An exclusive interview – part 1

Today, Patent my French! features a special post. Indeed, I had the honor and privilege to interview Marie-Christine Courboulay.

Ms. Courboulay recently retired after serving for almost 13 years as a judge in the 3rd chamber of the Paris Tribunal de grande instance (TGI), namely the chamber in charge of IP litigation. You can see her name on the front page of a number of prominent patent judgments issued over the years.

Ms. Courboulay was probably the single most senior and experienced patent judge in France in the recent past – given that, and this was one of the subjects we discussed, the turnover of IP judges in this country is usually very high.

Thus, my understanding is that she took a major part in framing recent case law on some of our favorite hot topics here on the blog, such as exclusion from patentability, or the application of the statute of limitations to patent nullity suits.

Therefore, I am sure that her views on the French legal system and on the current state of patent law will be of interest to all readers.

So I am very grateful that Ms. Courboulay accepted to (electronically) sit and have this chat.

In the first part of the interview, Ms. Courboulay tells us a little bit about her career; then she provides some insider’s perspective on how the 3rd chamber of the TGI operates; she also offers some advice to litigants and their attorneys, gives her opinion on the quality of patents. The last bit of today’s installment focuses on the more specific issue of prosecution file history – is there or isn’t there a notion of estoppel in this respect?

One final note: I translated the questions and answers into English, therefore any residual error despite the usual extensive proofreading would be entirely on me.

Some of the cutting-edge interview tools that we use here at Patent my French!

Can you briefly recount your career? What positions did you hold as a magistrate? How long were you in charge of IP cases at the 3rd chamber of the Paris Tribunal de grande instance (TGI)?

I joined the magistracy in January 1982, after a master’s degree in business law at the University of Paris I. I was a trainee judge for two years, and I did my internship in a court in Bobigny.

Then, I was appointed judge (juge d’instance) from March 1985 to September 1996, first in a small court in Coulommiers, then in the Tribunal d’instance (TI) of the 19th arrondissement in Paris, and finally in the TI of the 13th arrondissement.

During this period of time, I worked a lot on the then new laws relating to over-indebtedness and I got to train the members of the over-indebtedness commissions in a program set up by the Banque de France.

I joined the Paris TGI in September 1996 and I worked for three years in the 18th chamber (specialized in commercial leases) and another three years from September 1999 to September 2002 in the 9th chamber (specialized in banking law). At that time, I worked on the start of electronic contracting and on the proof of consent, when the first agreements were executed online.

I was also in charge, like all judges of the 9th chamber, of the execution of international letters rogatory assigned to the Paris TGI, and I took a lot of interest in this work, which required a knowledge of the law applicable in the countries making the requests.

In September 2002, I joined the 1st chamber of the Nanterre TGI as a vice-president, and I discovered literary and artistic property on this occasion.

I came back to the Paris TGI in September 2005, in the 3rd chamber, and I did not leave it for the rest of my career, as I did not want to be deprived of such beautiful litigation, open to the world.

How many different cases does a judge of the 3rd chamber of the Paris TGI handle per year, on average?

At least two judgments on the merits per week, or eighty per year.

Approximately twenty-five case management orders per year.

Approximately thirty urgency judgments (“référés”) each year, plus extreme urgency judgments (“référés d’heure à heure”).

Among these cases, what is the approximate distribution between copyright, trademark, design and patent cases?

I cannot precisely answer this question because I do not have the statistics.

I would say that half of the cases are trademark cases, 10% are design cases, 25% to 30% are copyright cases (including copyright on clothing) and 10 to 15% are patent cases.

How much time does a judge have to devote to a patent case, on average?

It depends on the complexity of the patent and the level of expertise of the judge. Between three and ten full days.

Do you think that the training of judges is sufficient for handling patent cases, or that it should be improved?

The training of judges to deal with patents, but also IP as a whole (because an artistic copyright case is at least as complicated as a patent case), should be improved in the sense that this function should be considered as a full-fledged specialty. Each new judge should be offered a compulsory theoretical training from one week to fifteen days before taking office.

For how long are judges appointed to the 3rd chamber of the Paris TGI, on average, and do you consider that this is sufficient, or too short?

Judges are appointed to the 3rd chamber for an average of three years, and this duration tends to increase.

