Protection of potential trade secrets in an action by stages

Case No. O2012_033 ¦ Decision of 02 June 2015 ¦ “Action échelonnée: obligation de fournir des renseignements; possibilité de sauvegarder des secrets d’affaires”

De Grisogono: Instrumento Grande (left) and Instrumento Grande Open Date (right)
De Grisogono: Instrumento Grande (left) and Instrumento Grande Open Date (right)

Déjà-vu, you think? Indeed, this procedural decision is a follow-up on a decision of 30 January 2014 (commented in any detail here). In brief, certain De Grisogono watches were held to infringe a patent of Richemont, and injunctive relief had thus been granted. This decision had been appealed by De Grisogono, but the Supreme Court had rejected the appeal with decision of 02 October 2014; see 4A_142/2014.

In consequence, the second aspect of Richemont’s action by stages came into play, i.e. De Grisogono had to open the books in order to enable the plaintiff to quantify the damages. According the the decision of 30 January 2014, this had to be done within 60 days after the decision has become final, i.e. until 02 December 2014. After a series of term extensions and incomplete production of documents, the defendant finally – belatedly, without any justification – submitted a DVD-ROM with invoices pertaining to the infringing watches on 07 May 2015. The decision leaves no doubt about the court’s discontentment, for both the delay as such and the documents that have been produced. Apparently, the documentation on the DVD-ROM is not self-explanatory. The defendant was thus obliged to again organize and index the documents in an understandable manner.

Further, the defendant referred to Art. 156 CPC and requested that appropriate measures be taken by the court to ensure that business secrets are protected. In particular, it was requested that the DVD-ROM shall not be made available to the plaintiff. This was a non-starter: The production of documents is only the execution of a partial judgement that has become final. Any such request could (and should) have been made before the judgement had been taken.

At least one ray of hope on the horizon for the defendant: The FPC noted that the documentation on the DVD-ROM contains data not only with respect to the watches at stake, but rather also contains information with respect to jewelry, etc. The defendant was given a final opportunity (with a non-extendable deadline) to accordingly redact the respective documents in order to not disclose these unrelated information to the plaintiff. The FPC notes that if the defendant fails to provide such documents, the plaintiff will be served with the unredacted documents contained on the DVD-ROM that is already on file.

Reported by Martin WILMING

— BIBLIOGRAPHY —

Case No. O2012_033 ¦ Decision of 02 June 2015 ¦ “Action échelonnée: obligation de fournir des renseignements; possibilité de sauvegarder des secrets d’affaires”

Richemont International S.A.
./.
De Grisogono S.A.

Subject(s):

  • Infringement
  • Nullity

Board of Judges:

  • Dr. Dieter BRÄNDLE (President)

Court Clerk:

  • Susanne ANDERHALDEN

Representative(s) of Plaintiff:

  • Michel MUHLSTEIN (JMLP)

Representative(s) of Defendant(s):

— DECISION IN FULL —

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Well, yet another request for legal aid … – but, wait: Granted!

Case No. S2013_009 ¦ Decision of 18 March 2015 ¦ “Unentgeltliche Rechtspflege”

This is not a new case. A first decision had been issued already on 29 January 2014 in the same matter. At that time, a request for recusal of Dr. Dieter BRÄNDLE had been dismissed. Moreover, the request for legal aid had also been dismissed — but only inasmuch as it concerned the request for recusal. The plaintiff’s request for legal aid also covered potential infringement proceedings, and this is what the present decision is all about.

According to Art. 117 CPC, a person is entitled to legal aid if he does not have sufficient financial resources (lit. a); and if his case does not seem devoid of any chances of success (lit. b). The claimant receives state benefits; his indigence was thus acknowledged (Art. 117 lit. a CPC). But the chances of success remained to be evaluated (Art. 117 lit. b CPC). In this respect, it is not necessary that the chances of success are outstanding. A case is not deemed to be devoid of any chances of success even if the risk of loss is slightly higher than the profit prospects. However, the profit prospects must not be be substantially lower than the risk of loss. In simple terms, it is decisive whether a party having the necessary financial resources would reasonably decide to lodge the suit. This has to be assessed by the President acting as single judge (Art. 23(1) lit. c PatCA) in summary proceedings (Art. 119(3) CPC).

