A French revolution

You may have heard that French revolutions have a reputation for violence. But things do not always have to be that way.

Case in point: a groundbreaking SPC ruling recently issued by the Paris Cour d’appel. Contrary to what you would expect, heads did not roll. Quite the opposite in fact: the revolution is precisely that the SPC at stake survived unscathed. Lionel Vial reports.

This is it. It has happened. The Paris Cour d’appel has finally reversed a decision of the French PTO (INPI) to refuse an SPC.

Indeed, as noted here, since we began discussing French SPC case law on this blog in 2016, the Paris Cour d’appel has upheld 100% of the 11 SPC refusals by the INPI that we have commented on.

What prompted the Cour d’appel to change its habit? Avelumab.

Avelumab is an anti-PD-L1 monoclonal antibody. It is the active ingredient of Bavencio® (Pfizer), which is indicated in the treatment of cancers.

Anti-PD-L1 antibodies, like anti-PD-1 antibodies, disrupt the PD-1/PD-L1 interaction in vivo, which accounts for their biological effects.

On November 17, 2017, the Dana-Farber Cancer Institute filed an application for an SPC (FR17C1046) based on European patent EP 1210424 (hereafter EP’424), filed on August 23, 2000, and on marketing authorisation (MA) EU/1/17/1214 for avelumab granted to Merck Europe B.V. on September 20, 2017.

Interestingly, the subject-matter of EP’424 essentially relates to PD-L1, which is claimed as an isolated polypeptide (in claim 12). EP’424 also generally claims “an antibody which selectively binds to a polypeptide of claim 12” (claim 17) and “an antibody which selectively binds to a polypeptide of SEQ ID NO: 2 or 4 [i.e. PD-L1]” (claim 27), but does not claim avelumab in itself. Indeed, avelumab is claimed in itself in a later patent, EP 2785375, filed on November 21, 2012 by Merck Patent GmbH, which forms the basis of SPC application FR20C1068.

On February 3, 2021, the INPI refused the SPC pursuant to Article 3(a) of Regulation (EC) No 469/2009 (hereafter the SPC regulation). Essentially applying the Royalty Pharma judgment of the Court of Justice of the European Union (CJEU) in case C-650/17, the INPI considered that while avelumab was implicitly and necessarily covered by the functional definition used in claims 17 and 27 of the basic patent, avelumab is nonetheless not specifically identifiable from the patent, avelumab having been developed after the filing date of the basic patent following an independent inventive step.

A very similar case was submitted to the Cour d’appel 2 years ago, leading to a decision on January 19, 2021, which we commented on here.

As a brief reminder, the Cour d’appel then sustained the decision of the INPI to reject an SPC application for nivolumab, an anti-PD-1 monoclonal antibody. The Cour d’appel considered that while nivolumab was implicitly and necessarily within the scope of the invention covered by the basic patent, the preparation of monoclonal antibodies required more than routine operations; furthermore, three years after the basic patent was filed were necessary to file a patent specifically relating to nivolumab, which was a sound indication that an independent inventive step was needed from the basic patent to arrive at nivolumab.

It is therefore quite a surprise that in the present case the Cour d’appel decided not to side with the INPI.

What seems to have been key in the new decision of the Cour d’appel was to take into account the criteria for inventive step which result from the European patent convention (EPC), as well as from the Guidelines and case law of the European patent office (EPO), in order to assess the “independent inventive step” criterion of Royalty Pharma.

The Cour d’appel thus considered that:

[…] The methods for generating and identifying an antibody directed against a given antigen are routine techniques for the person skilled in the art at the priority date; as a consequence, when the targeted antigen is already known, the discovery of an antibody binding to this antibody does not involve an inventive step.

Besides, the Cour d’appel did acknowledge that European patent EP 2785375, filed 11 years after the filing date of EP’424, was granted for avelumab but noted that the Examining division had first considered avelumab as lacking an inventive step and that if an inventive step was finally recognized by the EPO, it was due to the inter-species cross-reactivity of avelumab, and not for its capacity to bind to PD-L1.

