Compad Consulting and Werner & Mertz litigating over entitlement to a patent

Reading time: 2 minutes

As reported by Christopher GILB in the Luzerner Zeitung today, there is some litigation going on at the FPC about entitlement to a European patent pertaining to a washing agent that is free from palm oil.

Where’s the patent?

It appears that Werner & Mertz (well known e.g. for its brands Erdal® and Frosch®) has sued the Swiss start-up company Good Soaps for lack of entitlement to the patent, i.e. unlawful usurpation thereof.

The patent has not been identified in the news. I could not leave it at that and did my homework. The patent application at stake is EP 2 592 134 »; the currently registered applicant is Compad Consulting GmbH. See the European Patent Register for further information. The file wrapper is telling: The complaint of 9 January 2019, the reply of 20 September 2019 (including all appendices) as well as the comments on the rejoinder of 5 December 2019 are available online. The instruction hearing took place on 8 July 2019 — without a settlement being reached.

The main hearing is said to be scheduled for 16 September 2020. I trust this will get interesting …

UPDATE 19 August 2020:

The official announcement of the main hearing has just been published by the FPC. No surprises anymore, it’s indeed all about EP 2 592 134 ».

Reported by Martin WILMING

Header image courtesy of T. K. Naliaka, under CC BY-SA 4.0

BIBLIOGRAPHY

Case No. O2019_001

Werner & Mertz
./.
Compad Consulting GmbH

Panel of Judges:

    • Dr. Mark SCHWEIZER
    • Dr. Tobias BREMI
    • Dr. Frank SCHAGER

Judge-rapporteur:

    • Dr. Tobias BREMI

Court Clerk:

    • Susanne ANDERHALDEN

Representative(s) of Plaintiff:

Representative(s) of Defendant / Counterclaimant:

PATENT APPLICATION IN SUIT

Clean version of the DREX, i.e. the version for which the EPO indicated its intention to grant a patent:

BE ON THE KNOW

Enter your name and email address below to get notified of new posts by email.

No oral proceedings by video-conference if parties do not agree

Reading time: 3 minutes

Case No. 4A_180/2020 (Supreme Court) | Decision of 6 July 2020

Oral proceedings by video-conferencing are currently en vogue, e.g. in the U.K. and The Netherlands, just to name a few. When all parties agree, I have no issue with that. But I am troubled when parties to proceedings are forced into video-conferencing even when they don’t want them, e.g. in first instance proceedings at the EPO; see this Blog here.

Under the Swiss Civil Procedure Code (CPC), the Supreme Court had to deal with an appeal of a party who did not consent with the main hearing being held by video-conference at the Commercial Court Zurich. The hearing was held nevertheless by Zoom, in accordance with a procedural decision of 1 April 2020 (you can’t make this up) — and the respective party did not attend. It was bound to happen: The Supreme Court has now set aside the judgment on the merits in the aftermath of the hearing, in no uncertain terms.

The Supreme Court holds that the CPC requires the physical presence of the persons summoned and the members of the court at the same place. This results, for example, from the provisions governing appearance at the main hearing and the consequences of default; see, for example, Art. 133 lit. d, Art. 134,  Art. 147(1) CPC. The Code of Civil Procedure thus conceives the main hearing as an oral hearing in the courtroom with the parties and members of the court physically present.

On a side note, the EPC is not much different in this respect; see e.g. R. 115(2) EPC (emphasis added); yet a further argument why I believe that the recent draconian move of 1 April 2020 [sic!] to make videoconferencing in first instance proceedings at the EPO mandatory should be revisited:

If a party duly summoned to oral proceedings before the European Patent Office does not appear as summoned, the proceedings may continue without that party.

For this and yet further reasons, the Supreme Court allowed the appeal and set the judgment of the Zurich Commercial Court aside. In doing so, it explicitly did not address the security concerns regarding the use of the ZOOM Cloud Meetings app. You don’t think there are any? The zoom-bombed bond hearing in Florida on 5 August 2020 in the case of Graham Clark, the alleged mastermind of a recent bitcoin scam through the accounts of high-profile Twitter users, is a prime example of what can go wrong.

