Laurastar and Innosteam have settled

Case No. O2018_016 | Decision of 20 May 2020

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Laurastar logo

We have reported earlier on this Blog here about the litigation betwwen Laurastar and Innosteam about ownership of (the national phases of) two PCT applications, WO 2018/006994 A1 and WO 2018/036653 A1; see the EPO Register here and here. The patent applications are about devices and methods for producing instant steam (WO’994) and instant hot water (WO’653), for use e.g. in devices for ironing.

Innosteam logo

Nothing has surfaced after the main hearing of 25 June 2019. But now, I came across the FPC’s decision of 20 May 2020 to close the proceedings because the parties have ultimately settled, after a series of suspensions of the further course of the proceedings after the main hearing.

Laurastar is bearing the court fees; no party compensations are awarded.

I understand that the so-called InstantSteam feature is still a major selling point of Innosteam, the efficiency of which purportedly allows for the commercialization of a high end ironing system at an affordable price.

Reported by Martin WILMING

BIBLIOGRAPHY

Case No. O2018_016 | Decision of 20 May 2020

Laurastar SA
./.
Innosteam Swiss SA

Panel of Judges:

    • Dr. Mark SCHWEIZER
    • Dr. Ralph SCHLOSSER
    • Dr. Giovanni GERVASIO

Judge-rapporteur:

    • Dr. Giovanni GERVASIO

Court Clerk:

    • Susanne ANDERHALDEN

Representative(s) of Plaintiff:

Representative(s) of Defendant:

DECISION IN FULL

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The heat is on between Laurastar and Innosteam

Case No. O2018_016 | Hearing of 25 June 2019

Reading time: 7 minutes
Laurastar logo

Laurastar and Innosteam are litigating about ownership of two PCT applications, WO 2018/006994 A1 and WO 2018/036653 A1; see the EPO Register here and here. The patent applications are about devices and methods for producing instant steam (WO’994) and instant hot water (WO’653), for use e.g. in devices for ironing.

Innosteam logo

Briefly, plaintiff alleges that the subject matter of both PCT applications had been invented by the inventors in fulfillment of their contractual duties while they were employees of Laurastar.

We have reported on this Blog here about the provisional register ban that had been issued without hearing the defendant beforehand, and the subsequent hearing. The register ban had finally been maintained in summary proceedings S2018_003; see this Blog here.

Note that both PCT applications have meanwhile been nationalized inter alia at the EPO, but the EPO has stayed its proceedings on request of Laurastar SA pursuant to R. 14(1) EPC while main proceedings at the FPC are pending; see here (re WO’693) and here (re WO’994). It is still (too) early to obtain full and complete information about the status of nationalization elsewhere in the world, but WIPO’s PatentScope indicates further nationalizations in the Ukraine and the Russian Federation; see here (re WO’653) and here (re WO’994). Anyway, we could now catch a glimpse of what is going on in main proceedings O2018_016 at the hearing on June 25, 2019 in Neuchâtel. The hearing was held in French language — well, at least the most of it.

Plaintiff’s pleadings emphasized that the invention was conceived before the inventors left Laurastar SA to work for Innosteam Swiss SA. A significant part of the argument evolved around a document created by Mr. Pasche that allegedly shows all the features of the patent applications in question (hereinafter refered to as ‘Pasche’):

The document created by M. Pasche while employed by the plaintiff

But even if there were any potential differences between Pasche and the two patent applications, they were only of minor importance and could not render the claimed subject-matter inventive. And, in the plaintiff’s view, this has to be taken into account; else, one could just steal an invention, add an insignificant feature to it and be unassailable.

Plaintiff further questioned to what extent a detailed claim analysis, as apparently done by the judge rapporteur, was appropriate. In the plaintiff’s view, the claims are still subject to change and do not necessarily represent the invention as a whole. For this reason, according to the plaintiff, the judge rapporteur should have analyzed the description as well. In addition, plaintiff argued that the inventiveness of the subject matter over Pasche should have been analyzed as well.

Defendant, by contrast, argued that the subject-matter outlined in Pasche was free state of the art, in any event. Thus, even if it showed all the features of the patent applications in question, just for the sake of argument, it could not be proprietary to Laurastar SA or anybody else. This led to some discussion about the term ‘invention’: Does it imply non-obviousness over the prior art, i.e. an inventive step? It has been argued that under the Swiss Code of Obligations (Art. 332), an invention does not require an inventive step (emphasis added):

Inventions and designs produced by the employee alone or in collaboration with others in the course of his work for the employer and in performance of his contractual obligations belong to the employer, whether or not they may be protected.

A decision on these issues might be an interesting read — if the parties haven’t settled.

On the procedural side, the hearing was quite illustrative of Switzerland:

Defendant’s representative started his pleadings with reference to the federalism in Switzerland and explained that he was going to structure his pleadings according to what is customary in Geneva. This may have contributed to some confusion that arose after a (brief) first part of defendant’s pleadings. Defendant’s representative sat back down, and the President asked if he was done, which the representative affirmed. The president then firmly told the parties that the time to make arguments was now:

Le temps de répondre, c’est maintenant!