Accordingly, the Cour d’appel went on to conclude:

It can be deduced from these elements, on the basis of the general knowledge of the person skilled in the art and from the state of the art at the priority date of patent EP464 that the human monoclonal antibody avelumab was specifically identifiable by the person skilled in the art in the light of the teachings of said patent, by known and well mastered routine experiments, which may be long and fastidious, but do not involve an independent inventive step.

The Cour d’appel admittedly also took into consideration the fact that the invention forming the subject-matter of EP’424 was a breakthrough invention which led to the marketing of several antibodies, such as avelumab, having a decisive public health impact in the fight against cancer.

How could the difference in outcome with the earlier case regarding the anti-PD-1 nivolumab then be explained, as the basic patent also contained guidance for manufacturing anti-PD-1 antibodies in this earlier case? Certainly not by the composition of the Cour d’appel, which was identical to the composition in the present case.

One possible explanation would be that, although the invention forming the subject-matter of the basic patent originated from the work of Tasuku Honjo, who won the Nobel prize for the discovery of PD-1, it was less of a breakthrough invention, as the basic patent neither claimed PD-1 (which was discovered several years before its filing) nor anti-PD-1 antibodies in general, and was indeed filed after EP’424. Besides, the SPC in that earlier case was also found by the Cour d’appel not to comply with Article 3(c) of the SPC regulation, which made the assessment of the compliance with Article 3(a) less crucial.

Whatever the reason, the present judgment is in our opinion a landmark decision which could be seen as lowering the bar which had been set by the Medeva (C-322/10) and Eli Lilly (C-493/12) case law to pass the requirements of Article 3(a) of the SPC regulation for monoclonal antibodies in France.

Last year, Renaud promised, perhaps a little too boldly, to do something special on this blog next time an SPC refusal would be overturned on appeal. I therefore leave it to him to surprise you!

What can I say, I should know better than to make reckless promises, especially when SPC law is involved. But I am not one to balk – and so, a surprise it is…

The surprise.

CASE REFERENCE: Cour d’appel de Paris, pôle 5 chambre 1, May 25, 2022, Dana-Farber Cancer Institute Inc. v. INPI, RG No.21/08514.

Same player shoot again

Long time no see! I am sure that readers have noticed that PatentMyFrench has been dormant over the past few months. Hopefully, posting can resume in the near future, so as to perhaps tackle the backlog of interesting decisions that have not been commented on – but let’s face it, we are not there yet.

That said, owing to regular contributor and SPC enthusiast Lionel Vial, the blog at least temporarily comes back to life today, for an update on Halozyme’s mishaps with the French patent office. Many thanks Lionel, the floor is yours.

We had a feeling of déjà-vu with this decision of the Paris Cour d’appel, dated January 18, 2022, concerning the rejection by the French patent office (INPI) of Halozyme Inc.’s SPC application No. FR16C0030. This application pertains to a combination of an anti-CD20 monoclonal antibody, Rituximab, and recombinant human hyaluronidase, which is indicated for the treatment of non-Hodgkin lymphoma.

Indeed, last year we discussed the decision of the Paris Cour d’appel to sustain the decision of the INPI to reject Halozyme Inc.’s SPC application No. FR15C0053 pertaining to a combination of an anti-HER2 monoclonal antibody, Trastuzumab, and recombinant human hyaluronidase (here).

Of note, the panel of judges of the Cour d’appel was the same for both decisions.

In the previous case, the Cour d’appel had decided as follows:

[…] it appears from the “summary of the product characteristics” of the MA [marketing authorisation] that the active ingredient of the medicinal product is Trastuzumab, that hyaluronidase is an excipient, and that no other element contained in the MA justifies that hyaluronidase alone, or associated to Trastuzumab, would produce a pharmacological, immunological or metabolic action of its own which is covered by the therapeutic indications of the MA. […]

It follows that, in the combination of Trastuzumab and recombinant human hyaluronidase, forming the subject-matter of the SPC at stake, only Trastuzumab is the active ingredient, while a MA has already been granted for Trastuzumab alone. Therefore the invoked MA is not the first MA for the product pursuant to article 3(d) of the regulation. Accordingly, the director of the INPI rightly decided that the SPC application did not comply with the requirements of the regulation and that it had to be rejected.” (emphasis added).

