One shot one opportunity

The song goes like: “If you had one shot or one opportunity to seize everything you ever wanted in one moment, would you capture it or just let it slip?

I know, a quote from a rap song is not what you would expect in an IP blog post discussing infringement seizures. But bear with me and you will see that it is indeed quite fitting.

The case pitches France Routage Participations against Maury Imprimeur. The patent at stake is EP 1620211, granted in 2007 to France Routage and unopposed.

Maury Imprimeur, as its name indicates, is active in printing, but also in sorting and mailing. France Routage’s patent covers an installation and a method “for processing printed papers in order to dispatch the printed papers to addressees“.

In 2014, Maury Imprimeur received a cease and desist letter from France Routage and replied that it did not infringe the EP’211 patent. Two years went by, and in May 2016 France Routage had an infringement seizure carried out in the premises of Maury Imprimeur, in the fine town of Manchecourt. One month later, France Routage file a complaint with the Paris TGI, alleging infringement of the French part of their European patent.

During the proceedings, France Routage filed a motion to request a technical expertise.

This motion was rejected by the case management judge on April 5, 2018. The case proceeded to trial, and the judgment was issued by the TGI on November 8, 2018. According to this judgment, the patent was valid but the infringement claim was rejected.

France Routage appealed both the order of the case management judge of April 2018 and the judgment on the merits. The Paris Cour d’appel handled both aspects in its decision dated May 15, 2020.

The court started with dealing with the validity of the patent – which of course was challenged by the defendant. Insufficiency of disclosure, lack of novelty and lack of inventive step were the three grounds relied upon by Maury. All three were rejected by the court.

Then comes what I think is the most interesting part of the judgment, namely the plaintiff’s motion for expertise.

As a reminder, an infringement seizure had taken place in 2016. In June 2017, the defendant had called upon a bailiff on its own, to establish an exonerating report. It is as a reaction to this report filed by the defendant that the claimant had filed its motion for technical expertise.

France Routage explained that the infringement seizure had not enabled it to determine all components of Maury’s sorting installation. Therefore, it was not possible to fully appreciate the contents of Maury’s bailiff report.

However, the court was not sympathetic to France Routage’s argumentation:

The case management judge […] rightly recalled that France Routage, as the infringement claimant, has the burden of proof and was authorized to carry out an infringement seizure to this end on the sorting lines at stake. [The judge] rightly added that the acting bailiff was accompanied by two patent attorneys and an IT expert and […] described only the sorting line in operation (line No.3) and that the other sorting lines were not hidden. 

As rightly mentioned by the first instance judge, it is only after Maury filed the bailiff report of June 22, 2017 that France Routage, more than one year after the infringement seizure of May 9, 2016, requested an expertise after having deemed having sufficient evidence. 

It has not been demonstrated that the infringement seizure, which authorized […] “describing in a detailed manner the allegedly infringing processes and installations” as well as accessing the installations dedicated to “operations of sorting printouts and all related IT systems” and requesting that the operation mode of the installations should be explained, did not make it possible to more completely or precisely describe sorting line No.3 which was in operation as well as all associated computers and robots which were present, nor to describe and get explanations on the operation of the other visible sorting lines. 

Infringement seizure is a powerful weapon in the hands of IP right owners in France, in order to establish the existence of infringement. On the other hand, when an infringement seizure does not live up to its expectations of providing evidence of the infringement, then IP right owners are in serious trouble. Actually, in view of this judgment, they may not get a second chance.

In Eminem’s words, as the patentee, “you only get one shot, […] this opportunity comes once in a lifetime“.

What if there was only one shot in each game?

With the caveat that I am of course not aware of all the facts (they are never exhaustively reflected in the written decisions, perhaps the absence of infringement was already very clear based on the record), this position seems rather harsh.

An infringement seizure is no walk in the park. In (normally) just one day, the seizing team has to figure out which information to get and how to get it, in enemy territory, while complying with onerous formalism. Sometimes it works well, sometimes it doesn’t, depending on the circumstances. In a worst case scenario, the seizing team may come home completely empty-handed. And it is certainly possible for them to forget about asking some relevant questions, acting under pressure and severe time constraints, and not knowing how the defense will develop in the next couple of years.

