Damage control

Sometimes, a case is not over even after it is lost. This is especially true when a defendant is found guilty of patent infringement but the amount of damages is not yet determined in the infringement ruling. It is then still time to continue fighting for damage control. And this can pay off, like in the present case, where the total damages award amounted to approximately 7% of what the plaintiffs requested. That is, if my math is correct because the ruling contains so many figures that it is quite easy to lose track.

An example of not-too-bad damage control.
An example of not-too-bad damage control.

The story started a while ago, more precisely in June 2005, when Hutchinson, owner of European patent No. EP 0691481 (on a connecting rod for vehicles), together with its subsidiary and licensee Paulstra, sued two companies, CF Gomma Barre Thomas and Paul Robert Industrie, for infringement of the patent. CF Gomma Barre Thomas entered insolvency proceedings later in the same year, so that the infringement proceedings continued against the court-appointed receiver. In 2007, after another infringement seizure, a third company was added as a defendant, namely Société des Polymères Barre Thomas (later renamed as Cooper-Standard France).

In June 2009, the Paris Tribunal de grande instance (TGI) declared the patent valid but rejected all infringement claims. Hutchinson and Paulstra appealed.

In October 2011, the Cour d’appel confirmed that the patent was valid but set aside the first instance judgment as far as infringement is concerned: claims 1, 2, 4 and 5 of the patent were held to be infringed. The appeal ruling appointed an expert for determining the amount of damages.

A cassation appeal was lodged, and the supreme court judges partly canceled the 2011 judgment, because the finding of infringement of dependent claims 2, 4 and 5 was not sufficiently reasoned. However, this partial cancellation left intact the main findings of the 2011 judgment – in terms of validity of the patent and infringement of the main claim.

This leads us to the second ruling by the Paris Cour d’appel in 2016, after the expertise, on the assessment of damages.

Not exactly a fun read – unless you are an accountant, that is. But an important one, as this is the point at which the lawsuit finally has an actual impact on the various companies’ finances.

The guidelines for the assessment of damages are set forth in article L. 615-7 of the Code de la propriété intellectuelle:

In order to assess damages, the court shall separately take into account: 

1. Negative economic consequences of infringement, including lost profits and actual losses incurred by the harmed party. 

2. Moral prejudice. 

3. Profits made by the infringer, including intellectual, material and marketing investment savings deriving from the infringement. 

However, the court can alternatively, upon request of the harmed party, award a lump sum as damages. This lump sum is greater than the amount of royalties which would have been due if the infringer had asked for the permission to use the right that it infringed. This lump sum can be in addition to the indemnification of the moral prejudice.

A first issue raised by the defendants was whether the above (current) provision was applicable or not, given that it was modified in 2014. In particular the notion of “intellectual, material and marketing investment savings deriving from the infringement” was not recited in the earlier version of the law.

The court replied that the current provision is indeed applicable since the 2014 modification in fact did not change anything and did not add a new damages count; it is simply more explicit than the previous one.

A second issue was the definition of the perimeter of the infringing goods. Four models of connecting rods were mentioned in the infringement seizure reports of 2005 and 2007. These models were clearly to be taken into account in the assessment of damages. But the plaintiffs contended that six further models were also infringing and should also be taken into account.

The court disagreed. Indeed, the 2011 appeal judgment held that the first four models were infringing. Whether the six other models are also infringing or not was not decided upon. The 2011 ruling also contained an order not to make, market, and the like, any connecting rods identical or similar to the ones found to be infringing. However, this could not be seen as a basis for including the additional six models in the assessment:

This injunction, which guarantees that the monopoly right is restored to its state before the infringement, concerns the future and makes it possible if necessary to start further legal proceedings against an infringer who is then aware of the infringement. 

I have of course no idea whether the six additional models of connecting rods were similar or identical to the first four ones. But I think it is really a pity that the court did not find a way to rule on the additional infringement claim in this ruling (be it to hold that the new models infringe, do not infringe, or that there is not enough evidence of infringement). Telling the plaintiffs that they can start a new action does not seem satisfactory on the standpoint of efficiency, especially in view of the overall duration of the present proceedings.