This is much too short because judges leave when they begin to be really well trained, which creates a huge loss of value for the court. Furthermore, it requires a constant (and exhausting) effort for training newcomers, despite their generally high merits and hunger for knowledge.

At last, it seems that there may be a possibility for judges to be able to get promoted without leaving, thanks to the creation of the Economic Pole by President Hayat. This could make it possible to keep judges interested in this subject for a longer period of time, as they would be able to make part of their career there.

Is it an asset for a judge of the 3rd chamber to have held a previous magistrate position in a field other than IP, and if so why?

Of course, to understand IP law, you need to have an overview of society as a whole: its evolution, its major trends, and especially its innovations. I would say that one must take an interest in all economic sectors of society, but also have a pronounced taste for culture.

For example, if you have worked on the renewal of commercial leases, you know that the establishment of competing brands in a same sector is a factor of increase in commerciality, which in turn makes an increase in rent possible. This is a factor which can be used to reason, when it is claimed that competitors’ ads on a result page of a Google search creates a prejudice. What is true in “real” life is also valid in the so-called virtual economy (which it obviously is not).

So, yes, previous experiences of judges are useful and rewarding, as well as their personal history.

Similarly, I am very much in favor of the integration of judges who had a career in the private sector, or as independent professionals. It is again a great opportunity to have a colleague in the court who worked in another context and who can shed light on what litigants expect in this area, or on the difficulties they may have. And when this previous career was in the field of IP as was the case several times (I had colleagues who had been IP lawyers or had worked at the INPI), the benefit to be gained from their experience is even greater.

How do the different judges of the 3rd chamber work together? In particular, is there an effort of harmonization among judges to avoid discrepancies between judgments?

First, the judges of the 3rd chamber work in three-judge panels and deliberate on the cases assigned to their panel. But of course, they also discuss the various cases between them, and they try to find harmonized solutions to avoid any disorder with litigants.

All magistrates are very much aware of the fact that their decisions must comply as much as possible with the requirement of predictability. For example, they circulate the decisions that they issue when a new point is raised and a solution is provided by one of the panels (for example regarding the application of the statute of limitations to patent nullity suits, or regarding the nullity of infringement seizures).

Also, there are so-called chamber meetings with an agenda on points of law where there seem to be differences of interpretation or appreciation. There are also information meetings organized by the Cour de cassation on specific topics (trademarks, patents, etc.) to raise the awareness of judges on solutions to various current legal issues.

Patent cases are sometimes highly technically complex (e.g. in the biotech or telecom field). How do judges deal with this technical complexity? Are the explanations of the parties’ counsels in their submissions and during the hearing generally sufficient to fully understand the underlying technical issues, or would an additional effort of popularization be useful?

The hearing time, if it is well calibrated (I would say at least half a day per patent), is enough to explain the issues, and it is obviously more than necessary for the court.

However, in the case of a particularly complex lawsuit, it is possible to appoint a consultant whose main task will be to objectively explain the patent, the technology, but also the prior art.

The statute thus gives the court the necessary tools to understand the technology involved in e.g.  telecom patents – which to me are the most complex ones.

In patent cases, it is not uncommon for parties’ submissions to reach several hundred pages. Is this too much? Do judges have the time needed to read and digest such large file wrappers, given their heavy workload?

Yes, this is too much, and I must unfortunately say that, often, many pages are irrelevant, since they contain repetitions in various forms.

We must remember this sentence: “sorry, I did not have time to keep it short”.

Judges from other European countries also complain about the same phenomenon and also conclude that the strength of the case does not depend on the weight of the written submissions; and I know that in the United Kingdom, on appeal, submissions are limited to 25 pages, because the court already has the first instance judgment.

Judges do not forget that this can be, in some cases, a tactic to drown them, so that they are not able to properly handle the litigation anymore, if each case reaches 200 pages without any reason.

I believe that, one day, it will be up to the case management judge to limit the number of pages allowed per case, in view of the first exchanges (complaint and defense).

What do you think is the role and use of the attorneys’ pleadings in the trial?

As far as patents are concerned, oral argument is essential to clearly explain the invention and to allow the judge rapporteur who has read the submissions and the patent to verify that he/she has properly understood what the case is about.

It is also essential for the presentation of the prior art, and the voice of each party sheds a different light on the topic.

Finally, it is essential for presenting the comparison between the invention and the alleged infringement by the patent proprietor and by the defendant.

