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:
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.
We have reported about the main hearing on this Blog here ». From the pleadings at the hearing, I had expected a pretty straight-forward outcome. But when I had downloaded the decision, I panicked: 110 pages(!), a decision of epic length. When will I ever find time to read all this? But in the end it was not half as bad: One can thumb through more than half of the decision without missing much: It takes essentially the first 65(!) pages to recite the various requests of the parties during the proceedings.
Against the background of the pleadings at the main hearing, the conclusions of the decision indeed do not come as a big surprise anymore: EP(CH) 864 » is declared null and void; Bystronic’s further requests are dismissed, as well as Tomologic’s counterclaim for infringement. Appeal proceedings are currently pending at the Supreme Court.
Urteil vom 8. Mai 2020 i.S. Bystronic Laser AG v. Tomologic AB re Feststellung Nichtigkeit, Feststellung Mitinhaberschaft / Widerklage auf Verletzung: CH EP 2 485 864 B1 ist nichtig mangels Neuheit; im weiteren Umfang Klage und Widerklage abgewiesen; https://t.co/qZ689ocWuX
Now that the outcome is essentially in line with what we had learned in the main hearing », let’s have a look at some procedural aspects, and some issues of potentially more general interest.
Competency of the FPC
Competency of the FPC to hear all aspects of the case was not a given, since e.g. Bystronic had requested that foreign members of the patent families were assigned to co-ownership. It was only due to a Service Agreement between the parties, i.e. a choice of forum clause contained therein, that the FPC’s competency was acknowledged in toto.
Parties sometimes feel that the judge-rapporteur’s expert opinion should have dealt with yet further aspects of the case: Why didn’t he/she take a deep(er) dive? The decision holds that the parties do not have the right to have all the questions which might arise and which concern technical issues be dealt with in a specialised judge’s opinion; see ¶ 32. This is even more so in cases like the present one when more than 20 auxiliary requests are pending (which ultimately all failed for clarity issues and insufficiency of disclosure of a feature that was contained in all requests). It is at the judge-rapporteur’s discretion to make a reasonable choice of aspects to be dealt with in the expert opinion:
In general terms with respect to claim construction, the decision holds in ¶ 43 that a claim shall be read in such a way that the embodiments disclosed in the patent are literally covered. Applying this to the case at hand, the decision holds in ¶ 46, that one has to arrive at a certain conclusion since the embodiments disclosed in the specification must be covered (literally):
I have stumbled over the same wording several times in recent decisions of the FPC — and I am still not really comfy with it. My experience as a patent attorney is different: It frequently happens during prosecution that claims are amended in such a way that specific examples (only some or even all) disclosed in the specification are not covered anymore by the amended claim. Clearly, both the attorney and the examiner should spot and remove such inconsistencies before grant. But it just doesn’t happen, quite often.
By way of example, if a claim is amended during prosecution by specifying that a certain element is circular, and the patent as granted contains various embodiments of circular shape and still an embodiment where that element is rectangular, there is no way in my perception that circular in the claim should be construed such that it covers a rectangle.
On the other a hand, when the claim says round and the embodiments disclose only various polygons, chances are that polygons might well read on round(?). Subject to discussion, of course. But I feel that it is in no way a universal truth that a claim has to be construed in a way that it literally covers the disclosed embodiments, no matter what. Rather, it depends.
Accordingly, the German Supreme Court has held several times that the correct claim construction may well lead to a situation where only some or, in exceptional cases, even no embodiment at all is covered by the claim (see e.g. X ZR 43/13 – Rotorblätter (¶ 16) and X ZR 35/11 – Zugriffsrechte (¶ 26)):
Eine Auslegung des Patentanspruchs, die zur Folge hätte, dass keines der […] geschilderten Ausführungsbeispiele vom Gegenstand des Patents erfasst würde, kommt […] nur in Betracht, wenn andere Auslegungsmöglichkeiten, die zumindest zur Einbeziehung eines Teils der Ausführungsbeispiele führen, zwingend ausscheiden oder wenn sich aus dem Patentanspruch hinreichend deutliche Anhaltspunkte dafür entnehmen lassen, dass tatsächlich etwas beansprucht wird, das so weitgehend von der Beschreibung abweicht.
A claim construction which would have the consequence that none of the described embodiments would be covered by the patent is only possible if other ways of claim construction which lead to the coverage of at least some of the embodiments are definitely ruled out or if there are sufficiently clear indications from the patent claim that something is actually claimed which deviates so widely from the description.
What’s the threshold for someone’s contribution to be considered relevant enough to give rise to co-inventorship?
The decision holds in ¶ 62 that a co-inventor is someone who has participated creatively in the development of the invention. Mere workmanship is not sufficient to be a co-inventor, but it is not required that the contribution in itself is inventive or even that it fulfils the conditions for patentability in itself.
This example appears straight-forward to me. On the other side of the threshold, an input that is more than standard workmanship (or which is substantial; see ¶ 69) but not yet inventive in itself is sufficient for someone to be a co-inventor. Again, there may well be clear cases, e.g. when a car is claimed and the invention is all about an engine for the car, and someone only contributes to the subject-matter of the claim that the car has wheels (guess what!). But most cases won’t be this easy to decide.