Evidently, the chances of success depend on (i) the validity of the patents in suit; and (ii) whether the attacked embodiments actually infringed said patents. This assessment requires technical exerptise, and the President thus consulted a technically trained judge (Art. 35 PatCA).

The patents in suit are discussed in more detail in an ealier post. It’s an eventful history of limitations; the latest (second) published limitations are CH 687 352 C3 and CH/EP 0 660 960 H3. Yet another series of (third) limitations is mentioned in the decision (allegedly filed on 1 October 2013), but cannot yet be tracked in Swissreg. Thus, both patents are to be assessed on the basis of the second limitation only. In general terms, the claimant alleged that these patents were infringed by a method and system carried out / installed in Switzerland for collecting the heavy vehicle charges.

As to the validity of the patents on the basis of the prior art that is readily apparent, the technically trained consulting judge concluded that: —

The President agreed with this opinion.

As to the allgedly infringing embodiments, the technically trained consulting judge held that: —

  • infringement of claims 1 of both CH 687 352 C3 and CH/EP 0 660 960 H3 is not duly substantiated;
  • infringement of claim 9 of CH 687 352 C3 is plausible;
  • infringement of claim 9 of CH/EP 0 660 960 H3 is plausible, but still subject to yet further amendments to this claim corresponding to the other indepent claims. Note that the reference to claim 9 most likely is a typographical error; the second independent claim of CH/EP 0 660 960 H3 is claim 12, not 9.

The President also agreed with this opinion, but the latter (potential) further amendment of CH/EP 0 660 960 H3 was not taken into consideration; the facts are to be considered as they are on the filing date of the request for legal aid (Supreme Court decisions 139 III 475, r 2.2 and 138 III 217, r 2.2.4 with further reference). Nevertheless, in view of at least one claim having been plausibly infringed, the case could not be held devoid of any chances of success.

The decision also expands on the implications of the fact that both patents in suit have already expired back in 2012 and 2013, respectively. Therefore, there is no injunctive relief at stake any more; the potential plaintiff might only invoke financial claims. In general terms, the claimant apparently mentioned Art. 41 ff, Art. 423 and Art. 62 ff CO. However, a claim under Art. 41 ff CO requires fault, and a claim under Art. 423 CO requires bad faith. Only a claim for restitution in view of an unjust enrichment (Art. 62 ff CO) neither requires fault or bad faith; see Mark SCHWEIZER, Zivilrechtliches Verschulden bei der Verletzung von Schutzrechten, sic! 2015, p 1ff. In this respect, it is to be noted that the second series of limitation of the patents in suit was inter alia based on features taken from the description of the patents. Fault or bad faith of the potential defendants is thus doubted in the decision; only the (usually lower) restitution under Art. 62 ff CO would thus remain as a basis of a financial claim.

In passing, the decision also notes that the defendants might refer to the defence of limitation, which is to be taken into consideration in the assessment of whether or not legal aid is to be granted; see Supreme Court decision 119 II 368, r 5a. But from the file as-is, no clear conclusions could be drawn in this respect.

Legal aid was thus granted, for the time being. However, it is noted in the decision that — depending on the reasons given in the suit to be filed — the legal aid might be again withdrawn later on.

Reported by Thorsten MÜLL and Martin WILMING

— BIBLIOGRAPHY —

Case No. S2013_009 ¦ Decision of 18 March 2015 ¦ “Unentgeltliche Rechtspflege”

(not identified)
./.
1. (not identified)
2. (not identified)

Subject(s):

  • Infringement / Legal aid

Board of Judges:

  • Dr. Dieter BRÄNDLE (President; Single Judge)
  • Lic. iur. Susanne ANDERHALDEN (First Court Secretary)

Cosulting Judge:

  • Dr. Markus MÜLLER

Representative(s) of Plaintiff:

  • (not identified)

Representative(s) of Defendant 1:

Representative(s) of Defendant 2:

  • (not identified)

— DECISION IN FULL  —

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Recovery of profits based on estimation

Case No. O2013_007 ¦ Decision of 19 March 2014 ¦ “Quantitativer Schadenersatz”

— THE DECISION IN A NUTSHELL —

The defendant had not complied with a prior order of the FPC to provide information on sales figures and accounting. Complete silence. An easy walk-over for the plaintiff: Defendant’s profits were recovered based on estimation. Non-compliance with the prior order will be prosecuted by the criminal judge.

