It’s showtime again for the SPC community — but don’t expect big surprises:
The CJEU handed down its judgment in the matter Teva et al. ./. Gilead (C-121/17) earlier today, concerning an SPC for the combination of tenofovir disoproxil (TD) and emtricitabine, i.e. Gilead’s Truvada®.
Be remembered that Arnold J had referred the same question from the Actavis ./. Sanofi (C-443/12) case again, i.e.:
What are the criteria for deciding whether ‘the product is protected by a basic patent in force’ in Article 3(a) of the SPC Regulation?
Now, in case of a combination product, the CJEU’s answer is as follows (emphasis added):
Article 3(a) of Regulation No 469/2009 must be interpreted as meaning that a product composed of several active ingredients with a combined effect is ‘protected by a basic patent in force’ within the meaning of that provision where, even if the combination of active ingredients of which that product is composed is not expressly mentioned in the claims of the basic patent, those claims relate necessarily and specifically to that combination. For that purpose, from the point of view of a person skilled in the art and on the basis of the prior art at the filing date or priority date of the basic patent:
the combination of those active ingredients must necessarily, in the light of the description and drawings of that patent, fall under the invention covered by that patent; and
each of those active ingredients must be specifically identifiable, in the light of all the information disclosed by that patent.
It will now be on the referring court to decide how this will play out in the matter at hand. However, there is a quite clear message from the CJEU in ¶56:
Consequently, it does not seem possible that a person skilled in the art, on the basis of the prior art at the filing date or priority date of that patent, would be able to understand how emtricitabine, in combination with TD, necessarily falls under the invention covered by that patent.
Just in case you didn’t notice this in the rush before the holiday season:
There is a new referral pending before the Enlarged Board of Appeal (EBoA) of the EPO, i.e. G 1/18.
It has apparently been put on the website of the Boards of Appeal already on June 25, but I only took notice now. In accordance with Art. 112(1)(b) EPC, the former President of the EPO, Benoît Battistelli, has referred the following point of law concerning the interpretation of Art. 108 EPC to the EBoA, in his last month in office:
Lorsque la formation d’un recours et/ou la taxe de paiement ont lieu après l’expiration du délai de deux mois prévu à l’article 108 CBE, le recours est-il irrecevable ou réputé non formé, et la taxe de recours doit-elle être remboursée?
If notice of appeal is filed and/or the appeal fee is paid after expiry of the two month time limit under Article 108 EPC, is the appeal inadmissible or is it deemed not to have been filed, and must the appeal fee be reimbursed?
The referral is a booklet of 18 pages in French language; please find a ‘quick and dirty’ English translation below.
Actually, the question is not all new. Essentially the same question had been at stake in cases G 1/14 and G 2/14 — but remained undecided (abandoned application in G 2/14; inadmissible referral in G 1/14). However, the former President pushed the issue again before the EBoA.
The referral was triggered by T 1897/17. In that case, the Board held that an appeal lodged after the expiry of the two-month period is inadmissible; however, it is deemed to have been filed and therefore to have legal existence; the appeal fee cannot therefore be refunded.
As set forth in the referral, this question has quite some relevance beyond appeal proceedings since further provisions of the EPC are worded similarly, e.g.:
The request is currently deemed not to have been filed in all these cases and the fee is reimbursed in case of late payment of the fee.
The former President strongly advocates to maintain the current system whereby an appeal fee that is paid late must be refunded because the appeal is considered not to have been filed; similarly, where the appeal is filed after the prescribed time limit, the appeal fee paid within the time limit shall also be refunded.
I would happily agree with this if it was the outcome.
We have seen some interesting decisions lately that deal with basic principles in the assessment of inventive step / obviousness. For instance, the Supreme Court provided guidance how to deal with a non-enabling disclosure as a closest prior art document; see this Blog here. But there is yet another decision of potentially wider relevance, i.e. in that it apparently re-defines how to formulate the ‘objective technical problem’.
It’s silly season now, and I could not help but reflect a bit about the typical learning curve of a patent attorney trainee when getting acquainted with such basics. If you are in a rush, feel free to jump over here.
