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.