Patent protection is not price protection

This decision has been handed down by the Federal Administrative Court, not the Federal Patent Court. Still, it will surely be of interest for patent practitioners in the pharmaceutical field.

Case No. C-7765/2015 ¦ Decision of 07 March 2018 ¦ ‘KVG, Spezialitätenliste’

Lyrica® capsule

The decision has been published on 11 May 2018; it is anonymized but pretty obviously pertains to Pfizer‘s blockbuster drug Lyrica® with the active ingredient pregabalin; see the specialist information and the specialty list for further information (German only). Pfizer heavily litigated with generic companies about infringement issues, most prominently in the U.K. where the final judgment of the Supreme Court is still awaited.

The present matter is not about infringement, but rather all about pricing issues. It is important to understand that Lyrica® is approved for three indications:

  1. Neuropathic pain
  2. Epilepsy
  3. Anxiety disorders

Patent protection for (1) only expired in July 2017 (and allegedly accounted for about 2/3 of all uses of the drug), while protection for (2) and (3) already expired in May 2013. Overall sales of Lyrica® still accounted for about 5bn of Pfizer’s annual turnover in 2017.

Further, it is important to understand some basic principles of how prescription and use of generics is promoted in Switzerland. In general, the insured person’s share of costs consists of a fixed annual amount (franchise) and a deductible of 10% of the costs exceeding the franchise (up to a certain maximum). However, if the insured person demands a more expensive medicament and waives the cheaper option, he must pay 20% of the cost of the medication instead of 10%.

Until February 2017, this differentiated deductible of 20% applied to drugs whose price exceeded the average price of the cheapest third of all drugs consisting of the same active ingredients (and listed on the specialty list) by at least 20% (since March 2017: 10%).

Pfizer appealed an order of the Federal Office of Public Health (FOPH) of 29 October 2015, in which the FOPH issued a 20% deductible for Lyrica® with effect from 1 December 2015, not taking account of different indications at all. The overall calculation is anything but easy. In a nutshell, Pfizer argued that the price level of the generics had been wrongly determined by the FOPH, based on Art. 38a KLV. In simple terms, Pfizer argued that the not yet generic indication (1) has to be excluded from the maths and that a deductible of 10% shall apply in accordance with Art. 38a(4) KLV.

The FAC did not agree. Rather, the decision holds that the Health Insurance Act (KVG) and the Ordinance on Health Insurance (KVV) only differentiate on the level of preparations, not on the level of indications (¶8.2.7, emphasis in original):

[…]; vielmehr unterscheiden KVG und KVV auf der Stufe der Präparate zwischen Originalpräparat und generischen Arzneimitteln.

Further, the decision is very clear in that the patent law does not give the patent holder the right to a certain — or even just an economically worthwhile — price in the context of the commercial use of his invention. Contrary to what the plaintiff argued, patent protection does not mean price protection (¶8.3.3):

Das Patentrecht gibt dem Patentinhaber damit kein Recht auf einen bestimmten — oder auch nur auf einen für ihn wirtschaftlich lohnenden — Preis im Rahmen der kommerziellen Nutzung seiner Erfindung. […] Entgegen den Ausführungen der Beschwerdeführerin bedeutet Patentschutz nicht Preisschutz.

Finally, the decision holds that there would have been established ways for Pfizer to exclude the not yet generic indications from the maths — but it failed to take the appropriate actions. According to the Handbook for the Specialty List (p. 51, ¶C.5.2.2; corresponding to ¶C.4.4.3 of the former version of 1 September 2011),  only the market volume of the original preparation with the same indication as the generic drug is taken into account when different original preparations with different indications exist for an active ingredient. However, Pfizer only had the further indications added to the list of indications of one and the same preparation of Lyrica® (¶8.4.4):

Zu Recht weist die Vorinstanz auf die […] Möglichkeit hin, eine neue Indikation eines bereits bestehenden Wirkstoffes als neues Medikament anzumelden und in die SL aufnehmen zu lassen. Dieses Vorgehen hätte der Beschwerdeführerin ermöglicht, für ein (hypothetisches) Medikament “[…] [für] […]” bis Ende des Patentschutzes dieser Anwendung von den höheren Preisen für Originalpräparate zu profitieren, ohne gleichzeitig einen höheren Selbstbehalt in Kauf nehmen zu müssen. […] Es steht damit dem Hersteller und Patentinhaber frei, welches Vorgehen er wählen möchte, im Wissen um die jeweiligen Konsequenzen.