Reported by Martin WILMING

BIBLIOGRAPHY

Case No. 4A_180/2020 (Supreme Court) | Decision of 6 July 2020

n/a
./.
n/a

Panel of Judges:

    • Dr. Christina KISS
      • Dr. Fabienne HOHL
      • Dr. Martha NIQUILLE
      • Dr. Yves RÜEDI
      • Marie-Chantal MAY-CANNELLAS

Court Clerk:

    • Christian STÄHLE

Representative(s) of Defendant / Appellant:

Representative(s) of Respondent / Plaintiff:

DECISION

BE ON THE KNOW

Enter your name and email address below to get notified of new posts by email.

Synova and Avonisys litigating over water jet guided laser technology

Reading time: 2 minutes

According to a press release of 21 November 2019,

Synova SA has brought an action against Avonisys AG and its directors with the Swiss Federal Patent Court for infringing on the Swiss part of Synova’s Patent EP 1 833 636 B1 » by marketing its ‘Air-Jet’ technology.

The press release is still available online at presseportal.ch. Synova’s own MicroJet technology is explained in the following promotional video:

Synova explained in their press release that Avonisys’ founders and directors are former employees of Synova. Avonisys’ Air-Jet technology that allegedly infringes EP 636 » can be understood from their technical paper and a promotional video below:

Further bibliographic information about EP 636 » can be found in the European Register and Swissreg.

From Avonisys’ press release of 4 December 2019 (still available online at presseportal.ch), in response to Synova’s press release, it becomes clear that Synova had apparently already filed their complaint on 5 June 2018 — but only made this public in November 2019.

Avonisys denies that their Air-Jet technology infringes EP 636 ». Further, Avonisys has apparently lodged a counter-claim for nullity (inter alia based on a PhD thesis of Ricardo Cadavid-Giraldo), and yet a second counter-claim based on the Unfair Competition Act.

Stay tuned …

UPDATE 2 September 2020:

Synova has partially waived the patent (request of 19 June 2020, published 14 August 2020); see the corresponding H1 publication ».

Further, the battle of press releases continues: Avonisys has commented on the partial waiver with a press release of 1 September 2020, shortly before the main hearing of 3 September 2020.

Reported by Martin WILMING

PATENT IN SUIT

As initially granted:

 

After the partial waiver:


BE ON THE KNOW

Enter your name and email address below to get notified of new posts by email.

News from yesteryear: The first FRAND case at the FPC

Apparently, the FPC had to deal with its first FRAND case already back in 2018, but it had been settled and thus no judgment is available. Not even the parties are known. But what is known is the following:

According to this source, the case

    • had been pending at the FPC;
    • Andri HESS (Homburger) represented two clients in the dispute; and
    • the case has ultimately been settled, presumably already back in 2018.
worldtrademarkreview.com

From this source, I conclude that MLL represented the counterparty.

iam-media.com

As you may imagine, I’m bursting with curiosity. But I could not get hold of any further information about this case by now. Any help would be greatly appreciated. Now it’s your turn … 😉

By the way, for those of you who are interested in FRAND cases, the European Commissions’ JRC Report on Licensing Terms of Standard Essential Patents of 2017 gives an excellent overview of cases.

Reported by Martin WILMING

BE ON THE KNOW

Enter your name and email address below to get notified of new posts by email.

The public may be excluded from settlement discussions — but maybe not from the instruction hearing in general?

