Protocol not recognized

Another week, another issue of international jurisdiction. Last week’s post was about a case of declaration of non-infringement. This week’s post is about a case of ownership claim. But I think this time the decision issued by a French judge has a greater potential for arousing controversy.

In short: the judge decided that the Protocol on Recognition should be discarded in the determination of jurisdiction in the case at hand. The “Protocol on Recognition” is short for “Protocol on Jurisdiction and the Recognition of Decisions in respect of the Right to the Grant of a European Patent“. The object of the Protocol is to define which courts of the EPC contracting states shall have jurisdiction to decide claims, against the applicant, to the right to the grant of a European patent.

Pursuant to Article 164(1) EPC, the Protocol is considered as an “integral part” of the EPC, and therefore is part of an international agreement. So, I think the decision by the judge not to apply the Protocol is a pretty big deal.

Let’s turn to the specifics of the case. This is a dispute between a British company, NCAM Technologies Ltd. and a French company, Solidanim, both active in the field of motion picture technology. Both hold IP on similar technologies, respectively called NCAM Live and SolidTrack.

Solidanim filed a French patent application in December 2011, followed by a European patent application in December 2012, claiming the priority of the French application. The French patent was granted, and the European application is still pending.

NCAM Technologies Ltd. filed a British patent application in May 2012, followed by another British patent application and a PCT application in May 2013, claiming the priority of the initial 2012 filing. The PCT application entered regional phase at the EPO.

Filing date 1918 – the early days of cartoon technology.

Apparently, Solidanim told clients that NCAM had stolen its SolidTrack technology. NCAM did not like that and sued Solidanim in front of the Paris Tribunal de grande instance (TGI) in October 2015. NCAM requested that Solidanim’s French patent be held invalid, and that Solidanim be declared guilty of unfair competition due to disparagement.

In March 2016, Solidanim counterclaimed for infringement of its French patent and of its European patent application and for unfair competition.

Even more importantly for the present post, Solidanim claimed ownership of NCAM’s British patent, PCT application and resulting European application.

In June 2016, NCAM retaliated by presenting the case management judge with a number of procedural requests:

  • that the proceedings should be stayed with respect to Solidanim’s infringement claims;
  • that the proceedings should continue with respect to NCAM’s nullity claim; and
  • that the court should acknowledge its lack of jurisdiction with respect to Solidanim’s ownership claim.

This leads us to the order issued by the case management judge in November 2016. The first request was quite easily granted. Indeed, infringement proceedings based on a pending European patent application are stayed as of right (article L. 615-4 Code de la propriété intellectuelle). Furthermore, infringement proceedings based on a French patent are also stayed as of right if there is a parallel European patent application which is still pending (article L. 614-15 Code de la propriété intellectuelle). This is because the French patent is bound to totally or partially disappear after the grant of the European patent (more specifically, at the end of the opposition time limit or at the end of the opposition proceedings, if any).

Turning to the second request, there was no mandatory rule for the judge to follow. He had discretion whether to proceed further or to stay. He decided to stay, “for a good administration of justice“, according to the ritual phrase, due to the parallel European patent application still being examined at the EPO, and since the fate of the French patent is closely tied to that of the European application.

But the big prize was the third request. NCAM based its request on the Protocol on Recognition, and more specifically article 2:

Subject to Articles 4 and 5, if an applicant for a European patent has his residence or principal place of business within one of the Contracting States, proceedings shall be brought against him in the courts of that Contracting State.

Articles 4 and 5 are irrelevant here, as they relate to employees’ inventions and cases in which there is a preexisting agreement with a jurisdiction clause in place between the parties.

So, this is quite straightforward. According to article 2 of the Protocol, the British courts should have exclusive jurisdiction to rule on Solidanim’s claim for ownership of NCAM’s European application, since NCAM has its principal place of business in the UK.