— THE DECISION IN MORE DETAIL —

The patent in suit is EP 1 393 417 B1. The plaintiff had requested injunctive relief in first place, and further information and accounting in an action by stages for the recovery of profits of the defendant originating from illegitimate sales of infringing products. As discussed in detail in an ealier post on this matter, the defendant neither challenged the validity of the patent nor was the infringement disputed. He did not make representations of any kind. The FPC thus had accepted the claim for injunctive relief and the defendant was obliged to provide the requested information and accounting within 60 days after the decision had become final.

Now, guess what happened: The defendant did not respond. It was thus up to the plaintiff again to reasonably quantify his request for recovery of profits.

Art. 73 PatA stipulates that any person who performs an act of infringement either wilfully or through negligence shall be required to pay damages to the injured party according to the provisions of the Code of Obligations (CO). That means that (i) a loss or damage must have occured; (ii) the act must have been unlawful; (iii) it must have been a fault of the defendant; and (iv) causality of the unlawful act and the loss or damage must be established. But the plaintiff had requested recovery of profits of the defendant. This is a special case of business conducted in an agent’s interest, based on Art. 423(1) CO: Where agency activities were not carried out with the best interests of the principal in mind, he is nonetheless entitled to appropriate any resulting benefits.

In fact, the plaintiff had an easy walk-over: It was undisputed that the defendant had realised profit with the (undisputedly) infringing goods. Recovery of profits requires bad faith of the agent (BGE 126 III 69, r. 2a; 129 III 422, r. 4), but this was easily established here since the defendant had evidently imported the infringing goods from Taiwan without having clarified patent issues. Since the defendant did not comply with the order of accounting, the profits were estimated by the court at its discretion, essentially based on the representations of the plaintiff. The sales price of an infringing good was CHF 14,90. It was plausible that a reasonable purchase price of the defendant was USD 3,– per item, resulting in profits of approx. CHF 12,16 per item. Even though the plaintiff argued that 3’000 pieces had been purchased by the defendant, he apparently assumed that only 1’500 items had been sold and thus only profits for 1’500 items were recovered. Albeit the profit can only be recovered inasmuch as it is caused by the infringed right, this was not a critical issue in this case: The FPC held that the technical principle protected by the patent in suit was “evidently” the key feature of the infringing, and thus the whole profit could be recovered by the plaintiff. The plaintiff further requested an interest of 5%, without further substantiation; this request was dismissed. The plaintiff also requested damages for costs incurred prior to the suit by the attorney and patent attorney. However, these costs were attributed to costs and compensation to be paid by the defendant.

The FPC further obliged the defendant to destroy any infringing devices that are still in his possession, within 10 days after the decison has become final.

As noted above, the defendant failed to comply with the order of FPC with the prior decision of  14 August 2013 under the threat of the criminal penalty for non-compliance. Consequently, the FPC handed over this matter to the criminal judge for further prosecution.

Reported by Martin WILMING

— BIBLIOGRAPHY—

Case No. O2013_007 ¦ Decision of 19 March 2014 ¦ “Quantitativer Schadenersatz”

WorldConnect AG ./. John Rusillon, owner of the individual company Easy-Tech, Rusillon

Subject(s):

  • Patent Infringement
  • Damages
  • Recovery of profits

Composition of the Board of the FPC:

  • Dr. iur. Dieter BRÄNDLE (President)
  • Dr. Tobias BREMI (Judge)
  • Dr. Mark SCHWEIZER (Judge)
  • Lic. iur. Susanne ANDERHALDEN (Court Secretary)

Representative(s) of Plaintiff:

Representative(s) of Defendant:

  • (none)

— FULL TEXT OF THE DECISION —

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O2012_036: Main hearing of 17. January 2014

Case No. O2012_036 ¦ Main hearing of 17 January 2014

An order on information and accounting was granted in this matter in February 2013; please have a look at the earlier post with details about the subject-matter at stake. At the main hearing of 17 January, the defendant struggled heavily with his obligation on information and accounting pertaining to the actual number of infringing devices. Plaintiff estimated the value in dispute to CHF 25’000,–. Finally, the parties entered into (non-public) settlement discussions.