Patent law is somewhat mysterious. The basics of patentability are very simple: The claimed subject-matter shall
be new (‘just don’t claim exactly what has been out there already’); and
involve an inventive step (‘a bit creative, please – not just obvious’);
On the merits, that’s pretty much it. Admittedly, there are some side aspects to observe, e.g.
it should have industrial applicability (‘it should be useful’);
it should not be excluded from patentability by law (‘don’t do what is explicitly forbidden’);
it should be sufficiently disclosed (‘tell the world how to make use of it’).
But that doesn’t seem to be a big deal. A quite common first thought of a patent attorney trainee goes like:
Well, that’s it? Why do I have to wait three years to sit (and pass!) the exam?
Later, one realizes that things are much more complicated than it seemed at first glance — and that it’s probably not a bad idea to test these basic concepts in real cases for a while, and one is grateful for some supervision before actually sitting the exam (while still at least hoping to pass).
Thereafter, it’s like driving a car. Passing the exam does not yet mean that you are a good driver. Still, at some point sooner or later and with some experience in the field, almost everybody will fairly get along on the streets.
It’s the same with patent attorneys: We are said to have quite firm opinions (when we finally have made up our mind), and it’s our bloody job to transfer this opinion to whoever needs to be convinced, every single day.
But patent attorneys constantly fail. Just look at all the negative office actions in the mailbox every day. Still, we know how to play the guitar. No doubt that a case only failed because the specific piece of music was not well perceived by the audience.
But when the common general understanding of how to assess inventive step / obviousness is whobbling, I am getting concerned. That’s my day-to-day business! Do I still play the game correctly?
Assessment of ‘inventive step’
In knowledge of what the invention is, it’s hard (if not impossible) to objectively evaluate whether or not it had been obvious before the invention has seen the light of day. As soon as you are aware of the invention, the unavoidable hindsight bias undermines any objective assessment.
Case law should be predictable, and individual judgments must be ‘right’. That’s a tricky balance — and whenever things are tricky, it’s comfy to have standardized tools at hand. This is where the EPO’s problem-and-solution approach comes into play (Guidelines, G-VII, 5), and which the FPC has repeatedly indicated to apply. It aims to avoid hindsight bias, and it does so with a rigid framework to be worked through. In brief, the problem-and-solution approach involves three main steps:
Step i), i.e. the question of whether or not something should be considered as the ‘closest prior art’, is mostly a major issue in any discussion of inventive step. I won’t dive into this now, but I strongly recommend Oliver Randl’s Post on an his Blog ‘K’s Law‘. (The Blog is dormant now because he became a member of the Boards of Appeal.) His comparison of assessment of inventive step with mountaineering is just great.
Further, one may well discuss for quite a while in step iii) what a skilled person would actually have done or not. The EPO’s could-would approach requires that
[…] the prior art as a whole […] would (not simply could, but would) have prompted the skilled person, faced with the objective technical problem, to modify or adapt the closest prior art while taking into account of that teaching, thereby arriving at something falling within the terms of the claims, and thus achieving what the invention achieves.
The gist is that hindsight should not be an issue if there is a pointer or an objective incentive to combine two pieces of prior art. Fine. But …
The definition of the ‘objective technical problem’
Everything hinges on the definition of the objective technical problem in step ii), and this is what this Post is all about. According to the EPO Guidelines (G-VII, 5.1),
[…] one establishes in an objective way the technical problem to be solved. To do this one studies the application (or the patent), the ‘closest prior art’ and the difference (also called ‘the distinguishing feature(s)‘ of the claimed invention) in terms of features (either structural or functional) between the claimed invention and the ‘closest prior art’, identifies the technical effect resulting from the distinguishing features, and then formulates the technical problem. […]
It is noted that the objective technical problem must be so formulated as not to contain pointers to the technical solution, since including part of a technical solution offered by an invention in the statement of the problem must, when the state of the art is assessed in terms of that problem, necessarily result in an ex post facto view being taken of inventive activity (see T 229/85).
That’s how I’ve learned to play the game. A plain and simple mechanism:
identify the distinguishing feature (e.g. bolt and nut instead of a nail);
identify the technical effect of the distinguishing feature in the context of the invention (e.g. ease of detachability)
define the objective technical problem based on the technical effect of the distinguishing feature (e.g. facilitate detachability)
Does O2015_008 lower the bar?