On a sidenote, the decision also holds that the inventor has to be a human. Well, that is the current mainstream approach, see e.g. the EPO’s DABUS decisions and a recent report from the Five IP Offices:
But there are certainly AI-generated inventions around; see e.g. The Artificial Inventor Project, and it is a pity that the law — at least as it stands and as it is currently interpreted by the offices and courts(?) — deprives AI-generated inventions from patent protection. But the discussion about this and further AI-related aspects has only just begun.
From the earlier case S2018_005, it is known that Basys is the exclusive licensee of EP 827; Aschwanden’s ‘Dura Box‘ line of products (illustrated in the header image) had been asserted to infringe EP 827.
EP 827 pertains to reinforcing elements that can be integrated in concrete walls in order to support recesses for conduits (water, electricity, etc.). Opposition proceedings are currently pending at the EPO, and the parties have been summoned for oral proceedings on 31 March 2020. One of the two opponents is F.J. Aschwanden, i.e. the plaintiff in the present case. The second opponent is Jordahl H-Bau AG.
Noteworthy, the patentees have submitted two auxiliary requests in the EPO opposition proceedings on 16 January 2019, and for the second auxiliary request (AR2) the OD provisionally acknowledged at least novelty over the cited prior art in the interim assessment attached to the summons of 26 June 2019.
The hearing started with a somewhat odd interaction. As is customary, the people present for both parties were introduced by their respective lawyers. Mr Maier was referred to as their ‘patent representative’ (‘Patentvertreter’). The President raised his eyebrows and interjected with the question of whether Mr Maier was an admitted representative (‘zugelassener Vertreter’). Apparently, some phrasing in the briefs may have been understood as if Mr Maier identified himself as a patent attorney. Mr Maier immediately responded that this was a mistake, and that he was indeed not a patent attorney (‘Ja, das ist nicht ganz korrekt …’).
The hearing continued with a more substantial blow to defendant’s case. The President informed the parties that defendant’s further auxiliary requests (corresponding to the two auxiliary requests from the co-pending EPO proceedings) would not be admitted into the proceedings. Those requests could well have been submitted already with the rejoinder, but the defendants failed to do so. As a consequence, the court did not admit them into the proceedings; Art. 292 CPC. Note that the second auxiliary request (AR2) was the only one that was provisionally considered to be new over the cited prior art by the OD in the summons, and the judge-rapporteur’s expert opinion on the claim sets submitted before the closure of the file has apparently been rather negative for the patentee, in our perception of what has been discussed at the hearing.
Even though the further auxiliary requests had not been admitted into the proceedings, a substantial part of the pleadings was about the merits of those requests.
Interestingly, defendants requested to delay a judgment until after the EPO’s OD will have decided in the co-pending opposition proceedings. Defendants’ argument seemed premised on the expectation that the opposition division would maintain EP 872 in accordance with AR2. In that case (and, of course, when no appeal is lodged, or if the decision is affirmed by the Boards of Appeal), AR2 would become ex tunc the relevant claim set of EP 872.
As mentioned, AR2 was not admitted into the Swiss proceeding. Thus, so defendants, a conflicting judgment may be the result if the FPC found EP 872 invalid as the decision would be based on a claim set that had formally never been granted. Note that defendants only asked for the judgment to be delayed, but not for the proceedings to be suspended. Apparently, the latter had already been requested in the past but denied by the court.
Note that the Swiss PatA in no way precludes nullity actions while opposition proceedings are still pending, contrary to Art. 81 of the German PatA. The German Supreme Court did not make any difference between German and European opposition proceedings in this respect — but only in 2005, which was somewhat surprising to me; see X ZR 29/05. In Switzerland, nullity proceedings or the judgment may be suspendend while European opposition proceedings are ongoing; Art. 128 PatA. /MW
As always, the President asked the parties whether they were interested in settlement discussions. Both parties indicated that they would be very interested in a licensing agreement. However, the plaintiff stated that he was absolutely not going to pay for such a license, while defendants said that they would absolutely not give away a license for free. The President asked if they would at least listen to a proposal by the court, to which both parties responded affirmatively before the session closed.
Wondering about the color code? It is adopted from the decision itself (¶ 16), to help getting the ducks (pardon me, divisional applications) in line:
Yet again, it’s all about a combination of oxycodone hydrochloride and naloxone hydrochloride, in a weight ratio of 2:1.
This combination is an analgesic drug that is available as modified-release tablets under the trade name Targin® by MundiPharma.
Develco sought annulment of both EP(CH)’821 and EP(CH)’824inter alia for undue extension of subject-matter, in violation of Art. 76 and Art. 123 EPC. Note that both patents had been filed as divisional applications, without any claims in first place. However, the claims of WO’520 had been recited in the specification in ¶  of EP 821 A1 and ¶  of EP 824 A1, respectively.