Pfizer logo

In the end, it’s all about money. Due to the suspensive effect of the appeal, Pfizer benefited from an unlawful deductible of 10% instead of 20% from 1 December 2015 until 31 November 2017. Accordingly, the FOPH will have to examine whether and, if so, to which extent Pfizer will have to pay a refund.

The decision is not yet final; Pfizer’s appeal is pending at the Supreme Court.

Reported by Martin WILMING

BIBLIOGRAPHY

Case No. C-7765/2015 ¦ Decision of 07 March 2018 ¦ “KVG, Spezialitätenliste”

Pfizer PFE Switzerland GmbH ./. Federal Office of Public Health

Panel of Judges:

  • Beat WEBER
  • Christoph ROHRER
  • Vito VALENTI
  • Michael PETERLI
  • Viktoria HELFENSTEIN

Court Clerk:

  • Tobias GRASDORF

Representative(s) of Plaintiff:

Representative(s) of Defendant:

  • n/a

DECISION IN FULL

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Customer Satisfaction Survey

The FPC has published the detailed numbers of its Customer Satisfaction Survey yesterday.

The key findings had already been included in the Annual Report; see this Blog here. However, I stumbled upon two issues when glancing through the numbers now.

  1. Are you in favor of a more liberal approach to the use of the English language, i.e. by only one party?

English cannot be the language of the case since it is not an official language of Switzerland. However, parties may mutually agree to use English for their submissions and in the hearings. This possibility is regularly used. Now, the court wanted to know whether it should also be possible for only one party to use the English language. This apparently is not appreciated. People don’t want to be confronted with English language unless explicitly agreed, I guess.

Here are the numbers:

dyerware.com

 

This apparently is not appreciated. People don’t want to be confronted with English language unless explicitly agreed, I guess.

  1. Should an instructional hearing take place even if desired so by only one of the parties involved?

A vast majority says: Yes. An instructional hearing to take place unless it is explicitly not desired by both parties. In other words, it should also take place if only one party wants so.

Again, these are the numbers:

dyerware.com

 

According to Art. 226 CPC, the court may hold instructional hearings to discuss the matter in an informal manner, to complete the facts, to attempt to reach an agreement and to prepare for the main hearing. As noted earlier, the FPC now apparently examines how to hold instructional hearings on a regular basis after the first exchange of briefs even if requested by one party only.

No way to hide from unpleasant opinions and questions

My best guess is that it will become routine practice soon.

Reported by Martin WILMING

SURVEY RESULTS

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Clash of the Ottos

No patent case this time. But if you are more broadly interested in IP in general, and in trademark and unfair competition issues in particular, then this post is for you!

The German Otto Group and the Swiss retailer Otto’s are fighting over Geman Otto’s right to use the trademark ‘OTTO’ for distant selling over the internet in Switzerland.

Little time? Read the summary.

First, let’s get the setup straight:

  1. The parties

i)   The ‘Swiss Otto’

Otto’s AG is a well-known Swiss retailer that has been founded in 1978. To avoid any genitive issues in the following, I will just refer to it as the Swiss Otto, vis-à-vis the German Otto. To the best of my knowledge, the Swiss Otto is only active in Switzerland, with currently more than 2’000 employees and about 100 stores. The Swiss Otto generated an overall turnover of about CHF 649M in 2015.

E-commerce and distant selling currently only account for 1-2% of Swiss Otto’s turnover, but still it is considered of ‘high strategic value’.

Plaintiff’s logo

Swiss Otto’s first trademark application was 2P-453413 (OTTO’S WARENPOSTEN), filed 20 March 1998. Later, the phrase OTTO’S was singled-out in the trademark application 2P-462929 (OTTO’S), filed 21 April 1999. A figurative trademark with the upright finger has then been filed on 30 December 1999; P-473105 (OTTO’S (fig.)).

ii)   The ‘German Otto’

Defendant’s logo

The Otto Group, or Otto GmbH & Co KG (formerly Otto Versand), is based in Hamburg (Germany) and is widely known as a distant selling company. Purportedly, it is currently the world’s second biggest e-commerce group of companies.

