Friday, 22 May 2015

£27 million award for wrongful interim relief upheld

Recommended reading
for patent trial judges?
AstraZeneca AB & Anither v KRKA dd Novo Mesto & Another [2015] EWCA Civ 484 is a major ruling delivered yesterday on the calculation of damages from the Court of Appeal, England and Wales (Lords Justices Longmore, Kitchin and Floyd). This is an unusual instance of two specialist patent judges sitting together in the three-judge panel: one is usually enough. In the event Kitchin LJ delivered a unanimous judgment, so we weren't treated to display of duelling between the two virtuoso patent judges.

The question before the Court of Appeal was whether, in awarding damages of over £27 million to pharmaceutical companies for their losses resulting from an interim injunction restraining the launch of a non-infringing generic version of esomeprazole for a year, the trial judge -- Mr Justice Sales (not a specialist patent judge), was in error. Sales J's decision is noted on PatLit here. The point of the matter was that, but for the injunction, those companies would have entered the market for esomeprazole with full force and effect, and the sum awarded took account of the success they would have achieved and the profits they would have made, subject to an appropriate 20 per cent discount to reflect the various uncertainties inherent in that assessment. The award of £27 million was the largest ever made by the Patents Court on an enquiry of damages of this kind.

Essentially, said the Court of Appeal, Sales J had got it right and had was entitled to reach the conclusion which he had done, on the basis of the evidence before him. The assessment of damages was compensatory, not punitive, and while some of the reasoning was "concise" it was not (as counsel for the appellants had suggested) "wholly inadequate".

This blogger welcomes more concise reasoning in the decisions of trial judges. They are easier to follow and, in his opinion, less likely to result in an appeal since there's not so much rope with which trial judges can hang themselves.

Wednesday, 20 May 2015

The Unitary Patent and Unified Patent Court: new survey seeks responses

Nick Cunningham (Wragge Lawrence Graham & Co.) has written to tell us that his firm is running a survey to try to find out what patent owners and their advisers are planning to do about the Unified Patent Court, and whether they think it is a worthwhile development (something we've all been speculating about). Adds Nick:
"We would like to get as wide a response as possible, so I was hoping that you might be able to mention it in a posting".
PatLit is always pleased to oblige. Wragge Lawrence Graham & Co's Survey on the Unitary Patent and Unified Patent Court can be accessed at https://www.surveymonkey.com/s/unitarypatentsurvey and it should not take more than 10 minutes of your time. The questions are designed to be answered by respondents from outside as well as inside the UK and, while the organisers expect to be closing the survey in mid-June, there is no formal closing date.

Federal Circuit Again Addresses “Divided Infringement” Scenarios

On May 13, 2015, the U.S. Court of Appeals for the Federal Circuit again considered the circumstances in which a defendant may be liable for direct infringement under 35 U.S.C. § 271(a) when multiple actors carry out the required steps of a patented process. In a sharply divided panel decision, the court ruled that while principles of vicarious liability apply to direct infringement, liability is not available under joint tort concepts, such as “concert in action.” Akamai Technologies Inc. v. Limelight Networks, Inc., Case No. 2009-1372 (Fed. Cir. May 13, 2015). As a result, a defendant may be liable for direct infringement of a method claim only if: (a) the defendant performed every step of the patented method, or (b) if the defendant did not perform every step, the defendant was a “mastermind” that orchestrated the infringement and thus was responsible for the steps performed by others. In order to be a mastermind, a defendant must go beyond merely instructing or encouraging another actor to perform the steps that it did not perform -- a defendant is liable only if it is legally responsible for the missing steps due to a principal-agent relationship, a contractual arrangement, or a joint enterprise.

The latest Akamai decision essentially reaffirms the court’s earlier ruling in Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (2008) that direct infringement liability requires a single entity to perform all the steps of a patented method. This interpretation could have far-reaching implications for patent claim drafting and infringement litigation.

In a 2 to 1 decision written by Circuit Judge Richard Linn, the court ruled that § 271(a) includes a “single entity rule:”

[D]irect infringement liability of a method claim under 35 U.S.C. § 271(a) exists when all of the steps of the claim are performed by or attributed to a single entity—as would be the case, for example, in a principal-agent relationship, in a contractual arrangement, or in a joint enterprise. Because this case involves neither agency nor contract nor joint enterprise, we find that Limelight is not liable for direct infringement.

Slip op. at 6-7. The court ruled that while § 271(a) covers situations in which a defendant is legally responsible for the acts of closely-related third parties (i.e., vicarious liability), direct infringement does not extend to common law tort theories in which multiple persons acting together are jointly liable.