As to EP 824, the decision holds that claim 1 as granted does not comply with Art. 76 and Art. 123 EPC; see the following mark-up over the first claim-like clause in ¶  of EP 824 A1:
Likewise, the first auxiliary request (AR 1) — wherein only feature 1.7 had been amended over the claims as granted — failed for essentially the same reasons:
Finally, also AR 2 failed for essentially (some of) the same reasons as the claims as granted, and in line with the ratio decidendi of the EPO’s Opposition Division:
As to EP 821, the decision is pretty straight forward because the specification is the same as in EP 824. Claim 1 as granted does not comply with Art. 123 EPC:
The FPC comes to the same conclusion for claim 1 of AR 1:
This finding of the FPC is in line with the decision of an Opposition Division in parallel proceedings at the EPO; see the decision of 11 September 2019 (AR 1 corresponds to AR IX in EPO opposition proceedings).
On the merits, I feel that this case is nothing out of the ordinary in terms of assessment of undue extension of subject-matter. Still, there are two statements that I find noteworthy.
First, the decision holds in ¶ 25 that, as a rule, when reading a patent application or a patent, the person skilled in the art assumes that features, if they are expressly mentioned in an independent claim, are important and not just superfluous — unless there are clear indications to the contrary. Thus, for a feature to be omitted, it is therefore not sufficient to show that it is not highlighted anywhere as important. Rather, it must be shown that the skilled person recognizes that the feature does not make a technical contribution or can be omitted. It must therefore be established that the skilled person, using common general knowledge, would regard the claimed subject-matter even without the specific feature as — explicitly or implicitly — directly and unambiguously disclosed in the application as filed.
Grundsätzlich geht der Fachmann beim Lesen einer Patentanmeldung oder einer Patentschrift a priori zunächst einmal davon aus, dass Merkmale, wenn sie ausdrücklich in unabhängigen Patentansprüchen genannt werden, auch wichtig und nicht einfach überflüssig sind, sofern es nicht klare Hinweise für das Gegenteil gibt.
Damit ein Merkmal weggelassen werden kann, genügt es also nicht, zu zeigen, dass es nirgends als wichtig hervorgehoben wird, sondern es muss gezeigt werden, dass für den Fachmann zweifelsfrei erkennbar ist, dass das Merkmal keinen technischen Beitrag leistet oder auch weggelassen werden kann. Mithin muss gezeigt werden, dass der Fachmann unter Heranziehung des allgemeinen Fachwissens den beanspruchten Gegenstand auch ohne das Merkmal als – explizit oder implizit – unmittelbar und eindeutig in der ursprünglichen Fassung der Anmeldung offenbart ansehen würde.
In my perception, this is essentially the approach of the EPO, even though the decision does not make any reference to the EPO Guidelines or case-law of the Boards of Appeal in this respect.
Second, the decision makes a clear distinction in ¶ 44, with extensive reference to case-law of the Boards of Appeal, between mere deletion of some elements from lists of a certain length on the one hand (which may well be admissible), and so-called singling out of specific elements from a lists (which is typically not permissible).
The patent in suit is Lilly‘s EP 1 313 508 B1; see the EPO Register and Swissreg for further details. In a nutshell, EP’508 relates to combination of pemetrexed disodium and vitamin B12. See this Blog here for a discussion about earlier infringement proceedings concerning the same patent.
Now, nullity is at stake.
An Opposition Division of the EPO had maintained the patent as granted with decision of 27 December 2010; an appeal had initially been lodged but withdrawn later. Related decisions in civil proceedings elsewhere had also addressed the validity of EP’508, e.g. in
USA (Court of Appeals for the Federal Circuit, 2015-2067, decision of 12 January 2017 relating to the corresponding US patent 7,772,209 and maintaining the patent);
Japan (IP High Court, 2015 (Gyo-Ke) 10249 et al., decision of 2 February 2017 relating to the corresponding JP patent 5102928 and maintaining the patent).
Thus, it was an uphill fight for the plaintiff. And even though the FPC took the parallel decision of the German FPC into account, it explicitly disagreed. It is held on p 19 (penultimate and lastparagraph), that the German FPC erred with the finding that
[…] bei einer Pemetrexedgabe durch die Blockierung der drei Schlüsselenzyme Thymidylatsynthase (= TS), Dihydrofolatreduktase (= DHFR) und Glycinamidribonukleotidformyltransferase (= GARFT) im «DNA- Zyklus» nicht nur dieser Zyklus, sondern auch der «Methylierungszyklus» blockiert wird.
Consequently, the FPC did not put much weight (if any) on the parallel decision in Germany.
On the contrary, the decision holds that the claimed subject-matter was novel over Worzalla et al. since mere reference to a diet ‘Purina Chow #5001’ did not implicitly, yet clearly and unambiguously, disclose the presence of vitamin B12 (or folic acid).
1. Use of pemetrexed disodium in the manufacture of a medicament for use in combination therapy for inhibiting tumor growth in mammals wherein said medicament is to be administered in combination with vitamin B12 or a pharmaceutical derivative thereof, said pharmaceutical derivative of vitamin B12 being hydroxocobalamin, cyano-10-chlorocobalamin, aquocobalamin perchlorate, aquo-10-chlorocobalamin perchlorate, azidocobalamin, chlorocobalamin or cobalamin.