The German Otto has a very old trademark IR 218534 (‘OTTO-VERSAND’), registered on 28 March 1959 and with protection in Switzerland since 1 May 1979. Yet another trademark IR 616349 (‘OTTO’) has been registered on 14 December 1993 with protection in Switzerland since 20 June 1994.

Further, the German Otto filed national trademark applications 2P-423133 (‘OTTO-VERSAND’) and 2P-423132 (‘OTTO’) in Switzerland on 20 July 1994; both were granted on 25 March 1996 and specifically pertain to distant selling (‘Versandhandel’) in class 42.

  1. How did they get along in the past?

The German Otto had entered the Swiss market in 1996 with the takeover of Jelmoli Versand AG, still trading as jelmoli-shop.ch. German Otto’s further online businesses in Switzerland include quelle.ch and ackermann.ch. All these online businesses in Switzerland account for a combined annual turnover of 400M. However, the brand OTTO had never been used in Switzerland; the URLs otto-shop.ch (Whois), otto-versand.ch (Whois) and ottoversand.ch (Whois) currently redirect to jelmoli-shop.ch.

  1. What went wrong?

The German Otto approached the Swiss Otto in September 2016 and indicated the intention to use its brand OTTO on the Swiss market in connection with distant selling over the internet, and that a friendly co-existence  with the Swiss Otto should be possible; see ¶4.1.4 of the first instance decision:

[Otto DE] vermute, dass [Otto CH] keine Freude haben werde, wenn [Otto DE] in der Schweiz vergleichbar mit [ottoversand.at] einen Onlineshop eröffnen werde. Dies sei aber rechtlich geprüft und aufgrund der Markenrechtssituation als rechtlich möglich erachtet worden. Es werde aber kein Alleingang in Aussicht genommen, sondern eine friedliche Koexistenz in dem Sinne angestrebt, dass jeder seine Sortimente in seiner Zielgruppe online vermarkte.

Swiss Otto did not agree, but rather suggested that the German Otto could use its German TLD also for the Swiss market, i.e. otto.de/ch (currently resulting in a 404 errror message; last checked 05 April 2018). That was apparently not acceptable for the German Otto, and he indicated to enter the Swiss market with the URL otto-shop.ch most likely in the second half-year of 2017. This is also in accordance with reports e.g. here and here.

At that point, the Swiss Otto could obviously no longer agree with German Otto’s well-known slogan:

German Otto’s slogan (loosely translated: Otto … I like it.)

Swiss Otto filed his writ on 7 April 2017 with the Cantonal Court Lucerne, together with a request for interim measures provisionally prohibiting German Otto’s use of ‘OTTO’ or ‘OTTO-VERSAND’ in connection with distant selling in Switzerland.

The currently available judgments of the Cantonal Court Lucerne and the Supreme Court only relate to the requested interim measures. Main proceedings are most likely still pending.

  1. The summary judgment

The summary judgment holds that it is plausible by prima facie evidence that the brand awareness in Switzerland is much higher for the Swiss Otto vis-à-vis the German Otto. The judgment further holds that it is plausible that actual confusion of the two Ottos could occur.

It was apparently beyond dispute that the assortments of goods, ways of sales promotion and price levels are at least partly similar. Moreover, the websites show some similarities, e.g. in terms of navigation and the red color:

The German Otto undisputedly has the older trademarks in Switzerland. Still, it did never actively use these trademarks. The Swiss Otto did. With reference to the decision BGE 129 III 353 (¶ 3.3) of the Supreme Court, the Cantonal Court Lucerne held that the owner of a trademark may well be bared from actually using the trademark under certain conditions, based on the Unfair Competition Act.

Reverting to the aspect of potentially unfair competition, the decision provisionally holds that a risk of confusion of the two trademarks is given. Further, Swiss Otto appears to have a market position worthy of protection. In sum, Swiss Otto’s prospects for the case under Art. 3(1) lit. d UCA appeared prima facie reasonably promising.

Zusammengefasst erscheint der Verfügungsanspruch als einigermassen aussichtsreich, jedenfalls nicht als aussichtslos und ist folglich zu bejahen. […] Die Hauptsachenprognose fällt damit zu Gunsten der Gesuchstellerin aus.

The court held that there is a threat of an irreparable harm for the Swiss Otto if the interim measures were not issued. On the contrary, it did not appear of much relevance for the German Otto to just wait a little longer before actively using his trademark OTTO in Switzerland and to rely instead on his other brands while main proceedings are still pending – as he did so all along.  Urgency was apparent, in view of German Otto’s  announced market entry.