But the court further held:

The parties do not agree (and did not agree before the infringement seizure) on whether the characterizing part of the main claims of EP’211 is reproduced. This circumstance does not justify a taking of evidence having the same purpose as the infringement seizure, namely describing the operation of the sorting installations of Maury, in particular its IT means.  

Same purpose or not, an expertise is very different from an infringement seizure: it is an inter partes procedure, with much more time available, and wherein each party spontaneously and forcibly presents evidence to an impartial expert.

These two procedures can be thought of as complementary, and not mutually exclusive.

Wouldn’t it perhaps have been fairer to grant the motion for expertise on the condition that the plaintiff should provisionally bear all related costs (including reasonable fees of the defendants’ attorneys)?

Anyway, having denied the plaintiff’s motion, the court then also found against them regarding the infringement claim. Not very surprising: after explaining that an expertise was required to prove its case, the patentee probably had a hard time convincing the court that there was sufficient evidence of an infringement.

The only consolation for France Routage was that their infringement claim had been found abusive by the TGI. The Cour d’appel set aside that part of the judgment, applying a higher abuse of procedure threshold.

In particular, France Routage had the right to request an expertise and still claim that there was infringement, said the court.

The end – at least for now: “Snap back to reality, oh there goes gravity“.


CASE REFERENCE: Cour d’appel de Paris, pôle 5 chambre 2, May 15, 2020, SARL France Routage Participations v. SAS Maury Imprimeur, RG No. 19/00916.

No U.S. torpedo

No breaking new today, as the case I am going to talk about has already been commented upon in many various places.

Looks like I may have some catching up to do.

And yet, this is a prominent international patent case with a French component, and it involves a quite unusual point of law. So, I would be remiss if I failed to mention it on this blog.

The German company IPCom owns a telecom patent portfolio acquired from Robert Bosch. These patents are presented by the owner as essential for the 2G, 3G and 4G standards.

IPCom has been negotiating a license for some time with the Chinese group Lenovo (which also owns Motorola Mobility) – without any luck so far. 

Lenovo was the first to shoot, litigation-wise, by filing a complaint with the District Court for the Northern District of California in March 2019, seeking the setting of the conditions of a worldwide FRAND license for the IPCom portfolio.

In July 2019, IPCom retaliated by initiating infringement proceedings based on one of their patents, EP 1841268, in the UK.

Probably wary of a likely escalation in other jurisdictions as well, Lenovo filed a motion for anti-suit injunction with the California court on September 18, 2019.

On October 16, 2019, IPCom performed infringement seizures against the French Lenovo subsidiaries and filed a motion for preliminary injunction.

On October 24, 2019, IPCom filed a petition with the juge des référés (the judge in charge of emergency interim proceedings) in Paris, seeking the withdrawal of the motion for anti-suit injunction filed by Lenovo in the U.S.

In other words, IPCom reacted to the motion for anti-suit injunction in the U.S. by a motion for anti-anti-suit injunction in France.

The hearing on the motion for anti-suit injunction in the U.S. was originally scheduled on November 14, 2019. Lenovo, in an attempt to beat the French proceedings, tried to bring this hearing forward by filing a motion to expedite with the U.S. court. IPCom was not intimidated and obtained an ex parte order from the French judge dated October 30, 2019, per which Lenovo was ordered to withdraw the motion to expedite, so that the hearing on the motion for anti-anti-suit injunction in France could take place on November 6, 2019, before the hearing on the motion for anti-suit injunction in the U.S.

Still on October 30, 2019, the motion to expedite was rejected by the U.S. court. The hearing in front of the juge des référés took place on November 6, 2019 as planned, and the judgment was issued on the same day, which is really remarkable.

At this point, you would probably venture that this post will mainly thrill civil procedure geeks, and not so much GSM, UMTS or LTE geeks – and you would be right.

Now that you have been warned, we can go through the judgment.

Before the judge was able to decide on the very procedural motion at stake… there were of course a few procedural preliminary objections to deal with.

First, Lenovo argued that the October 25, 2019 petition had not been properly served on the U.S. defendants before the deadline of October 29, 2019 which had been originally set by the judge for this service to take place.

