The U.S. used to have submarine patents staying under water as pending applications for many years without getting published and suddenly emerging upon grant and awarding 17 years of protection to their owners.
We in France have had a similarly exotic and frightening species of IP rights, that one could call zombie patents: patents that have apparently been dead for years but that are in fact quietly waiting in their graves for an awakening – which can be triggered e.g. by a decision from the highest court in the country.
European patent No. EP 0984773 to Astrazeneca AB, directed to a pharmaceutical formulation of omeprazole, was such a zombie patent. The patent was filed in 1998 and granted in 2003, and the French translation of the granted patent was duly filed at the Institut National de la Propriété Industrielle (INPI) as was required in those pre-London days. Unfortunately, the sixth renewal fee which was due in 2003 was not paid in due time – nor within the 6-month grace period.
As a result, a formal decision of lapse was issued by the INPI on January 30, 2004 and a mention of this decision was published in the official bulletin (Bulletin Officiel de la Propriété Industrielle or BOPI) on February 27, 2004.
Several pharmaceutical companies apparently relied on this lapse and started marketing generic drugs, such as Ethypharm, which launched its formulation in April 2004.
Five years went by, until one day in April 2009 Astrazeneca filed a request for restoration of right at the INPI. One would think that the request would be expediently dealt with but, as is often the case, one would be wrong. It took the INPI four years to issue its decision on the case, which was… positive. And therefore, in 2013, the patent woke up from the dead.
Obviously Ethypharm was not too happy about this turn of events and filed an appeal against the decision. The Cour d’appel de Paris had sympathy for the generic manufacturer’s case and canceled the decision from the INPI in a judgment dated January 15, 2014 – a swifter process than the proceedings in front of the INPI.
Quite predictably, Astrazeneca filed an appeal on points of law with the Cour de cassation, which brings us to the ruling issued on April 12, 2016, in which the highest court set aside the judgment of the Cour d’appel and therefore reinstated the 2013 INPI decision – and thus revived the patent for the two additional years that are left until it expires.
At this stage there are two questions any puzzled reader would be entitled to ask:
- Why such a mess?
- How can a patent possibly be reinstated by a request for restoration of right filed five years after the loss of right occurred?
I think there are two main factors which can help answer these questions:
- the modification of the statute that took place in 2008; and
- the famous pravastatin case law.
Let’s first look at the old pre-2008 statute. At that time, the restoration of right further to a lapse due to non-payment of a renewal fee was handled differently from a restoration of right further to non-compliance with another type of time limit.
The former version of article L.613-22 CPI (Code de la propriété intellectuelle) provided in its second paragraph that:
The patent proprietor can file a request for restoration of right within three months from the notification of the decision [of lapse] if it had a legitimate excuse for not paying the renewal fee.
In the omeprazole case, the decision of lapse having been issued in January 2004, the three month-deadline should have been long expired by the time the request for restoration was filed, and also by the time the law changed in 2008, right?
Well, no, and this is because of the pravastatin case law. It was decided in this famous case (which involved a zombie SPC) that when a decision of lapse is notified to the wrong recipient (i.e. to a recipient who was not entitled to receive the decision), the time limit of article L. 613-22 does not start. Since it does not start, it cannot expire.
This is exactly what happened in the present case. The decision of lapse was not notified to the patent proprietor in Finland. It was not notified to a representative of the patent proprietor either. Instead, I understand from the decision of the Cour de cassation, or rather from the statement of grounds of appeal annexed to the decision, that the 2004 decision of lapse was notified to… the annuity provider:
[…] The director of the INPI states that the notification was made to Mrs Caroline C, who is not an employee of Astrazeneca AB, nor a patent attorney, nor an attorney at law, nor a representative registered with the INPI, and therefore this notification was not made to a person who would be entitled due to the annuity provider, RWS group. Thus, this illegal notification did not trigger the three-month time limit for the restoration, and the request filed by Astrazeneca AB was not outside the time limit.
OK. But what about the change of law which took place in 2008? How does this come into play?
By way of an executive order dated December 13, 2008, the statute was amended in such a way that paragraph 2 of article L.613-22 CPI was canceled. As a result, the system of restoration of right further to a lapse was aligned with the normal system of restoration of right further to non-compliance with other types of deadlines.