The rest of the decision is concerned with the actual computation of damages, plaintiff by plaintiff, defendant by defendant, and period of time by period of time.

For the most part, the expert’s report was approved by the court.

By way of example, the plaintiffs contended that some accessories, such as fixation means, should also be included in the calculation, in view of the well-known doctrine of the “tout commercial” (which could be translated as the doctrine of the commercial package). The court rejected the contention, because there was no evidence that the accessories were sold as a consequence of the sale of the infringing connecting rods.

Paulstra claimed that it has suffered lost profits because they would have been able to make and sell all the connecting rods according to the invention marketed by the defendants. This point was accepted by the expert and the court.

However, the margin to be applied to the lost sales in order to compute loss profits was hotly debated.

Paulstra successively announced three different margins: 3%, 5.6% and finally 9.7%. They said the first two figures were erroneous: the first one concerned another equipment, and the second one concerned all connecting rods in general and not specifically those protected by the patent.

The court was (understandably) irritated by this flip-flopping and was not convinced that the initial figure was erroneous:

[The defendants] rightly stigmatize the behavior of Hutchinson and Paulstra, by emphasizing the contradictions in their successive statements, their inconsistency, and their lack of credibility, stating that this is due to their decision to prevent any control over Paulstra’s claims […]. The error alleged by Paulstra when the first rate of 3% was mentioned is indeed not credible, in view of the time that they took before replying to the expert, and of the importance of its “connecting rods” business. They necessarily knew what it was worth […].

Furthermore, the final figure of 9.7% was only supported by a statement by the company’s accounting director; and by a late-filed communication from an external auditor. The former was criticized by the expert as being a non-certified statement. The latter was disregarded by the court as it was too vague and imprecise, and not explicit enough.

As a result, the court applied a margin rate of 3% to Paulstra’s lost sales, also noting in passing that it is “the rate generally used in this type of product in the automobile industry“.

The moral prejudice suffered by the licensee Paulstra was calculated by the expert to be 125,000 euros. But the judges reduced this amount to zero. They held that there was no evidence that the defendants’ actions had harmed Paulstra’s reputation, as was alleged.

Turning to the patentee, Hutchinson first claimed lost profits due to Paulstra’s lost sales, because the patent was licensed to the subsidiary. Here, again, the court refused to take such lost profits into account:

It cannot be denied that a patent proprietor that does not exploit the invention but grants a license for its exploitation has the right to be awarded the profits it did not make because of the infringement. But it has to show that the alleged lost profits are real. 

In this respect, even if it is demonstrated that Hutchinson and its subsidiary Paulstra were bound by a lease management agreement, Hutchinson does not provide any evidence as to the profits earned owing to the license. […]

[…] [Hutchinson] relied on trade secret as the reason why no information was provided in this respect. But, during the expertise proceedings, they stated: “[…] these damages should no be calculated based on the contractual royalty that Paulstra would pay to Hutchinson. Indeed, Paulstra is only a subsidiary of Hutchinson, and it is not conventional, at least in terms of patentee-licensee relationships, to have such contractual royalty be paid between companies of a same group” […]. 

Since the very existence of the royalty was not demonstrated, the corresponding claim cannot succeed. 

Again, the claimants’ ambiguous statements certainly played against them. Half-admitting that there was no license royalties between Hutchinson and Paulstra while relying on trade secret not to say more was not a successful strategy for convincing the court that there were indeed lost profits to be recovered. Would the outcome have been different if Hutchinson had claimed the lump sum provided for in the last paragraph of article L. 615-7, which cannot be less than the royalties the infringer would have paid? I tend to think so.

Hutchinson was nevertheless awarded 60,000 euros (as estimated by the expert) in terms of moral prejudice. It is indeed generally accepted that patent infringement necessarily causes moral prejudice to the patent proprietor because the invention is depreciated.

On the other hand, Hutchinson lost again when they claimed the profits due to the infringers’ investment savings. They estimated such profits to be equal to 5% of the defendants’ connecting rod turnover. But the court held that the profits made by the defendants had already been taken into account in Paulstra’s damages; and that the claimed percentage, allegedly based on Hutchinson’s own spending, was not credibly substantiated, since it seemed to include other activities than those related to the patented invention.