Reported by Martin WILMING and Oliver JEKER

BIBLIOGRAPHY

Case No. O2012_036 ¦ Main hearing of 17 January 2014

WorldConnect AG ./. Pearl Schweiz GmbH

Subject(s):

  • Patent infringement
  • Compensation

Composition of the Board of the FPC:

  • Dr. iur. Dieter BRÄNDLE (President)
  • Dr. rer. nat. Tobias BREMI (Referent)
  • Dr. iur. Mark SCHWEIZER
  • Lic. iur. Susanne ANDERHALDEN (Court Secretary)

Representative(s) of Plaintiff:

Representative(s) of Defendant:

Request for information and accounting granted in an action by stages

Case No. O2012_036 ¦ Partial decision of 13 February 2013 ¦ “Teilurteil Auskunft und Rechnungslegung nach abgegebener Unterlassungserklärung”

This case pertains to power plug adapters that allegedely infringe EP 1 393 417 B1. An essential feature is that various plugs can be slid out of a housing, but only one at a time; cf. Fig. 8 and 9 of the patent in suit (click to enlarge):

Figures 8 and 9 of <a href="http://www.patentlitigation.ch/wp-content/uploads/2013/02/EP1393417B1.pdf" target="_blank">EP 1 393 417 B1</a>

The plaintiff WorldConnect AG sells power plug adapters according to the patent in suit under the brand SKROSS®. The allegedly infringing power plug adapter is identified as “CH-685” in the decision, offered / sold by the defendant. An article with this identifier can still be found on the website pearl.ch, as well as the manual, but it is explicitly no longer available in Switzerland (click to enlarge):

CH-685 power plug adapter
CH-685 Travel Adapter
Source (visited February 27, 2013):
http://www.pearl.ch/ch-a-CH685-5452.shtml

The plaintiff confronted the defendant with the alleged infringement on July 1, 2011. On September 14, 2011, the defendant complied and submitted a cease and desist agreement. Moreover, the defendant provided some details on suppliers and quantities of received / sold items with letter of October 6, 2011. Finally, with letter of November 30, 2011 the defendant declared that 428 items had effectively been sold (after deduction of returns). The total turnover amounted to CHF 3’922,99. The defendant then paid the plaintiff a lump-sum of CHF 2’500,–, “in order to not end up in a law suit” (voilà, here we are …). An additional amount of CHF 5’346,– for incurred costs of an assisting patent attorney  was not compensated; in the defendant’s view, these costs could have been avoided by the plaintiff.

The plaintiff filed the suit on June 5, 2012 as an action by stages (Stufenklage), in accordance with Art. 85 CPC: Information and accounting for evidence was requested in first place, to enable the plaintiff to quantify the amount being requested in the main request, i.e. the recovery of profits of the defendant originating from illegitimate sales of infringing products. The duty of disclosure is based on Art. 66 lit. b of the Federal Act on Invention Patents (note that this duty is not only given vis-a-vis the court as the mere wording of Art. 66 lit. b of the Federal Act on Invention Patents might suggest, but also vis-a-vis the patentee; cf. Heinrich, PatG/EPÜ, 2nd ed., Bern 2010, para. 7).

The defendant submitted that the request for information and accounting was unfounded inasmuch as such information was already provided. Further information could only be provided on the basis of the electronic merchandise planning and control system. The defendant had offered that an independent accountant could review and approve the electronic data, but the plaintiff had not been responsive to this offer. In essence, the defendant alleged that the plaintiff’s request for information and accounting was now in bad faith, in view of the defendant’s prior offer.

In its decision, the FPC summarizes that neither the right of action of the plaintiff (as the exclusive licensee) nor the patent infringement as such was contested. It was not even contested that a profit had been made by the defendant; only the actual amount was in dispute. Thus, all prerequisites for the defendant’s duty of disclosure were given — which is an obligation to deliver (by the defendant), not an obligation to collect (by the plaintiff). Consequently, the defendant’s argument failed. Subsequent assessment of the disclosed documents is a matter of consideration of evidence by the court.

With respect to the extent of the duty of disclosure, the FPC stated that the disclosed information needs to put the plaintiff in a position to quantify the amount to be demanded in the main request. The defendant did not object in detail to the requests for information and accounting. The defendant only submitted that individual sales in the shop cannot be allocated to specific customers; this was acknowledged by the FPC. Moreover, the FPC corrected an obvious error in the request (“manufactured by” was replaced by “sold by”, since it was not alleged by the plaintiff that the defendant had manufactured the infringing items himself), and some redundancies were omitted.