In the present case, Halozyme repeated the previously raised arguments that the fact that hyaluronidase was coined an excipient in the MA did not mean that it was deprived of a physiological action of its own. In fact, hyaluronidase makes room in the subcutaneous space by degrading hyaluronan, which increases the dispersion and absorption of Rituximab upon its injection.

In addition, in order to show that hyaluronidase has a therapeutic effect of its own, Halozyme also provided two publications reporting the results of experiments carried out in mouse models of pancreatic cancer and breast cancer, one of the two publications – presumably Shuster et al. (2002) Int J Cancer 102:192-7 –  indicating that hyaluronidase may itself have intrinsic anti-cancer activity.

So, did Halozyme prevail this time?

Moving up to the next level.

This is what the Cour d’appel decided:

[…] the CJEU ruled [in case C-210/13 Glaxosmithkline] that “(…) just as an adjuvant does not fall within the definition of ‘active ingredient’ (…), a combination of two substances, namely an active ingredient having therapeutic effects on its own, and an adjuvant which, while enhancing those therapeutic effects, has no therapeutic effect on its own, does not fall within the definition of ‘combination of active ingredients’ within the meaning of that provision”.

In the present case, the court noted that on page 14 of the assessment report […] a paragraph entitled “New excipient: recombinant human hyaluronidase (rHuPH20)” states that “rHuPH20 degrades hyaluronan under physiological conditions and acts as a propagation factor in vivo. Thus, when combined or co-formulated with certain injectable drugs, rHuPH20 facilitates their absorption and dispersion by temporarily clearing a pathway through the connective tissue in the subcutaneous space […]”.

It follows from these elements that recombinant human hyaluronidase is an excipient that allows to increase the therapeutic effects of the active ingredient by facilitating its absorption and dispersion through the connective tissue of the subcutaneous space. This does not allow, contrary to the allegations of Halozyme, to qualify the combination of Rituximab and recombinant human hyaluronidase as being a combination of active ingredients within the meaning of article 1(b) of the Regulation as interpreted by the CJEU.

It follows from all the foregoing that the combination of Rituximab and recombinant human hyaluronidase for which the contested SPC application was filed is not a product within the meaning of Article 1(b) of Regulation (EC) No 469/2009, that Rituximab has already been the subject of two previous marketing authorizations, so that the MA invoked is not the first for this product within the meaning of article 3(d) of the regulation, and that the Director of the INPI therefore rightly decided that the [SPC] application does not meet the conditions set forth by the Regulation, so that the appeal against the decision of the Director of the INPI must be rejected. (emphasis added).

Same result then.

In this regard, it should be noted that the two above-mentioned publications cited by Halozyme to establish that hyaluronidase has a therapeutic effect of its own were not taken into account by the Cour d’appel because they relate to the treatment of cancers other than non-Hodgkin lymphoma. One can therefore wonder what the outcome would have been, if results of experiments establishing that hyaluronidase has a therapeutic effect of its own in an animal model of non-Hodgkin lymphoma had been presented to the court.


CASE REFERENCE: Cour d’appel de Paris, pôle 5 chambre 1, January 18, 2022, Halozyme Inc. v. Directeur Général de l’INPI, RG No. 20/17731.

Orange juices up its defense

The summer was relatively quiet – patent case law-wise, that is. Thus, now may be a good time to go back on some interesting decisions issued during the first semester which I did not have time to comment upon.

In particular, and just in case you missed it a couple of months ago, I would like to showcase a procedural ruling issued by a case management judge, which addresses the evolution of the statute of limitations (for infringement claims) over time.

