion which is simply not present in the statute. No distinction is made depending on the nature of the supplied means. The only important thing is whether the supplied means relate to an essential element of the invention or not.
In fact, what the appeal judges probably had in mind is the second paragraph of article L. 613-4:
The provisions of [the first paragraph] are not applicable when the means for implementing [the invention] are products which are commonly on the market, unless the third party incites the person to whom the supply is made to commit the acts prohibited by article L. 613-3 [i.e. acts of direct infringement].
This is a special provision for products which are “commonly on the market“. But those are not the same as “consumables“. It is easy to picture consumables which have very peculiar features and are thus not really commonly on the market. Conversely, products commonly on the market certainly encompass other products than consumables (screws and nails, for instance).
So, the test applied by the Cour d’appel as to the nature of the supplied means was not the right one.
Last, the Cour d’appel had held that:
[…] no document from Sipinco mentioned that its toilet paper rolls were compatible with the dispensers marketed by Tissue France […].
Here is the Cour de cassation comment on this, which is slightly more detailed this time:
[…] By making this determination, whereas Tissue France argued in its appeal submissions that, due to its specific dimensions, the paper at stake did not correspond to toilet papers commonly on the market, the Cour d’appel, that did not investigate whether this was correct, and in this case whether this should be taken into consideration to examine whether Sipinco and Global Hygiene knew, or circumstances made it obvious, that these rolls were adapted and intended for implementing the invention, the Cour d’appel did not provide a legal basis for its decision.
Now, the issue is that the Cour d’appel did not find evidence that there was any incitation to customers for them to use the toilet paper at stake with the patented dispensers, which is the test under paragraph 2 of article L. 613-4.
But, before making that determination, it should have been checked whether the toilet paper was a product commonly on the market or not.
If not, then paragraph 2 should not come into play. And in this respect, the patentee’s argument was that the dimensions of the toilet paper were so specific that it could not be considered as a product commonly on the market, so that only paragraph 1 should apply. While the Cour de cassation did not formally endorse the patentee’s argument and just requested that it should be further considered by the Cour d’appel on remand, it certainly looks like they thought that it had merit.
If this is correct, then it means that a relatively cheap and commonplace product such as toilet paper is not a product “commonly on the market” if it has some specific features which make it original relative to other, similar products.
In summary, this Tissue France decision will probably be important for future cases involving so-called combination inventions, as well as cases where a defense related to “products commonly on the market” is raised.
And now the Cour d’appel will have to dispense another judgment in this litigation.
Infringement proceedings are a thing of many possible metaphors, and one of them may be an assault course. Invalidity defenses, non-infringement arguments, burden of proof issues, procedural traps are some of the hurdles that a plaintiff has to go over along the way.
So, after climbing up so many walls, nets and ropes, it is really too bad when the plaintiff falls into a muddy pit just before the finish line. In the case at hand, the muddy pit was the assessment of damages.
On March 20, 2014, the Paris Tribunal de grande instance (TGI) held that the two companies Carrera and Texas de France had committed acts of infringement of European patent EP 1067822 directed to a heating element for a heating or cooking apparatus, owned by Muller & Cie.
The court pronounced a permanent injunction against the defendants and ordered that they should provide accounting information regarding the infringing devices in order to make it possible to compute damages.
This judgment was confirmed by the Paris Cour d’appel on September 6, 2016. In the meantime, in view of the accounting information filed by the defendants, the TGI issued a second judgment dated January 14, 2016, in which Carrera and Texas de France were condemned to pay Muller damages of respectively 327,733 euros and 280,130 euros for Muller’s commercial prejudice, plus 100,000 euros for its moral prejudice.
The defendants appealed, which leads us to today’s judgment, issued on December 9, 2016.
In short, the appeal judges set aside the decision of January 14, 2016 and set the total amount of damages to… zero euro. How is this even possible, since acts of infringement were indeed committed?
The answer is that the legal basis for Muller’s computation of damages was held to be incorrect, and no alternative, legally correct computation seems to have been proposed by the plaintiff.
The method for the computation of damages is set in article L. 615-7 Code de la propriété intellectuelle:
In order to set damages, the court separately takes into account:
1° Negative economic consequences of the infringement, including lost profits and losses suffered by the harmed party;
2° Moral prejudice inflicted to said party;
3° And profits made by the infringer, including savings on intellectual, material and promotional investments made owing to the infringement.
However, the court may, alternatively and upon request of the harmed party, grant a lump sum in terms of damages. This lump sum is higher than the amount of royalties or rights which would have been due if the infringer had asked for the authorization to use the right that it infringed. This sum does not exclude the further indemnification of the moral prejudice of the harmed party.