When re-reading the judgment O2015_008 of 14 March 2018 (commented on this Blog here), I stumbled upon a general remark in ¶66 that I had overlooked before. It reads as follows (translated from French):
Nevertheless, the question must be asked whether the objective problem that is used for the problem-and-solution approach […] finds a basis or motivationin the closest prior art document or is part of the standard problems for the skilled person, and does not incorporate elements of the proposed solution into the patent (cf. T 59/90, r. 8). This is important to avoid hindsight bias.
(A reasoning along these lines, but in less explicit terms, can also be found in ¶33 of the decision O2015_018 of 15 June 2018, with the very same reference to T 59/90; see this Blog here.)
First, I just don’t know for sure what is meant with ‘standard problems’; but maybe this refers to e.g. ‘less expensive’, ‘faster’, ‘more efficient’ or similar things.
But be that as it may, I feel that the whole approach is flawed.
Why should it be required to have a basis or motivation for the ‘objective technical problem’ in the ‘closest prior art’?
Let’s take a simple example:
The invention is a car with an allegedly clever engine — but there is a lot of other stuff recited in the claim, e.g. wheels, mirrors, bumper, a radio, etc.
The ‘closest prior art’ shows almost everything, in particular the allegedly clever engine. So this really is a reasonably chosen ‘closest prior art’. In fact, it is almost novelty destroying. It is only silent about the radio.
Car radios are perfectly known, but in no way mandatory. Thus, there clearly is no implicit disclosure of a radio in the ‘closest prior art’, and one has to deal with it as a matter of obviousness.
In my perception, a proper definition of the objective technical problem will somehow need to address entertainment and/or information in a car, while carefully avoiding to mention a radio.
The alleged invention correctly just cannot survive the problem-and-solution approach because there are a lot of car radios in the prior art as a whole, and the skilled person would surely have integrated them as a straight-forward solution to the objective technical problem to be solved.
But I am not so sure about this if the reasoning in ¶66 of O2015_008 was correct. To be frank, I don’t even have a clue how the objective technical problem should then be defined. There just is no ‘basis or motivation’ towards entertainment or information in that document.
Alternatively, let’s start from a car with wheels, mirrors, bumpers and a radio as the ‘closest prior art’, and then try to combine it with the (not anymore) ‘closest prior art’ showing the engine. Assume the clever engine is just shown somewhere in the smallprint, without any indication of advantages or further explanations. It’s just there, and it’s not immediately apparent why it actually is clever. You will then have a hard time to hunt this April Fool’s joke of an ‘invention’ down with the problem-and-solution approach, in the absence of any pointer towards the invention, i.e. to use the engine from the prior art in a car with wheels, mirrors, bumper and — believe it or not — a radio.
Frankly, this cannot be it. I feel there must be a bug in a test that does not reliably sort out such non-inventions.
Struggling with this, I sought for guidance in T 59/90 (¶8) referred to in ¶66 of O2015_008. But there is none. It might be the last paragraph of ¶8 that appears to support the view taken in ¶66 of O2015_008, at least at first glance. It reads as follows:
Daraus muss geschlossen werden, dass aus [dem nächstliegenden SdT] das der patentgemässen Aufgabe zugrundeliegende Problem nicht bekannt war, und demzufolge auch die Lösung der Aufgabe aus [dem nächstliegenden SdT] in Verbindung mit dem allgemeinen Fachwissen nicht nahegelegt gewesen sein kann.
It must be concluded that the actual technical issue underlying the objective technical problem was not known from [the closest prior art], and therefore the solution of the problem could not have been obvious from [the closest prior art] in connection with the general technical knowledge.
However, the Board did not deal with the formulation of the objective technical problem here. It took the objective technical problem as it had been properly defined beforehand, and then summarized its assessement according to step iii), i.e. the could-would approach.