Reading time: 3 minutes

As discussed a while ago on this Blog here, the settlement discussion at the occasion of a main hearing is non-public at the FPC. I trust that this will not change any time soon, in view of a decision of the Supreme Court that has been published earlier this week (4A_179/2019 of 24 September 2019). In that case, an accredited court reporter of the Republik had been asked to leave the room for the settlement discussion at the end of a main hearing in proceedings at the Zurich labor court. Ultimately, the Supreme Court has now endorsed this exclusion of the public from the settlement discussion:

Die Bemühungen des Gerichts, zwischen den Parteien zu vermitteln, gelten nicht als Gerichtsverhandlung respektive Verhandlung und unterstehen nicht dem Grundsatz der Justizöffentlichkeit.

Now, what about instruction hearings according to Art. 226(2) CPC?

Maybe, the Supreme Court telegraphed a message by explicitly saying nothing (emphasis added):

Demgegenüber ist hier nicht zu beurteilen, ob es zulässig wäre, die Öffentlichkeit über die Vergleichsgespräche hinaus generell von Instruktionsverhandlungen auszuschliessen, zumal an solchen nach Art. 226 Abs. 2 ZPO unter anderem auch der Sachverhalt ergänzt und die Hauptverhandlung vorbereitet werden kann ([…]).

In English (emphasis added):

On the other hand, it is not necessary here to assess whether it would be permissible to generally exclude the public from instruction hearings beyond the settlement discussions, especially since, according to Art. 226 para. 2 CPC, the facts of the case can be supplemented and the main hearing can be prepared in the instruction hearings ([…]).

The FPC took note. Here is the FPC’s tweet of earlier today:

Indeed, the Supreme Court did leave it undecided whether the public could also be excluded from the formal part of an instruction hearing. Still, the Supreme Court made it crystal clear that it does not want to see its judgement being read on instruction hearings in general, in view of what is (or maybe) going on in (the formal part of) an instruction hearing — contrary to mere settlement discussions, be it during a main hearing or an instruction hearing.

In my perception, that’s a somewhat deafening silence on this issue, isn’t it?

Reported by Martin WILMING

BIBLIOGRAPHY

Case No. 4A_179/2019 (Supreme Court) |  Decision of 24 September 2019, on appeal against RA190002-O/U (High Court, Zurich) | Decision of 6 March 2019 (unpublished)

[accredited court reporter, Republik] (Appellant)
./.
Labour Court, Zurich (Respondent)

Panel of Judges:

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

Court Clerk:

    •  Dr. Christian KÖLZ

Representative(s) of Appellant:

    • Marin FARNER (FWE)

Representative of Respondent:

    • n/a

SUPREME COURT DECISION

Fullscreen view (new tab)

BE ON THE KNOW

Enter your name and email address below to get notified of new posts by email.

The money behind the pharmaceuticals being litigated

The Njardarson Group of the University of Arizona has just published the 2018 edition of the poster ‘Top 200 Pharmaceutical Products by Retail Sales‘ (file size is about 8 Mb).

Quite a few have already been litigated in Switzerland. And there is more to come, for sure. Stay tuned.

Reported by Martin WILMING

TOP 200 PHARMACEUTICALS (2018 ed.)

Fullscreen view (new tab)

BE ON THE KNOW

Enter your name and email address below to get notified of new posts by email.

The EPO assesses all aspects of entitlement to priority. Rightly so.

Reading time: 9 minutes

Proper assignment of the right to claim priority is intensely discussed in recent times, in particular the way how the EPO addresses such issues.

Why is that?

Broad’s logo

Most attention is where the biggest money is. Or where the most spectacular mishap occurs. Or both. The Broad Institute is upon to lose its CRISPR-Cas gene editing patents in Europe, for a lack of entitlement to priority. It’s not a question of ‘same invention’ this time, but rather of identity of inventor(s) / applicant(s) in both the priority application and the subsequent application.

Some priority basics at the EPO

Art. 87 to 89 EPC provide a complete, self-contained code of rules on claiming priority for the purpose of filing a European patent application (see J 15/80, confirmed in e.g. J 9/07). However, since the EPC — according to its preamble — constitutes a special agreement within the meaning of Art. 19 PC, it is clearly intended not to contravene the basic principles concerning priority laid down in the latter (see T 301/87, G 3/93 and G 2/98).