On the other hand, for the determination of damages, clear written submissions with convincing supporting documents are more than enough.

Is there any advice you could give to parties and their counsels to improve their chances of convincing the court in patent litigation?

A clear presentation of the invention, optionally with the help of diagrams or slides.

A debate limited to the real issues at stake.

Avoid raising quibbles instead of arguments and avoid raising inadmissibility pleas and other motions on the communication of exhibits that pollute the real debate and sometimes weaken the position of those who raise such objections without any serious reason.

Do you consider that patents granted by the INPI or the EPO are generally of a good quality? Or is this quality insufficient in your opinion?

In the midst of a debate on the granting procedure of French patents, I can only say that the French patents that were submitted to me often suffered from a lack of quality, and I have some oddities in mind which were worthy of a cabinet of wonders.

I am in favor of a better control of French patents by the INPI, in particular by not focusing on the sole criterion of novelty, which is totally insufficient and puts us in a miserable position compared to other European offices. However, it seems to me that, in order for this reform to make sense and not give rise to other criticisms on the process of granting French patents, it will be necessary to hire many examiners trained in the analysis of inventive step, sufficiency of disclosure and extension of subject-matter beyond the application as filed, and also trained in discussing with the applicant and then with possible opponents, in full compliance with the adversarial principle.

With regard to European patents, their quality often depends on the technical field. Despite a more in-depth analysis of the various criteria mentioned above, there is a significant invalidity rate in French courts, but also in German, Dutch or English courts, of the order of 60 to 70%, which is still a lot.

I would say that the other criticism that can be made against European patents is the extreme length of the proceedings before the examining division and then the opposition division.

What is the role of the modifications made by the patent proprietor during examination proceedings, as well as of their statements in front of the patent office concerned, at the litigation stage? In your opinion, should the proprietor be bound by the strategy and the procedural choices adopted during examination?

Both French case law and Dutch case law take into account the amendments made during examination proceedings and the statements made to the patent office, when they are submitted to the court, because they are then elements of the dispute.

And the patent proprietor is bound by the modifications, which are in any case enshrined in the patent as granted, which is the very basis of the case, but also by its statements, insofar as they make it possible to understand what the proprietor itself considers as the perimeter of its invention, as the proprietor specifies the limits thereof (what is part of it and what is not part of it).

That said, the proprietor may take another position, but the new interpretation will be read in the light of the modifications made and ratified by the patent office in the granted patent, and of the reasons for which the modifications were agreed to be made.

It seems that the German Supreme Court in Düsseldorf has now slightly opened the door to this possibility, which it had long refused, even though some regional courts, including the one in Munich, already took statements before the patent office into account.

To be continued.

A risky launch at risk

Launching at risk is not a business for those who have a weak stomach.

Once a generic drug company has decided that it will go on the market despite the existence of an IP threat – e.g. because they have determined that the IP right at stake is probably invalid or unenforceable – then anything can happen, and it may happen really fast.

Today’s decision illustrates the risks of a launch at risk.

GD Searle LLC owns European patent No. EP 0810209 filed on August 24, 1993. The patent is directed to a family of antiretroviral drugs, more precisely protease inhibitors, useful for the treatment of HIV infection.

On May 9, 2008, Searle obtained a Supplementary Protection Certificate (SPC) from the French patent office (INPI), under No. FR 07C0034. This SPC is based on the EP’209 patent and relates to “darunavir or one of its pharmaceutically acceptable salts, esters or precursors“.

An exclusive license to the SPC was granted to Janssen Sciences Ireland Unlimited Company and then a sub-license was granted to its French affiliate Janssen-Cilag SAS. Janssen (Johnson & Johnson group) markets a drug known as Prezista®, the active compound of which is darunavir.

SAS Sandoz is a French affiliate of the Sandoz group (affiliated to Novartis). As readers have probably already guessed by now, Sandoz launched a generic version of Prezista® before the expiry of the French SPC – which is set to take place on February 23, 2019.

Another form of launch at risk.

The parties have been entangled in pan-European litigation over the darunavir SPCs. This litigation actually hit the headlines when, on January 25, 2018, the British Court of Appeal referred a question to the CJEU in relation with the validity of the British SPC.

The case is still pending and was allocated number C-114/18.

The issue at stake is the following.

Claim 1 of the EP’209 patent is a so-called Markush claim.