At closer scrutiny, it turns out that all this was only intended to sum up the reasons in respect of a single attack based on the ‘closest prior art’ per se, only in further view of the common general knowledge of the skilled person. Thus, it had essentially been argued by the opponent that the ‘closest prior art’ in itself would render the claimed subject-matter obvious for the skilled person. In that case, I might agree that the ‘objective technical problem’ needs to have a basis or motivation in the ‘closest prior art’ because it is not combined with yet another document but rather is considered self-contained, only seen with the eyes of the skilled person (common general knowledge). Where else should the pointer come from, if not from the ‘closest prior art’ in such a case?
But as soon as the ‘closest prior art’ is considered in further view of yet another document, the basis or motivation may well be derived from that further document.
And this is exactly what has been done in T 59/90. The Board moved on to assess in ¶9 whether there is any incentive towards the solution of the objective technical problem in any other prior art document:
It remains to be checked whether a suggestion for the solution of the objective technical problem can be derived from any of the other documents on file.
Note that the Board did not touch the wording of the ‘objective technical problem’ when moving on to check the combinations with the other documents on file. This is the problem-and-solution approach; nothing more, nothing less.
Further, I strongly doubt that this decision is of much relevance at all. It had been only distributed to Chairmen of other Boards (classified as ‘C’), and it has been cited by other Boards only once in 25 years (T 1009/96), for an unrelated aspect. And it is not that this Board had cited it by its own volition. Rather, it had to bother with T 59/90 because a party brought it up. It had been argued that a piece of prior art cannot be considered as ‘closest prior art’ at all because it did not deal with the specific problem of the invention. But this is not my point here, and the argument failed anyway. What is more, T 59/90 is not even mentioned in the reference book ‘Case Law of the Boards of Appeal‘. Thus, the decision has effectively been ignored by other Boards for a quarter of a century. Rightly so, because there is nothing special in it.
Concluding, I don’t see that T 59/90 supports the view taken in ¶66 of O2015_008 (except for the special situation where lack of inventive step is argued based on a single reference, i.e. the ‘closest prior art’ per se), and the above example shows how it would almost inevitably lead to obviously wrong results. In my perception, there is no need to spice up the well established framework of the problem-and-solution approach with yet further requirements. Rather, it can and should be applied as set forth in the Guidelines, for that case law remains predictable. And I have no reason to doubt that it leads to ‘right’ decisions — if applied correctly.
However, [the definition of the objective technical problem according to the problem-and-solution approach] is only valid insofar as the technical problem thus determined can reasonably be presumed to be a problem that arises without inventive effort within the general framework of the closest prior art document. Otherwise, this approach would focus the disclosure of the closest prior art and its interpretation in the direction of the invention, and introduce hindsight. (cf. T 59/90, ¶8)
is obvious in view of the state of the art (Art. 56 EPC).
The fate of a patent application thus critically depends on the ‘state of the art’. Now, what is comprised in the ‘state of the art’? The EPO educates its customers in the Inventors’ handbook in plain and simple words:
A prehistoric cave painting can be prior art. A piece of technology that is centuries old can be prior art. A previously described idea that cannot possibly work can be prior art. Anything can be prior art.
Easy, isn’t it? Not so, the closer you look.
In legal terms, the ‘state of the art’ is defined in Art. 54(2) EPC which reads as follows in the three official languages of the EPC (emphasis added):
Den Stand der Technik bildet alles, was vor dem Anmeldetag […] der Öffentlichkeit […] zugänglich gemacht worden ist.
The state of the art shall be held to comprise everything made available to the public […] before the date of filing […].
L’état de la technique est constitué par tout ce qui est été rendu accessible au public avant la date de depot […].
There are at least two issues that have recently been looked at more closely in relation to the term ‘state of the art’ in Switzerland:
How shall a pre-published, non-enabling disclosure be dealt with?
The Swiss Supreme Court recently held that even a non-enabling disclosure well belongs to the ‘state of the art’ (contrary to what the EPO typically does, i.e. to just ignore it; see Guidelines, G-IV, 2). But, in the Supreme Court’s view, such a piece of prior art cannot be assessed with the EPO’s problem-and-solution approach because the objective technical problem in such a case is just to find a working solution for what had been insufficiently disclosed previously, and there is an inherent motivation to search for that solution; see this Blog here.