EPO logo

The EPO does not normally check the validity of a priority right during examination. A check, however, is made if relevant prior art has been made available to the public within the meaning of Art. 54(2) EPC on or after the priority date claimed and before the date of filing or if the content of the European patent application is totally or partially identical with the content of another European application within the meaning of Art. 54(3) EPC, such other application claiming a priority date within the above-mentioned period. In opposition proceedings this applies where prior art is invoked in connection with a ground for opposition under Art. 100(a) EPC in relation to which the priority date is of decisive importance. If the claim to priority turns out to be not valid, intervening prior art may lead to revocation of the patent.

All this is not very exciting; it’s just the law because the patentee cannot enjoy the benefit of an earlier effective date.

It is established practice at the EPO that the claim to priority is invalid if, at the filing date of the subsequent application, the applicant did not have the right to claim priority. Further, it is settled case-law at the EPO that the validity of the transfer of the right to claim priority is a matter of national law (cf. e.g. T 1008/96). All this is even reflected in the Guidelines, A-III, 6.1:

[T]he transfer of the application (or of the priority right as such) must have taken place before the filing date of the later European application and must be a transfer valid under the relevant national provisions. Proof of this transfer can be filed later.

A revolutionary new approach?

Tobias Bremi (second ordinary judge at the FPC) recently made an interesting contribution to the discussion on priority issues at the Fordham Conference (summarized on IPKat here). Tobias argued:

[The] EPO is not competent to assess entitlement to priority issues. […] As long as the formalities encoded in the law have been complied with, entitlement is to be presumed by the EPO.

And, finally, with respect to the CRISPR-Cas case referred to above, Tobias mentioned that he is

still hopeful that they will reconsider in the next instance.

The FPC has distributed a link to IPKat’s report, and the tweet is strict to the point: In Tobias’ view, third parties have no standing to challenge the assignment of the right to priority.

That’s a pretty bold statement, and Judge Grabinski apparently referred to it as ‘revolutionary’. Tobias’ key arguments are as follows:

  1. Analogy to entitlement proceedings

Tobias is cited on IPKat as follows:

Once the formal requirements for claiming priority have been complied with, there is actually no legal basis for questioning entitlement, there is no legal basis for the EPO to ask for proof, and there is also no legal basis for finding a loss of the priority right. [T]he general idea of the EPC was to keep the EPO completely out of entitlement issues as a matter of principle for a number of reasons and to leave that exclusively to the jurisdiction of national courts. It is for national courts to decide on entitlement issues when challenged by an allegedly entitled person. As long as the formalities encoded in the law have been complied with, entitlement is to be presumed by the EPO.

  1. General principles of property law

In Tobias’ view,

[i]t goes against the general principles of property law that priority entitlement issues can be brought up by any third party before the EPO and not just by the one who is allegedly entitled. This opens up rather opportunistic and destructive battles on the validity of priority claims.

  1. Clash with the Paris Convention

With respect to the same/all applicant(s) approach of the EPO (see e.g. T 788/05), Tobias held that

if the EPO uses that approach, actually they apply the ‘lex protectionis’, i.e. the law of the country where protection is sought, to the priority applicants. However, the gist of the Paris Convention is to reduce impediments for international protection.

In Tobias’ view, these principles are in jeopardy by forcing applicants to comply with the law of the country of subsequent filing.

In sum, arguments i) – iii) are also presented by Broad on appeal in opposition proceedings of EP 2 771 468 B1; see Broad's appeal brief (p. 19 ff).

I don’t agree.

Wholeheartedly. Here is my line of thinking:

  1. The analogy with entitlement proceedings is flawed

Entitlement proceedings concern only two sides; i.e. the applicant / patentee on the one hand, and yet another party who believes to be the legitimate owner on the other hand. The EPC explicitly applies the legal fiction that the applicant is entitled (Art. 60(3) EPC), until someone else comes along at a national court and challenges this. The EPO then steps back until the national court has decided on this issue, and thereafter continues its proceedings with the legitimate owner. In my view, this makes perfectly sense since the public is not concerned in any way.