In a vigorous dissent, Circuit Judge Kimberly A. Moore argued that the single entity rule has no basis in the statute or case law, and that limiting the scope of § 271(a) to vicarious liability situations creates a “gaping hole” in liability under the Patent Act, effectively rendering thousands of process claims uninfringeable. She argued that liability under § 271(a) also applies in cases where defendants would be considered jointly liable under some common law tort principles. Due to the pointed dissent, however, it is likely that the Federal Circuit will again review the issue en banc.


The Akamai decision underscores the need for patent applicants to claim their process inventions in a way that can be infringed by a single actor, either through actions by a single competitor or actions attributable to it through contractual relationship or agency principles. This is especially important because liability for active inducement or contributory infringement will not be available in many cases due to the high intent standard required in § 271(b) and (c). See Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060 (2011) (active inducement requires actual intent to cause infringement or willful blindness). 

A copy of the decision is available HERE.

Tuesday, 19 May 2015

Adding more infringing products at the stage of assessing financial compensation: can it be done?

AP Racing Ltd v Alcon Components Ltd [2015] EWHC 1371 (IPEC) is a decision of Judge Hacon, sitting in the Intellectual Property Enterprise Court (IPEC), England and Wales, on 15 May, relating to infringement of a patent for calipers. This decision established something that, in theory, we may well have assumed anyway -- but it's good to spell it out to patent litigants. The message? That, as a general rule, in cheap-and-cheerful IPEC proceedings a patentee whose patent has been shown at trial to be infringed will not be entitled to litigate a broader range of infringements in an account of profits, or in an inquiry as to damages, than those included in his original infringement claim. However, as an exception to that general rule, where a patentee has no reason to know of those other infringements until after the case management conference, the most expeditious way forward is for the court to consider further allegations in the inquiry or account -- if this can be done without having to deal with additional evidence.

In making this statement of general principle, Judge Hacon stated that the patentee is under no general duty to exercise reasonable diligence to ascertain whether he has a potential further cause of action against the defendant. However, he added, a lack of diligence where the further claim would have been apparent to a reasonable claimant early in the proceedings, if he had only exercised reasonable diligence, could tip a claimant's attempt to deal with further infringements at the remedy stage into the category of abuse of process -- though it wasn't an abuse of process in this instance.

Monday, 18 May 2015

CIPA initiative to boost 2015 Congress

This blogger has often wondered about the pricing of major conferences. While the main cost to any IP professional is the loss of chargeable time while he attends them, the registration fees can be a significant factor too -- particularly for people who are not partners or owners of their own practices but who work in-house and have little or no control over their budgets.  Accordingly the following news, received via Chartered Institute of Patent Attorneys (CIPA) Chief Executive Lee Davies, is especially welcome. Writing to CIPA members he says:
CIPA’s annual Congress has been a recurring theme during the recent ‘meet-the-members’ tour. It is clear that you value CIPA staging Congress each year as it acts as a showcase for the UK profession and helps your Institute to influence policy formers on your behalf. Many of you have, however, said that you would be more likely to attend if it were not so expensive. I am going to put that to the test.

I have encouraged the Congress Steering Committee to reduce the cost of Congress by up to twenty-five percent for 2015 as an experiment [Bravo! Can this be the beginning of a new trend?]. This is a challenge for us in that we always aim for Congress to achieve a break-even budget and to do so we need more of you to attend, but you have told me that cost is the deciding factor and I hope that at £775 (+VAT) for a two day conference (£685 +VAT if you book early) you will see this to be real value for money.

We are taking a provocative look at the world of intellectual property in 2015, asking the question: The global IP system, is it fit for purpose? A programme full of influential speakers will address themes such as:
  • Do patents block innovation?
  • Harmonisation: holy grail or poisoned chalice?
  • IP crime: a crime without victims?
  • At last, a unified patent system for Europe, but what does this mean for business strategy?
  • Disruptive technologies: the end of IP as we know it or a new beginning?
  • How can business and industry make the best use of the global IP system?
The venue is still the Lancaster London Hotel, and the dates are Thursday 1 and Friday 2 October 2015. This blogger ventures to suggest that the new registration fee arrangements will have an impact, particularly on corporate patent departments, and he expects that the event will be all the better for them [ie the fee reduction should be fit for purpose ...].

This year's CIPA Congress has its own website here, from which all relevant details can be accessed.

Friday, 15 May 2015

Springtime, but no summary judgment for Huawei and their co-defendants

 Unwired Planet International Ltd v Huawei Technologies Co Ltd & Others [2015] EWHC 1198 (Pat) is a Patents Court, England and Wales, decision of Mr Justice Birss, delivered on 12 May. This ruling gives some useful guidance on applications for strike-out and summary judgment -- and on when not to bother making them.