Thus, the German Otto was provisionally ordered to abstain from distant selling in Switzerland with the trademarks OTTO or OTTO-VERSAND.

  1. What remains to be clarified in main proceedings

The first instance judgement explicitly points to the following issues that need to be assessed in further detail in main proceedings:

i)   Do Swiss Otto’s trademarks also cover distant selling over the internet?

This has provisionally been answered in the affirmative, but note that only German Otto’s trademarks of 1994 explicitly recite such services in class 42; see above.

ii)  Are German Otto’s trademark rights forfeited?

The decision provisionally holds that this is definitely not unlikely (‘jedenfalls nicht unwahrscheinlich’).

iii)   The Agreement between Germany and Switzerland

The Agreement of 1894 between Germany and Switzerland essentially concerns a reciprocal recognition of the use of a trademark in the home country also for the respective other country. But does this legal fiction of a use in Switzerland also provide sufficient basis for a use-based defense? This remains to be seen in main proceedings.

  1. The Supreme Court’s view on the interim measures

The German Otto lodged an appeal to the Supreme Court, inter alia alleging a formal denial of justice by deferring the assessment of the agreement between Germany and Switzerland to main proceedings, even though this legal aspect of the case was allegedly simple and easily comprehensible (‘einfach und leicht verständlich’). The Supreme Court did not agree, in particular with reference to the judgment C-445/12 P of the European Court of Justice that also dealt with aspects of the legal scope of this Agreement.

Yet further grounds of appeal, such as arbitrariness, were of no avail, either. The appeal was dismissed.

Reported by Martin WILMING

BIBLIOGRAPHY

OTTO’S AG
./.
UNITO Versand & Dienstleistungen GmbH

Cantonal Court Lucerne:
1F 17 3 ¦ Decision of 14 August 2017

Judge:

  • Robert THALMANN

Court Clerk:

  • Peter ARNOLD

Supreme Court:
4A_500/2017 ¦ Decision of 12 February 2018

Judges:

  • Dr. Christina KISS
  • Dr. Kathrin KLETT
  • Dr. Fabienne HOHL
  • Dr. Martha NIQUILLE
  • Marie-Chantal MAY CANNELAS

Court Clerk:

  • Dr. Matthias LEEMANN

Representative(s) of OTTO’S:

Representative(s) of UNITO:

CANTONAL COURT LUCERNE

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SUPREME COURT

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SUMMARY

The German Otto has older trademark rights in Switzerland than the Swiss Otto, but never actually used them on the Swiss market. The Lucerne Cantonal Court issued interim measures based on the Unfair Competition Act and ordered the German Otto to abstain from using his trademarks OTTO and OTTO-VERSAND in Switzerland while main proceedings are still pending. An appeal was dismissed by the Supreme Court. Outcome in main proceedings needs to awaited.

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Annual Report 2017 reveals all-time high of incoming cases

The official Annual Report 2017 of the FPC has been published earlier today, together with a press release. It comes along with an official Executive Summary as follows:

Compared to the previous year, the total number of incoming cases increased to 34 (27 in the previous year). The increase was attributed to ordinary proceedings (26, 18 in the previous year), while the number of summary proceedings remained practically the same (8, 9 in the previous year).

During the reporting year the Federal Patent Court handled 15 ordinary proceedings, of which 10 were disposed of by compromise and 5 by judgment. A total of 9 summary proceedings were disposed of during the reporting year, 4 of which were settled by compromise and 5 were decided by judgment.

The current president, Dieter Brändle, resigned at the end of the reporting year due to his age. Mark Schweizer, former non permanent judge with legal training, was elected as his successor. Four of the non-permanent judges with technical training resigned at the end of the term of office, the others were reelected. Moreover five new non-permanent judges with technical training were elected. All of the non-permanent judges with legal training except for the new president were reelected, and three new judges with legal training were elected. All newly elected judges take office on 1 January 2018.

It is always good to put isolated annual numbers into perspective. So let’s have a look at the bigger picture, taking the whole time of operation of the FPC since 2012 into consideration. The overall number of incoming cases per year increased once again, after two years of declining numbers before. The number of incoming cases has reached an all-time high in 2017, which is indicative of the high reputation that the FPC has gained meanwhile both on a national and international level.