On the other hand, entitlement to priority affects the effective filing date and is therefore decisive for the EPO to correctly assess patentability. There is no legal fiction of entitlement to priority. The EPO fulfills its duties according to Art. 114 in conjunction with Art. 87 to 89 EPC and aims to grant / maintain only those patents that comply with the EPC, to full extent. Rightly so.

  1. General principles of property law are not contravened

It is not just a ‘third party’ who challenges the right to claim priority. It is either the EPO when fulfilling its duties to check for compliance with the EPC, or it is a party to the proceedings in opposition / appeal proceedings who raises the issue. It is in no way ‘destructive’ or ‘opportunistic’ by the EPO or parties to proceedings to challenge a patent for non-compliance with the law. I fail to see how this might go against general principles of property law.

  1. There is no clash with the Paris Convention

The Paris Convention clearly aimed to facilitate international filings. The current practice at the EPO in no way contradicts this purpose. It definitely makes foreign filings much more simple than before the Paris Convention. Admittedly, the European approach is not absolutely fool-proof by design. But it doesn’t have to be. It’s the law: Practitioners are navigating a jungle of pitfalls every day — not only in their home jurisdictions, but in particular abroad. Messing up a priority claim before an IP5 office is just one of many potential nightmares. 

The mere fact that the USPTO more easily acknowledges entitlement to priority even in cases where not all initial applicants are named in the subsequent application doesn’t impress me much. In my view, they just overachieve the minimum standards defined in the PC. But that’s no good reason to abolish with decades of consistently developed case-law at the EPO.

Final thoughts

Consider a world where the EPO does not care anymore about who claims priority.

Bad guys could systematically just grab all early published European patent applications, or utility models, that are still within the priority year and then file subsequent applications with the EPO, claiming priority. The applications could proceed to grant without the entitlement to claim priority ever being challenged. Bad guy could only be stopped by the legitimate owner of the utility model.  If that just doesn’t happen because he/she doesn’t care anymore, or is afraid of costly litigation, bad guy has got the patent. This cannot be it.

Stay firm, EPO.

Reported by Martin WILMING

DISCLOSURE STATEMENT

Nil. I have nothing to disclose. In particular, I am not in any way engaged in the CRISPR-Cas proceedings referred to above. /MW

BE ON THE KNOW

Enter your name and email address below to get notified of new posts by email.

Should instruction hearings and/or court-mediated settlement talks be public?

Reading time: 5 minutes

The FPC has attempted from the very beginning to settle its cases by compromise; see e.g. the Annual Report 2013 (p 6, left col):

The Federal Patent Court sees itself as a service provider to the private sector. Each patent case is an obstacle for all of the parties concerned and the aim is to overcome this obstacle. One means of achieving this objective is to issue a judgment but a better alternative is for the parties to reach a compromise. The Federal Patent Court therefore strives to reach mutually acceptable compromises in its handling of cases. During instruction hearings, which take place after the first exchange of briefs, the court delegation provides the parties with a preliminary legal as well as – and especially – a technical assessment of the dispute. The Federal Patent Court expects that this approach will result in a settlement by compromise in around 50% of the  cases,  […].

Please see this Blog here if you are interested in the actual development of the settlement rate over time; the early estimate has proven stunningly correct.
Private stuff(?)

Instruction hearings at the FPC (referred to in the above citation) have never been announced by now. I thus cannot tell whether the public would be admitted to attend or not. One just cannot even try to attend in the absence of any announcement — i.e., neither the first (formal) part is public, nor the second (informal) part where the court-mediated settlement talks are taking place.