In summary the total damages award for Hutchinson and Paulstra is 652,003 euros. Was the so far 11-year long litigation worth it? Of course the damages award is only part of the answer, as the claimants did get a permanent injunction which after all is the actual weapon of mass destruction in a patent war.

Anyway, the case strikingly illustrates that damages assessment is an endeavor of its own, sometimes underestimated by litigants. Just like for the assessment of validity and infringement, the court wants to see convincing evidence of whatever is asserted by the parties and will not satisfy itself with unsupported statements, let alone ambiguous ones.


CASE REFERENCE: Cour d’appel de Paris, Pôle 5, chambre 2, February 12, 2016, Hutchinson & Paulstra v. CF Gomma Barre Thomas et al., RG No. 09/13793.

Bang bang

Prior user rights are one area of common misconceptions about patent law among the public.

Suppose you teach an IP class in a scientific university, and you tell the students about patent infringement, the first-to-file system, etc. Soon enough one of them will speak up and express the view that there cannot possibly be a right to a patent if the invention was actually made by someone else earlier. “Sorry folks, but there most certainly is a right to a patent if the invention was not publicly disclosed before the filing date“, you reply. “That said, there are what they call prior user rights“. At this point, relief is palpable in the room, until you add: “But hey, don’t count on that, it is only an exemption and it is seldom of any use in practice“.

This last part sometimes gets over people’s heads. Not just students, but also misleading websites that allegedly provide cheap protection to inventors. In one of those (no link included in this post), it is stated that “prior user right is the ideal alternative to patent filing, it makes it possible to legally protect an invention and to continue exploiting it even in the presence of a patent filed later on a similar invention, it also allows you to regularly make your innovation evolve”. Quite a few inaccurate statements in this sentence…

Let’s have a look at what French law actually has to say on the subject, and more particularly article L. 613-7 of the Code de la propriété intellectuelle:

Any person who was in possession of the patented invention in good faith, at the patent filing or priority date, on the territory where the present law is applicable, has the right to personally exploit the invention despite the existence of the patent. 

The right acknowledged by the present article can only be transmitted with the business assets, company or part of the company to which it relates. 

So, this is not a form of legal protection similar to a patent. It is a defense that can be raised against allegations of infringement. It can only apply if the prior possessed invention is the same as the patented one (and not just a “similar” one). Accordingly, the defense may no longer apply if the prior user later changes something in their invention.

Also, this defense can only be raised by the person (individual or company) who possessed the invention before the filing / priority date. Not by anyone else, even if they are related to this person. The defense cannot be raised if the possession of the invention occurred abroad. And finally this “right” cannot be freely transmitted to another person, it is linked to the business assets to which it relates (somewhat like the opponent status in EPO opposition proceedings).

This is only a short summary of course, but it already makes it clear that there are many boxes that need to be ticked before a prior user right can be effectively used as a defense. And of course there is also the issue of proof – the burden being on the defendant who relies on this right. Not exactly “the ideal alternative to patent filing“.

Accordingly, prior user right defense is seldom relied upon, and even more rarely successfully so.

One recent example involved a French patent on an “adaptable and modulable support assembly for automatic/semi-automatic gun“. The two co-owners of the patent were the inventors themselves. Together with their licensee, Société Technique de Rééquipement de Combat, they sued the manufacturer (RDS Industries) and the distributor (OPS Equipement) of an allegedly infringing gun support. The plaintiffs lost both in first instance and on appeal.

If only guns always shot candy bullets like this one...
If only guns always shot candy bullets like this one…

However, a prior user right defense was raised and this part of the defense was shot down by the first instance judges as well as the appeal ones.

The patent filing date was December 17, 2008. The company RDS Industries was founded by a Mr. K only three weeks earlier. Mr. K previously owned another weapon and ammunition manufacturing business, known as L’Armurier Breton (i.e. “the Breton gunsmith“). This was a personal business, and not an incorporated one.

According to the defendants, Mr. K had an employee at L’Armurier Breton who made a prototype back in 2007-2008 having all the features of the patented invention. But they never moved forward with production and marketing due to commercial uncertainty, they said. Anyway, they added, Mr. K possessed the prototype (and thus the invention) when RDS Industries was created, so that the company should benefit from a prior user right.