Irish company Unwired, which held a portfolio of telecommunications patents, many of them declared to be essential to various telecommunications standards, sued Huawei and some other fairly serious telecommunications equipment businesses, alleging patent infringement in respect of the sale of standard-compliant products. In total, the action involved five standard-essential patents (SEPs) and one non-essential patent.

Unwired sought injunctive remedies, except to the extent that the various defendants were required and entitled to take licences to the SEPs on FRAND terms. Unwired made two open licensing proposals to the defendants; (i) in April 2014 it proposed a worldwide licence of all its patents, and (ii) in July 2014 it proposed a worldwide licence of its SEPs only.

The defendants said that none of the patents was essential, valid or infringed, but they said they'd be willing to take licences under any patents found to be valid and infringed. Their defence also alleged that, in seeking an injunction, Unwired was in breach of Article 102 of the Treaty on the Functioning of the European Union (TFEU) by committing an abuse of its dominant market position. Once the Article 102 issue was raised, further interested parties were joined to the proceedings. Unwired then applied to add to its claim a declaration that its offers of licence were FRANDly; the company also sought a declaration as to the terms or range of terms that would be FRAND for a licence to use the claimant's portfolio of SEPs and/or its portfolio of patents.

Huawei and the other defendants contended that the FRAND obligation points were capable of being dealt with summarily and that they should be: Unwired's proposals couldn't be FRANDly because Unwired failed to offer (i) single patent licences if requested; (ii) a licence under all SEPs essential to a particular standard; (iii) a licence under SEPs relating to a particular territory.

Birss J refused to deal with the FRAND issue summarily. In his view:

* It was at least arguable that a key part of the factual matrix against which the offer of FRAND terms had to be construed was competition law and policy. This being so, no matter how clear the meaning of the words themselves might seem, a final decision about their meaning and scope could not be made without putting them into their proper factual and competition law context.

* It could well be that competition law considerations and the wider context actually worked in the defendants' favour -- but that should be decided at trial. It would not be sensible to try and decide issues of the construction of the claimant's proposals summarily, since they were too closely connected with underlying facts which were themselves in dispute. Since Unwired had a real prospect of defending all the points arising on the summary judgment application, it must be refused.

* Unwired's assertion that its proposals were FRANDly had a real prospect of success, so its application to amend its claim by adding a declaration to that effect would be allowed on terms stipulated by the court.

Of all the areas of intellectual property litigation, patent law is probably that in which applications for summary judgment and/or strike-out of claims have the least chance of success since not only are the facts often complex and in dispute but the ease with which competition law issues under the TFEU can be raised will tend towards the conclusion that there is a need for a full trial.  In contrast, applications for speedy trials may be a bit more promising for patents than for other IP rights, given the relatively short life of a patent and the fact that a swift decision on the issue of validity in the light of allegedly killer prior art may avoid the need for a full-blooded court battle on issues of infringement.

Prix de thèse Véron: the winners, and a new book

PatLit has learned from its friend Pierre Véron that the award for best French thesis on patent litigation, Prix de thèse Véron & Associés, Contentieux des brevets d’invention, 3rd edition, was presented last month in Paris.

A very distinguished jury, composed of Professors Jacques Azéma, Christian Le Stanc, Jérôme Passa, Frédéric Pollaud-Dulian, and Jacques Raynard, conferred the award upon Mr Dominique Perdreau for his thesis "Le contentieux des brevets d’invention" ("Patent litigation"), under the direction of Professor Jean-Pierre Clavier (Nantes).

Ms Linda Boudour received a special mention for her thesis "La saisie-contrefaçon à l'aune des droits fondamentaux" ("The saisie-contrefaçon with respect to fundamental rights") under the direction of Professor Michel Vivant (Montpellier).

During the ceremony, Véron & Associés announced the imminent publication of the trilingual version (German, English, French) of the firm's book Saisie-contrefaçon, published in French by Éditions Dalloz, collection Référence (3rd edition, 2013). The new edition is due out this June: you can get all the details from the book's web page here.

Thursday, 14 May 2015

Viiv and Teva to fight SPC dispute without benefit of premature CJEU ruling

ViiV Healthcare UK Ltd v Teva UK Ltd [2015] EWHC 1074 (Ch), a Patents Court, England and Wales, decision of John Baldwin QC, sitting as a Deputy Judge of the High Court, is a bit of a curiosity -- a case on supplmentary protection certificates (SPCs) for pharmaceutical patents that did not result in a reference to the Court of Justice of the European Union for a preliminary ruling (it seems quite ironical that it's SPC cases that get referred to the CJEU so often when the mere fact of a reference can add a couple of years to the length of a trial while the SPC itself is for such a short period of time).