However, the judge deemed that the formalities were properly performed by the due date. A French bailiff sent the petition on October 25, 2019 to the U.S. process server, and in parallel shipped it by express mail – which was received on October 28. Still in parallel, the petition was also sent to Lenovo’s usual French attorney. The petition was referred to by Lenovo on October 28 when they filed their motion to expedite with the California court. As a result, the juge des référés deemed that everything was in order, even if the U.S. process server did not provide the proof of service before the due date.

Second, Lenovo objected that the French judge lacked jurisdiction and that only the District Court for the Northern District of California had jurisdiction.

The judge dismissed this objection, mainly based on article 46 Code de procédure civile, per which, in a non-contractual dispute, a plaintiff may initiate proceedings in “the court of the place of the event causing liability or the one in whose district the damage was suffered”. 

The judge noted that, if the anti-suit motion was granted in the U.S., IPCom would suffer harm in France. Therefore, the French judge had jurisdiction over the petition for an anti-anti-suit injunction.

Third, Lenovo raised an objection due to lis pendens and related proceedings.

Since a lawsuit was already pending in California, the French judge should defer to the U.S. court, Lenovo argued. Once again, the juge des référés disagreed, noting that the present action related to a different matter from the one in front of the U.S. court; and that it would not be proper (in the original text: “pas d’une bonne administration de la justice“) to defer to the U.S. court when the very purpose of IPCom’s petition is to prevent the U.S. proceedings from interfering with the French proceedings.

Finally, the judge was able to address the petition on the merits, so to speak.

The judge stated that article 808 Code de procédure civile empowers her to order any measure which is not serious challenged or which is justified by the existence of a dispute, if there is an emergency.

In the present case, the existence of an emergency was easy to establish, in view of the pending motion in front of the U.S. court.

Then, the judge stated that anti-suit injunctions are not allowed among member states of the EU.

With regard to a non-EU country such as the U.S., the judge held that an anti-suit injunction would violate the French international public order – except if a jurisdiction clause or an arbitration clause was at stake, which was not the case here.

Wrote the judge:

Indeed, the anti-suit injunction (except in the cases mentioned above) is an interference with the jurisdiction of the courts and indirectly results in violating the exclusive jurisdiction which each state enjoys in order to freely define the international jurisdiction of its courts. 

Therefore, the judge granted IPCom’s petition.

Lenovo was ordered to immediately withdraw their motion for anti-suit injunction, insofar as it relates to legal proceedings which could be initiated by IPCom in France regarding EP 1841268. Lenovo was ordered not to file any other similar motion anywhere in the world. This order was issued under a penalty of 200,000 euros per violation and per day of non-compliance.

All in all, this ruling is a quite spectacular affirmation of sovereignty from the French court. The docket was fast-tracked at quasi-light speed, including with the interim issuance of the ex parte order mentioned above (which is rather exceptional), to make sure that the anti-anti-suit injunction was issued before the U.S. court could rule on the motion for anti-suit injunction.

My initial reaction is that this judgment fully makes sense. Patent infringement is a matter of national law, and it would thus be shocking if a patent proprietor could be prohibited by a foreign court to even attempt to assert its IP.

Accordingly, I understand that the high court in the UK also granted IPCom an anti-anti-suit injunction in the same case (see here). A few months earlier, in a different case and under different circumstances, an anti-anti-suit injunction was also issued in Germany (see here).

That said, without knowing of course who is acting in more or less good faith or bad faith, I do also have some sympathy with Lenovo’s position to some extent. The central issue in this dispute is that of setting the terms and conditions of the FRAND license for the IPCom portfolio. If the parties cannot agree, litigation must solve the issue.

But once the matter has already been brought in front of a court of law, what is the point in filing patent infringement suits here and there, beside exerting additional pressure on the would-be licensee?

To Lenovo’s point, centralized litigation makes more sense on a global standpoint.

But then again, on the other hand, there is something wrong in the notion that the first party to act can choose the forum that they please and then stop and freeze any possible initiative of the other party outside of that forum.

Why should the first one to pull the trigger always have the upper hand? After the Italian torpedoes which were in fashion some time ago, Lenovo tried to launch a U.S. torpedo, but it fizzled out.

Anyway, the case can easily make one think of a house of mirrors. It seems like an endless source of paradoxical questions.

In a procedural maze.