Noteworthy, the increase can be solely attributed to main proceedings.

dyerware.com


 

The overall number of concluded cases remained stable; a slight decline of concluded main proceedings is outweighed by more concluded summary proceedings.

dyerware.com


 

The backlog of cases reached an all-time high in 2017. Still, I do not feel that this is something to worry about.

dyerware.com


 

The number of settlements by compromise has recovered again to a share of 67% in main proceedings (2016: 47%) and 44% in summary proceedings (2016: 29%).

dyerware.com


 

On a sidenote, it is clear from the small print that a submarine case has finally been buried in 2017, after a pendency of record-breaking 1’335 days at a cantonal court and 1’885 days at the FPC, i.e. 3’220 days or a little less than 9 years in total.

Two main proceedings are already pending since more than two years; it is pretty evident that these cases are O2015_008 and O2015_009.

And how is all this perceived by the users? Well, you never really know until you ask …

So the FPC did ask! And the feedback is positive:

The information provided by the Court on the courses of proceedings and jurisdiction was deemed to be very good. Likewise more than 80 % of respondents are satisfied or very satisfied with the courtesy and cooperation of the Federal Patent Court dealing with inquiries, and with the quality, reliability and promptness of information. […]

78% of the respondents evaluate the clarity and traceability of the reasons given for the decisions with 3 or higher on a scale from 1 to 5.

The FPC also asked specific questions relating to procedural issues, e.g. about timing:

Practically all respondents deemed durations of proceedings and time-limits to be appropriate. In case of summary proceedings about one fourth of the respondents would like faster proceedings.

There is obviously no need to take any urgent action here. On the contrary, there are two other topics that might actually lead to a change of practice:

Two thirds of the respondents would like an instructional hearing after the first correspondence even if this is requested by one party only.

A few respondents would welcome it if after failed settlement proceedings binding terms for the further procedural steps were fixed by agreement with the parties.

The Federal Court takes suggestions by the users seriously and examines if instructional hearings can be held on a regular basis even if requested by one party only and how the proposal to fix binding terms for the further procedural steps at an early stage can be realized.

The question relating to instructional hearings had already been included in the questionnaire. Moreover, the FPC now apparently examines how to hold instructional hearings on a regular basis after the first exchange of briefs even if requested by one party only. A contrario, this suggests that it may well be done (or has already been done?) exceptionally in any event.

As to the second topic, it is clear from the German version of the Annual Report (page 8) that terms is to be understood as dates (‘Termine’).

Reported by Martin WILMING

PRESS RELEASE

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ANNUAL REPORT 2017

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Be prepared for some proposed changes to the Civil Procedure Code

The current Swiss Civil Procedure Code has been enacted in 2011, and the Federal Council had been asked to assess its practicality and to come up with suggestions for improvement, if appropriate (motion 14.4008).

The first draft of proposed changes has been published on March 2, together with exhaustive explanatory notes. The consultation process is open until June 11, 2018.

Proceedings at the Federal Patent Court are governed by the Civil Procedure Code, and the proposed changes would have quite some implications for FPC proceedings. In my perception, the most important aspects are the following:

  1. Costs

First, it is proposed that only half of the expected court fee may be ordered as an initial advance payment; see Art. 98(1) of the draft. Notably, this is already the current practice at the FPC since December 2015; see this Blog here.

It is also proposed that a successful plaintiff shall get his advance payment(s) refunded; see Art. 111(1) of the draft.

Collection risk

Currently, the court keeps the plaintiff’s advance payment(s) irrespective of the outcome on the merits and orders that the defendant refunds the amount to the successful plaintiff. The proposed amendment actually shifts a collection risk from (successful) plaintiffs to the State.

Finally, legal aid is currently not available for the precautionary taking of evidence. It is now proposed to explicitly provide for this possibility in Art. 118(2) of the draft.

  1. Private expert opinions
A smart party expert

Private expert opinions are newly listed as a ‘physical record’ in Art. 177 of the draft. Note that private expert opinions are currently not considered as a means of evidence according to Art. 168 CPC, in particular not as a ‘physical record’ in the sense of Art. 177 CPC; see e.g. BGE 141 III 433. The dispatch of the Federal Council on the current CPC held that private expert opinions are admissible, but will only be considered as a statement of a party; see BBl 2006, p. 7325, 3rd paragraph. If the proposed change is adopted, party expert opinions would henceforth be subject to the court’s free assessment of evidence according to Art. 157 CPC.