I frequently report about main hearings at the FPC on this Blog; see e.g. here. Contrary to instruction hearings, the main hearings are announced and thus it is very easy for the public to just walk in and see what is going on. The presiding judge always asks the parties at the end of the hearing whether they are interested in settlement talks. In the early days, I had to leave only after the parties had agreed to have settlement talks. In more recent times, I am being asked to leave the room even before the representatives even answer that basic question. This way, the public does not even get to know whether or not settlement talks take place, not to mention how they are conducted or the result thereof.

I shrugged that off by now, even though I didn’t like it. But it appears that public accessibility of hearings and court-mediated settlement talks are currently of quite some wider public interest. Corsin Zander (Tagesanzeiger) recently reported about some labour law cases before a Zurich court where the public had been expelled from court-mediated settlement talks. Apparently it is customary at the Zurich labour courts for the presiding judges to give an initial, non-binding assessment of the case in the courtroom prior to court-mediated settlement talks. Likewise, this is what happens at the FPC (see above).

As reported by Corsin Zander, Markus Schefer holds that it is problematic that journalists cannot check how the judges act in such settlement negotiations. The renowned professor of constitutional and administrative law at the University of Basel well understands the will to exclude the public from settlement negotiations because two private individuals are trying to come to an agreement. But if such negotiations are conducted with the assistance of a court, at least the behaviour of the judges should be public, says Schefer:

Courts act in the name of the state. The public must be able to understand this.

That’s currently not the case. But one might easily conceive court-mediated settlement talks being conducted in a way that makes the court’s conduct public, while at the same time the parties negotiate the details in break-out sessions, based on the court’s input. Anyway, my understanding is that the Supreme Court will now have to deal with the issue because a journalist brought the matter to the attention of the Supreme Court.

While I do have some understanding for courts to expel the public from settlement talks in certain labour law issues (which may occasionally be of very personal nature), I fail to see why that should be the case in typical proceedings at the FPC where SMEs and multinationals quarrel over patent infringement and/or validity.

I’d be keen to know your thoughts on the following questions:

Instruction hearings

Instruction hearings are foreseen in Art. 226 CPC. The formal part is followed by court-mediated settlement talks (if the parties are interested).

Should instruction hearings at the FPC be open for the public to attend?

  • Yes, without ifs or buts. (44%, 12 Votes)
  • The formal part: yes; the settlement talks: no. (37%, 10 Votes)
  • No. (19%, 5 Votes)

Total Voters: 27

Loading ... Loading ...
The above poll had been open from May 5-20, 2019.

Public announcement

Should instruction hearings be publicly announced, just like main hearings?

  • Yes. (72%, 18 Votes)
  • No. (28%, 7 Votes)

Total Voters: 25

Loading ... Loading ...
The above poll had been open from May 5-20, 2019.

Main hearings

Main hearings are foreseen in Chapter 3 CPC (Art. 228 ff). Parties are typically asked at the end of the public hearing whether they are interested in court-mediated settlement talks.

Should the court-mediated settlement talks at the end of the main hearing be open for the public to attend?

  • Yes. (44%, 11 Votes)
  • No, except for the fact that they are taking place. (40%, 10 Votes)
  • No, incl. the fact that they are taking place. (16%, 4 Votes)

Total Voters: 25

Loading ... Loading ...
The above poll had been open from May 5-20, 2019.

/MW

BE ON THE KNOW

Enter your name and email address below to get notified of new posts by email.

FAC overrules IPI and acknowledges acquired distinctiveness of the sign POSTAUTO

No patent matter this time, but rather a trademark case with a very Swiss touch.