The new relevant provision is article L.612-16 CPI, which will look familiar to European practitioners as it is similarly drafted as the restitutio in integrum provisions in the EPC:
The applicant who does not comply with a time limit set by the [INPI] may file a request for restoration of right if they have a legitimate excuse and if the failure to comply with the time limit directly results in the refusal of the patent application or of a request, in the lapse of the application or the patent or in the loss of any other right.
The request must be filed with the director of the [INPI] within a deadline of two months from the removal of the cause of non-compliance. The omitted act shall be accomplished within this deadline. The request is only admissible within a deadline of one year from the expiry of the unobserved time limit.
When the request relates to a failure of payment of a renewal fee, the unobserved time limit is the end of the grace period […].
So, in the new system, the deadline of three months from the notification of the decision of lapse has been replaced by the usual double deadline: two months from the removal of the cause of non-compliance and one year from the expiry of the unobserved time limit.
Since this second deadline is an absolute time bar and is independent from any actions taken or not taken by the patent proprietor and the patent office, it seems that there can no longer be zombie patents in this new system. If this provision had been in place before, Astrazeneca would have been barred from filing a request for restoration of right on the first of December, 2004 (one year after the six-month grace period following the due date for the sixth renewal fee, on the first of June, 2003).
The illustrated device is useful for store clerks: it displays the minimum birth date for an individual who is entitled to purchase alcohol or tobacco. I suggest a variant for patent office clerks displaying the maximum date of lapse of a patent for a patentee who is entitled to restoration of right.
The new provision came into force a few months before Astrazeneca filed its request for restoration. How did this affect the request? As the Cour de cassation summarizes it:
[…] in order to set aside the decision [to restore the patent], the judgment [by the Cour d’appel] stated that the executive order […] entered into force on December 2008 and deleted the second paragraph of article L.613-22 CPI so as to replace it with article L.612-16; and that this was a procedural law and thus was immediately applicable; that Astrazeneca was subjected, in order to benefit from a restoration of right, to the time limit of two months from the removal of the cause of non-compliance in the new provision; that the publication in the BOPI of the decision [of lapse] removed the circumstance which had prevented Astrazeneca to pay the sixth renewal fee when the new article L.612-16 came into force, so that the request filed on April 6, 2009 was late and inadmissible.
So, in summary, for the Cour d’appel, the time limit of two months came into force with the new law, and since the cause of non-compliance had long been removed, this deadline started on the day the new provision came into force, and was expired by the time Astrazeneca filed its request – so that the restoration could not be granted.
On appeal in front of the Cour de cassation, Astrazeneca criticized the computation of the two-month deadline. They said that a law cannot have a retroactive effect, and that the judgment by the Cour d’appel amounted to such a retroactive effect because the publication of the mention of the decision of lapse in the Bulletin in 2004 retroactively acquired a legal effect in 2008. Also, they explained that this publication was not an actual removal of cause of non-compliance.
But very interestingly, the Cour de cassation set aside the judgment on another ground, that the court came up with on its own – I am not sure I have ever seen this before. Namely, the court ruled that the former pre-2008 rule in fact still applied to the request for restoration filed in 2009. Said the supreme court:
[…] legal remedies against a decision are determined by the law which is in force on the day the decision is issued;
[…] the decision of lapse of patent right was open to restoration of right under article L.613-22 [CPI] second paragraph, within a time limit of three months from the notification, and since the notification was illegal, the deadline did not start running, and thus the Cour d’appel violated the law […].
As a side remark, Ethypharm was not the only third party involved in this dispute. Parallel cases involved Actavis, and therefore there are two other judgments by the Cour de cassation of the same date with substantially the same content.
All in all, this is a rather spectacular result which does seem to make sense on a legal standpoint. The real aberration is probably the error made by the INPI. Why on earth a decision of lapse was notified to someone else than the representative is puzzling – and I guess there must have been a representative actually appointed since the patent was validated by filing a French translation.
Fortunately this kind of fiasco would no longer be possible nowadays – or could it?
CASE REFERENCE: Cour de cassation, ch. com., April 12, 2016, Astrazeneca AB v. Ethypharm & Directeur général de l’INPI, pourvoi No. V 14-17.439.