To wit:

  • Could Lenovo have filed a motion for anti-anti-anti-suit injunction in the U.S.? And so on? Is there any theoretical end to this game?
  • By issuing the anti-anti-suit injunction, didn’t the French judge achieve exactly what she wanted to avoid in the first place, i.e. interfere with another court’s business? In other terms, if an anti-suit injunction is per se illegitimate, isn’t there some illegitimacy in an anti-anti-suit injunction as well?
  •  What if the anti-suit injunction had been granted in the U.S.? What would the effect have been in France? The injunction would have targeted the patent proprietor, not the French court itself. So, could the French court have thwarted the effect of the injunction by e.g. granting damages to the patent proprietor for any loss suffered due to non-compliance with the U.S. injunction? Would the court have had jurisdiction to do so?

Anyway, now that a few months have passed since this ruling, I bet that multiple new developments have taken place in this multinational game of 3D procedural chess, and I would be delighted to be updated by any readers in the know.


CASE REFERENCE: Tribunal de grande instance de Paris, ofronnance de référé, November 8, 2019, IPCom GmbH & Co. KG v. Lenovo Inc. et al., RG No. 19/59311.

The neverending story

Happy new year to all readers!

And, to make sure that we are off to a good start in 2019, consider this: it has been a while since we last heard of Nergeco and Maviflex, right? One of the longest and messiest examples of French patent litigation, perhaps only equaled by the pravastatin case. 

But a few weeks ago, Jean-Martin Chevalier, from the law firm Cousin & Associés, was the first one to kindly draw my attention to the latest episode of the saga. 

Drum roll… Ladies and gentlemen, we now have a 4th (yes, fourth) cassation ruling partly setting aside a previous judgment by an appeal court.

My previous post on the saga was entitled Groundhog case.

I might as well copy here the timeline of the case from this post and simply add the latest developments at the end of the list:

  • At the end of the nineties, Nergeco (patentee) and Nergeco France (licensee) sued two companies, Mavil (now Gewiss France) and Maviflex, for infringement of a European patent.
  • On December 21, 2000, the Lyon Tribunal de grande instance (TGI) held that the plaintiffs’ claims were admissible but ill-founded. The plaintiffs appealed.
  • On October 2, 2003, the Lyon Cour d’appel set aside the first instance judgment and concluded that the patent was infringed. The court ordered an expertise to assess damages.
  • On October 15, 2005, the Cour d’appel issued a second judgment further to the expertise. The amount of damages was set to 60,000 euros to the patentee (Nergeco) and 1,563,214 euros to the licensee (Nergeco France). The defendants then filed an appeal on points of law.
  • On July 10, 2007, the Cour de cassation partly set aside the 2005 judgment regarding the damages to be paid to the licensee. The reason for the reversal was that the Cour d’appel had not addressed the argument that the license agreement had been registered in the patent register only in 1998, so that it was not enforceable against third parties before that date. The case was thus remitted to a different Cour d’appel, in Paris this time.
  • On June 2, 2010, the Paris Cour d’appel held that all claims against Mavil (now Gewiss France) were in fact inadmissible as Mavil no longer existed when they were initially sued; and reduced the amount of damages to be paid by the second defendant Maviflex to the licensee Nergeco France by approximately half (taking into account the date at which the license agreement was registered and became enforceable against third parties). Both sides filed another appeal on points of law.
  • On September 20, 2011, the Cour de cassation set aside the 2010 judgment. First, because the Cour d’appel should have ruled on an argument of invalidity of the license agreement (there was no res judicata on this issue, as it was not addressed in the 2003 and 2005 judgments). Second, because the argument that the claims against Mavil were inadmissible should not have been given any consideration, as Mavil / Gewiss France acted in the proceedings as if their designation in the initial complaint was correct. In fact, this part of the decision became very famous since it is one of the few illustrations of an estoppel principle in this country.  The case was again remitted to the Paris Cour d’appel.
  • On June 21, 2013, in a new judgment by the Cour d’appel, the case was reexamined pursuant to the instructions of the Cour de cassation. But the actual outcome was pretty much the same as in the previous judgment. In particular, the damages award to Nergeco France was similar to the one ordered in 2010. The defendants filed a third appeal on points of law.
  • On December 16, 2014, the Cour de cassation set aside the 2013 judgment. Once again, the supreme court ruled that the appeal judges should have ruled on some arguments relating to the inadmissibility of Nergeco France’s claims.
  • On October 28, 2016, the Paris Cour d’appel held that the agreement containing the license provision was invalid. Nergeco France further filed a claim based on unfair competition, but this claim was held as new and thus inadmissible at this stage.