However, Solidanim relied on the Brussels I regulation, namely regulation (EU) No. 1215/2012, already discussed last week. More specifically, Solidanim relied on article 8(3) of the regulation, per which:

A person domiciled in a Member State may also be sued: […] (3) on a counter-claim arising from the same contract or facts on which the original claim was based, in the court in which the original claim is pending.

Claims were already pending in the Paris TGI due to NCAM’s original complaint. Solidanim’s case was that their ownership counterclaim arose from the same facts on which the original nullity and unfair competition claims were based. As a result, the French court also had jurisdiction under the Brussels I regulation.

The judge thus had to address two questions:

  • First, as a matter of fact, did Solidanim’s ownership counterclaim indeed arise from the same facts on which the original claims were based?
  • Second, as a matter of law, which provisions should prevail: those of the Protocol on Recognition or those of the Brussels I regulation?

As to the first point, the judge agreed with Solidanim that the conditions of article 8(3) of the regulation were met:

[…] The latter claims are closely related to the circumstances of fact and relations between the parties, which need to be assessed so as to determine whether the filings made by NCAM did or did not violate Solidanim’s rights on the FR’057 patent, the validity of which is challenged in front of the Parisian court. 

I am not sure I fully understand why a nullity claim concerning one patent is necessarily closely related to an ownership claim concerning other, later applications by another party – apart from the general background of the case. On the other hand, it seems quite clear that NCAM’s unfair competition / disparagement original claim was closely related to Solidanim’s ownership counterclaim. In both cases, the issue, to put it bluntly, was whether or not NCAM had “stolen” Solidanim’s technology.

But the legal issue is certainly the most interesting one. Both the Protocol and the regulation contain some general provisions on how they should be articulated with other legal instruments.

On the one hand, according to article 11(1) of the Protocol:

In relations between any Contracting States the provisions of this Protocol shall prevail over any conflicting provisions of other agreements on jurisdiction or the recognition of judgments.

So the Protocol proclaims itself to be superior to any other agreement. But the regulation is not an agreement. It is a piece of EU law.

On the other hand, the regulation contains an entire chapter (articles 67 to 73) on its relationship with other instruments. This chapter contains general guidance and some specific provisions, but no specific provisions regarding the Protocol on Recognition.

So the judge turned to a CJEU decision relevant for this issue, namely C-533/08 (TNT Express Nederland BV v. AXA Versicherung AG) of May 4, 2010. This decision deals with the articulation between regulation (EC) No. 44/2001, which was the previous version of the Brussels I regulation, and an international agreement, namely the Convention on the Contract for the International Carriage of Goods by Road, signed in Geneva in 1956.

The court interpreted article 71 of regulation 44/2001 as meaning that:

in a case such as the main proceedings, the rules governing jurisdiction, recognition and enforcement that are laid down by a convention on a particular matter […] apply provided that they are highly predictable, facilitate the sound administration of justice and enable the risk of concurrent proceedings to be minimised and that they ensure, under conditions at least as favourable as those provided for by the regulation, the free movement of judgments in civil and commercial matters and mutual trust in the administration of justice in the European Union (favor executionis).

Article 71 of regulation 1215/2012 is similar to article 71 of regulation 44/2001. Therefore, the judge applied the criteria set by the supreme court of the EU, based on the premise that the same criteria should apply whatever the international agreement at stake is.

The judge acknowledged that the Protocol on Recognition affords a high degree of predictability.

However, turning to the objectives of sound administration of justice and of minimizing the risk of concurrent proceedings, the judge noted that the claims and counterclaims at stake were so closely related that the sound administration of justice and the minimization of the risk of concurrent proceedings were better served if all claims and counterclaims were handled by the same court.

The judge noted that

On the one hand, the [NCAM] patents relate to a system similar to the one claimed by Solidanim in its FR’057 patent, in that they deal with real-time merging or composing of computer-generated 3D objects and a video stream from a video camera. And on the other hand, the ownership claims rely on the same factual circumstances relating to the relationships between the parties and their employees, which lead them both to claim a primacy on the inventions provided in these different patents or applications and to consider that the statements made by the parties against each other constitute acts of unfair competition. 