This prompted defendant’s councel to get back up again and finish his pleadings. The assisting patent attorney then added his share to the pleadings — in German language. This was apparently not appreciated by everybody in the room, and the opposing patent attorney could not help himself but leave a snarky remark about this in his own pleadings later.

I wonder whether I should better immediately refresh my French and learn some Italian, just to be prepared for some spontaneous pleadings in a language that hasn’t been announced beforehand(?).  (Just kidding) /MW
Where do we go now?

At the end of the hearing, the President asked whether the parties were interested in settlement talks. Both parties gave answers along the same lines, saying that in principle they would of course be interested in a settlement. However, neither party found it realistic to find a mutually agreeable compromise since a joint assignment of the patent applications was not desirable to either party. Thus, according to both parties, settlement negotiations were pointless.

OMG

The President buried the face in his hands and, after a sigh, explained to the parties in German (‘Erlauben Sie mir, das auf Deutsch zu sagen’) that it was conceivable that a judgment could give exactly that result: Joint ownership. Such a forced marriage may not facilitate things for either party and the President gently reminded both parties that a settlement may well be the better course of action.

A three-legged race is a tricky exercise. It may work, but one may also stumble miserably.

The parties asked for a short break to discuss the President’s comment, after which it was discussed non-publicly whether the parties may be willing to settle after all.

Reported by Philippe KNÜSEL and Martin WILMING

BIBLIOGRAPHY

Case No. O2018_016 | Hearing of 25 June 2019

Laurastar SA
./.
Innosteam Swiss SA

Panel of Judges:

  • Dr. Mark SCHWEIZER
  • Dr. Ralph SCHLOSSER
  • Dr. Giovanni GERVASIO

Judge-rapporteur:

  • Dr. Giovanni GERVASIO

Court Clerk:

  • Agnieszka TABERSKA

Representative(s) of Plaintiff:

  • Dominique GUEX (Bourgeois)
  • André ROLAND (Roland), assisting in patent matters

Representative(s) of Defendant:

ANNOUNCEMENT

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WO 2018/006994 A1

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WO 2018/036653 A1

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Laurastar ./. Innosteam: Register ban upheld, but what is next?

Case No. S2018_003 | Decision of 24 August 2018 | ‘chaudière-miniature’

Reading time: 6 minutes

Laurastar and Innosteam are litigating about ownership of two PCT applications, i.e. WO 2018/006994 A1 and WO 2018/036653 A1; see the EPO Register here and here. The patent applications are about devices and methods for producing instant steam (WO’994) and instant hot water (WO’653), for use e.g. in devices for ironing.

We have reported on this Blog here about the provisional register ban that had been issued without hearing the defendant beforehand, and the subsequent hearing.

Laurastar logo

The main disagreement between the parties relates to the relevant time period in which the inventions had been made: While Laurastar alleges that the inventions had been made by Mr. Mantegazzi and Mr. Pasche when they had been employed by Laurastar, defendant submits that the inventions had only been made thereafter, i.e. when Mr. Mantegazzi and Mr. Pasche have been employed by the defendant.

Plaintiff inter alia relied on the following document that was undisputedly created by Mr. Pasche during his employment with the plaintiff:

act. 1_8, created by M. Pasche while employed by the plaintiff

In a nutshell, the present decision maintains the register ban while main proceedings are pending, to sort out the ownership dispute. And this might turn out to be a tricky exercise: The decision provisionally holds that the subject-matter of

  • claims 1, 5, 7, 11, 20 and 21 of WO’653; and
  • claims 1, 5, 7, 8, 9, 11 (first and second option), 22 and 23 of WO’994

had likely already been invented by the two inventors when they had been employed by the plaintiff, in fulfilment of their contractual duties. Rights in these aspects would reside with the plaintiff; Art. 332(1) CO. The two PCT applications may thus have to be partially assigned to the plaintiff (Art. 29(1) PatA) — but only in main proceedings. This co-ownership would be kind of a forced marriage. If it doesn’t work out in practice and the parties get divorced, it will be hard to cut out and reshuffle the respective shares in the inventions.

Now, how to proceed with the two PCT applications in the meantime? They need to be nationalized in early 2019, and a decision in main proceedings is unlikely to be final by then. The decision unmistakably holds that it will be up to the plaintiff to decide how to best protect his interests in this respect:

On ne saurait manifestement condamner la défenderesse à entrer dans les phases nationales dans tous les Etats contractants du PCT, car cela pourrait se révéler prohibitif. Il appartiendra à la demanderesse de décider comment sauvegarder ses intérêts une fois que le délai d’entrée dans les phases nationales approchera de sa fin, ce qui semble être le 5 janvier 2019 (pour WO’994) respectivement le 24 février 2019 (pour WO’653).

