Today, this blog is featuring a high-flying case. It started with Lufthansa Technik filing complaints against Astronics, Panasonic Avionics and Thales Avionics over a period of time ranging from December 2017 to June 2018.
The three complaints related to the alleged infringement of European patent No. EP 0881145 directed to an electrical power supply system for aircraft seats.
Since the allegedly infringing device targeted in the three complaints is the same, namely Astronics’ EmPower® high power USB in-seat power system, the three proceedings were joined in October 2018.
In parallel, Lufthansa Technik initiated discovery proceedings in the U.S. against the three defendants, for the purpose of gathering evidence for the French lawsuit. This would be under 28 USC § 1782, I presume.
Lufthansa Technik thus obtained confidential information and documentation from the defendants, and made reference to it in the French proceedings, as exhibits No.8.1 to 8.53.
This, however, caused a practical problem for the defendants. Indeed, the U.S. court had issued protective orders regarding some of the discovered documents. As a result, each of the three defendants, which are independent companies, are not entitled to review the exhibits originating from the other defendants.
In October 2019, Thales Avionics filed a motion with the judge in charge of case management in order to define how the confidential information was to be shared between the parties. In November 2019, Astronics and Panasonic Avionics also requested a ruling on confidentiality, but added, as a main request, that the court should rule on the invalidity defense first, before dealing with the infringement aspect of the case if needed.
The defendants argued that there was a real risk of trade secret breach, and that the confidentiality measures were complex to set up. However, these complex measures will anyway be useless if the patent is found invalid.
Lufthansa Technik countered that separating the validity and infringement discussions was contrary to the longstanding practice of the Paris court, and that this was just a delaying tactic.
The judge in charge of case management noted that, indeed, the validity of the EP’145 patent could be addressed without any communication of the discovery exhibits. The judge also regretted that the parties were unable to reach an amicable agreement on a confidentiality club to handle these exhibits.
As a result, the judge deemed it appropriate to order that the validity of the patent should be decided upon first. Therefore, Lufthansa Technik should hold off from actually filing the discovery exhibits for the time being.
The ruling was issued on June 19, 2020, and the judge set a relatively tight mandatory schedule for the next steps, namely:
- July 31, 2020: submissions of the defendants on the validity of the patent.
- October 2, 2020: submissions of the plaintiff on the validity of the patent.
- October 8, 2020: partial closing of the proceedings and hearing on the validity of the patent.
Once the court rules on this validity aspect, the case will either stop or continue with a further discussion on how to deal with the confidential exhibits.
Overall, this looks like a rather reasonable and pragmatic ruling. Approximately one patent out of two is found invalid in court. An invalidity ruling is therefore not just a remote possibility, on a statistical standpoint, and it may be sensible to make sure that a patent is valid before addressing the infringement issue, if only from the perspective of procedural economy.
On the other hand, if the infringement side of the case does proceed, this sequencing will of course ultimately lead to a delay in the final resolution – although the schedule set by the judge is relatively tight, which was possible in this case since all parties had already filed submissions on the merits including on the validity issues.
Could the validity first / infringement second sequencing become commonplace in future cases?
Probably not – although this is not the first time, see this previous post.
The patent at stake in this case has already expired (it was filed in 1998). I assume this may have played a role in the judge’s decision: since an injunction is out of question, the negative impact of a delay for the plaintiff is probably less serious than usual.
In addition, the case has other very specific features. The defendants’ motion was caused by an unusual procedural mess resulting partly from the configuration of the parties (with three independent and competing defendants); and partly from the plaintiff’s original strategy. Instead of requesting access to the defendants’ confidential business information with the French court (this may be ordered prior to the ruling on the merits or after the ruling on the merits, in a second phase dealing with the assessment of damages), Lufthansa Technik opted for the nuclear option of opening a new front in the U.S.
Now, to end up on a less positive note on this ruling, setting up some sort of confidentiality club should not be viewed as an insurmountable task. If the parties cannot agree, it should be possible for the judge to solve this problem within a matter of weeks. As a general rule, too much time seems to be wasted dealing with procedural motions such as this one. I have a feeling that this significantly impacts the overall duration of French patent litigation – Covid crisis notwithstanding.
CASE REFERENCE: Tribunal judiciaire de Paris, 3ème chambre 2ème section, ordonnance du juge de la mise en état, June 19, 2020, Lufthansa Technik AG v. Thales Avionics Inc. et al., RG No. 18/04501.