Consequently, said the judge, the Protocol for Recognition did not pass the test set in C-533/08 in the present circumstances, and it should thus simply be ignored, to the benefit of the Brussels I regulation.

Let’s see how this case further develops. It could even be a matter for further reference to the CJEU down the road, could it not?

As a side note, in a few years’ time, I assume that the Brussels I regulation will no longer apply to the UK, so that a similar situation will have to be handled completely differently.


CASE REFERENCE: Tribunal de grande instance, 3ème chambre 2ème section, ordonnance du juge de la mise en état, November 24, 2016, NCAM Technologies Ltd. v. Solidanim, RG No. 15/15648.

A solo invention

France is well known around the world for its baguette bread, strong cheese, good wines and frequent strikes. Turns out French IP also has clichés of its own, and one of them is probably the Soleau envelope. Although the general public does not necessarily know much about IP law, they have usually at least heard of this national institution.

The Soleau envelope is a way to self-preserve evidence by putting any document in a sealed envelope and having it date-stamped and kept in store by the INPI (the French patent and trademark office). It is popular probably mainly because it is a cheap and easy process. But this comes at a price of a number of misconceptions (just like some of the other French clichés), as many people tend to believe that it is a lesser alternative to a patent – which of course it is not.

The Soleau envelope had an inventor, Mr. Eugène Soleau, who quite interestingly filed and obtained… two patents for his invention. At least he knew better.

The Soleau envelope patent.
One of the Soleau envelope patents.

The case discussed today is relatively exceptional in that it is an example of a situation in which Soleau envelopes were actually useful in the end. There is yet another reason why the case is fairly exceptional: it relates to a claim for ownership of a patent, and the claim was successful – quite often the burden of proof on an ownership claimant is simply too heavy to be properly discharged.

Mr. Courau is a specialist of pine resin extraction, which is a traditional practice in the Southwestern part of France. Resin extraction is performed by making an injury on the trunk of the tree. Resin exudation can be stimulated by spraying sulfuric acid on the injury, but this has obvious drawbacks for the environment and workers.

According to the judgment, Mr. Courau has been experimenting the use of alternative resin exudation stimulating agents, comprising notably citric acid or sodium citrate, for a number of years.

He filed Soleau envelopes describing his work in 1994, 1995, 2003, 2009, then on July 7, 2010 and finally on August 18, 2011.

Between 2007 and 2012, he worked with the company Holiste Laboratoires et Développement, which specializes in aromatherapy. A confidentiality agreement was signed between them on July 7, 2010 (the same day as the fifth Soleau envelope was filed), and then apparently a collaboration agreement two weeks later.

On March 16, 2012, Holiste filed a French patent application. This application was eventually withdrawn but a divisional application was also filed which matured into a patent. Holiste also filed a PCT application claiming the priority of the French application. Mr. Courau found out about these filings and sued Holiste in June 2014, claiming ownership of the patents / applications because, he said, the invention was stolen from him and the filings violated the 2010 confidentiality agreement.

Holiste’s defense was that Mr. Courau was not the inventor of the patents / applications at stake. They said he had offered to replace the conventional acid stimulating agent by a neutral stimulating agent. The parties had therefore discussed a possible neutral composition based on sodium citrate, calcium carbonate and water. On the other hand, the invention at stake is rather about using citric acid as a stimulating agent. This concept was suggested by another technician (namely the person designated as the inventor in the French and PCT filings).

The court analyzed the claims and the description of the French patent. The main claims recite a solution containing citric acid or a derivative thereof for stimulating resin exudation. Various additives can be employed, including in particular a filler such as clay.