The Court of appeal admitted that Mr. K possessed a prototype made by his employee but nevertheless rejected the prior user right defense on two grounds.

First, not enough evidence was provided that the prototype or one of the prototypes made in 2007-2008 comprised all the patented features. The defendants’ case was apparently incomplete in this respect:

Even if, when RDS Indstries was created, Mr. K may have possessed a prototype received from his inventor […], nothing shows that this is the prototype that they rely on. The engineer who is said to have designed it is not specific on the identification of the prototype in question as well as on the features said by the respondents to be identical to those of the invention of the patent. In particular, he wrote in his affidavit: “we have made several prototypes from early 2008”. 

This illustrates the major burden of proof issue that those wishing to rely on prior user rights always face. It is certainly fair to demand full and convincing evidence from the defendants, especially since the plaintiffs are generally not in a position to provide counter-evidence of their own on this topic. But documenting and record-keeping practices being what they are, such evidence is usually very difficult to provide.

Second, even if there was some sort of prior user right, it was not proven that RDS Industries could benefit from it:

Even if one admits that Mr. K can claim the possession of the mentioned prototype […], the freedom to exploit that he can benefit from under the first paragraph of article L. 613-7 is personal. It cannot extend to the company that he founded, unless there is a demonstration that the individual transferred this right to the company according to the provisions of the second paragraph of the article (which is not the case). 

The case illustrates that there are many hurdles on the way to prior user rights, and any of them is sufficient to make the defense stumble.

Fortunately for the defendants in this case, and unfortunately for the plaintiffs, the patent was revoked for lack of inventive step. The inventive step discussion is actually rather interesting as well so that I may want to address it in a future post.


CASE REFERENCE : Cour d’appel de Paris, Pôle 5 chambre 2, May 27, 2016, Rogeon, Cambres & STRC v. RDS Industries & OPS Equipement, RG No. 14/03454.

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.

Defense ripped to shreds

Today’s case relates to a shredder for plant materials. And while I was browsing online desperately looking for some kind of introductory witticism for this post, I came across a fiction character called the Shredder, to whom a very detailed Wikipedia page is dedicated. It turns out the Shredder is a villain in the Teenage Mutant Ninja Turtles comics – which I must confess I really do not know anything about.

It is actually fascinating to find out that the Shredder’s webpage is significantly longer than the Wikipedia page on, say, the European Patent Convention. Just to put things into perspective.

So back to what I might indeed attempt to comment on, i.e. a dispute between Société d’Equipements pour l’Environnement (or SEE), owner of a French patent No. FR 2795661 and a European patent No. EP 1066883 (EP’883 claiming the priority of FR’661), and Rabaud, against which the two patents were asserted.

There are at least four different points which are of interest in the judgment handed down by the Cour d’appel de Paris on this case:

  • The invalidation of several claims of FR’661 for insufficiency of disclosure.
  • The finding that Rabaud’s shredder called Xylomix infringes the French part of claim 1 of EP’883 by equivalence.
  • An additional finding of contributory infringement.
  • The rejection of a false marking claim.

Let’s have a look at the invalidity issue first. Claim 1 of the priority patent FR’661 is quite different from claim 1 of the subsequent patent EP’883, which is why this invalidity issue only applies to the former.

Claim 1 of FR’661 concerns a shredder having a shredding rotor, wherein, in particular, “the rotor is suitable for creating an air flow for ejecting matter towards the ejection zone“.

The court noted that the claim does not define how the air flow is created, and that the description of the patent is also silent on this. Specific features seem to be present in the drawings, but without any explanation:

[….] The drawings do not make it possible for the skilled person to understand what the means for creating the air flow in claim 1 is, since the inverted S-shaped line which can be seen on Figures 2 to 4 and the inverted S-shaped double line which can be seen on Figure 6 are not captioned, unlike the other elements making up the rotor, and do not make it possible to interpret claim 1 in such a way that the means is made of ventilation blades. 

[…] In fact, on the other hand, this ventilation means is precisely described in claim 1 of [EP’883], at [paragraphs] [0033] to [0035] of the description, and is captioned in Figures 2 to 4 and 6 (with reference 16) and reproduced in three-dimensional view on Figure 7, which implies that without this description of the means for creating the air flow, the skilled person was not able to implement the invention simply based on common general knowledge. 