The lawsuit revolves around telecommunications equipment that was supplied by Alcatel-Lucent International to Orange SA, under a 2007 agreement. The equipment (called Network Analyzer 5530 or NA 5530) is believed by a U.S.-based company, Assia, to infringe two of its European patents. In July 2020, Assia had no fewer than four infringement seizures carried out at Orange, and then initiated infringement proceedings in front of the Paris tribunal judiciaire (TJ). Alcatel-Lucent was forced by Orange to join the lawsuit.

A procedural motion was filed by Assia to request access to some of the seized and sealed documents. As a counterclaim, the defendants requested that Assia’s infringement claims be declared time-barred, to the extent that they concern alleged infringement acts having taken place before August 6, 2015.

In order to address this request, the judge had to review the evolution of article L.615-8 of the Code de la propriété intellectuelle over time.

From 1992 to 2014, this provision was worded as follows:

Infringement actions […] are time-barred three years after the underlying facts.

As from March 12, 2014, the limitation period was increased to five years:

Infringement actions […] are time-barred five years after the underlying facts.

The limitation period of article L.615-8 was then further modified by the recent loi PACTE – not in terms of duration, but of starting point:

Infringement actions […] are time-barred five years after the day on which the owner of a right knew or should have known the last fact allowing them to act.

As you can see, patent infringement is not yet treated as seriously as crimes against humanity – which are not subject to any statutory limitation – but things are slowly moving in that direction.

Going way back in time – a patentee’s dream.

In the present case, the alleged infringement started in May 2010, when Orange began using the NA 5530 equipment. Therefore, the statute was amended twice between the start of the alleged infringement and Assia’s complaint.

In order to determine the proper limitation period, the judge applied two legal principles:

  • First, if a new statute makes a limitation period longer, the longer period immediately applies to any action which is not yet time-barred. But it does not apply to an action which has already been time-barred. This general principle is set in article 2222 of the Code civil.
  • Second, the entry into force of a new statute of limitations does not modify the starting point of a limitation period which has already started running based on the previous statute. This is based on established case law of the Cour de cassation.

In view of these principles, the judge ruled as follows:

  • Claims relating to alleged infringing acts dated between May 2010 and March 12, 2011 were already time-barred (under the three-year statute of limitations) on the day the increased five-year period entered into force, i.e. on March 12, 2014. Therefore, these claims remained and are still time-barred.
  • Claims relating to alleged infringing acts dated between March 13, 2011 and May 23, 2014 were already time-barred (under the five-year statute of limitations) on the day the modification of the starting point entered into force, i.e. on May 22, 2019.
  • Claims relating to alleged infringing acts dated between May 24, 2014 and August 5, 2015 are still subject to the pre-PACTE starting point, they are thus time-barred since the acts were more than five years old on the day the complaint was served, on August 6, 2020.

As a result, the only acts of alleged infringement which can still give rise to damages are those which took place on or after August 6, 2015.

Assia had argued that the loi PACTE was immediately applicable upon entry into force. This seems to be correct, but “immediately applicable” does not mean “retroactively applicable“. They had also argued that the infringement claim as a whole was not time-barred even under the previous statute, since the alleged infringement acts, namely using and keeping the equipment, were continuous acts; the limitation period in such a case only starts running once the continued acts have ceased – and in this case, Orange has never stopped using the NA 5530 equipment.

Remarkably, the judge did not have the same interpretation of the alleged infringement acts. She considered that the act of “keeping” the equipment (“détention” in French) corresponds to the one-time act of acquiring the equipment from Alcatel-Lucent. And that the use of the equipment should be considered as a succession of repeated, daily acts – not as a single, years-long continued act.

One practical takeaway is that the post-PACTE, patentee-friendlier starting point for the infringement limitation period only applies to infringement acts taking place as from May 23, 2019.

But I think the most controversial aspect of the ruling may well be the passage in which the acts of keeping and using equipment are said not to be of a continuous nature – I bet that not everyone would agree with this characterization.

The ruling contains a second part on the original subject of the procedural motion, namely how to deal with some of the documents taken during the infringement seizures and provisionally placed under seal, especially in view of the necessity to protect trade secrets.

