Liability for damages when goods are withheld at the customs

Reading time: 4 minutes

Case No. O2020_018 | Judgment of 4 January 2022 | ‘Customs assistance’

HEADNOTE

Art. 86k para. 2 PatA; Assistance provided by the customs administration, damages:

If no preliminary measures are ordered after goods have been withheld by customs, the applicant is liable for the damage caused by the withholding irrespective of whether the goods are patent-infringing.

We have reported about the main hearing in this matter on this Blog here. Now, the judgment is out. In a nutshell, plaintiff’s request for damages in the amount of about kCHF 38 was denied to about 95%; only CHF 1’800,– were awarded for legal assistance in the context of the seizure of a shipment at the customs. Interestingly, not even the costs for this item were awarded in full. First, the time spent (6 hours) was held to be excessive; only four hours were held reasonable:

Secondly, the hourly rate of CHF 550,– was reduced to CHF 450,–. Even though attorneys may well charge their clients more, the FPC holds that such costs cannot necessarily be imposed on a party liable for damages to full extent:

Requested items of the alleged damages that were not admitted are:

    • costs of refrigeration and deadfreight (for lack of substantiation; cf. ¶20);
    • costs for legal assistance relating to a test delivery (because that devlivery was not in the course of plaintiff’s normal business operations, i.e. voluntary; cf. ¶22 et seq.);
    • costs incurred for a protective letter (for lack of causation; cf. ¶24 et seq.);

The FPC also held that defendant’s course of action was apparently not vexatious; cf. ¶26 et seqq. and ¶33. Further, the FPC did not buy into the argument that customs assistance was not meant to be used for securing evidence of patent infringement, but rather (only) to stop piracy; cf. ¶28 et seqq.

All this appears pretty straight-forward to me. In my perception, the (really) interesting aspect of the decision is indeed the headnote. A Supreme Court judgment of more than twenty years ago (4C.164/2000, ¶3) in a trademark case might suggest that damages for withheld goods at the customs and when no PI has been granted can only be awarded when the preliminary question of infringement has been assessed. The FPC notes, however, that even though this might be a sensible approach in a trademark case, the same approach in patent matters would lead to a situation where the costs incurred for the assessment of (non)infringement would typically exceed the actual damages to be recovered, by far — contravening the gist of the framework defined by Art. 50 TRIPS.

Accordingly, the hn holds that liability for damages occasioned by withholding goods at the customs and when no PI is granted does not depend on whether or not the goods are actually infringing or not.

Reported by Martin WILMING

BIBLIOGRAPHY

Case No. O2020_018 | Judgment of 4 January 2022 | ‘Customs assistance’

Ypsomed AG
./.
Becton, Dickinson and Company

Panel of Judges:

    • Dr. Mark SCHWEIZER
    • Dr. Rudolf RENTSCH
    • Christoph MÜLLER

Court Clerk:

    • Dr. Lukas ABEGG

Representative(s) of Plaintiff:

    • Dr. Christian HILTI (Rentsch)
    • Maria ISKIC (Rentsch)
    • Dr. Alfred KÖPF (Rentsch), assisting in patent matters

Representative(s) of Defendant:

    • Dr. Simon HOLZER (MLL)
    • Louisa Galbraith (MLL)
    • Dr. Ulrike CIESLA (MLL), assisting in patent matters

JUDGMENT IN FULL

BE ON THE KNOW

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

Ypsomed and BD fighting over (abusive?) use of customs assistance

Reading time: 4 minutes

Case No. O2020_018 | Hearing of 18 November 2021

BD logo

As indicated already in the public announcement of the hearing, defendant BD had requested assistance from the Swiss Federal Customs Administration, targeted against (a) certain product(s) of plaintiff Ypsomed. The customs administration subsequently indeed detained two shipments, i.e. one shipment of ‘SoloStar’ injection pens on July 30, 2020, and a shipment of components of ‘UnoPen‘ injection pens on August 5, 2020. Both shipments were released after a short period of time without the defendant filing a request for judicial seizure.

On a sidenote: It is not that BD did not do anything. BD had already lodged infringement proceedings against Ypsomed on 10 January 2020. The FPC has dismissed the complaint with decision of 9 June 2021; see this Blog here. An appeal is currently pending at the Supreme Court.

Ypsomed logo

Ypsomed now claims that the customs assistance measures were applied for improperly / abusive, and claims compensation for the damage it allegedly suffered as a result of the detention.

BD denies that the conditions for a claim for damages are met; moreover, Plaintiff has not been able to prove any financial damage in any event.

At the main hearing, Ypsomed painted a bigger picture and argued that customs assistance was not meant to be used for securing evidence of patent infringement, but rather (only) to stop piracy — which was not at stake here. Ypsomed was obviously fearing that its frequent exports of injector pens of various kind was in danger, at a larger scale. Further, Ypsomed complained that it had not been given sufficient access to the files of the proceedings at the customs. Only a redacted version of BD’s request was provided, but the actual request explicitly referred to features described in a fully redacted chapter. I understand that proceedings are co-pending before the Federal Administrative Court in this respect.

BD softpedalled the matter, essentially arguing that it simply used customs assistance, in full compliance with the law. As a matter of fact, customs assistance measures could be in place against anyone at any time, without knowledge thereof. That’s the whole point of the provision. BD argued that the present case actually shows that the system works smoothly. Both deliveries were released very quickly. The first one with ‘SoloStar’ injector pens could have been released even more quickly if Ypsomed’s counsel would only have provided a little more information over the phone when BD’s counsel asked for technical details of the retained ‘SoloStar’ pens.

Now, what’s the point of customs assistance when main proceedings are already pending and the allegedly infringing embodiment is available on the market, or plaintiff obviously has knowledge of the detailed mechanics of the allegedly infringing embodiment otherwise? At one point, Ypsomed referred to a correspondence between BD’s counsel and the customs administration, indicating that BD was seeking to clarify

[…] in which form or with which components Ypsomed exports the UnoPens from Switzerland.

Now, that makes sense! I understand that Ypsomed had argued in O2020_001 that BD’s patent required a cartridge with the medicament as part of the injector pen; see ¶ 27 of the FPC’s judgment in O2020_001. Accordingly, I assume that BD wanted to find out whether or not Ypsomed actually delivered ‘UnoPens’ with or without such cartridges. The timing fits well: The shipments were detained after Ypsomed’s answer and only after the instruction hearing, but (likely) before BD’s reply in O2020_001.

The parties did not enter into settlement discussions on the spot. The President indicated that a judgment (or an order on taking evidence) can only be expected in 2022, in view of the current workload.

Reported by Martin WILMING

BIBLIOGRAPHY

Case No. O2020_018 | Hearing of 18 November 2021

Ypsomed AG
./.
Becton, Dickinson and Company

Panel of Judges:

    • Dr. Mark SCHWEIZER
    • Christoph MÜLLER
    • Dr. Rudolf RENTSCH

Court Clerk:

    • Dr. Lukas ABEGG

Representative(s) of Plaintiff:

Representative(s) of Defendant:

    • Dr. Simon HOLZER (MLL)

ANNOUNCEMENT

SOME LIVE NOTES FROM THE HEARING

BE ON THE KNOW

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