Some valid figures

Lionel Vial, Laura Barona and I have recently published an article in “the orange journal. For those readers who are not overly familiar with the French patent scene, this is the nickname of LexisNexis’ Propriété Industrielle.

This article looks at key figures of French patent litigation, based on a sample of recent decisions which were manually reviewed. In this post, I will present some highlights from this work.

As the devil is in the detail, especially when stats are concerned, the methodology that we used will be summarized at the end of the post.

The main takeaway message from our study is probably that the recent overall patent invalidation rate in France is high, at approximately 56%.

This invalidation rate conflates both patents subjected to nullity actions and patents subjected to infringement actions in which a nullity counterclaim was filed.

Now, before all patent holder readers start fleeing our country out of desperation, let me immediately add that this comes with a number of caveats.

First, we have only studied court decisions on the merits. 

However, many patent lawsuits are settled before going to trial, so that a decision on the merits is never issued. It can be postulated that patents that give rise to settlement may on average be stronger than patents that get to be actually ruled on by a court – although there are of course many different factors that come into play when a party decides whether to settle or not. Anyway, the overall invalidation rate may not reflect the actual strength of all patents that are litigated.

Second, the 56% invalidation rate corresponds to patents of which at least one claim was declared invalid by a court.

Admittedly, in the vast majority of cases, when one independent claim is declared invalid, all dependent claims that are reviewed by the court are also declared invalid (what I would call the “throwing the baby out with the bathwater” approach). On the other hand, some dependent claims of the patents in suit are frequently not examined at all, simply because their validity is not challenged (which generally means that these claims are not asserted against a defendant). As a result, even when a patent is counted as invalid in the above figure, it may in fact contain some valid claims (although, again, this is usually not apparent from the decision).

Third, the 56% figure is based only on patents the validity of which was challenged.

But not all litigated patents go through a validity review by the court. In fact, 27% of all patents mentioned in the sample that we looked at did not give rise to any validity challenge. This is significant proportion.

It is possible that these other, non-reviewed patents are stronger on average. But other explanations are possible as well. For instance, these cases may correspond to infringement defendants who have less money to spend on litigation.

This third caveat is also probably the reason why the above figure markedly differs from the lower and often-quoted invalidation rate of 27% found by Pierre Véron in a famous study. Pierre Véron’s sample was much larger than ours, but is now an older one (as it covered the period of 2000-2009). Sabine Agé recently presented additional figures for the period of 2010-2016. She said the invalidation rate varied between 21% and 42% depending on the years.

However, as far as we understand, in these studies, patents that were not challenged on a validity standpoint were counted as valid; whereas such patents are excluded from the sample on which our own figure is based.

Lucky numbers in litigation.

That being said, how does this French figure of 56% invalidation compare with other European jurisdictions?

Well, it is particularly instructive to look at the situation in Germany, since this country attracts the vast majority of the European patent litigation “market” due to its perceived patent-friendliness.

Believe it or not, but it seems (based on figures released in 2016) that the partial or total patent invalidation rate at the Bundespatentgericht and the Bundesgerichtshof is approximately 80%. More precisely, there is a 44% rate of total invalidation, whereas 36% of patents are maintained in amended form. Only 20% of patents survive a nullity challenge in their granted form.

Now, the French figure and the German one cannot be directly compared, due to differences between the two systems. Indeed, there is no claim amendment in front of a French court. Besides, frequently, some dependent claims in a patent are never actually looked at by French judges, for the reasons recalled above.

But it is anyway quite doubtful that patents fare much better in Germany than in France, on a validity standpoint. Actually the opposite could be true.

Another striking conclusion of course is that, whatever the jurisdiction, a significant proportion of granted patent claims which ultimately go to trial are found invalid. This may be an important fact to bear in mind, at the time the EPO has just released its annual report, with the usual emphasis on quality.

The quality of the work done by a patent office is certainly extremely complex to assess. But maybe more attention should be paid to court decisions in this connection. After all, European judges are those who have the last say on what a “good” or “bad” patent is.

A couple more figures before you go, especially on the distinction between French and European patents, and on the various grounds for nullity.

Approximately one third of patents litigated in France are French national patents, while two thirds are French parts of European patents.

It turns out there is a significant discrepancy between the invalidation rates for these two categories, namely: 41% for European patents and 78% for French patents.

The conclusion is pretty straightforward: European patents are stronger than French patents. This is not surprising. Since the INPI does not perform a complete examination of French patent applications, the granted claims in a French patent are usually the sole responsibility of the applicant. It is therefore always tempting to pursue overly broad claims in a French national patent, which makes them more prone to a nullity challenge.

As to the various grounds for nullity leading to the invalidation of patent claims, we found the following breakdown:

  • Lack of novelty: 15%;
  • Lack of inventive step: 54%;
  • Extension of subject-matter: 10%;
  • Insufficiency of disclosure: 15%;
  • Others (non-patentability…): 6%.

So, most patent claims are revoked for lack of inventive step. The 54% figure that we found is in full agreement with Sabine Agé’s recent presentation, based on a larger sample of decisions.

The relatively large number of patent claims which are deemed to lack inventive step certainly reflects a national take on this issue which is much more flexible than the EPO’s problem-and-solution somewhat rigid framework.

Other, maybe less known, notable facts include a recent surge in added matter-based invalidations, as French case law tends to align on EPO case law in this respect; as well as a relatively large number of insufficiency-related invalidations. My personal view is that French courts tend to be more severe than the EPO on the appraisal of sufficiency.

METHODOLOGY: this study was based on a review of all judgments on the merits issued between January 1, 2016 and July 31, 2017, both at first instance and on appeal, in which at least one issue of patent validity or patent infringement was decided upon. The sample of judgments was obtained from the Darts-ip database. They were manually analyzed by us. Interim orders as well as orders from a case management judge were excluded. Judgments from the Cour de cassation, as well as judgments concerned with other issues (computation of damages, employees’ inventions, etc.) were also excluded. The final sample contained 100 decisions, representing a total of 118 litigated patents.

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