What actually is the ‘art’ referred to in ‘state of the art’?
At the INGRES annual meeting of July 5, 2018, Hannes Spillmann briefly discussed a clash between two Board of Appeal decisions at the EPO, i.e. T 0172/03 and T 2101/12. The latter explicitly disagrees in its headnote with the headnote of the earlier decision T 0172/03, in the fundamental question of what actually is meant with
state of the art.
Which ‘art’ does Art. 54(2) EPC refer to? Can something described previously be excluded right from the outset just because it is not related to classic ‘technology’? The headnotes of T 0172/03 suggest exactly that (emphasis added):
1. The term ‘state of the art’ in Article 54 EPC should, in compliance with the French and German text, be understood as ‘state of technology’, which in the context of the EPC does not include the state of the art in commerce and business methods. The term ‘everything’ in Article 54(2) EPC is to be understood as concerning such kind of information which is relevant to some field of technology.
2. From these considerations it follows that anything which is not related to any technological field or field from which, because of its informational character, a skilled person would expect to derive any technically relevant information, does not belong to the state of the art to be considered in the context of Articles 54 and 56, even if it had been made available to the general public before the relevant priority date (see points 8 to 10 of the reasons).
Points 8 to 10 of T 0172/03 referred to in hn 2 leave no doubt that the gist really is to just exclude certain publications from any consideration as ‘state of the art’ whatsoever:
[T]he decision under appeal […] identifies the closest prior art as “the existing order placing mechanism” as if such a business scheme qualified as prior art as any other piece of technical information. […]
It can hardly be assumed that the EPC envisaged the notional person skilled in the (technological) art to take notice of everything, in all fields of human culture and regardless of its informational character. A consistent construction of the patentability provisions requires the term “everything” in Article 54(2) to be understood as concerning such kind of information which is relevant to some field of technology.
I am having difficulties to read an element (“art” / “Technik” / “technique”) of the phrase that is to be defined (“prior art” / “Stand der Technik” / “l’état de la technique”) in Art. 54(2) EPC into the definition itself. This is a Catch-22, in my perception; see also T 2101/12, ¶6.6 in this respect.
Luckily, T 2101/12 sets it right again; the hn reads as follows:
I fully concur with this. Whatever has been made available to the public is to be considered ‘state of the art’ in the sense of Art. 54(2) EPC, irrespective of whether it relates to a field of ‘technology’ or not.
It remains to be seen how the case law of the Boards will develop. Note that T 2101/12 only explicitly disagrees with hn 2 of T 0172/03. However, a quotation from hn 1 of T 0172/03 even made it into the EPO Guidelines for Examination (G-VII, 2):
The ‘state of the art’ for the purposes of considering inventive step is as defined in Art. 54(2) (see G‑IV, 1). It is to be understood as concerning such kind of information as is relevant to some field of technology (see T 172/03).
It is not that I have an issue with this quote. Even a non-technological ‘state of the art’ may well be relevant to some field of technology, e.g. when a mere business method as ‘state of the art’ is automated, and it is patentable when this is achieved in a new and non-obvious manner. This is how T 2101/12 approached it. But this understanding clearly is not what T 0172/03 advocated for. Incomplete reference to only part of hn 1 of T 0172/03 is misleading, at best. In my opinion, reference to T 0172/03 should be deleted from the Guidelines completely.
The following is just to name a few examples of state of the ‘art’ not taken from what one would typically consider a ‘field of technology’. Have fun.
I once had a hard time to properly communicate to a client that a U.S. examiner held SpongeBob to anticipate his invention:
The cartoon SpongeBog SquarePants Episode 1 ‘Help Wanted’ teaches a shearing tool which is mounted coaxially, rotatable, wherein the shearing tool comprises at least a bent arm wherein the tool has at least one opening.
The examiner referred to the following screenshot:
See the tool in motion here, if this meets your sense of humor; the screenshot was taken at approx. 1:04 min.
Drawings and pictures can anticipate claims if they clearly show the structure which is claimed. […] The origin of the drawing is immaterial. The drawings must be evaluated for what they reasonably disclose and suggest to one of ordinary skill in the art.