This second part is also a must-read, since the new trade secret statute is still fairly recent (2018), and it is enlightening to see how it is applied by the courts in practice.

A few notable points in my opinion:

First, several successive versions of the Alcatel Lucent’s NA 5530 user guide were seized. In view of the judge’s finding on the statute of limitations, a number of the older versions of the user guide were deemed not relevant for the lawsuit (since the contemporaneous alleged acts of infringement were time-barred) and were thus ordered to be handed back to the seized party.

Second, concerning the more recent versions of the user guide (as well as a presentation by Orange on the user guide), the judge deemed that these documents could not be considered as trade secrets because they appeared to be easily accessible to the public, in particular on the collaborative scribd platform. This highlights the importance of putting effective restrictive measures of protection in place if a document is to be argued as relating to a trade secret.

On the other hand, the judge added that not the entirety of these documents were useful for the infringement suit. Therefore, the judge ordered that only redacted versions prepared by Alcatel Lucent be handed over to the plaintiff. In other terms, if some of the seized documents are not useful for the lawsuit, they should not be handed over to the patent proprietor, despite their unprotected nature – see articles R.153-5 to R.153-7 of the Code de commerce.

Third, another group of documents was held to relate to trade secrets. For those, the judge also ordered that only redacted versions prepared by Alcatel Lucent be handed over; but in addition, a confidentiality club was put in place for the access to the documents, comprising only one individual for each party, plus the attorneys at law and patent attorneys acting on behalf of the parties.

One question that can legitimately be raised, though, is how the plaintiff can react if too much information was redacted, in a case such as this one, as the redaction was not examined by an independent expert.


CASE REFERENCE: Tribunal judiciaire de Paris, 3ème chambre 1ère section, ordonnance du juge de la mise en état, Adaptive Spectrum and Signal Alignment Incorporated – Assia Inc. v. Alcatel Lucent International & Orange, RG No. 20/07066.

The show must go on

I have always been fascinated by the longevity of some soap operas.

As a teenager, I have memories of holidays at my grandparents’, with The Young and the Restless on TV. This show has been airing in the U.S. since 1973 and has recently reached its 12,000th episode milestone. (Un)fortunately for French viewers, the story started for them at episode 3,263 only. Anyway, sooner or later, even the oldest shows come to end. After 54 years of broadcasting, As the World Turns stopped in 2010.

As I have already mentioned a couple of times on this blog, one of the oddities of French patent litigation is that we have a few soap opera cases, which seem to go on and on for ages, fueled by a regrettable back-and-forth movement between the Cour d’appel and the Cour de cassation (i.e. the appeal court and the supreme court).

One such litigation, the numerous twists of which have given rise to many comments over the years, is the pravastatin case.

On May 21, 2021, the Paris Cour d’appel issued a batch of parallel judgments in this saga. Since they nicely and clearly summarize the main episodes of the dispute, I thought I might take this opportunity to present the updated facts to the readership.

The case revolves around SPC No. FR 92C0224 owned by the Japanese company Daiichi Sankyo Company Ltd. The SPC concerns the cholesterol-lowering drug pravastatin. It should have expired in August 2006. The SPC was filed by an IP law firm which can be referred to as L. But the renewal fees of the SPC were then paid by another IP law firm. Let’s call it W.

In 2004, the fourth renewal fee for the SPC fell due. It was duly paid by the W.  firm. However, the INPI (French IP office) made an extremely unfortunate mistake, and did not properly take the payment into account. On July 15, 2004, the INPI sent a warning communication to L., the first law firm which had filed the SPC application. The INPI received no response from the SPC proprietor or its representatives. It then issued a decision noting that the SPC had lapsed, on January 26, 2005. This decision was again sent to L., received the next day, and published in the official bulletin (BOPI) on March 25, 2005.

Nevertheless, it is apparently only a few weeks before the scheduled expiry of the SPC that the patentee realized what had happened.