  1. Ex-parte interim measures

Ex-parte interim measures are a powerful tool – when granted. However, a request for ex-parte interim measures may backfire when the court dismisses the request. According to the current Art. 265 CPC, the court will summon the parties to a hearing and set the respondent a deadline to comment in writing. As a consequence, the respondent is informed about the ex-parte request, and there is a risk that a later enforcement of the measure might be frustrated.

It is held in Art. 265(4) of the draft that the court shall not inform the respondent of the decision and shall abstain from issuing the summons or setting the respondent a deadline to respond until it has been decided on an appeal against the decision to refuse ex-parte interim measures, if requested so by the applicant.

Reported by Martin WILMING

DRAFT OF CHANGES

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The draft changes are also available in French language here; I did not grab the Italian version.

EXPLANATORY NOTES

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The explanatory notes are also available in French language here; I did not grab the Italian version.

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The Codex of this Blog

I am very grateful for all the positive feedback that I receive for this Blog. But it goes without saying that sometimes a party or a representative is just not happy to see details about her/his case on the internet.

I feel that mostly the mere fact that I got hold of this further information is what concerns people:

Has the other party leaked the information?

Does that guy have some other secret channels?

No magic. Just work.

I am not doing any magic here, and there is no conspiracy ongoing. The truth is much more simple. Actually, I am using Google (guess what!) and patent databases (e.g. Espacenet). Sometimes I just cannot avoid to stumble upon the relevant facts. And, frankly,  sometimes I do my stuff with quite some persistence. One of the first things that I have learned in my training as a patent attorney is that the mentality of a truffle pig is extremely helpful. But that’s it.

I did my homework on how to deal with anonymisation already in the early days of this Blog (see here), and my aim is to consistently run this Blog in accordance with some basic rules:

  • Be truthful and honest.
  • Don’t be a spokesman for anybody.
  • Correct mistakes, and make it known when you do so.
  • Identify when you report about a case you are / your firm is involved in.
  • Do factual and legal research to a reasonable extent in order to be on solid ground when publishing something.
  • Present the information you have in a way that leaves as little doubt as reasonably possible about the technical and factual background of the case at hand to allow for a more thorough understanding of the decision.
  • Encourage people to form their own opinion, e.g. by enabling review of primary sources of information.
  • Don’t bore people. Present the information in an entertaining and appealing way. It’s a Blog, finally.

And, last but not least, I do surely respect people’s private life and the right to self-determination about personal information. I have no sensational interests at all. I am particularly cautious with identifying natural persons, and even more so when they are defendants in summary proceedings. When my reporting is identifying, the public interest in that information in my personal judgment outweighs the interests worthy of protection of the persons involved.

Some final notes:

Not a bad idea since 1939 anyway
  • I am a human. If you are concerned about anything that you come across on my Blog, it might be a good idea to just give me a call to talk it over. A kind Email would be fine, too. I will never refuse to spend a second thought on what I have published.
  • On the other hand, I might appear a little stubborn if you just send me a registered letter setting a time limit to comply with your takedown requests. Threat of legal action will likely be counter-productive, too.
  • I will correct errors, and I am grateful if you inform me of any errors that you feel should be corrected. But I will never accept pushy requests to reformulate things to twist the message for the benefit of the one or the other party.
  • I have no reason to believe that a party has an issue with certain information being published on my Blog if she/he (or a representative) has already published or enabled publication of the same information elsewhere.
  • Take good care of what you or your (client’s) representative files with the EPO or other major IP offices. The file wrapper are public, and I do find a wealth of valuable information there.

Best regards,

Martin WILMING

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Amendments of the Patent Court Act approved by both chambers of the parliament

I have reported earlier about the forthcoming organisational changes at the FPC on this Blog here.

After the National Council, the Council of States has also approved the amendments to the Patent Court Act on February 28, 2018, without any votes to the contrary.

Accordingly, the debate was not controversial:

  1. Robert Cramer (member of the Council of States)

A verbatim transcript is also availabe here (FR only).

  1. Simonetta Sommaruga (Federal Councillor):

A verbatim transcript is also availabe here (DE only).

Now, what is next?

