Conference of 3 December 2019 on case management issues in IP proceedings

I had the pleasure to attend the conference on Case Management Issues in IP Proceedings earlier this week in St. Gallen, jointly organized by INGRES and SVRH. Expectedly, the discussion between judges, legal practitioners and patent attorneys was vibrant and open-minded. I gained a lot of full and frank insight into how cases are handled before the various commercial courts in Switzerland; these aspects of the conference will surely be dealt with in a summary to be made available here.

My personal take-away messages concerning proceedings before the FPC are the following:

No split reply anymore …

In the normal course of infringement proceedings, the FPC had ordered a partial reply from the plaintiff that only dealt with the nullity arguments brought forward by the defendant in his answer to the complaint, as a plea in defense. The FPC’s intention was to have a single statement of both parties on the two key aspects of the case, i.e. infringement and validity, before the parties were summoned for the instruction hearing. In the informal part of the instruction hearing, the court delegation could thus indicate a preliminary opinion on both key aspects, in view of the first exchange of arguments. Things may well have changed in view of the second exchange of briefs. But still, the interim assessment of the matter in the instruction hearing had been based on a well-balanced exchange of arguments: The first round had been completed. The exchange of briefs had been as follows:

Old practice w split reply

In view of the obiter dictum in the Supreme Court’s recent decision 4A_70/2019 (discussed on this Blog here), the FPC has meanwhile discontinued the practice to split the reply in infrigement proceedings. Thus, the regular exchange of briefs in infringement cases will be as follows:

New practice w/o split reply

The reply will not be split anymore. The plaintiff will be invited to file his reply only after the instruction hearing. That’s a pretty standard exchange of briefs now, as it is known in any kind of proceedings governed by the CPC.

… and how that might influence the procedural strategy of the parties

Clearly, the assessment of validity of the patent in suit by the court delegation during the instruction hearing will be even more preliminary than ever before. The plaintiff will likely not have anticipated and addressed all the nullity arguments in the complaint. Thus, there will likely be nullity arguments on file on which the plaintiff / patentee has not yet been heard, and the court delegation cannot easily give an opinion on such arguments (except, maybe, for some formal / purely legal issues). Time will tell whether the instruction hearing will henceforth be of that much value to foster a settlement as it had been in the past; see the settlement rates over the years on this Blog here.

Some food for further thought, based on what has been discussed at the conference:

    • Will we see more infringement complaints with a full and frank discussion of potential nullity arguments, based on what has been argued in proceedings elsewhere, or in prior communication between the parties? That is pretty likely, indeed. It became clear in the discussion that such extensive frontloading has already happened.
    • A defendant in an infringement case has any motiviation to get invalidity reasonably addressed by the court delegation in the instruction hearing. But that will not happen to large extent when the plaintiff had just been silent on validity in his complaint. Still, the defendant might cure this ‘defect’ himself: He could gather what had been argued elsewhere by the patentee / plaintiff in defense of his patent or during prosecution, and disprove those arguments.  The plaintiff would be hard pressed to contradict his own arguments that had been made elsewhere — and the court delegation could well indicate an opinion on such arguments in the instruction hearing, in my opinion.
    • Will patents more often be asserted only to a limited extent in the future, i.e. limited enough to render the (expected) plea for nullity in defense moot, yet broad enough to cover the allegedly infringing embodiment? In my perception, that would not be a sign of weakness at all. It is just pragmatic to assert the patent only to the extent necessary.
    • Yet another strategy of patentees might be to frontload various limited versions of the patent for assertion inter partes (verbal limitations) as auxiliary requests already with the complaint, to get a broad(er) picture of potential allowability in the instruction hearing.
    • Finally, patentees might also consider to assert the patent as granted, but to set out in the reasons that a whole lot of further features of the patent, from dependent claims or even from the specification, are fulfilled in the allegedly infringing embodiment. That leaves much leeway for various verbal limitations at a later stage of the proceedings.

Plan B?

Now, what if the instruction hearing turns out to be not of much value under the new regime anymore? Dieter BRÄNDLE mentioned that the Commercial Court Zurich had invited the parties to submit a brief statement only for consideration in the instruction hearing. If no settlement was reached and the parties wanted to rely on anything from their statements, they had to refile those arguments with their outstanding briefs.

Could that maybe a worthwile approach to bring the patentee’s complete view on defendant’s plea for nullity to the court delegation’s attention before the instruction hearing? Initial reactions were split: Would such a statement maybe considered as a reply in disguise? That could have fatal consequences with respect to an early closure of the file. However, I have also heard prominent voices in favor of this approach. Mark SCHWEIZER indicated that nothing like this would now be introduced in a rush now. Let’s see how the new regime works in practice. If it doesn’t, one might well consider this in more detail.