The Swiss Post filed the trademark application 61979/2010 ‘POSTAUTO’ already back in November 2010; see Swissreg. After the original application had been split up and a first trademark had been allowed to proceed to grant with a relatively wide scope covering inter alia transportation of goods and persons and operation of buses according to timetables in class 39 (CH 674’035; see Swissreg), the IPI maintained its objection with respect to some further goods and services and refused the remaining application on 31 December 2015. The IPI held that the sign ‘POSTAUTO’ was purely descriptive for these goods and services, and that it was not credible that the sign had gained distinctiveness through use.  The following list of goods and services was at stake:

9 Magnetic or optical data carriers.
12 Vehicles.
16 Printed matter.
28 Toys, especially Postbus models.
39 Storage and packaging of goods; travel arrangements; planning (transport logistics) of transport solutions for passengers and goods; arranging transport services; renting vehicles; operating vehicles on a joint basis (car-sharing, carpooling); consultancy services for all the above services.
41 Services related to education and training, in particular in the field of transport, the carriage of persons, goods and goods.

PostAuto Schweiz AG is a subsidiary company of Die Schweizerische Post AG (Swiss Post). But Postauto is not only the name of a company, it is also a very well known brand in connection with public transport services; see e.g. Wikipedia.

Postauto Logo

It is not overly bold to assume that almost every child is well aware of the sign ‘POSTAUTO’ in Switzerland …

Postauto toy (Siku)

And it’s been like that for quite a while …

Post bus (1907). Source: PTT-Archive.

In first place, the FAC confirmed the IPI’s finding that ‘POSTAUTO’ is not a distinctive sign per se. Rather, ‘POSTAUTO’ is perceived plainly descriptive for a postal car or postal bus.

As an auxiliary measure, Swiss Post had requested that the sign be registered because it had become a trademark through use; Art. 2 lit. aTmPA.

Now, this is where it’s getting interesting: The IPI even refused this auxiliary request.

But the FAC did not agree for the majority of goods and services, in very clear terms; see ¶7.3. The FAC held that the IPI erred in law when it did not examine the reputation of the sign, in addition to just assessing the evidence of use that had been submitted.

So hat die Vorinstanz es rechtsfehlerhaft unterlassen, neben der Beurteilung der Gebrauchsbeilagen die Bekanntheit des hinterlegten Zeichens zu prüfen.

The FAC further held that the Swiss Post should have benefited from the fact that, throughout Switzerland, the sign has acquired the significance of a keyword-like reference to the public transport services offered by the Swiss Post for decades throughout the entire Swiss settlement area, as well as to related services. The evidence of use must be assessed in the light of the reputation of the sign at stake, based on decades of intensive use throughout Switzerland. In its assessment to the contrary, the IPI failed to include in the required overall assessment the circumstances which were relevant for the acquired distinctiveness through use. 

The FAC held that it is known to the court that the sign ‘POSTAUTO’ has been in use as a trademark since long ago for goods in classes 9 and 16; see ¶7.6:

Dass das hinterlegte Zeichen im Zusammenhang mit den Waren der Klassen 9 und 16 aufgrund des schweizweiten Streckennetzes bereits seit Jahren markenmässig verwendet wird, ist gerichtsnotorisch.

Pretty straight-forward, isn’t it? In addition to printed timetables, the network routes are nowadays even available online — and I can hardly even remember a time when this had not been the case.

The FAC further held that the IPI fundamentally overlooked the fact that its requirement of proof of ten years’ use of a sign is not sacrosanct.

Die Vorinstanz übersieht sodann grundlegend, dass ihre Beweiserleichterung eines zehnjährigen Markengebrauchs nicht dazu dienen soll, die Wahrnehmung des Marktes jener zehn Jahre absolut zu stellen (vgl. Urteil des BVGer B-6363/2014 vom 8. Juli 2016 E. 8.3 “Meissen”).

If a sign has been successfully marketed for decades, only a few declaratory pieces of evidence of the last ten years are well sufficient. In the case at hand, the very long use of the sign and its excellent market position mean that there is no need for specific evidence from French- and Italian-speaking parts of Switzerland, where sufficient dissemination and recognition can simply be deduced from the excellent reputation of the appellant over decades and its uninterrupted market presence to this day; see ¶7.6.