This leads us to the latest development: on September 26, 2018, the Cour de cassation set aside the 2016 judgment and remitted the case once more back to the Cour d’appel in a different composition.

As Forrest Gump would say, this case is like a chocolate box, you never know what you’re gonna get.

There were two parts in Nergeco’s appeal. According to the first part, the agreement containing the license provision should not have been held invalid. This part of the appeal was rejected by the Cour de cassation.

As explained in my previous post, there are two reasons why the license agreement was held invalid by the Cour d’appel.

First, the agreement was allegedly executed at a date when Nergeco France was not yet registered in the commerce register. But the agreement mentioned that Nergeco France was registered in the commerce register of Le Puy, under a certain number – which was untrue, as this registration only took place later. The agreement was thus executed by a company with no legal capacity. It can be surmised from these facts that either the execution date was erroneous, or the document was forged – although the appeal decision did not go down that road.

Second, the agreement only licensed the European patent at stake in the lawsuit but failed to license the corresponding French
priority patent. Under French law, this omission made the license invalid.

In front of the Cour de cassation, Nergeco argued that the parties to the agreement had proven their willingness to renew or continue the agreement after the cause for nullity of the agreement had disappeared.

In particular, the agreement was filed at the national patent register several years later, and amendments were signed, at a time when Nergeco France was properly registered (as indicated in the original agreement) and the French patent had ceased to be in force (due to the substitution of the European patent).

The supreme court was not convinced. If an agreement is invalid due to an “absolute” ground for nullity, it cannot be retroactively confirmed. Nergeco did not argue that another, valid license agreement had been executed at a later stage, but rather argued that the initially invalid agreement later became valid, and this is not possible according to the court.

But then there was the second part of Nergeco’s appeal, per which the Paris Cour d’appel wrongly held Nergeco’s unfair competition claim inadmissible. Here, the cassation judges sided with Nergeco.

Here is my translation of the Cour de cassation’s take on this. First point:

[…] The judgment [under appeal] stated that Nergeco France’s claim is inadmissible because [the court] cannot rule on a claim for damages on a different ground from the patent infringement ground, on which the claim was originally based, and on which the Lyon Cour d’appel ruled in a final ruling that it could in principle be indemnified.

By ruling in this manner, the Cour d’appel [erred] as the judgment of the Lyon Cour d’appel of October 2, 2003 did not decide, in the order, on the dispute relating to the ground for damages [now] filed by Nergeco France.

Second point:

[…] Partie’s submissions [on appeal] are not new when they have the same purpose as those filed in front of the first instance judge, even if the legal ground is different.

[…] The judgment [under appeal] stated that Nergeco France’s claim for remedy further to the acts of infringement of patent No. EP 0398791 is inadmissible because this company cannot file a claim for damages on a ground which is different from the patent infringement one, on which its claim was initially based.

By ruling in this manner, the Cour d’appel [erred] as the claims successively filed by Nergeco France based on article L. 615-2 Code de la propriété intellectuelle and then on article 1382, now article 1240 Code civil, both had the purpose of obtaining a remedy further to the harm caused by the patent infringement.

So if I understand correctly the court’s reasoning, Nergeco France’s claim is not “new on appeal” (and thus inadmissible) because Nergeco France simply changed the legal ground for its claim for damages, but the damages are still requested for the same purpose, in view of the same acts. And on the other hand, this more recent legal ground was not previously examined and there was thus no res judicata.

I have to say that I am a little bit surprised by this reasoning.

There is case law aplenty per which an unfair competition claim cannot be based on the exact same facts as a patent infringement claim.

If this is correct, then how can Nergeco France’s unfair competition claim not be “new” relative to the original patent infringement claim?

Besides, irrespective of the correctness of the legal reasoning, the practical outcome of this cassation ruling appears to be most unfortunate.

I find it preposterous that this is the tenth ruling in this litigation, and that it is still not yet the final one. You can probably count on at least two more: a further judgment of the Paris Cour d’appel, and then back again to the Cour de cassation, unless of course there are yet additional twists in the story.