On June 28, 2006, W. filed a request for cancellation of the decision of lapse on behalf of Daiichi Sankyo, explaining that the fourth renewal fee had been duly paid (as well as the following one in fact).

It took the INPI only a few days to dismiss this request for cancellation, in a decision dated July 3, 2006. The INPI’s position was that the deadline for challenging the decision had expired. Indeed, according to general rules of administrative law, an unlawful decision can only be canceled within 4 months from the date of the decision.

Daiichi Sankyo filed an appeal against both decisions (the decision of January 26, 2005 noting the lapse of the SPC, and the decision of July 3, 2006 rejecting the request to cancel this decision), in front of the Paris Cour d’appel. Teva intervened in these appeal proceedings, since they had launched their generic pravastatin drug on the French market in the meantime.

On March 14, 2007, the Paris Cour d’appel issued a first judgment, which canceled both INPI decisions, thereby reinstating the SPC.

The court reasoned that the decision of lapse was erroneous, and that it had not been properly notified to Daiichi Sankyo’s representative. Indeed, the law firm L. was only entrusted with filing the SPC application, whereas W. was in charge of handling the renewal fees.

Teva filed a cassation appeal (appeal on points of law), but the supreme court rejected it on July 1, 2008, holding that L.’s power of attorney was limited to filing the SPC application; that W. was not required to file a power of attorney with the INPI; that the communication of lapse was therefore not notified to the proprietor’s representative; and that the deadline for challenging the decision had accordingly never started running.

In April 2009, Daiichi Sankyo filed infringement actions not only against Teva, but also against a number of other generic drug companies that had similarly launched their respective pravastatin generics prior to the SPC expiry, namely Biogaran, Sandoz, EG Labo, Arrow, Mylan and Qualimed.

In an interesting turn of events, three of them, namely Sandoz, EG Labo and Biogaran, filed so-called third-party oppositions (“tierce oppositions“) to the 2007 judgment.

This is a procedure by which a person negatively affected by a judgment, although they were not a party to the proceedings leading to the judgment, may challenge this judgment.

In three parallel rulings dated February 20, 2012, the Paris Cour d’appel held that the oppositions were admissible but were not well-founded. It therefore let the 2007 ruling, which was favorable to the SPC proprietor, stand. Sandoz and Biogaran did not give up and filed respective cassation appeals.

In another stunning development, on June 25, 2013, the supreme court rejected Sandoz’ appeal but set aside the 2012 judgment involving Biogaran.

In the Biogaran ruling, the Cour de cassation reasoned that Daiichi Sankyo had not informed the INPI that the law firm W. was its representative. Therefore, the Cour d’appel should not have considered that the decision of lapse was not properly notified. In other words, a complete U-turn from the Cour de cassation’s own judgment issued five years earlier.

By the way, why did the Cour de cassation allow only Biogaran’s appeal but not Sandoz’ appeal? Simply because only Biogaran raised the winning legal argument, and the court is strictly bound by the parties’ submissions.

The Biogaran case was thus remitted back to the appeal stage.

Smelling blood in the water, three more generic companies filed their third-party oppositions to the 2007 judgment at this point, namely Mylan, Qualimed and Arrow.

Teva, who had lost the very first round, joined the proceedings (all three in fact). As a result, the Paris Cour d’appel issued three more parallel judgments on October 27, 2017.

In these new judgments, the Paris Cour d’appel (in a different composition) modified its 2007 ruling and held that the decision of lapse should stand after all (in keeping with the guidance offered by the Cour de cassation in 2013). Of course, Daiichi Sankyo filed a cassation appeal. Once again, on December 4, 2019, the cassation judges partly set aside the three 2017 judgments, but due to a mere technicality. Indeed, the 2017 judgments modified the reasoning of the 2007 ruling but failed to formally issue a new order.

And so, there we are again in front of the Paris Cour d’appel, with three brand new parallel judgments issued on May 21, 2021.

The show must go on.

In these judgments, the Cour d’appel once again reevaluated the facts.