12. A product containing pemetrexed disodium, vitamin B12 or a pharmaceutical derivative thereof said pharmaceutical derivative of vitamin B12 being hydroxocobalamin, cyano-10-chlorocobalamin, aquocobalamin perchlorate, aquo-10-chlorocobalamin perchlorate, azidocobalamin, chlorocobalamin or cobalamin, and, optionally, a folic binding protein binding agent selected from the group consisting of folic acid, (6R)-5-methyl-5,6,7,8-tetrahydrofolic acid and (6R)-5-formyl-5,6,7,8-tetrahydrofolic acid, or a physiologically available salt or ester thereof, as a combined preparation for the simultaneous, separate or sequential use in inhibiting tumor growth.
It’s all about a combination of the antifolate pemetrexed disodium, vitamin B12 and, optionally, folic acid. Briefly, pemetrexed is an antifolate that inter alia inhibits synthesis of thymidine and thus de novo DNA synthesis. Evidently, antifolates are quite toxic. But according to EP’508, toxicity can be successfully controlled by co-administration of pemetrexed with vitamin B12 and, optionally, folic acid.
EP’508 had already been litigated in infringement proceedings in Switzerland, resulting in a landmark decision of the Supreme Court on the Doctrine of Equivalents and how amendments of the patent during prosecution are to be dealt with in this respect; see this Blog here.
This time, validity of EP’508 is being challenged, based on a lack of novelty or, at least, lack of an inventive step; and added matter. Only inventive step has been pleaded in the hearing. With respect to the other grounds of nullity, the Sandoz merely referred to the written submissions.
It was evident from the pleadings that the opinion of the judge-rapporteur had been in favour of the defendant. This interim opinion is in line with the decision of an EPO opposition division, the Rechtbank Den Haag (Case No. C/09/533354 / HA ZA 17-581; judgment available as Dutch original and inofficial English translation), the IP High Court of Japan and the U.S. CAFC. On the other hand, the German Federal Patent Court had revoked the German part of EP’508; an appeal before the Supreme Court is still pending.
Sandoz started from Jackman as closest prior art in the assessment of inventive step. With reference to Worzalla et al., Jackman describes experiments in which pemetrexed was administered alongside with folic acid. Further, phase I clinical trials had been reported in which pemetrexed was administered together with folic acid (Hammond et al.). In consideration of the biochemical pathways, Sandoz argued that it had been obvious to add vitamin B12 to said known combination.
Eli Lilly of course disagreed. In Lilly’s view, the skilled person would not have pursued a combination of pemetrexed and folic acid, let alone to add vitamin B12. In real life, phase II clinical trials began with pemetrexed alone, irrespective of the experiments of Hammond et al. Toxicity of pemetrexed had intially been deemed controllable. It was only in the course of phase II clinical trials that the therapy scheme was switched because toxicity was found to be too severe.
A significant point of discussion was whether a skilled person would have been motivated to add vitamin B12 in light of some marker experiments. Niyikiza, the main inventor of the patent in suit, had published a report that described a correlation of pemetrexed toxicity with an unspecific marker (homocysteine), but not with the vitamin B12-specific marker MMA (methlymalonic acid). Accordingly, in Lilly’s view, a skilled person would not have been prompted towards the invention.
EP’825 pertains to a combination of oxycodone hydrochloride (in an amount of 10 to 150g) and naloxone hydrochloride (in an amount of 1 to 50g), in a weight ratio of 2:1.
This combination is an analgesic drug that is available as modified-release tablets under the trade name Targin® by MundiPharma. Oxycodone is an opioid that has pain-relieving effects. Naloxone opposes the effects of opioids but is poorly absorbed when given orally; it stays within the gastrointestinal tract and reduces the local side effects of oxycodone.
Defendant / patentee MundiPharma countersued for infringement.
It was evident from the pleadings that the expert opinion of the judge-rapporteur had held that the patent was invalid for undue extension of subject-matter. Note that the first instance decision at the EPO (11 December 2018) and the Barcelona Commercial Court No. 4 (19 December 2018) came to the same conclusion. While an appeal is still pending at the EPO, the decision in Spain is already final.
The most interesting part of the hearing was actually how the FPC had structured it. Normally, the parties are just given the floor, one after the other, to plead on all relevant aspects of the case. Not so this time. The FPC wanted to hear the parties on a single aspect only, before moving on to the next aspect. Very much like hearings at the EPO are conducted. Apparently, the FPC had also indicated beforehand that a preliminary opinion would be given on each aspect right after the pleadings relating thereto. However, the patentee / defendant objected, and the court thus abstained from doing so.
On a personal note, I don’t see much value in a ‘preliminary’ opinion of the court being issued in the main hearing. Since one cannot take this opinion for granted, one has to effectively ignore it in all the following pleadings, and be prepared for an outcome to the contrary.
But it still is an interesting approach that could well be taken to the next level, in my perception: What about making a break after the pleadings on each aspect for the judges to deliberate and actually decide on that issue, and pronounce the decision right thereafter? That works perfectly fine at the EPO, and a nullity case at the FPC doesn’t differ much.