Luckily, the SpongeBob reference was overcome and the application proceeded to grant; US 8,622,507 B1, see the SpongeBob reference on the title page (‘Other Publications’).
2. The Beano
An entry signal system for pets is described and claimed in GB 2 117 179 A (filed March 18, 1983 and claiming priority of March 18, 1982). The applicant had been faced with the comic strip ‘The Beano’ (No. 2015 of February 28, 1981) as ‘state of the art’:
Reference to ‘The Beano, No. 2015, page 1’ is indicated on the title page of GB 2 117 179 A, under the heading ‘Documents cited’.
3. James Bond
On his fourth mission ‘Thunderball‘, James Bond aimed to recover two stolen warheads. They had been taken by the evil SPECTRE organization. The world was held hostage and Bond headed to Nassau where he was forced into a thrilling confrontation with SPECTRE agent Emilio Largo, on board and around his boat, the Disco Volante. Bond used a special breathing apparatus:
This scene was cited as ‘state of the art’ in GB 2 273 053 A; see ‘Documents cited’ on the title page. Indeed, figure 1 of GB’053 shows a stylized special agent with a somewhat similar breathing apparatus:
4. The Holy Bible
If I had prosecuted the following claim (US 10/212,636, claim 2 as filed), I surely had not expected to become best buddies with the examiner:
But being faced with the Holy Bible as ‘state of the art’ might make one’s blood run cold in one’s veins! The rejection read as follows:
[The claim] is rejected under 35 U.S.C. 102(b) as being anticipated by the Holy Bible (Levite, Moses, et al.)
[…] In Genesis, Chapter 41, we are told that Pharaoh appointed Joseph to be his representative and instructed him to enter into contracts to purchase grain. These contracts included an offer with an activity (supply grain) and a benefit (get paid for the grain). Payment was made upon delivery of the grain. The story of Joseph is about 4,500 years old. Neither Joseph nor Pharaoh were considered innovators – the principal / agent relationship is of immemorial antiquity. It no doubt predates civilization itself. The purpose of rejecting this claim using the Bible as reference is to illustrate how ancient the claimed subject matter is. Many of Applicant’s claims could also be rejected using the same reference.
The applicant took up the fight, and his response really is a good read:
On a sidenote, I have once been told (but did not manage to independently verify) that a patent application pertaining to a voice-controlled automated lighting system had been challenged at the EPO with reference to the Holy Bible, too. More particularly, with reference to Genesis, Chapter 1:
And God said, ‘Let there be light’, and there was light.
5. The Law of Agency
Misfortunes never come singly: The claim recited above in (4) had also been rejected in view of the law of agency. The apparently highly motivated examiner held:
Basic agency law teaches that a principal may conduct any business through an agent (representative) that he could conduct in person. This includes entering into contracts. To enter into a contract, one determines a recipient (the other party) and an offer, which includes an activity (e.g., paint my house) and a benefit (consideration). If using an agent, the principal transmits instructions to the agent to provide the offer to the recipient. In any contract, there is the step of determining whether the recipient has performed the activity and providing the benefit to the recipient if the recipient has performed the activity.
6. Donald Duck
In a 1949 Walt Disney comic, a sunken ship had been raised by Donald Duck and his nephews. They pushed ping pong balls into it to lift it up:
A similar technology has actually been used later, for the first time in 1964 when Karl Kroyer lifted a sunken ship with 6’000 sheep right in front of Kuwait’s major fresh water intake in the harbor.
Rumor has it that Kroyer’s patent application was rejected in view of the comic strip (as reported e.g. in the newspaper scan above), allegedly by the Dutch patent office — but I could not find any proof for this. Patents have been granted elsewhere (e.g. in Germany and the U.S.).
Nevertheless, I have no doubt at all that this comic strip would have had to be considered as ‘state of the art’ in the assessment of patentability of Kroyer’s invention.
It is a good tradition that the President of the Swiss Patent Court takes the opportunity to directly address users of the court at the occasion of the annual INGRES conference, and to remind them (or inform for the first time) of certain procedural aspects of relevance for practitioners.