Loosely translated:

It is clearly not possible to order the defendant to enter the national phases in all the contracting states of the PCT, as this could be prohibitive. It will be up to the plaintiff to decide how to safeguard its interests once the deadline for entry into the national phases approaches its end, which appears to be 5 January 2019 (for WO’994) and 24 February 2019 (for WO’653), respectively.

Not to be missed

I am very much looking forward to see how this finally unfolds. The immanent time pressure requires some creativity to ensure that no rights in at least the most relevant designated states are lost.

On the procedural side, it is worthwile to note how the FPC dealt with a document that had been submitted by the defendant that contained additional technical data. The defendant requested that this information shall be considered by the court, but not being handed over to the plaintiff. The court held that either a redacted copy shall be submitted that can be provided to the plaintiff, or the defendant shall agree to have the unredacted version provided to the plaintiff’s attorney and patent attorney, for attorney’s-eyes-only and under threat of sanctions according to Art. 292 CC. The defendant chose to not agree to any of these options. Thus, the court did not take this additional document into account at all.

UPDATE 10 October 2018:

No appeal has been filed; the decision in summary proceedings has become final; main proceedings pending.

Reported by Leila MÜLLER and Martin WILMING

BIBLIOGRAPHY

Case No. S2018_003 | Decision of 24 August 2018 | ‘chaudière-miniature’

Laurastar SA
./.
Innosteam Swiss SA

Panel of Judges:

  • Dr. Mark SCHWEIZER
  • Dr. Ralph SCHLOSSER
  • Dr. Giovanni GERVASIO

Judge-rapporteur:

  • Dr. Giovanni GERVASIO

Court Clerk:

  • Agnieszka TABERSKA

Representative(s) of Plaintiff:

  • Dr. Ivan CHERPILLOD (Bourgeouis)
  • André ROLAND (Roland), assisting in patent matters

Representative(s) of Defendant:

  • Jacy PILLONEL (BCP)

DECISION IN FULL

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WO 2018/006994 A1

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WO 2018/036653 A1

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Laurastar and Innosteam Swiss working flat out

Case No. S2018_003 | Hearing of 28 June 2018

UPDATE 14 July 2018:

This post initially mentioned that the prohibition to dispose of the applications at stake has been lifted. We have learned meanwhile that this was unfortunately not correct. Rather, the register ban was maintained. The post has accordingly been corrected.

Laurastar logo

Laurastar and Innosteam are litigating about ownership of two PCT applications filed in the name of Innosteam; see the announcement of the hearing here. It is pretty clear that WO 2018/006994 A1 and WO 2018/036653 A1 are at stake; see the EPO Register here and here.

Innosteam logo

The patent applications are about devices and methods for producing instant steam (WO’994) and instant hot water (WO’653), for use e.g. in devices for ironing.

Plaintiff alleges that the two patent applications pertain to subject-matter that has been invented by two of its former employees that are now employed by the defendant. On the contrary, defendant argues that the claimed subject-matter had been invented when the inventors had no longer been employed by the plaintiff. In the hearing, the role of yet another former employee of Laurastar was briefly touched who apparently changed sides, too. He is not named as an inventor in the applications at stake, but from what the defendant has argued we understand that he apparently has referred his new employer to publicly available documents (inter alia patents / patent applications) of his former employer. Further clarification in this respect may well be subject of main proceedings which are pending.

On plaintiffs request, the President of the Court had ordered the defendant in a summary judgement of 20 April 2018 (unpublished) and without hearing the defendant beforehand not to dispose of the two patent applications while the main proceedings are pending.

The hearing was remarkable for some procedural reasons.

First, an exhaustive expert opinion of the judge-rapporteur in accordance with Art. 183(3) CPC has been given orally — for the first time ever, to the best of our knowledge. This expert opinion was not favorable for the plaintiff. The parties were then given the opportunity to comment on the expert opinion immediately thereafter.

Not yet done …

The parties were then asked for their interest in settlement discussions, but both parties denied.

Typically, this would have been it, and a decision on whether or not the interim measures are upheld would be issued in writing. Not so here. The President asked the second judge for his brief opinion, which was unfavorable for the plaintiff, too.

The prohibition for the defendant to dispose of the two patent applications while the main proceedings are pending has been upheld, for the time being.

Reported by Leila MÜLLER and Martin WILMING

BIBLIOGRAPHY

Case No. S2018_003 | Hearing of 28 June 2018

Laurastar SA
./.
Innosteam Swiss SA

Panel of Judges:

  • Dr. Mark SCHWEIZER
  • Dr. Ralph SCHLOSSER
  • Dr. Giovanni GERVASIO

Judge-rapporteur:

  • Dr. Giovanni GERVASIO

Court Clerk:

  • Agniezka TABERSKA

Representative(s) of Plaintiff:

Representative(s) of Defendant:

  • Jacy PILLONEL (BCP)

ANNOUNCEMENT

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WO 2018/006994 A1

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WO 2018/036653 A1

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