In short, Viiv had an SPC on the basis of its UK patent for a medicinal product containing abacavir and lamivudine for the treatment of HIV. Viiv issued proceedings for a declaration as to the proper interpretation of Article 3 of Regulation 469/2009 (the SPC Regulation) in the context of its 2009 SPC for "a combination comprising abacavir, optionally in the form of a physiologically functional derivative and lamivudine, optionally in the form of a physiologically functional derivative". In response, Teva applied to revoke the patent and the SPC.

Both parties agreed that the patent revocation proceedings should progress to trial regardless of whether a reference was made, and the trial was expected to take place in March 2016, with a Court of Appeal judgment following about a year later. The parties had cooperated in producing drafts of an agreed statement which set out their factual contentions.

In these proceedings Teva argued that there was no need to make a reference to the CJEU until essential facts had been found. No, said Viiv: the question of whether to make a reference was essentially one of case management, and the overriding objective of the Civil Procedure Rules was best served by making a reference now so that it would be better placed to decide whether to make any application to amend the patent.

John Baldwin QC refused the application, making the following observations:

* The CJEU's "Recommendations to national courts and tribunals in relation to the initiation of preliminary ruling proceedings" stated that
"A national court or tribunal may submit a request for a preliminary ruling to the Court as soon as it finds that a ruling on the interpretation or validity of European Union law is necessary to enable it to give judgment."
* Case law made it clear that, as a rule, the court could not tell whether it was necessary to decide a point until all the facts were ascertained, so in general it was best to decide the facts first; it followed that, in principle, a reference should only be made in the context of facts agreed or determined by the national court,

* On references to the CJEU, it was not unusual to include facts in "Agreed Statements of Facts" which were not actually facts but which were parties' factual contentions. There might be circumstances where that was appropriate -- but that should not be the norm as it was contrary to the concept that references were only made when a decision on the question was necessary to enable the court to give judgment.  The issue was not desirability from the parties' perspective but necessity from the court's perspective.

* It was wrong for the court to make a reference to the CJEU merely to enable a party to be better informed as to whether to go forward with an application to amend its patent.

* In this particular case it was far too early to make a reference. The proposed statement of facts was not sufficiently precise to give the CJEU a firm basis on which to make a decision and there were too many contingencies. In any event, if the patent was revoked at the validity trial, all questions relating to the SPC would become irrelevant.

This blogger thinks that the Deputy Judge got it right, even if this ruling does rather spoil the fun for those of us who enjoy watching the continuing evolution of CJEU jurisprudence and measuring it up against the twin criteria of commercial necessity and common sense.

Friday, 8 May 2015

Grounds for Revocation in Art. 138 EPC are Necessary but not Sufficient Conditions - BGH Wundbehandlungsvorrichtung

Art. 138 EPC sets the conditions under which national courts may revoke national parts of European Patents:
Article 138
Revocation of European patents
(1) Subject to Article 139, a European patent may be revoked with effect for a Contracting State only on the grounds that:
...
(c) the subject-matter of the European patent extends beyond the content of the application as filed or, if the patent was granted on a divisional application or on a new application filed under Article 61, beyond the content of the earlier application as filed;

Did any of our esteemed readers ever remark the word "may" in Art. 138 EPC?

It is the basis on a BGH decision "Wundbehandlungsvorrichtung" resolving a controversy on the so-called "inescapable trap" between Art. 123(2) and 123(3) EPC within the Bundespatentgericht. While the BGH had ruled for purely national German patents that non-disclosed features may be left in a granted claim under certain circumstances  (feature is purely limiting, no "Aliud" - i.e. the amendment relates to a non-disclosed technical aspect), the 4th senate of the Bundespatentgericht had found that this cannot apply for the German parts of European Patents where the inescapable trap according to G1/93 should fall shut.

The BGH did not agree and argued that the basis of the decision in the German courts is not Art. 123 EPC but the national implementation of Art. 138 EPC, which is known as Art. II § 6 IntPatÜG. It then argues that Art. 138 EPC sets necessary but not sufficient conditions for revoking a patent and that it opens the possibility for the national court to abstain from revoking the patent although a ground according to Art. 138 exists without conflicting with Art. 123 EPC as the latter is understood by the Enlarged Board of Appeal (cf. point 49 of  the reasons, rough translation by the author).

This result is even more fascinating as the word "may" (kann) is missing in Art. II § 6 IntPatÜG, which stipulates that the patent is revoked mandatorily if the subject-matter of the European patent extends beyond the content of the application as filed.

According to the BGH, the German approach strikes the right balance between the fundamental right to protection of (intellectual) property and the aim to avoid adverse effects for third parties.