The court then turned to the contents of Mr. Courau’s successive Soleau envelopes. In those dated 1994 to 2009, stimulating compositions based on sodium citrate are mentioned. As a reminder, sodium citrate is a salt of citric acid; when put in a solution citrate sodium will decompose and yield citrate (a base) and/or citric acid (guess what: an acid) depending on the pH of the solution. Anyway, in the later Soleau envelopes of July 2010 and August 18, 2011, citric acid per se is mentioned.

Then the court reviewed the collaboration agreement of July 2010. The agreement defines confidential information exchanged in the framework of the agreement and provides that the recipient of confidential information from the other party has no right on (notably) related inventions. In a letter dated September 3, 2010 to Holiste’s designated inventor, the plaintiff had explicitly referred to “the neutral exudation paste which contains sodium citrate and the know-how necessary for its implementation” as confidential information under the agreement.

Finally, the court took into account of number of email exchanges. In August 2010, Holiste acknowledged that Mr. Courau was the sole inventor of a new resin exudation stimulation composition. The filing of a patent application by Mr. Courau was planned after some additional testing, with a license to be granted to the company. In December 2011, Holiste further confirmed in writing that Mr. Courau was the inventor of the exudation stimulation composition.

The court considered all the above evidence as convincingly showing that Holiste had indeed been disloyal and breached the agreement by filing a patent application on his invention. The invention was a solo invention made by the plaintiff.

The court disregarded Holiste’s defense based on the use of the term “neutral by Mr. Courau to characterize his invention (whereas the patent applications mention the use of citric acid):

Claude Courau invented the composition of an exudation paste that he termed as “neutral”, not in a chemical sense (i.e. at pH 7) but in a common sense, meaning that it is not harmful for man and the environment, unlike sulfuric acid which was previously used. It cannot be concluded from the awkward use of this term that the product did not contain any acid. On the contrary, all documents mentioned above, which are dated prior to the patent filing, recite the presence of either citric acid or its derivative sodium citrate (which is obtained by adding soda). 

As a result, the court ordered that Mr. Courau be retroactively considered as the sole applicant of the French patent, as well as of the PCT application, “including patent applications originating from national phase entries thereof“.

The plaintiff was also awarded 10,000 euros for moral prejudice as well as 8,000 euros for reimbursement of attorney’s fees.

It seems that the claimant in this case was a very careful person, who had extensively documented his work or ideas over the years. This is not so common and is certainly the reason for the positive outcome that he obtained.

I do wonder however whether the court sufficiently reviewed all the claims of the French patent. For examples, dependent claims 6, 7 and 10 recite the presence of clay as a filler, in particular bentonite or kaolin. Whether this embodiment was also communicated by the plaintiff to Holiste prior to the filing date is unclear as the judgment is silent on this aspect. Also, the PCT application contains a slightly different claim set, with some additional features.

It seems to me that, if Holiste’s designated inventor contributed to at least some of the claims, the court should have ordered co-ownership instead of a full retroactive transfer of ownership.

As a last remark on this case, the PCT application entered into European regional phase. This is not mentioned in the judgment, but of course the file wrapper is accessible online on the EPO website.

In December 2014, Mr. Courau’s representative requested that the examination proceedings be stayed due to the pending ownership litigation. This request was immediately accepted by the EPO.

Holiste’s representative countered by stating that the lawsuit was groundless and by directly attacking Mr. Courau. The legal division of course stayed miles away from taking position on the merits of the case but simply explained that the legal conditions for ordering a stay of proceedings were met.

In July 2016, Holiste’s representative nevertheless filed amended claims to (oddly) align the European claims onto the French granted claims. Of course, this amendment could not be processed by the EPO. As a result, Holiste’s representative sent another letter in August 2016 expressing bewilderment at the EPO’s refusal to deal with the amendment.

To be continued. The next steps in the examination proceedings will of course depend on whether an appeal was lodged by Holiste against this TGI ruling.


CASE REFERENCE: Tribunal de grande instance de Paris, 3ème chambre 3ème section, May 13, 2016, Courau c/ Holiste Laboratoires et Développement, RG No. 14/09297.