A finding of insufficiency of disclosure is not a common thing. And when this finding is in the mechanical field, it is all the more uncommon. Even if the ventilation blades were not mentioned in FR’661, it may not be too difficult for the skilled person to think of such blades as a possible means for generating an air flow. So, was there something specific about the shape or positioning of the ventilation blades which was not obvious to achieve for the skilled person?

The judgment does not tell. But clearly the more detailed explanations in the European patent were held against the French patent. So, drafters had better be careful about leaving claimed functional features unexplained in the description.

See how easy it is to create an air flow?
See how easy it is to create an air flow?

After invalidating claim 1 of the French patent (as well as all other dependent claims asserted by SEE, for the same reason), the court turned to the European patent. Apparently no invalidity defense was raised by Rabaud, which was of course of a great help to the patent proprietor.

Rabaud focused on a non-infringement defense. 

Claim 1 of EP’883 reads as follows (adding the same feature analysis taken up by the court):

a. A shredder, more particularly intended for reducing plants or other materials,

b. comprising a feeding section

c. and an ejection section,

d. between which is arranged a chamber provided with shredding means

e. which consist of a rotor including specific tools depending on the type of plants or materials to be shredded, in alternating positions,

f. i.e.: cutting tools intended for shredding a type of plants,

g. and defibring and bursting tools intended for shredding other types of hard plants or materials,

characterized in that,

h. on the same rotor are also positioned ventilation means, positioned with respect to said cutting tools, so as to define the gauge of the chunks of plants or other materials cut by said cutting tools, allowing the discharge of the shredded plants and other materials out of said chamber,

and in that,

i. in said shredder, said cutting tools, said defibring and bursting tools and said ventilation means are positioned with respect to each other, depending on the direction of the rotor rotation, so as to successively allow the defibring or the bursting operation, the definition of the gauge of the chunks to be cut, the cutting and the discharge of the shredded plants or other materials, 

j. so as to serve as a multipurpose active drum. 

The defendant argued that features h. and i. were not reproduced by the Xylomix apparatus.

Regarding feature i., Rabaud argued that Xylomix’ flails (defibring and bursting tools) do not act on the plant materials before its knives (cutting tools), whereas such a particular order of operation is required by claim 1. But the court was not convinced, especially because they said the order of operation is defined more particularly in a dependent claim 6, so that claim 1 is broader.

The judgment does not specifically address the word “successively” in feature i., which may support Rabaud’s defense. My understanding is that the court interpreted this adverb as simply introducing the various operations, as opposed to requiring a certain order between them. Such interpretation may be debatable. Also, depending claim 6 further specifies driving sections for the flails and knives and does not just add an order of operation to what is recited in claim 1.

As for feature h., the infringement theory was based on equivalence. As a reminder, under French practice and as recalled in the judgment itself:

Two means are held equivalent when, although they are of a different structure, they have the same function for achieving a result of a similar nature or degree. 

In the Xylomix apparatus, the gauge is obtained by way of dedicated metal sheets and not by the ventilation means as required by feature h. Nevertheless, the court acknowledged that the gauge function is achieved in the Xylomix apparatus like in the patent and that the result is of a similar nature. Therefore, there was infringement by equivalence.

One effective defense against the doctrine of equivalence generally consists in arguing that the doctrine does not apply because the claimed function is known from the prior art. But in this case it seems that the defendant did not rely on any prior art at all, which is why the court did not have to examine this particular aspect.

The third interesting point in the judgment relates to contributory infringement. In addition to Xylomix devices having both flails and knives, which were found to be a direct infringement of the patent, Rabaud also marketed “simple” Xylomix devices, with only knives or only flails. Also these simple devices were held to infringe under article L. 613-4 Code de la propriété intellectuelle. Said the court:

[…] The Xylomix shredder brochure intended for Rabaud’s customers, which was seized during the infringement seizure, highlights that it is possible with one rotor to rapidly transition between knives, flails or dual mode, and that the rotor, pictured as “3 in 1” is the only one “capable of addressing all market needs”. 