The order on information and accounting was granted essentially as requested, with threat of punishment under Art. 292 Criminal Code (Art. 236(3) in conjunction with Art. 343(1) lit. a CPC). As an exception to the rule, a decision on the costs of this partial decision will be taken in the final decision.

Reported by Martin WILMING

BIBLIOGRAPHY

Case No. O2012_036 ¦ Partial decision of 13 February 2013 ¦ “Teilurteil Auskunft und Rechnungslegung nach abgegebener Unterlassungserklärung”

WorldConnect AG ./. Pearl Schweiz GmbH

Subject(s):

  • Patent infringement

Composition of the Board of the FPC:

  • Dr. iur. Dieter BRÄNDLE (President)
  • Dr. rer. nat. Tobias BREMI (Referent)
  • Dr. iur. Mark SCHWEIZER
  • Lic. iur. Susanne ANDERHALDEN (Court Secretary)

Representative(s) of Plaintiff:

Representative(s) of Defendant:

  • Hans-Ulrich Pfeiffer (Pfeiffer Rechtsanwälte, Freiburg (Germany)), with mailing address at the defendant in Switzerland

Parties for the first time agreed to use English in FPC proceedings

Case No. O2012_037 ¦ Order of 30 July 2012 ¦ “Parteisprache Englisch, Verbindlichkeit der Wahl”

A major advantage of the Act on the FPC (PatCA) in an international environment is that the parties can agree to use English language; Art. 36(3) PatCA. However, even though the parties may use the English language, one of the official languages of Switzerland is still the language of the proceedings. The FPC will always issue its decision in the language of the proceedings (Art. 6(3) PR-PatC).

Parties to FPC proceedings now for the first time agreed to use the English language:

The plaintiff is native Italian speaker, but his representatives are native German speakers. The plaintiff requested in his writ that German language shall be established as the language of the proceedings (Art. 36(1) PatCA, Art. 6(1) PR-PatC), but also indicated that he would agree to English language being used in subsequent motions of the parties. The FPC established German as the language of the proceedings and the defendant was invited to file the counterclaim.

The defendant also agreed to the English language being used by the parties. Consequently, the FPC took due note of the parties’ choice of the English language for their further motions. This mutual consent of the parties being given, no further approval of the FPC is necessary in this respect (Art. 6(3) PR-PatC). However, the FPC held that this choice of the English language is binding, i.e. a waiver to use an official language of Switzerland in later motions and oral proceedings again.

Noteworthy, the FPC held in an obiter dictum that parties might agree on the English language even before FPC proceedings are initiated. In this case, already the writ could be filed in English language.

Reported by Martin WILMING


BIBLIOGRAPHY

Case No. O2012_037 ¦ Order of 30 July 2012 ¦ “Parteisprache Englisch, Verbindlichkeit der Wahl”

(not identified) ./. (not identified)

Subject(s):

  • Financial reporting and monetary claim

Composition of the Board of the FPC:

  • Dr. iur. Dieter BRĄNDLE (President, Single Judge)

Representative(s) of Plaintiff:

Representative(s) of Defendant:

  • Stefano Codoni (Poledna Boss Kurer)

No plaintiff: Case not considered

Case No. O2012_029 ¦ Decision of 6 February 2012 ¦ “Nichteintreten”

A claim for outstanding money was pending before the commercial court of the Canton of Zurich. On 26 January 2012, the case was transferred to the FPC, in accordance with Art. 41 PatCA. However, the FPC noted that the plaintiff was already cleared from the Commercial Register on 28 December 2011. Consequently, the FPC did not consider the case, in view of the absence of a plaintiff.

Fehlt es mithin an einer Klägerin, so ist auf die – noch verbleibende – Forderungsklage nicht einzutreten.

The decision has become final.

Reported by Martin WILMING

BIBLIOGRAPHY

Case No. O2012_029 ¦ Decision of 6 February 2012 ¦ “Nichteintreten”

Strela Development AG (cleared) ./. Artemio GRANZOTTO

Subject(s):

  • Outstanding money

Composition of the Board of the FPC:

  • Dr. iur. Dieter BRÄNDLE (President, Single Judge)

(Former) Representative(s) of Strela Development AG:

Representative(s) of Artemio GRANZOTTO:

  • (none)