The new President Mark Schweizer did not break with this tradition:
Mark Schweizer informed about the current workload at the court and presented the figures of the first six months of 2018. Nothing out of the ordinary, actually.
disposed of until
Infringement w/o counterclaim
Nullity w/o counterclaim
Infringement and nullity
disposed of until
injunctive relief / preservation
2. Amendment of the PatCA
The amendements to the PatCA will come into effect as of August 1, 2018, with the most important aspect being that not only the President but also the second ordinary judge (currently Tobias Bremi) may preside over proceedings in the capacity of instructing judge.
See this Blog here for further information about the forthcoming changes.
3. Anonymisation of decisions
Decisions in summary proceedings will not be anonymised anymore (decisions in main proceedings had not been anonymised anyway); see this Blog here.
No rule without exception: If you feel that special circumstances require your decision to be published only in anonymised form, a reasoned request should be filed.
4. Case management
a) Less Doodle
Figuring out a convenient date with Doodle apparently turned out to be more and more time consuming for the court (see this Blog here for further information).
Henceforth, parties will only provided once with a set of only three dates to choose from in a Doodle form (not five dates as under the previous regime), whenever possible in three different weeks and on different days of the week.
b) Preparatory hearing
The parties are summoned to a preparatory hearing not only when both sides desire so, but even if only one side does. And the hearing will be held even if the other side does not appear.
Again, no rule without exception. But one should be prepared that there is no chance to hide from unpleasant provisional opinions or questions of the court; see this Blog here (item 2) for further information.
c) Timeline of proceedings
If no settlement can be reached at the preparatory hearing, a timeline is established for the further course of the proceedings, to ease projectability for the parties and the court; see Art. 8 of the Guidelines on Proceedings.
The date of the main hearing will likely not be fixable at the preparatory hearing, since the full panel of judges is not yet established at that time. But still, a time frame for the hearing will be indicated at the preparatory hearing, with the exact date being fixed thereafter.
It remains to be seen how this works out in practice. Mark Schweizer made the reservation that changes to this procedure are not excluded, in view of the planning fallacy:
The planning fallacy is that you make a plan, which is usually a best-case scenario. Then you assume that the outcome will follow your plan, even when you should know better.
— Daniel Kahneman
d) Single exchange of briefs in summary proceedings
The typical course of actions in summary proceedings is:
reqest for interim injunctive relief;
no second exchange of briefs;
plaintiff’s limited reply to validity issues raised by defendant (if any);
expert opinion of the judge-rapporteur;
the parties comment on the expert opinion at the hearing (orally).
4. Specific cases
The President briefly presented the following decisions:
The ‘house ban’ of a (now: former) Board of Appeal member caused a huzzle and bustle a while ago; see e.g. this Blog here. But it got silent lately. Thanks to Thorsten Bausch’s report on Kluwer Patent Blog, we now got to know the outcome of the EPO President Benoît Battistelli’s criminal complaint: Nothing. Zero. Actually, it could not have failed more spectacularly. The original judgment of the Munich Regional Court in German and a translation into English language are provided below.
Whatever Mr Battistelli’s place in the history books may finally be: This ‘house ban’ saga will surely not be a glorious chapter.
No, it is not that I am going to change my practice regarding de-anonmyization. Rather, the FPC changed its practice as of June 1, 2018:
Judgments in ordinary proceedings had typically not been anonymized anyway, but final decisions in summary proceedings had only been published in anonymized form by now. Those days are gone. The FPC will now publish all final decisions in full and non-anonymized form, also in summary proceedings — unless anonymization is warranted by a public interest or requested by a party and deemed justified for the protection of private interests.
Decisions granting or denying legal aid are always anonymized if published.
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:
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.
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.
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.
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:
This apparently is not appreciated. People don’t want to be confronted with English language unless explicitly agreed, I guess.
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:
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.
My best guess is that it will become routine practice soon.
Reported by Martin WILMING
Ergebnisse der Zufriedenheitsumfrage 2017 online; insgesamt hohe Zufriedenheit mit der Arbeit des Bundespatentgerichts, https://t.co/mYvDWzLc6q
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’.
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’
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.
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:
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.
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.
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.
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
UNITO Versand & Dienstleistungen GmbH
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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