Fortunately, this case is exceptional and is not representative of IP litigation in France in general. But seriously, what a terrible example…


CASE REFERENCE: Cour de cassation, ch. com., September 26, 2018, Nergeco France et al. v. Gewiss France et al., pourvoi No. Y 16-25937.

For your eyes only

No, this post has nothing to do with the famous 007 spy.

It rather deals with the restriction of the accessibility of evidence filed during patent litigation to protect trade secrets. With such an exciting topic, who needs car chases, double agents and half-naked bodies?

A while ago, I reported on the first instance judgment in the Core Wireless Licensing v. LG  litigation. As a reminder, this is an SEP (standard essential patents) infringement action brought by Core Wireless (Core) against the Korean giant LG, which was handled super fast by the Paris Tribunal de grande instance, upon the claimant’s request for accelerated proceedings. Not that it worked out for them though, as there was no finding of infringement by the court for any of the five asserted patents.

As swift as the first instance case was, I have not heard about any appeal proceedings since the judgment of April 17, 2015 – until very recently, that is. Now, owing to LG’s lawyers and via the AIPPI French group (thank you), here are tidings of Core’s appeal.

It turns out that the appeal case has been moving at a much slower pace, with already three orders on procedural motions issued by the appeal judge in charge of case management. The third order, dated October 9, 2018, is of particular interest.

First of all, the order of the judge mentions that “what is at stake in the litigation is now the determination of a FRAND royalty rate applicable to the patents in suit“.

This is somewhat surprising, since the first instance judgment dismissed all infringement claims brought by Core. I can only assume that a partial agreement between the parties must have been reached, that LG must have agreed to take a license from Core and that the only remaining contentious issue must be the royalty rate.

Now, a major difficulty in a FRAND royalty rate-setting lawsuit such as this one is how evidence relevant to the royalty rate determination should be handled.

For instance, similar license agreements granted by the right holder, or even third party license agreements may be of relevance to the determination, but these are also highly sensitive documents.

Eyeing towards the right royalty rate.

The first point addressed in the October 9 order is a dispute regarding one exhibit filed by LG, namely a license agreement between Nokia and Qualcomm.

Core’s patent portfolio was originally owned by Nokia. Nokia licensed the patents to the chip manufacturer Qualcomm. The LG devices comprise Qualcomm chipsets. As a result, LG contends that they benefit from pass-through rights under the Nokia / Qualcomm agreement (by exhaustion of the Nokia patent rights). A recurring debate in many SEP lawsuits.

LG had made repeated official requests for being granted access to the Nokia / Qualcomm agreement, to no avail. But on October 31, 2017, LG finally filed a redacted version of this agreement in front of the Paris Cour d’appel, which they apparently originally obtained from parallel proceedings in the U.S.

Core protested and stated that this filing was illegal. They argued in particular that, under article 21 of the agreement, Nokia’s consent is a prerequisite for filing the agreement in the French proceedings, and that Nokia did not consent. Core thus requested that the exhibit should be dismissed.

An interesting problem, but also one that the appeal judge did not solve. Indeed, the judge noted that it is not within her prerogatives to dismiss an exhibit. This is a matter for the three-judge court to decide. So, Core’s request was rejected – for the time being at least. It will be decided in the judgment on the merits.

As a second point addressed in the order, various requests for additional evidence were filed by both LG and Core.

LG requested that Core be ordered to file a number of contracts: 1) a purchase and sale agreement between Intellectual Property Asset Trust and Core dated 2011, 2) a royalty participant agreement between Intellectual Property Asset Trust, Core, Nokia and Microsoft dated 2011, and 3) all further agreements between Core and any third party regarding the patents at stake, and in particular an agreement of 2015 between Core and Microsoft.

The judge deemed that these agreements were indeed relevant to the determination of the FRAND royalty rate. Besides, Core did not frontally object to the submissions of these documents but requested that confidential information be protected (more on that below).

On the other hand, Core requested that LG be ordered to file license agreements between LG and Nokia, Interdigital, Ericsson and Blu Products.

LG objected, and the judge held that the LG agreements are in fact not relevant to the lawsuit because they do not relate to the patents in suit. Also, the judge did not like that this request by Core was submitted only a few days before the scheduled hearing on the parties’ motions.