Once officially published, the amendment to the Patent Court Act might be challenged with an optional referendum (Art. 141 FC) within 100 days, but this is highly unlikely. Thus, one may expect the changes to be enacted in mid 2018.

UPDATE 15 March 2018:

The final parliamentary vote on this matter will be on 16 March 2018. The drafting committee has published the final version of the draft bill earlier today; see here.

UPDATE 03 April 2018:

The official publication was made on 27 March 2018, so the optional referendum is possible until 05 July 2018. Without a referendum, the amendments will enter into force on 01 August 2018.

Reported by Martin WILMING

Header image courtesy of Parlamentsdienste, 3003 Bern

AMENDMENTS TO THE PATENT COURT ACT

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Litigation that won’t take your breath away

Hamilton Medical

I recently came across some press releases about litigation between Hamilton Medical AG and imtmedical AG. Both parties are active in the field of medical ventilation units.

Nothing surfaced so far at the FPC, but the press releases of the parties provide quite some insight.

A first complaint was apparently filed by Hamilton on May 31, 2016, alleging infringement of CH 701 755 B1 (see Swissreg for further bibliographic details) by certain flow measurement sensors of imtmedical; see Hamilton’s first press release.

iFlow sensor

From imtmedical’s press release, it becomes clear that their iFlow sensors 40S and 200S are at stake. However, imtmedical mentions that the complaint had been filed by Hamilton already in December 2015; it might be that there are (or had been) actually two cases pending at the FPC relating to the sensors.

imtmedical

According to Hamilton’s second press release, yet another litigation between the parties concerns imtmedical’s Bellavista ventilators with the feature ‘Animated Lung‘. Hamilton alleges infringement of EP 1 984 805 B1; see EPO Register and Swissreg for further bibliographic details. The complaint has apparently been filed on March 23, 2017. In turn, imtmedical argues for invalidity of EP’805; see imtmedical’s press release for further details about their arguments for invalidity.

Reported by Martin WILMING

CH 701 755 B1

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EP 1 984 805 B1

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The Patent Court that tweets

Be my Valentine

The Swiss Federal Patent Court now has an official Twitter account and published its first tweet on Feb 14, i.e. Valentine’s day. This surely is an account to follow. Much appreciated!

The tweet was about the forthcoming hearing in the matter Guenat SA Watches Valgine ./.  Swiss Finest SA that will take place on March 13, 2018 at the Hôtel de Ville de Neuchâtel. Please find some further information about this litigation on this Blog here.

Reported by Martin WILMING

Be prepared to learn more about ‘plausibility’ soon

It is not often that I report about forthcoming hearings at courts elsewhere in the world. But this case pending at the Supreme Court of the UK might have quite an impact well beyond the UK.

Pfizer’s Lyrica®

The hearing is the final showdown of the pregabalin litigation saga between Pfizer’s subsidiary Warner-Lambert, Generics (UK) Ltd t/a Mylan and Actavis Group. Pregabalin is marketed by Pfizer under the tradename Lyrica®.

The Appellant is the proprietor of Swiss-form EP 0 934 061 B1 (expired in July 2017), for the second medical use of pregabalin in the treatment of neuropathic pain. The Respondents applied to revoke the patent in part on the basis that the specification was insufficiently disclosed for it to be performed by a person skilled in the art. In [2015] EWHC 2548 (Pat), judge Arnold’s test for sufficiency required plausibility of the efficacy of the invention across breadth of a claim. He found that the claims for use in treating pain peripheral neuropathic pain were plausible and valid, but the remaining claims were implausible and therefore invalid for insufficiency. He construed claim 3 for treating neuropathic pain as including peripheral and central neuropathic pain (the latter of which he found the invention did not plausibly treat), and was therefore invalid as only partially plausible. The Appellant’s application to amend claim 3 to limit it to peripheral neuropathic pain was held to be an abuse of process. The findings of the judge were upheld by the Court of Appeal in [2016] EWCA Civ 1006, against whose judgment the Appellant now appeals.