The current wording of the article derives from the implementation of the enforcement directive 2004/48/EC, with a later modification in 2014. And it is not really crystal clear.
Computation of damages based on the “negative economic consequences” of the infringement is a conventional and well-delineated exercise.
On the other hand, how “profits made by the infringer” are to be “taken into account” by the court is not self-evident.It is also not so clear whether the plaintiff has full discretion to rely on the alternative lump sum calculation, or whether, in some circumstances, it is mandatory to rely on one assessment method or the other.
If we focus first on the issue of how infringer’s profits are to be “taken into account“, one way to interpret this provision would be to consider that the infringer’s profits may be awarded to the claimant as an alternative to loss profits damages. Another way would be to consider that the infringer’s profits are merely a modulating factor in the assessment of loss profits.
In the present case, Muller put forward a radical theory – successfully so in first instance, i.e. that the entire infringer’s profits should be awarded to the patent proprietor. However, this method was fully discarded at the appeal stage.
The Cour d’appel noted that Muller did not personally exploit the patent. The patent was exploited through six licensed subsidiaries, which tried to intervene in the infringement proceedings. However, the respective license agreements were not registered with the French patent register, so that they were not enforceable against third parties. Accordingly, the claims brought by the six licensees were previously held inadmissible in the initial 2014 judgment – and the unregistered licensees did not appeal.
In this particular context, the Cour d’appel deemed that the sole proper methodology for assessing damages was the so-called indemnifying royalty provided in the last paragraph of article L.615-7:
[Muller] does not claim the payment of the indemnifying royalty which was however rightly mentioned by the appellant, but this mode of compensation should be applied in this case. This royalty indeed corresponds to the percentage of the turnover that Muller could have claimed from the two companies sued for infringement, if the authorization to exploit the patent that it owns had been requested, with an additional penalty to take into account the existence of the wrongful acts committed against it.
But again, Muller did specifically not claim an indemnifying royalty. Muller argued that the words “upon request of the harmed party” in article L. 615-7 meant that this mode of calculation was not mandatory. The court concurred and stated that it “could not validly impose such a mode of compensation of its economical prejudice” on Muller. But this turned out to be a self-inflicted wound, as the sole mode of compensation put forward by Muller was not acceptable according to the court, for the two following reasons:
first, Muller did not personally suffer any lost profits;
second, the infringer’s profits may not be claimed by the plaintiff in the absence of lost profits.
As to the first reason, Muller argued that, although it had not directly suffered lost profits, there were lost profits for the overall Muller group. The court replied that Muller could not possibly claim lost profits suffered by other companies, namely the six licensees, which are distinct legal entities (in fact, it seems that it was not even properly demonstrated that they were part of the same group as Muller). The licensees’ claims were held inadmissible by the TGI, and they did not appeal. Thus, only Muller’s personal lost profits could possibly be compensated.
Yet, no lost royalties were claimed by Muller. On the one hand, the six licenses were apparently royalty-less, so that Muller did not personally lose money due to the licensees’ possible lost sales. On the other hand, Muller could have relied on a depreciation of the invention’s value due to the infringement, but did not do so. Here, the court cruelly noted: “again, it is not the court’s task to compensate an item of prejudice in the absence of a claim from the owner of the right in this respect“.
Then comes the second point on the infringer’s profits. Says the court:
In addition, it is true that the law of October 29, 2007, transposing the 2004/48 directive, provides that the judge should take into account the “profits made by the infringer”. But it did not introduce a possibility to confiscate them into the statute. Said taking into account is limited to the part which may remain, once the losses related to the exploitation have been assessed, in order to achieve a full compensation of the prejudice.
In other words, according to this court, the infringer’s profits can only be taken into account in the context of the assessment of a commercial prejudice. The confiscation of the infringer’s profits is not an alternative option which would be available to the plaintiff instead of claiming the compensation of a commercial prejudice.
Consequently, Muller’s claim for damages was simply rejected. The court noted in passing that the permanent injunction, which remains in place, is a proper sanction in this case anyway.
The last nail in the coffin was the rejection of Muller’s claim based on the moral prejudice which was said to be insufficiently substantiated.
All in all, this is a tough decision for the patentee, although we can have a feeling that the court was irritated by its behavior. For instance, there is a remark that the patentee obtained evidence of the infringement as soon as July 2009 owing to a bailiff’s report but waited until May 2011 to file its complaint.
It remains to be seen whether the Cour de cassation will have to rule on the Cour d’appel’s interpretation of the legal provision on the apportionment of the infringer’s profits.
In the meantime, one take-away message can be that the best practice for a patent proprietor is certainly to claim an indemnifying royalty, if only as an auxiliary request. Indeed, this should always be a possible option. Better safe than sorry.