On a sidenote, I have recently been involved in a settlement conference in U.S. proceedings. The judge did a great job, even though no settlement could be reached in the end. The judge issued a very specific order beforehand about a confidential memorandum to be filed by both parties; see the Order for Settlement Conference. Along with a strict word count limit, I feel this is indeed very helpful for a judge to better understand where both parties are coming from. I am not overly enthusiastic about litigation in the U.S. at all, but this could be sth worth to consider.

Settlement talks in general

Should court-mediated settlement talks be held only with the two parties together? What about shuttle diplomacy, i.e. the judge(s) also talking with each party individually, e.g. to overcome certain personal tensions or hostile feelings between the parties and/or their representatives. Shuttle diplomacy (referred to as ‘Einzelabreibung’ or ‘Einzelabschlachtung’ by some participants) is practised at least by some Swiss courts; see Mark SCHWEIZER’s recent comparative study.

One potential downside is, of course, that a party may easily feel uncomfortable with the fact that some unilateral conversation is going on behind the scene between the judge(s) and the counterparty.

Mark SCHWEIZER had been asked whether shuttle diplomacy is done at the FPC. The answer was a clear ‘No’, and it became pretty clear that this was not an option for him at all.

Further news from the FPC

What¨s up?

The FPC has recently issued ex parte interim measures without any written statement of the grounds, in accordance with Art 239(1) lit. a CPC. A written statement of the grounds must be provided if one of the parties so requests within 10 days of the notice being given of the decision; else, the parties are deemed to have waived their right to challenge the decision (Art 239(2) CPC). Since ex parte interim measures cannot be appealed in any event (see e.g. decision 134 III 417 of the Supreme Court), ex parte interim measures need arguably not come along with a written statement of the grounds in any event. It would have been interesting to learn more about the particular urgency of this matter that urged the FPC to explore this possibility. However, nothing will be published: The parties have settled. Darn!

As mentioned on this Blog here, a timeline for the further course of the proceedings is established during the instruction hearing if no settlement is reached. It became clear that not everybody at the FPC believes that this is feasible, but Mark SCHWEIZER said that he is a die-hard optimist.

Claim construction is key in almost every case — and it might perhaps play an even more important role in the instruction hearing than ever before. However, Mark SCHWEIZER indicated that claim construction is still frequently treated like a red-headed stepchild in the briefs, and that it is hard for the court to only catch a glimpse of a party’s understanding of a certain feature from e.g. the discussion of the cited prior art.

Mark SCHWEIZER mentioned on a sidenote that he would tend to always allow joint procedural requests of both parties, as long as they do not contravene the law. Let’s see how parties make use of this flexibility.

The unconditional right to be heard sometimes leads to an essentially meaningless exchange of party submissions after formal closure of the file. Both sides feel prompted to reply just in order to formally contest the other party’s allegations. The question came up whether a court could forward such statements with the comment that the submission is deemed to be contested in any event. Mark SCHWEIZER indicated that the FPC would look into this, in particular whether this would be compliant with the CPC.

Gossip

Based on what had been mentioned at the conference I have to believe that the recent dissenting opinion had been supported by two judges; the actual split of the panel was thus 3:2. That’s a close call, indeed! See this Blog here for further information.

Reported by Martin WILMING

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Tackling questions of law and questions of fact, again …

The annual INGRES event of 2 July 2019 (‘Praxis des Immaterialgüterrechts’) has been very interesting and enjoyable, as always. I am not intending to anticipate the full report about the event that will be prepared by Estelle SEILER for publication in sic!, but there was one specific discussion following-up on Susanna RUDER‘s presentation that I am still digesting.

Susanna had opened the discussion with the following (somewhat provocative) questions:

May the court correct a claim construction mutually agreed upon by the parties? If so, under which conditions?

May the court correct divergent claim constructions of the parties if they both are wrong? If so, under which conditions?

In first place, this gave rise to some discussion about the difference between questions of fact on the one hand (governed by the principle of party presentation [Verhandlungsmaxime]), and questions of law on the other hand (which the court may freely assess).

Michael RITSCHER teased the Supreme Court judges in the room with the remark that aspects are typically considered questions of law when the Supreme Court wants to decide on them. Else, they are (only) questions of fact and remain untouched by the Supreme Court.

In reply, Kathrin KLETT clarified that a question of fact is something about which evidence can be gathered. A legal issue, on the other hand, is something that can be discussed.

Next, on an abstract level of the discussion, there was some agreement that claim construction is a question of law. And I fully concur therewith — in general. But life is complicated. In an attempt to nail the abstract discussion down with an example, I mentioned the following example of a nullity case (adapted from some thoughts on this Blog here):

A claim feature of the attacked patent is “round” (rund);

The parties mutually agreed that “round” means “circular” (kreisrund).