As a summary, Core was ordered to file a number of agreements in relation with the patent portfolio at stake, but LG was not ordered to filed its own license agreements regarding other patents.

But the most interesting part of the order is probably that the judge made use of a brand new provision, introduced by law No. 2018-670 of July 30, 2018 into the French statute.

This is the transposition of the so-called “trade secret directive” (aka Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure).

Among others, this law created a new article L. 153-1 in the Code de commerce, which reads as follows (my own translation):

When, in civil or commercial proceedings relating to a motion for taking of evidence before a trial on the merits or during litigation on the merits, the communication or supply of an exhibit is relied upon or requested, and a party or a third party contends, or it has been held, that it may breach a trade secret, the judge can, on his/her own motion or upon the request of a party or a third party, if the protection of this secret cannot be otherwise safeguarded and without prejudice of the rights of the defendants: 

1. Read the exhibit alone and, if deemed necessary, order an expertise and ask for the opinion, for each party, of a person authorized to assist or represent them, in order to decide whether the protection measures provided in the present article should be applied; 

2. Decide to limit the communication and supply of this exhibit to some elements only, order the communication or supply in the form of a summary, or restrict access, for each party, to at most one person and another person authorized to assist or represent them; 

3. Decide that the debates will take place and the decision will be handed out in private; 

4. Adapt the reasons of the decision and modalities of publication thereof to the necessities of protecting trade secrets. 

The judge thus decided that the documents at stake should be first communicated for LG’s attorneys’ eyes only. The attorneys of both parties should then tell the judge which parts of the documents may or may not infringe a trade secret, in their view. The judge will then, if necessary, issue another order to implement some of the measures under 2, 3 and 4 above.

I think it is very positive that the range of options to preserve trade secrets during litigation has been broadened by the transposition of the trade secret directive. This will hopefully make it easier for judges to order relevant evidence to be communicated – knowing that guarantees can be put in place in order to prevent the misuse of such evidence, if it is highly confidential and sensitive. This is essential in the French system which does not provide for a broad discovery / disclosure procedure.

Turning back to this Core v. LG case, I personally hope that the judge will not issue an order under paragraph 3 of article L. 153-1, and will make moderate use of paragraph 4. This is because the judiciary determination of the FRAND royalty rate in a case such as this one will be of major interest to all stakeholders in the industry, as it could provide some eagerly awaited general guidance.


Cour d’appel de Paris, pôle 5 chambre 1, October 9, 2018, Core Wireless Licensing SARL v. LG Electronics France SAS & LG Electronics Inc., RG No. 15/17037.

Competence? Competence!

When international private law meets patent law, things never fail to get interestingly complex.

Today’s case pits a German plaintiff, TerraNova Energy GmbH & Co. against a French defendant, Suez International SAS, and the litigation involves a number of patents and patent applications worldwide.

The background of the case is the following (according to the summary provided by the judge in the order to be discussed).

TerraNova developed a technology for recycling organic waste recovered from sewage sludge. Suez International, originally Degrémont, is now part of the Suez group, a major actor in the water and waste treatment industry.

Between April 2011 and October 2012, TerraNova presented its so-called “Ultra” technology to Suez in a demo plant in Germany. A non-disclosure agreement (NDA) was signed in November 2012. Both companies continued to cooperate, which led to the execution of a second, partnership agreement in April 2013. According to this partnership agreement, Suez had an exclusive right to the Ultra technology in France, and had a preemption right on the technology in other countries.

In 2013 and 2014, the Ultra technology was implemented in a sewage treatment plant in Compiègne, France and then in another facility in Maribor, Slovenia. In May 2014, the parties began negotiating a license agreement. November 2014 is the point in time when things started going south, as Suez informed TerraNova that they wanted to improve the Ultra technology, and to work on this new process in China. Then, they announced that they no longer intended to get a license, having developed their own improved process.

In January 2015, Suez offered to pay royalties for the ongoing Chinese project and for a potential second one, and requested exclusive rights in China. TerraNova refused. In October 2015, Suez opened a renegotiation of the 2013 partnership agreement and mentioned the development of its own, distinct technology. TerraNova then realized that Suez had filed three PCT applications, based on three French priority applications filed respectively in May 2013, July 2013 and November 2014. A number of granted patents and pending applications were later filed from these PCT applications, in Europe, China, the U.S., Canada, Australia and Brazil.