Lawyers may prove me wrong, but I do not readily see why this shouldn’t be possible in civil proceedings governed by the CPC.
The inventions are all about the capacitive testing of yarns or fabric, wherein the dielectric property of a capacitor arrangement is determined.
It became clear from the pleadings that the defendant’s main request in both cases was that the patent be maintained in amended form only. In my understanding, the expert-opinion of the judge-rapporteur had held that the main request in O2016_010 / EP’250 was allowable, but not in O2016_011 / EP’018.
Novelty has not been an issue anymore, in both cases. Only obviousness, undue extension of subject-matter (interim generalisation) and clarity (of the additional feature) have been discussed. D2 (US 4,843,879; referred to in EP’250, ¶) was apparently agreed to be the closest prior art, and was combined in the assessment of obviousness with either D4 or D11 — both of which have unfortunately not been identified.
For me as a chemist, the highlight of the day was the plaintiff’s emotional release:
That’s not chemistry here; it’s physics!
The formulation of the ‘objective technical problem’ was quite a big deal in the hearing. This is what EP’250 says in ¶ (emphasis added):
It is therefore the aim of the present invention to provide a method for the symmetry adjustment of a device for the capacitive examination of a moving elongated textile test sample which does not have the above disadvantages. The device should be simple, fast, cost-effective and, in particular, automatically adjustable.
Now, can automation be considered as the ‘objective technical problem’? In the plaintiff’s view, the ‘in particular’ is an emphasis of the aim of automation. The defendant disagreed: Automation was an add-on, and the other advantages could well be realised without automation. On the funny side, the following example has been used:
She likes flowers, in particular roses.
Now, imagine that the rose-loving woman visits a florist. Which flowers will she recognise first, amidst all the other flowers? The roses, of course!
Compensation of the ‘necessary expenses’ for the assisting patent attorney pursuant to Art. 3 lit. a and Art. 9(2) CostR-PatC was yet another point of discussion. The plaintiff requested reimbursement of about kCHF 45 for each case and argued, that the defendant triggered the additional costs because the amended claims had only been filed with the rejoinder which then had effectively restarted the whole discussion. I did not get the value in dispute, but the presiding judge indicated that kCHF 45 is about twice as much as the amount that would be awarded for legal respresentation, i.e. ‘according to the tariff’ that is based on the value in dispute.
Now, why is that important?
Since O2012_043, the FPC’s practice is that, as a rule, the ‘necessary expenses’ for the patent attorney may well be within the same order of magnitude of the costs for legal representation. But what about nullity cases? A patent attorney could do that on his/her own, without any legal representative; Art. 29(1) PatCA. Compensation would then be awarded according to the tariff for legal representatives; Art. 9(2) CostR-PatC.
The defendant questioned whether costs incurred for the assisting patent attorney are ‘necessary expenses’ at all, on top of the costs for legal representation according to the tariff, if he/she could have done the whole case on his own.
Use of the technical infrastructure in the court room
It is quite hard for the public to follow the arguments when the representatives just argue with acronyms and references. It’s sometimes frustrating, but I got used to it. But still, one of the basic ideas of a public hearing is to give the public the opportunity to follow the proceedings, isn’t it? But how would you even get a glimpse of what is really at stake when the parties only refer to ‘EP’111’ or ‘D1’ or ‘feature 1da’. That’s not information — it’s just noise.
I was very happy that the recent hearing in case S2018_006 was different (see this Blog here): Whenever someone referred to a specific document, the President put the same on the screen for it to be easily recognisable by the whole audience and the judges; projector and screen are fixedly installed in the ceiling anyway (see yellow arrow in the image below). Much appreciated!
But that’s not only great for the audience; I strongly feel that it is also beneficial for representatives when arguing their case. When referring to a certain paragraph in a specific document in your pleadings, or a technical drawing, you always want to make sure that all the judges are on the same page, right? But how would you know that, with the judges sitting on a podium that even has an elevated front side that makes sure that nobody reveals a hand up there, behind the monitors. Yes, there are fixedly installed monitors (green arrows in the above image).
Now, did they all pick up the document that you are upon to discuss? You never know. So, why not actually use the monitors that each judge has in front of him/her, and the projector/screen for the audience, to make sure that everybody sees what you want to be seen? I could not think of any more powerful way to focus the discussion and thoughts on a specific argument.
Unfortunately, it didn’t work out that way in this hearing even though the defendant suggested it. I hope this was for technical reasons only, and does not indicate a general change of practice again.
The patentee who deletes their patent from the patent register after the filing of a nullity action is liable to pay the procedural costs even if they have not been forewarned before the filing of the action.
The hn highlights in no uncertain terms the risk associated with maintaining patents of doubtful validity in Switzerland: Even in case of a nullity action out of the blue, and even if the patent is then withdrawn immediately, the patentee / defendant still has to bear the procedural costs.