The court focused in particular on the provision which is now known as article R. 612-2 Code de la propriété intellectuelle, per which applicants having their seat overseas must appoint a representative in order to act in front of the INPI. It is specified that “unless otherwise mentioned, the power of attorney extends to all acts and to the reception of all communications“.

The court then noted that the law firm L. was appointed as a representative by Daiichi Sankyo, without any express mention according to which L. was not empowered to receipt communications on behalf of Daiichi.

The court further stated:

The payment of the renewal fees as from 2001 by W. and not by L. cannot in itself justify a change of the representative in charge of receiving communications. Thus, the intervention of a second patent attorney, who did not have to justify their quality for the acts that they carried out, namely paying renewal fees, did not amount to informing the INPI of a change of representative, especially because the renewal fee receipts issued until May 2005 did not mention that W. was the representative. 

Therefore, only L. was properly registered as Sankyo’s representative when the warning before lapse was issued by the […] INPI […] on July 15, 2004 […]. The same applies to the notification […] of the decision of lapse issued on January 25, 2005 […]. 

Since the notification of these communications was proper, the request for cancelation of the INPI’s (unlawful) decision was filed too late. Therefore, the original 2007 judgment must be canceled, and the decision of lapse must stand.

Most importantly, the court noted the following:

The effect of the [INPI] decisions of January 26, 2005 and July 3, 2006 is that the ‘224 SPC has lapsed. This lapse can only be effective with respect to all. It cannot be divided. Indeed, an SPC cannot lapse with respect to some and remain valid with respect to all parties. Therefore, Daiichi’s auxiliary request that only the third-party opponent […] should benefit from the cancelation cannot be granted. 

End of the story? I would not bet on it, unless a general settlement takes place. First, Daiichi Sankyo may still file a cassation appeal. Second, regardless of this possibility, there may be a couple of spin-off proceedings still pending regarding other aspects of the case (such as infringement and liability of the INPI).

Anyway, these latest rulings seem to bring at least some sanity back to a crazy case.

The situation was difficult to handle for the judges from the onset, since all parties, to some extent, acted in good faith. On the one hand, the SPC should never have been declared lapsed, as the renewal fees were paid in time. On the other hand, the third parties were entitled to rely on the lapse of the SPC.

That said, the theory that, by stating ex post facto that there was a change of representative, and that a deadline never started running because the INPI communications were not properly notified to the new (unannounced) representative, was a severe blow to legal certainty. It is thus reassuring that this reasoning finally seems to have been set aside.

Furthermore, it would have been quite unfair if there had been winners and losers among the generic companies, depending on who raised which legal argument and when. It is therefore fortunate that the Cour d’appel has now clarified that the lapse of the SPC must have an erga omnes effect.

Now we just have to wait and see how this plays out next time, as the world turns its attention to the pravastatin case again – no longer young but seemingly forever restless.


CASE REFERENCE: Cour d’appel de Paris, pôle 5 chambre 2, May 21, 2021, SAS Biogaran v. Daiichi Sankyo Co. Ltd., RG No. 20/02952 & 20/04838.

A pro-choice ruling

Once in a while, a complex and long-lasting patent case gives rise to a simple and straightforward ruling.

Only longtime readers having an exceptional memory will remember that, a few years ago, I reported on a first cassation ruling in a Time Sport International v. Décathlon France et al. case. This ruling dealt with a priority issue.

It turns out that another cassation ruling has recently been issued in the same litigation. So this is one of these few never-ending cases in which the judiciary pingpong seems to go on eternally. Is it a bug or a feature of the French legal system? We may never know for sure.

Anyway, there is probably no need to go over the entire case in detail: as I said, the point made in this new ruling is quite simple and straightforward.

Suffice it to say that Time Sport International owns European patent No. EP 0682885 on a device for the adjustable occipital fixing of a helmet, and that Décathlon France and DHG Knauer were found to have infringed the French part of this patent. The only outstanding question is the computation of damages.

More innovation in the helmet business.