A Markush claim covers a large class of chemical compounds by way of a generic formula, without reciting them individually. In this case, the generic formula contained in claim 1 is the following:

Each group among P1, P2, R2, R3 and R4 is defined as being selected among of list of possible options. I will spare you the complete lists here. But it may be important to note that each list itself recites generic classes of groups, rather than individualized groups. For instance P1 and P2 can be alkoxycarbonyl groups, aralkoxycarbonyl groups, alkylcarbonyl groups, etc. Each of these options encompasses an unknown number of individual possibilities. In the end, the array of choices falling under the generic formula is practically unlimited.

Well, not quite. In fact the number of theoretical possibilities was estimated in the British litigation to be from 7 x 10135 to 1 x 10377. Not a very accurate estimate, but let’s not skimp on a couple hundred zeros.

Now, darunavir has the following structure:

It turns out to be one of the zillion compounds covered by claim 1

Several other claims of the patent also cover darunavir, but always in a generic way. Darunavir is not cited in the patent, not exemplified, nor singled out in any other manner.

Now, according to famous / infamous article 3(a) of the so-called SPC Regulation (Regulation (EC) No. 469/2009):

A certificate shall be granted if, in the Member State in which the application referred to in Article 7 is submitted and at the date of that application:

(a) the product is protected by a basic patent in force […].

As regular readers of this blog are well aware, people have been arguing, fighting and spending millions and millions of euros for a number of years over what it means for a product to be protected by a basic patent.

Some (limited) guidance has been offered by the CJEU over time.

For instance, this is from the Medeva judgment (C-322/10):

Article 3(a) of [the SPC Regulation] must be interpreted as precluding the [grant on an] SPC relating to active ingredients which are not specified in the wording of the claims of the basic patent relied on in support of the SPC application.

Then there is the Eli Lilly judgment (C-493/12):

Article 3(a) of [the SPC Regulation] must be interpreted as meaning that, in order for an active ingredient to be regarded as ‘protected by a basic patent in force’ within the meaning of that provision, it is not necessary for the active ingredient to be identified in the claims of the patent by a structural formula. Where the active ingredient is covered by a functional formula in the claims of a patent issued by the EPO, Article 3(a) of that regulation does not, in principle, preclude the grant of an SPC for that active ingredient, on condition that it is possible to reach the conclusion on the basis of those claims, interpreted inter alia in the light of the description of the invention, as required by Article 69 of the EPC and the Protocol on the interpretation of that provision, that the claims relate, implicitly but necessarily and specifically, to the active ingredient in question […].

And let’s not forget about Teva (C-121/17):

Article 3(a) of [the SPC Regulation] must be interpreted as meaning that a product composed of several active ingredients with a combined effect is ‘protected by a basic patent in force’ within the meaning of that provision where, even if the combination of active ingredients of which that product is composed is not expressly mentioned in the claims of the basic patent, those claims relate necessarily and specifically to that combination. For that purpose, from the point of view of a person skilled in the art and on the basis of the prior art at the filing date or priority date of the basic patent: the combination of those active ingredients must necessarily, in the light of the description and drawings of that patent, fall under the invention covered by that patent, and each of those active ingredients must be specifically identifiable, in the light of all the information disclosed by that patent.

And there are a few other relevant ones.

But the thing is, the CJEU has never ruled so far on how article 3(a) should be applied with respect to a Markush claim. So, in this case, should darunavir be considered as being “specified in the wording of the claims” (as per Medeva)? Is it possible to conclude that the claim “relates, implicitly but necessarily and specifically“, to darunavir (as per Eli Lilly)? Or is this not a relevant question as the claim should not be considered as a functional claim? Or maybe a combination of substituents in a Markush formula should be treated like a combination of active compounds, so that it should be investigated whether, “from the point of view of a person skilled in the art and on the basis of the prior art at the filing date or priority date of the basic patent“, each of the substituents is “specifically identifiable, in the light of all the information disclosed by that patent” (as per Teva)?

Of particular interest in this case is that, not only was darunavir not known as a compound at the filing date and was only made available several years later; but group P1 of the generic formula, when the formula applies to darunavir, can be considered as an unusual group at the filing date, which does not form part of common general knowledge.