Frankly, this does not come as a complete surprise. The tendency has already been clear since O2015_010, decision of 5 January 2016. The present order again confirms that Swiss law (unlike Germany, cf. § 93 DE-ZPO) does not provide for an obligation to issue a prior warning letter. With reference to the practice of the cantonal court of Zug (A3 2010 58, ‘Geburtsgel’), the order holds that clapping all costs on the defendant is justified if the defendant had
[…] given the impression by his pre-litigation conduct that he had not had the patent cancelled on mere warning.
Noteworthy, the present order holds that this conclusion can already be drawn from the mere existence of a formally valid patent. This is because the patent is cancelled if the renewal fees due are not paid on time (Art. 15(1) lit. b PatA). It would be unreasonable to assume that the patentee would pay the annuities on time but cancel the patent on first demand.
And, in fact, the patentee in the present matter did not respond immediately to the (informal) notification of the action by cancelling the patent, but rather offered the plaintiff a licence. This suggests that even in the case of a pre-litigation request, the patent would not have been cancelled immediately.
The order has been published in highly truncated form only. But still, I am reasonably sure about the patent at stake. Searches in Swissreg give only a single perfect fit, i.e. EP(CH) 1 204 164 B1 of Feller AG; see Swissreg. Annuities had been validly paid until 30 November 2018, but the patent had been withdrawn shortly before that date, with letter of 6 November 2018 (published in Swissreg on 8 November 2018).
The invention of EP’164 apparently is all about a screwless connecting terminal for electrical conductors, with more secure releasability of the conductors. Claim 1 reads as follows:
Device (1) with screwless terminals for connecting electrical conductors, with at least one spring comprising an elastic terminal arm (7) and a brace (2) which encloses it, where a contact tongue (8) of the terminal arm (7) cooperates with a retaining part (5) of the brace (2) so as to maintain a conductor introduced between the contact tongue (8) and the retaining part (5), where the brace (2) leaves the contact tongue (8) at least partially accessible on both sides of the retaining part (5), so that it can be acted upon from outside the brace (2) on both sides of the retaining part (5), characterized in that the brace (2) comprises a base (3) and a lateral wall (4) the upper part of which is bent so as to form the retaining part (5) in such a way that this retaining part (5) is only connected through its longer side with the lateral wall (4), and that the latter comprises at least one recess (11) in the vicinity of the extremity of the contact tongue (8).
All this is more readily understandable with Fig. 1 of EP’164 at hand:
Unfortunately, I failed miserably to track the plaintiff of this case. If someone out there does know more, please let me know.
Salmon Pharma as the defendant in SPC infringement proceedings neither disputed validity of the basic patent EP 0 716 606 B1 of Genzyme Corporation, nor that the subject-matter of the SPC C00716606/01 is actually covered by the basic patent or that the attacked embodiment (sevelamer carbonate) is covered by the SPC. Rather, the defendant (only) alleged that the SPC was invalid because the IPI wrongfully allowed re-establishment of rights (Art. 47 PatA) with respect to the time limit for filing the SPC application under Art. 140f PatA.
The question as to whether the lists of grounds for nullity in Art. 26 and Art. 140k PatA are exhaustive had indeed not yet been explicitly decided by the Supreme Court before. However, the present judgment refers to an indication in 4A_52/2008, ¶2.2, according to which the grounds for invalidity for the certificate are listed in Art. 140k PatA. Furthermore, in application of the Patent Act of 1888, the Federal Supreme Court had already held that the grounds for invalidity of patents were exhaustively listed therein (28 II 309, ¶5). I just love to read such old decisions. Amazingly straight to the point; and the type face is so stylish:
Unsurprisingly, the Supreme Court takes the case-law of the Court of Justice of the European Union (ECJ) on Art. 15 of Regulation (EC) No 469/2009 (or Regulation (EEC) No 1768/92) into account, in view of the legislator’s explicit intent to bring the Swiss rules into line with European law.
However, the Supreme Court could not infer anything from the ECJ’s case-law in support of Salmon’s position. Rather, the Supreme Court confirms the FPC’s reasoning: The ECJ only affirmed the nullity of certificates due to the non-observance of standards which are not explicitly mentioned in Art. 15 of Regulation No 1768/92 by referring to Art. 15 as interpreted in view of Art. 3.
For example, in C-127/00 — Hässle ./. Ratiopharm, the ECJ held that failure to comply with the transitional regime of Art. 19 of Regulation No 1768/92 may result in the certificate being invalid. The requirement under Art. 19 is to be understood as an implicit substantive requirement additional to the conditions laid down in Art. 3 of the Regulation. A certificate which was granted even though an initial marketing authorisation had already been granted before the date laid down in Article 19 of the Regulation is therefore null and void; ¶¶84-92).
Likewise, in C-195/09 — Synthon ./. Merz Pharma, the ECJ held that Art. 3 of Regulation No 1768/92 necessarily referred to a product falling within the scope of that regulation within the meaning of Art. 2 thereof. A certificate granted for a product falling outside the material scope of the Regulation should be considered null and void; ¶56.