The issues at stake before the Supreme Court are as follows:

  1. Whether (and what) role plausibility should play in the statutory test for sufficiency, and whether a patent should be held insufficient for lack of plausibility even though it is in fact enabled across the full scope of the claim.
  2. If a plausibility test is appropriate, provided there is basis to support the claim across part of its scope, whether later evidence can be used to fill the gap.
  3. The correct approach to (and the use of expert evidence in) the construction of patent claims.
  4. Whether a post-trial application to amend an invalid patent claim to limit it to a part found to be plausible is an abuse of process.
UK Supreme Court

I am very keen to read the judgment re ‘plausibility’ when it comes out. It is a term that is discussed in many jurisdicitions in almost every pharmaceutical case nowadays, and it is not only raised in relation to ‘sufficiency of disclosure’ (e.g. Regeneron Pharma, Inc. & Bayer Pharma AG v. Genentech Inc.) but has rather sneaked in many aspects of validity, in particular novelty (Dr. Reddy’s Laboratories (UK) v. Eli Lilly & Co.), inventive step (e.g. Conor Medsystems Inc v. Angiotech Pharma, Inc.), priority (Merck Sharp & Dohme v Ono Pharmaceutical) or industrical applicability (e.g. HGS v. Eli Lilly & Co.).

Today’s relevance of the ‘plausibility’ concept is somewhat surprising (to say the least) since it is not codified in any patent law that I am aware of. I feel it all stems back to the EPO’s  AgrEvo decision T 939/92 (introducing the requirement to make it ‘credible’ that an alleged technical effect is obtained by all compounds claimed). Later, T 1329/04 gained much attention with the catchword:

The definition of an invention as being a contribution to the art, i.e. as solving a technical problem and not merely putting forward one, requires that it is at least made plausible by the disclosure in the application that its teaching solves indeed the problem it purports to solve. Therefore, even if supplementary post-published evidence may in the proper circumstances also be taken into consideration, it may not serve as the sole basis to establish that the application solves indeed the problem it purports to solve.

This bar has arguably been raised again lately when ‘verifiable evidence’ was required in the application as filed; see decision T 488/16 revoking BMS’s EP 1 169 038 B1 relating to dasatinib, a blockbuster pharmaceutical marketed by BMS as Sprycel®.

I strongly doubt that ‘verifiable evidence’ means clinical trials; but the actual threshold is vague. A UK Supreme Court judgment on the role of plausiblity in the statutory test for sufficiency will hopefully provide some guidance. In a ruling in 2011 the Supreme Court noted in ¶123 that

[t]he dividing line between ‘plausibility’ and ‘educated guess’, as against ‘speculation’ […] can be difficult to discern in terms of language and application, and is a point on which tribunals could often differ.

Indeed. And given the potential impact of this decision, it comes at no surprise that stakeholders got active. The Supreme Court has granted the UK Bioindustry Association (BIA) permission to intervene; see their arguments here.

The hearing is scheduled for Feb 12-15, 2018. Tune in to the live stream here. See the videos of the hearing here.

Reported by Martin WILMING

PATENT IN SUIT

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INTERVENTION OF THE BIA

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Shutters down in Liechtenstein

Princely Courts in Vaduz (Asurnipal under a CC BY-SA 3.0 license)

I have reported about the decision 4A_18/2017 of the Swiss Supreme Court (Utz ./. Hilti) on this Blog here.  It is an interesting decision for various reasons, but the factual setup is just not fully clear from the Supreme Court decision itself. I thus tried to obtain the underlying decision of the Princely High Court of the Principality of Liechtenstein, to gain further insight. I felt this should not be an issue nowadays.

Oh, how mistaken I was! The Princely High Court just put the shutters down.

Coats of Arms (LI)
Coats of Arms (LI)

I was informed that a formal request of file inspection would be required to obtain a copy of the decision. Practically, this will just not work: The parties involved need to consent (how would you ever get consent from six parties which are anonymised in the Supreme Court decision?), or one would have to have a legal interest (which obviously does not apply).

I could not even obtain an anonymised version of the decision (I did not expect more than that anyway):

Sending the anonymised decision to a foreign country is out of the question.

Eh? The ‘foreign country’ is the seat of the competent second instance court in this matter.

As a last resort, I suggested that the decision be published ex officio in the database gerichtsentscheide.li. However, only ‘selected’ decisions are included in this database. For some reason this decision is apparently not worth being selected.

Frankly, I have difficulties to accept that this is still happening nowadays. Just for the sake of comparison, note what the Swiss Supreme Court has decided in a recent case in relation to the public access to judicial decisions.

Reported by Martin WILMING

(Header image by Asurnipal under a CC BY-SA 3.0 license)

A VIEW OF THE SWISS SUPREME COURT

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