As rightly noted by the first instance judges, the user who bought a shredder having a “simple” rotor can then buy knives or flails, which are sold separately from the shredder, so as to make it work in a dual mode and thus implement the patented invention without having a right to do so. 

What I think is the most interesting question though is whether all simple rotor sales will be taken into account in the assessment of damages, or only a fraction of those. But this question has been left unanswered so far as the court did not rule on damages, an expertise being ongoing in parallel.

Fourth, and last, false marking. SEE claimed that, in addition to patent infringement, Rabaud was also guilty of unfair competition, due to various mentions in their commercial brochures dating back to 2011. One mention in particular was that Xylomix was “patented“, which was in fact not the case. The first instance judgment sided with SEE on this question, but the Cour d’appel reversed this part of the judgment. The reversal was based on the fact that Rabaud had filed a French patent application in 2009 and then a European patent application in 2010. The French patent was granted in 2014.

The bottom line seems to be that it is OK to put the cart before the horse and refer to a “patented” device when in fact the patent is still pending. Not that I would recommend doing so, though.


CASE REFERENCE: Cour d’appel de Paris, Pôle 5, chambre 1, May 17, 2016, Rabaud v. Société d’Equipements pour l’Environnement, RG No.14/10335.

Infringement wiped out

It is an infrequent but real pleasure for a litigant to face an opponent who does not fight and does not bring any contradiction to the litigant’s case. But I guess the pleasure is considerably reduced when the opponent in question is a Chinese infringer which vanishes from the radar and might always reappear later in another form.

It seems that the wiper business of the Valeo group was confronted with this situation, as suggested by two judgments from the Cour d’appel de Paris dated April 14, 2015 against two Chinese companies which did not even appoint a lawyer to defend them.

At first instance, both companies were found guilty of infringement of the French part of European patent No. EP 1486134. In one of these cases, the defendant was in addition found guilty of infringing two trademarks as well as of passing off. This looks more like organized piracy than conventional patent infringement.

However, the first instance judges rejected two further infringement claims based on patents No. EP 1485280 (EP’280) and  EP 1565359 (EP’359). Valeo appealed, and the Cour d’appel partly reversed the first instance decisions, finding in favor of the claimants.

This gives us the opportunity to look at how French courts appraise contributory infringement. The relevant legal provision is article L. 613-4 of the Code de la propriété intellectuelle:

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. 

Claim 1 of the EP’280 patent reads as follows:

Wiper device (10), particularly for wiping vehicle windscreens, comprising a drivable wiper arm (14), with a flat wiper blade (16) positionable on the wiper arm (14), which (wiper blade) comprises a wiping rubber (18), the support elements (20) bearing the wiping rubber (18), which (support elements) may preferably be designed in the form of strip-like elongated spring rails and means of connection for connection to the free end (12) of the wiper arm (14), wherein the means of connection comprise a carrier element (22) firmly arranged on the support elements (20) and a connecting element (24) arranged to be partially pivotable in relation to the carrier element (22) and the connecting element (24) is detachably connectable to the free end (12) of the wiper arm (14), characterized in that the free end (12) of the wiper arm (14) presents several, preferably two, tongues (30, 32) extending in the longitudinal direction, which in the installed state engage in tongue receptacles (34, 36) provided on the connecting element (24) and that the tongues (30, 32) are designed in one piece with the free end (12) of the wiper arm (14) and project at least in sections in the direction facing the windscreen.

So, the claim is directed to a wiper device made of several elements, including a so-called “connecting element“. The mention and characterization of the connecting element are underlined above. The defendants marketed wiper connectors in France having the same features as the connecting element of the above claim.

The first instance judges had rejected the infringement claim by simply noting that the products marketed by the defendants did not reproduce all the features of claim 1 of EP’280, since said defendants did not market wiper arms compatible with the (infringing) connecting element.

I would have loved to illustrate this post with Eiffel tower wipers but strangely enough it seems like nobody had the idea of patenting them.

I would have loved to illustrate this post with Eiffel tower wipers but strangely enough it seems like nobody had the idea of patenting them.

This was certainly an incomplete reasoning, since the existence of contributory infringement does not require that the infringer markets all parts of the claimed product, even separately. It is only necessary that the infringer markets one part of the claimed product, provided that this part represents means for implementing the invention in relation with an essential element thereof.