It cannot be inferred from these judgments that the list of grounds for nullity in accordance with Art. 15 of the Regulation is not to be understood as exhaustive. On the contrary, the ECJ stated that it could not be inferred from either the wording or the history of Art. 15 of the Regulation that the list of grounds for nullity of the certificate referred to therein was not exhaustive (Synthon, ¶55; Hässle, ¶¶90-91).
The Supreme Court thus held that the lists of grounds for invalidity of both Art. 26 and Art. 140k PatA cannot be supplemented. Consequently, in the context of a patent nullity action or a nullity action relating to an SPC, only the grounds provided for in these provisions may be invoked. The Supreme Court notes in passing that legal certainty demands for this, too.
Angesichts dessen, dass es sich bei der Nichtigkeit eines Patents bzw. Zertifikats um eine schwerwiegende Folge handelt, entspricht dies dem Gebot der Rechtssicherheit.
Next, the Supreme Court assessed whether non-compliance with the deadline for filing the request pursuant to Art. 140f PatA or wrongful reinstatement pursuant to Art. 47 PatA, could be subsumed under a ground for invalidity pursuant to Art. 140k PatA. However, this is neither apparent nor does it result from the relevant case-law of the ECJ.
Finally, the Supreme Court notes that SPCs and patents are granted by order of the IGE (144 III 285, ¶3.2). Nullity under Art. 26 and Art. 140k PatA is not to be mixed up with the administrative contestability or nullity of the dispositions of the IPI on which the grant of a patent or SPC is based. In other words, the fact that the catalogues of grounds for invalidity under the PatA are exhaustive does not mean that these dispositions cannot be contestable or void, which must be assessed according to general principles of administrative law.
Dass die Kataloge der patentrechtlichen Nichtigkeitsgründe abschliessend sind, bedeutet […] nicht, dass diese Verfügungen nicht anfechtbar bzw. nichtig sein können, was nach allgemeinen verwaltungsrechtlichen Grundsätzen zu beurteilen ist.
Interestingly, the Supreme Court explicitly left the question open whether the decision of grant of the SPC (or the earlier decision of 4 April 2005 concerning reinstatement) could have been challenged by the appellant, as the FPC had assumed: Any relevant time limit had expired since long, anyway. On the other hand, the nullity of a decision must be observed by all authorities applying the law at all times (137 I 273, ¶3.1; 133 II 366, ¶¶3.1-3.2; 132 II 342, ¶2.1; 129 I 361, ¶2; each with further references to case-law).
Incorrect administrative acts are usually not null and void, but only contestable; and they become legally effective when not challenged. Invalidity, i.e. absolute ineffectiveness, of an order is only accepted if it is afflicted with a profound and substantial defect, if this serious defect is obvious or at least easily recognisable and if the legal certainty is not seriously jeopardised by the acceptance of invalidity. Deficiencies in content only rarely result in the nullity of an order, in exceptional cases; this requires an extraordinarily serious deficiency. The main grounds for invalidity are the functional and factual lack of competence of an authority and serious procedural irregularities (such as the fact that the person concerned did not have the opportunity to participate in the proceedings). If an order is not legally binding in this sense, any authority dealing with the matter must comply with it at all times and ex officio (see, inter alia, 138_II_501, ¶3.1; 137 I 273, ¶3.1; 136_II_489, ¶3.3).
Salmon had argued that reinstatement was granted ‘arbitrarily and contrary to the clear and decades-long practice’ of the IPI. Again, the Supreme Court left undecided whether the IPI indeed wrongly allowed reinstatement because the alleged misjudgment could not be a defect that leads to the nullity of the decision. In particular, the Supreme Court held that any such deficiency would be neither obvious nor easily recognisable: By definition, reinstatement is a remedy when something went wrong, i.e. in the event that a time limit prescribed by the law was not observed.
Finally, in simple terms, the Supreme Court notes: The IPI had come to the conclusion that the conditions for reinstatement pursuant to Art. 47 PatA were met. The appellant may not share this view, but the administrative act is still not null and void.
Das IGE ist zum Schluss gekommen, dass die Voraussetzungen für die Wiedereinsetzung gemäss Art. 47 PatG gegeben waren. Die Beschwerdeführerin mag diese Einschätzung nicht teilen; ein nichtiger Verwaltungsakt liegt jedoch nicht vor.
The Supreme Court now dismissed Omega’s appeal, i.e. confirmed the FPC’s decision. EP(CH) 1 837 719 B1 is thus finally declared invalid.
The issues dealt with by the Supreme Court in the decision, in brief:
Age of a prior art document
On appeal, Omega has argued that the FPC took an unrealistic piece of prior art into account in the assessment of inventive step. Indeed, the FPC had considered a document that was published already about a century ago, i.e. US 759,914. In view of the evolution of watchmaking since then, Omega considered it unrealistic that such a document was actually considered as a starting point in the assessment of inventive step. Consequently, Omega alleged a violation of Art. 56 EPC.
The Supreme Court did not buy this argument. It is held in no uncertain terms that everything that had been made publicly available — including old documents — forms part of the prior art. One cannot exclude a document from consideration in the assessment of inventive step just because of its age; see ¶3.1.3.