Damages were awarded to Time Sport by the Paris Cour d’appel in a judgment dated September 22, 2017 (corrected on May 4, 2018). Several amounts were awarded in consideration of different periods of time and defendants. The total amounted to more than 800,000 euros for Décathlon France, but (only) approximately 71,000 euros for Knauer.

The Cour de cassation, which only rules on points of law and does not reassess the facts, let the 2017 ruling stand for the most part, but took issue with one amount in particular, namely the one supposed to address Knauer’s infringement for the period running from November 1, 2007 to September 8, 2012.

Time Sport’s claim amounted to 1,754,483 euros. But the 2017 appeal ruling only granted them 28,620.90 euros. If the staff mathematicians are correct, this means that the court granted Time Sport 1.6% of what they asked for – obviously quite a disappointment for them.

The amount claimed by Time Sport was based on an expert’s report and was said to correspond to the profit made by Knauer. It seems that Knauer refused to communicate its sales figures relating to the infringing helmets to the expert, so that he made an estimate based on a minimum number of helmets sold by Knauer to Décathlon, on Décathlon’s average unit price and on Décathlon’s gross margin (not Knauer’s gross margin).

But the appeal judges noted that Knauer and Décathlon have different activities. Knauer is a manufacturer and wholesaler while Décathlon is a retailer. Therefore, the expert’s estimate based on Décathlon’s gross margin did not correctly reflect Knauer’s profits. As a result, the court decided that the damages should rather be computed by applying a 6% royalty rate to a certain turnover – how exactly this turnover figure was obtained is unfortunately not very clear to me when reading the judgment.

Time Sport argued in front of the Cour de cassation that this approach was incorrect.

The key provision here is article L. 615-7 Code de la propriété intellectuelle.

In the relevant version which was in force between October 30, 2007 and March 13, 2014, the article read:

To set the damages, the court takes into consideration the negative economic consequences suffered by the harmed party, including lost profits, the profits made by the infringer, and the moral prejudice caused to the right owner due to the infringement. 

However, the court may, as an alternative and upon request of the harmed party, award a lump sum as damages, which cannot be lower than the amount of royalties or rights which would have been due if the infringer had asked for a permission to use the right which was infringed.  

The amended version of the article currently in force is not much different from this one.

In summary there are at least three modes of computation laid out in the statute (leaving aside the moral prejudice aspect, which rarely gives rise to significant indemnification): the first one based on negative economic consequences for the IP right owner, the second one based on the infringer’s profits and the third one which is royalty-based.

The Cour d’appel applied the third one.

But these different modes of computation are not equally available to the court. In particular, the phrase underlined above shows that the third modality has to be requested by the plaintiff.

The Cour de cassation confirmed that there is no getting around the underlined phrase, and that the plaintiff indeed has the right to choose whether or not to be indemnified by way of a royalty:

The Cour d’appel, by ruling thusly, by refusing to take into account the indemnification claim based on one of the evaluation criteria set in article L. 615-7, first paragraph […] and by awarding the amount of royalties which would have been due to Time Sport if there had been a permission to work the patent, although a claim for enhanced royalties had not been filed, violated this provision by refusing to apply the first paragraph and by wrongly applying the second paragraph. 

The case is therefore again remitted to the (regular) appeal level to have this portion of the damages award reassessed.

This cassation ruling can be viewed as a useful clarification – although, frankly, I would say the provision at stake in the Code de la propriété intellectuelle was in fact clear enough.

What remains fuzzy to me is how the court should “take into account” both the first and second modes of computation (negative economic consequences and infringer’s profits). I am not sure the case law is crystal-clear in this respect (see also this previous post on the same topic).

What is also somewhat fuzzy is what happens if the defendant refuses to open its account books, as seems to have been the case here. Wouldn’t it be logical in such a situation for the court to simply follow the plaintiff’s estimate?


CASE REFERENCE: Cour de cassation, chambre commerciale, March 17, 2021, Time Sport International v. DHG Knauer GmbH et al., appeal numbers 17-28.221 & 18-19.206.