The British Court of appeal thus proposed the following question for the CJEU:

Where the sole active ingredient the subject of [an SPC] issued under [the SPC Regulation] is a member of a class of compounds which fall within a Markush definition in a claim of the patent, all of which class members embody the core inventive technical advance of the patent, is it sufficient for the purposes of Article 3(a) of the SPC Regulation that the compound would, upon examination of its structure, immediately be recognised as one which falls within the class (and therefore would be protected by the patent as a matter of national patent law) or must the specific substituents necessary to form the active ingredient be amongst those which the skilled person could derive, based on their common general knowledge, from a reading of the patent claims?

And this now brings us to France.

Sandoz obtained a Marketing authorization (MA) for the generic version of Prezista® on December 15, 2017. Searle and Janssen issued multiple warnings to Sandoz and then discovered in December 2018 that the generic drug (Darunavir Sandoz) was on the French market.

On December 14, 2018, they filed a complaint against Sandoz in urgency proceedings (référé d’heure à heure) for infringement of their SPC No. FR’034 – after getting an authorization to do so from the court.

Sandoz’ sole defense relied on the invalidity of the SPC for non-compliance with art. 3(a) the SPC Regulation. 

The hearing took place one week only after the filing of the complaint, on December 21, 2018. Then the judge Ms. Lignières took the case home during the Christmas break and issued her decision on January 11, 2019, ruling against Sandoz.

In the decision, the judge analyzed the CJEU case law and came to the conclusion that the Eli Lilly test is not applicable to a Markush claim:

It should be noted that, in the Eli Lilly decision, the case related to a functional claim, so that the CJEU insisted on a double condition of necessity and specificity. In the present case, the claims of the basic patent are structural and better allow the skilled person to determined in view of the claims whether the active compound protected by the SPC was covered by the basic patent. 

Then, after analyzing the formula of claim 1 of the patent and the various meanings of the variable groups in this claim and some of the dependent claims, the court concluded that:

Therefore darunavir is identified by the skilled person as being implicitly but necessarily and specifically protected by the EP’209 patent in view of the substituents identified in the claims, in keeping with the requirements of article 3(a) of the EC Regulation and of the CJEU case law.

The judge thus considered that the defendant did not prove that the SPC was manifestly invalid.

Accordingly, a preliminary injunction was ordered, under a 50,000 euro-penalty per violation of the injunction. The judge also ordered a seizure of the infringing drugs, as well as a product recall.

I don’t have an exhaustive view of the pan-European Searle v. Sandoz litigation, but at least in the Netherlands a similar preliminary ruling was issued a couple of months earlier: see here.

In a recent post I wondered whether there was a surge in preliminary injunctions in France these days. The darunavir case seems to provide a confirmation. 

We will have to wait for the CJEU ruling to know whether the French judge correctly guessed which way the Luxembourg winds will finally blow.

But at any rate this decision should reassure IP right holders. A very quick preliminary decision can be issued in France when time is of the essence. Therefore, launching a generic drug a couple of months before the expiry of the IP at stake does not curtail the injunctive risk.

CASE REFERENCE: TGI Paris, ordonnance de référé, January 11, 2019, GD Searle LLC et al. v. SAS Sandoz, RG No. 18/60334

Patentee schussing down

Are you getting tired of automotive equipment technology and anti-hypercholesterolemic drugs?

This would be understandable. Cheer up, as today I give you a seasonal alternative, with this ruling which involves a patent directed to a “method of securing, monitoring and management of the ski area of wintersportplaces“.

As if this technical field weren’t unconventional enough, the ruling is also unusual in that it was issued by the Lyon Cour d’appel.

The Paris courts have had exclusive jurisdiction over patent matters for a number of years now, so it is increasingly infrequent to come across a judgment issued in another forum. Who knows, this could actually be the very last one.

Mr. Costa, who lives in the Rhône département, owns European patent No. EP 1048789, filed in 2000 and which claims a French priority. The patent was licensed to a local company, Construction Moulage Fabrication Polyester (CMFP).

The patent was granted in 2003. Shortly thereafter, the patentee and the licensee initiated infringement proceedings against Perception and Guidance Embedded Systems (now Perguisys), Kässbohrer Engins au Service de l’Environnement as well as SA Aménagement Touristique de l’Alpe d’Huez et des Grandes Rousses. Already from the name of the third defendant, it can be inferred that the alleged infringement takes place in the Alps area.

As this was 15 years ago, the complaint was filed with the Lyon Tribunal de grande instance (TGI), which had jurisdiction at that time.