Écarter un document de ceux que consulterait l’homme de métier en raison de son ancienneté reviendrait à priver les brevets ayant dépasé un certain âge de toute valeur dans le cadre de l’analyse de l’effet invenif. Un telle pratique ne saurait être déduite de l’art. 65 CBE.
Reference to some case-law of the Boards of Appeal of the EPO did not help either: The mere age of a document has not been decisive in T 479/00, T 366/89, T 1000/92 and T 334/92. The Supreme Court notes that the obsolescence or outdatedness of a technology had been the key issue in these decisions, which excluded the respective documents from consideration by the skilled person. Apparently, no such case had been established by the appellant in the present matter.
Incompatibility of technical teachings
The balance wheel of US 759,914 has inertia blocks that must have been placed from the inside, as claimed by the patent in suit; see the screw head on the inner side of the felloe in the figures below.
But what is still missing here is the stud (‘plot’) according according to the patent in suit. Omega argued that the skilled person would not have added studs to the balance of US 759,914 in view of the risk to impair the automatic adjustment of its temperature dependent moment of inertia, which is the sole purpose of this invention. However, the Supreme Court holds that this is not in agreement with the fact findings of the FPC, and thus did not consider this argument any further.
And the Supreme Court indeed acknowledges that it would have been desirable if it had done so.
Ainsi, il eût été souhaitable que la juridiction précédente détaille la première étape de l’approche problème-solution comme elle l’a fait pour les autres étapes de son examen.
But still, in view of the FPC’s detailed discussion of how the skilled person had arrived at the invention starting from US 759,914 without inventive merit, it became sufficiently clear how close both inventions actually are, and why US’914 thus is a reasonably chosen closest prior art.
Late filed auxiliary requests / claim limitations
Omega had filed yet another, even more limited auxiliary request (AR3) with the response to the expert opinion of the judge-rapporteur. The FPC had not admitted this request into the proceedings anymore, with reference to O2015_012.
Omega had challenged this on appeal. But while this appeal has been pending, the Supreme Court ruled on the appeal against O2015_012 — and backed the practice of the FPC in this respect; decision 4A_543/2017 of 08 May 2018, see this Blog here. Accordingly, Omega did not succeed with this argument, either.
Following-up on a decision granting interim injunctive relief (reported here), the present decision in main proceedings now confirms this outcome. I have reported about the hearing in main proceedings on this Blog here.
As indicated earlier, the defendant neither disputed validity of the basic patent EP 0 716 606 B1 of Genzyme Corporation, nor that the subject-matter of the SPC C00716606/01 is covered by the basic patent or that the attacked embodiment (sevelamer carbonate) is covered by the SPC. Rather, the defendant (only) alleged that the SPC is invalid because the office wrongfully granted re-establishment of rights (Art. 47 PatA) with respect to the time limit for filing the SPC application under Art. 140f PatA.
The FPC now confirms that the list of grounds for nullity of an SPC as set forth in Art. 140k PatA is exhaustive. The alleged wrongful reinstatement is thus no valid ground of nullity. In particular, the decision refers to the dispatch of the Federal Council when the SPCs had been enacted, i.e. the note that Art. 140k is to define the grounds for nullity:
Artikel 140k Nichtigkeit: Absatz 1: Neben dem Erlöschen bzw. der Sistierung des Zertifikats müssen auch die Gründe festgelegt werden, sie seine Nichtigkeit herbeiführen.
Further, the decision reviews the CJEU’s case law and notes that the grounds for nullity according to Art. 15 of the EU SPC Regulation 469/2009 have never been held to be an open list. Rather, the CJEU only interpreted Art. 3, violation of which is referred to as a ground for nullity in Art. 15 of the EU SPC Regulation.
The FPC notes that the defendant could have appealed the decision of reinstatement (Art. 48 ff APA in the version of 09 December 2003), together with the decision of grant of the SPC – but failed to do so. The decision is thus formally final, and the defendant has to live with it.
If there is a take away message for practitioners in this decision, then it is surely to watch out for fresh grants (not only of SPCs, but also patents, trademarks, designs, etc.), to not miss the 30 days(!) time limit for an appeal; Art. 50(1) APA. This will be the only chance to fight against e.g. a wrongful reinstatement — which is more than you will ever get e.g. at the EPO where there is no such chance at all; but still, you need to act quickly.
Yet another interesting aspect of the decision is the assessment of the value in dispute. The parties heavily disagreed. Plaintiffs had considered it to be CHF 5m, while the defendant only estimated it to be CHF 500k. The FPC had thus to decide on this issue, too; Art. 91(2) CPC. Towards this end, it relied on some interesting rules of thumb:
one third of the turnover of the originator’s product is replaced by the generic within about 2 years;
the profit margin of a generic is 50%.
Based on these rules of thumb, and the plaintiffs’ own statement of an annual turnover in Switzerland of CHF 2.25m p.a., the FPC considered the the value in dispute as CHF 750k, for the roughly two years of protection at stake before the SPC will finally lapse in February 2019.
UPDATE 18 July 2018:
The decision has been appealed to the Supreme Court.