TerraNova was of the opinion that the patent applications disclosed confidential information communicated to Suez under the 2012 NDA. They filed a complaint with the Paris Tribunal de grande instance (TGI) in October 2016, claiming damages as well as the transfer of the various patents / applications.

Patent law meets international law.

As a legal defense, Suez argued that the Paris TGI lacked jurisdiction over this dispute. As an auxiliary argument, they said that the court lacked jurisdiction at least regarding the requested transfer of patent rights deriving from Suez’ PCT applications.

This legal defense was debated in front of the case management judge, which gave rise to the order discussed today. The merits of the case are not addressed in this order.

Let’s first deal with Suez’ general argument of lack of jurisdiction. The difficulty here is that the parties were bound by two successive agreements: the 2012 NDA and the 2013 partnership agreement.

Now, the NDA contained a jurisdiction clause, per which any dispute in connection with the agreement should be tried by the Paris courts. But the partnership agreement contained an arbitration clause, per which any dispute in connection with the agreement should be brought to the Swiss Chambers’ Arbitration Institution.

Suez claimed that, according to the competence-competence principle, only the arbitral tribunal had jurisdiction to decide on which forum had jurisdiction.

The court referred to article 1448 of the Code de procédure civile. According to this provision, if a lawsuit subjected to an arbitration agreement is filed in front of a national court, the court must decline jurisdiction unless (1) the case has not yet been brought to an arbitral tribunal, and (2) the arbitration agreement is manifestly null or inapplicable. These conditions (1) and (2) are cumulative.

In this case, condition (1) was fulfilled, as the case had not been brought to an arbitral tribunal. As to to condition (2), the court came to the conclusion that it was also fulfilled. The arbitration clause of the partnership agreement was manifestly inapplicable to the dispute, said the court. If there was the slightest doubt as to whether the arbitration clause was applicable, my understanding is that the judge had no other choice but to decline jurisdiction. Yet, in this situation, there was apparently no doubt at all.

Indeed:

  • It was clear that the parties to the NDA intended to subject this agreement to the jurisdiction of the Paris court.
  • The later partnership agreement did not state (be it implicitly or explicitly) that this jurisdiction clause in the NDA was no longer applicable.
  • The NDA contained a mention that the agreement would expire 3 years after the execution date, except some provisions which would still apply for 5 years after the end of the agreement. The jurisdiction clause was not cited among the surviving provisions. But the judge held that a jurisdiction clause was autonomous with respect to the rest of the agreement and necessarily continued to apply to disputes arising from the agreement.
  • Finally, the complaint did relate to an alleged breach of the non-disclosure provisions of the NDA, and not to an alleged breach of the partnership agreement.

Therefore, the overarching competence-competence principle in this particular instance did not apply, and the judge refused to decline jurisdiction.

This leads us to the second (auxiliary) part of Suez’ legal defense, i.e. that the judge should decline jurisdiction at least over the requested transfer of patent rights stemming from Suez’ PCT applications.

Indeed, the applications were filed after the execution of the partnership agreement, so that only this later agreement was applicable to TerraNova’s claim for ownership.

It is not perfectly clear to me when reading the order whether Suez also argued that the TGI had no jurisdiction over disputes regarding the ownership of foreign patent rights (as opposed to French patent rights) as a matter of principle. Anyway, in the past, French courts did not hesitate to rule on ownership claims regarding foreign patent rights, and the trend was not reversed in this case.

It is interesting to note, though, that TerraNova did not request that the foreign patent rights should be transferred to them by the court, but rather that the court should order Suez to perform the transfer of these patent rights to their benefit. The formulation of this claim probably makes it easier to avoid any potential argument that the French courts would encroach upon the prerogatives of foreign states.

As to the merits of Suez’ argument, the judge held that TerraNova’s transfer claim was analyzed as a remedy pertaining to the alleged breach of the NDA, so that the TGI did have jurisdiction also over this aspect of the case.

To summarize, Suez’ legal defense was rejected, and the proceedings will continue on the merits.


CASE REFERENCE: Tribunal de grande instance de Paris, 3ème chambre 1ère section, ordonnance du juge de la mise en état, April 5, 2018, TerraNova Energy GmbH & Co v. Suez International SAS, RG No.16/16334.