In sum, the FAC only denied acquired distinctiveness of the sign ‘POSTAUTO’ for class 12 (vehicles) and, partially, class 39 (operating vehicles on a joint basis (car-sharing, carpooling)). The final list of goods and services thus reads as follows:

9 Magnetic or optical data carriers.
12 Vehicles.
16 Printed matter.
28 Toys, especially Postbus models.
39 Storage and packaging of goods; travel arrangements; planning (transport logistics) of transport solutions for passengers and goods; arranging transport services; renting vehicles; operating vehicles on a joint basis (car-sharing, carpooling); consultancy services for all the above services.
41 Services related to education and training, in particular in the field of transport, the carriage of persons, items and goods.

Frankly, the decision is not much of a surprise on a substantive level, in my perception. But why does it take eight years and two instances to get there?

Reported by Martin WILMING

BIBLIOGRAPHY

Die Schweizerische Post AG (Swiss Post)
./.
Swiss Federal Institute of Intellectual Property (IPI)

Panel of Judges:

  • David ASCHMANN
  • Daniel WILLISEGGER
  • Marc STEINER

Court Clerk:

  • Claudia WALZ

Representative(s) of Swiss Post:

DECISION IN FULL

Fullscreen view (new tab)

BE ON THE KNOW

Enter your name and email address below to get notified of new posts by email.

Friendship on Facebook is no ground for recusal of a judge per se

Supreme Court
Case No. 5A_701/2017 | Decision of 14 May 2018 | ‘Friends on Facebook’

This decision of the Supeme Court does not concern a patent case, but it clarifies what might constitute a ground for recusal of a judge in general.

Thumbs up?

Judges are not living in an ivory tower. They even use Facebook and have ‘friends’ there. Now, is it a ground for recusal if a party is a Facebook ‘friend’ of a judge?

Well, the answer is a clear not necessarily, but maybe.

The mere fact that a judge is a Facebook ‘friend’ of a party to the proceedings does not in itself constitute a ground for recusal. Without additional information, it cannot be concluded that there indeed is a friendly relationship that could give rise to the appearance of a judge being biased.

Every person is entitled to have his case decided by an impartial, unbiased and impartial judge. It is not decisive whether or not a judge is actually biased. Even the appearance of bias or the danger of bias is to be avoided. In the case of friendly connections, this requires a certain closeness that goes beyond a mere acquaintance or a ‘dozy relationship’.

Bei freundschaftlichen Verbindungen ist dazu eine gewisse Nähe erforderlich, die über eine blosse Bekanntschaft oder ein ‘Duzverhältnis’ hinausgeht. Eine ‘Freundschaft’ auf Facebook weist noch nicht auf freundschaftliche Beziehungen im traditionellen Sinn hin.

Who’s out there?

The decision holds that a ‘friendship’ on Facebook does not yet indicate friendly relationships in the traditional sense. Mutual affection or sympathy is not necessary to establish a ‘Facebook friendship’. ‘Facebook friends’ may well include people with whom one maintains regular contact in real life; but they can also include people one would only qualify as a simple acquaintance or as a person with whom one would only have a common interest in a social network on a particular subject.

Recent studies have also shown that a number of more than 150 ‘Facebook friends’ typically include people with whom one does not have any contact or one does not even know. Without additional information, one cannot conclude from  a ‘Facebook friendship’ that a friendly relationship actually exists which could lead to the appearance of bias.

In short:
A ‘Facebook friend’ is not necessarily a friend.

Reported by Martin WILMING

P.S.:
The FPC’s Guidelines on Independence can be found here. Grounds for recusal of judges are governed by Art. 3-5.

DECISION IN FULL

Fullscreen view (new tab)

PRESS RELEASE

Fullscreen view (new tab)

BE ON THE KNOW

Enter your name and email address below to get notified of new posts by email.

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

Fullscreen view (new tab)

BE ON THE KNOW

Enter your name and email address below to get notified of new posts by email.

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

Fullscreen view (new tab)

SUPREME COURT

Fullscreen view (new tab)

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.

BE ON THE KNOW

Enter your name and email address below to get notified of new posts by email.