The appeal judges thus held differently. Quoting from one of the two appeal judgments:

[…] The connecting element (24) contributes to the result of the main claim of the patented invention, which is to offer a wiper device comprising a wiper blade arranged on a wiper arm (14) the free end (12) of which comprises two tongues (30, 32) arranged in tongue receptacles (34, 36) provided to that end on this connecting element; this element therefore is a means for implementing the patented invention, relating to an essential element of the invention. 

This finding seems to make perfect sense because, looking at the claimed wiper device, if we leave aside features which are probably common to most wipers (such as the presence of a drivable wiper arm with a wiper blade comprising a wiper rubber, etc.), the features which seem to be really characteristic of the invention are, on the one hand, the presence of tongues on the free end of the wiper arm, and on the other hand the presence of corresponding tongue receptacles on the connecting element.

In other terms, the invention really is about a particular manner of connecting the connecting element to the wiper arm (at least, this is what is reflected in the characterizing portion of the claim).

Therefore, the connecting element having the right shape and connecting features does indeed relate to (or even, is) an essential, i.e. original, problem-solving, element of the invention.

Turning now to the other patent, EP’359, the main claim is the following:

Device (10) for detachably connecting a wiper blade (12) with a drivable wiper arm (14), with the wiper blade (12) having a wiping strip (16) facing the screen to be wiped, at least one strip-like elongated carrier element (18, 20), a slider element (22) connected to the carrier element (18, 20) and an oscillatably mounted connecting element (24) on the slider element for connection to a coupling section (26) of the wiper arm, characterized in that the coupling section (26) has a tongue-like insertion section (28), the connecting element (24) has a receptacle (30) for the insertion section (28) and the coupling section (26) and the connecting element (24) have securing sections (42, 56) for mutual permanent connection, wherein in order to achieve a preinstallation position in which the longitudinal axis of the wiper arm (14) and the longitudinal axis of the connecting element (24) form an angle a in the range of approx. 10° to 100°, the insertion section (28) can be broadly linearly (64) inserted into the receptacle (30) and wherein in order to achieve a final installation position the wiper arm (14) and the connecting section (24) are pivoted towards each other around the contact area between the insertion section/receptacle until the securing sections (40, 42, 56) allow a mutually permanent connection.

What is important to note in this claim, beside the word “oscillatably” which is probably a challenge to most automatic spelling correction softwares (the original claim was in the German language, which may be an explanation), is the features which characterize the connecting element, which I have underlined.

Again, the defendants marketed a connecting element similar to the one recited in the claim, under reference Q-P in one case (the connecting element infringing EP’280 being referenced as Q-B), and under reference FG9 in the other case (the connecting element infringing EP’280 being referenced as FG7)…

And again, the court found that the connecting element was “a means for implementing the patented invention relating to an essential element of the invention“.

This makes a lot of sense just like in the EP’280 case, as this is still a plug/socket type of invention, wherein the innovative features relate to the way two elements are connected together. Therefore, the invention is embodied both in the plug and in the socket – or, in this case, both in the wiper arm and in the connecting element.

In both of its orders, the Cour d’appel pronounced an injunction and awarded damages to the claimants, as expected.

But, most interestingly, the judges additionally ordered that the infringing products be seized and remitted to the claimants. This measure is not very often ordered and it is certainly attributable to the unusual context of the case. In particular, the judges may have thought that it would not be easy for the claimants to recover the ordered damages from the foreign defendants, so that a seizure was probably necessary as a form or relief.


CASE REFERENCE: Cour d’appel de Paris, Pôle 5 chambre 1, April 14, 2015, SASU Valeo Systèmes d’Essuyage, Valeo Wischersysteme GmbH & SASU Valeo Service v. Ningbo Youngsun Auto Parts Co. Ltd., RG No. 13/15794; Cour d’appel de Paris, Pôle 5 chambre 1, April 14, 2015, SASU Valeo Systèmes d’Essuyage, Valeo Wischersysteme GmbH & SASU Valeo Service v. Qeep Auto Spare Parts Ltd., RG No. 13/15800.