The patent is only attacked for lack of inventive step / obviousness because the prior art on file only showed a polygon, but no circular shape (i.e. “round” as mutually agreed upon by the parties). Let us further assume that the attack for lack of inventive step is weak, for any reason whatsoever.

But: In a single, isolated example 97 on page 35 of the patent, the shape of a “polygon” is used. Neither party ever pointed to that example.

Now, just imagine the potential consequences if the court points to that example on page 35 and corrects the claim construction mutually agreed upon by the parties: The prior art on file would in fact be novelty destroying. I argued that this should not happen because it contravenes the principle of party presentation (Verhandlungsmaxime).

Interestingly, Mark SCHWEIZER jumped in and said that there are two separate issues involved: First, the court should indeed not pinpoint to the example on page 35. Second, he confirmed that in his view claim construction is a question of law which can and should be adressed by the court.

I did not manage to follow-up on this remark. Now, what does that mean when both issues are intermingled in a specific situation like the example above? In my perception, proper claim construction can only be done in light of the specification. But may the court only construe the claim in light of the specification to the extent pleaded?

Any thoughts, anyone? Or would someone please get this clarified in a case to be decided by the FPC? 😉

Reported by Martin WILMING

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Takeaways from the INGRES annual meeting

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:

1.   Workload

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.

Ordinary
proceedings
received until
June 30
disposed of until
June 30
Infringement w/o counterclaim 5 6
Nullity w/o counterclaim 2 1
Infringement and nullity 1 2
Ownership 1
Claim 1
Miscellaneous 1 1
Total 9 12
Summary
proceedings
received until
June 30
disposed of until
June 30
injunctive relief / preservation 3 1
Description 1 1
Total 4 2

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;
  • defendant’s answer;
  • 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:

  • O2017_025, discussed on this Blog here;
  • S2018_001, discussed on this Blog here.

Reported by Martin WILMING

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A brief wrap-up of the 2017 INGRES conference

The annual INGRES conference took place yesterday, July 5. It is a good tradition that the most relevant patent-related decisions are summarized by an attorney-at-law and a patent attorney. Just in case you missed the event (you shouldn’t, not only because of the famous boat trip on lake Zurich!):

Cyrill RIEDER presented the cases

Claudia BIBUS focused on the Doctrine of Equivalents and expanded on the decisions

  • ‘Urinalventil’ (4A_131/2016 of the Supreme Court); and
  • ‘Pemetrexed’ (O2015_004 of the FPC).

The latter decision could not be discussed on the merits; an appeal is currently pending at the Supreme Court.

Dieter BRÄNDLE, the President of the FPC, presented a very helpful overview of the time limits which are generally set by the FPC for the various procedural steps, including the potenial term extensions. In brief:

Procedural stepMain proceedingsSummary proceedings
advance payment / security obligation2w + 1w1w + 1w
statement of defense / answer to counterclaim6w + 2w2w + 1-2w
answer to counterclaim and reply6w + 2w2w + 1-2w
reply / rejoinder4w + 2w2w + 1-2w
rejoinder and reply to counterclaim4w + 2w2w + 1-2w
rejoinder to counterclaim incl. comments on new factual allegations in rejoinder4w + 2w2w + 1w
limited reply4w + 2w2w + 1w
comments on new factual allegations in the rejoinder2w + 1w1w + 1w
comments on submission with new factual allegations2w + 1w1w + 1w
comments on expert opinion of the judge-rapporteur4w + 2w2w + 1w
comments on procedural motions2w + 1w1w + 1w
comments on security obligations2w + 1w1w + 1w
comments on cost issues1w + 1w1w + 1w
unconditional right to reply10d1w

The overview of time limits will also be made available on the website of the FPC in due course.

Dieter BRÄNDLE also made clear that certain party submissions are just unwanted, ie those which contravene the court’s intention to have an equal number of party submissions per issue on file before the instructional hearing (see eg O2016_012 and O2012_039). Beware: Even a fine for the respective attorney was mentioned in case of non-compliance.

Decision O2016_016 was briefly discussed.

Finally, Dieter BRÄNDLE expanded on dos and don’ts for offers of evidence.  The court won’t search for proper evidence somewhere in the docket when it is merely referred to proof ‘mentioned elsewhere herein’ or the like. Evidence should be properly identified where it is relied on. And it does not make much sense to ‘reserve the right to submit further evidence’: A party either has the right to do so by law (then the statement is not necessary), or the exchange of party submissions is already finished. In the latter case, there is no right to be reserved and the statement is useless.

Reported by Martin WILMING

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