Two oppositions were filed at the EPO, one by Sabatier SA and a joint one by the defendants Perguisys and Kässbohrer. This led the Lyon TGI to stay proceedings pending the outcome of the opposition. Hence the extraordinary length of the proceedings.

The oppositions were rejected by the opposition division in 2006 and the rejection of the oppositions was confirmed by the Board of appeal in 2009. Only then were the infringement proceedings resumed. But it took 6 more years for the Lyon TGI to issue its judgment, in 2015. This is amazingly long but (1) we don’t know all the details, and it is possible that all parties did their best to delay the proceedings; and (2) now that patent litigation is centralized in Paris, my understanding is that there are no longer cases that drag on forever to this extent – except when the Cour de cassation successively sets aside appeal judgments four times, like in the Nergeco case discussed last week.

In the first instance judgment, the infringement claim was dismissed, and so was the defendants’ nullity counterclaim. The plaintiffs appealed, which now brings us to the appeal judgment.

Here is claim 1 of the patent at stake, again, not a conventional one, as you will see:

Method for protecting, following up maintenance and managing the field intended for skiing in a winter sports resort using mobile protection, control and maintenance means equipped with means for marking the position and guiding vehicles from a satellite network or from fixed markers, using fixed devices which need to be controlled and maintained, using a digitized cartography, as well as radio or remote transmission cables for transmitting digital data between at least one computer situated in a central station and computer terminals situated in intervention services or on mobile means fully or partially associated with automatic or manual coding means, characterized in that the computer system situated in the central station is able to divide the site of the winter sports resort into homogeneous zones with respect to at least one criterion from a series of coherent criteria zones stored in said computer system connected by remote transmission means to the mobile means and the intervention services so that when a mobile element is positioned in an homogeneous zone of the skiing field, the computer system of the central station is able to immediately be aware of the criteria applied to this homogeneous zone so as to deduce from this task orders, observations or action to be taken by the central unit and/or by the mobile element and/or by the intervention or maintenance services.

Peter Rabbit managing the ski area.

The validity discussion is extremely short in the decision.

Apparently, the defendants raised the same arguments of lack of novelty and lack of inventive step that they had already raised in first instance. The appeal judges thus simply stated that they agreed with the first instance judges and had nothing to add.

The infringement discussion is more interesting. The plaintiffs alleged that there was infringement by equivalence.

According to the court, the patented method comprises numerically mapping a ski resort site in the form of points according to coordinates, and then storing the information in a computer of a central station so as to provide a virtual grid in the form of planar polygones (cf. the claimed “digitized cartography“).

Fixed and mobile devices are deployed in the ski area and supply positional information to the central station using transmission means.

Still according to the court, the alleged infringement does not make use of virtual mapping and of a central station. Thus, the court held:

[…] Even though the [allegedly infringing] system uses GPS technical means, it does not achieve the sophistication of the patented system, in that it does not make it possible to provide a division of the area into homogeneous zones in real time on the screen, based on predefined and modifiable criteria.  Contrary to what the appelants state, this sophistication […] prevents infringement by equivalence from being acknowledged, as the Snow Sat system is of a lesser quality and lesser efficiency. 

Okay. This is kind of frustrating as it is very far from being a clear and complete infringement reasoning. But again, you probably cannot expect too much from a court that may not have seen any other patent case in a number of years.

But there is possibly one interesting take-away message though.

The established standard for assessing infringement by equivalence under French law is the following: two means are equivalent when, although they are of a different form, they perform a same function for a result of a same nature, if not of the same degree.

Lyon’s position is that, since the defendants’ method is not as efficient as the patented one, it does not infringe.

This is clearly confirmed by the court’s following statement:

[…] A means is not equivalent when its different implementation leads to a result of a same nature but of a different quality or efficiency. 

This is not a common aspect of equivalence discussions. But it is not unheard of. In fact, in a previous post, I reported on a similar analysis by the Paris Cour d’appel.

Thus, if anything, today’s judgment confirms that assessing infringement by equivalence is tricky. You cannot just look at the function of the means at stake – and at whether the function was known from the prior art. You also have to look at how effective the means is and what the quality of the end result is.

CASE REFERENCE: Cour d’appel de Lyon, 1ère chambre civile A, September 20, 2018, Antoine Costa et al. v. Perguisys et al. (RG No. 2015/06635).

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.