Late stage partial waiver of a patent: No appropriate ways to deal with them?!

Reading time: 6 minutes

Case No. 4A_420/2019 (Supreme Court) | Decision of 13 May 2020 on appeal against O2016_001 | Decision of 27 June 2019

We had reported about the decision of the FPC on this Blog here.

In brief, Harcane had sued Comadur essentially to the effect that CH’572 be declared invalid (based on Art. 26(1) lit. a PatA, not lit. d); or, alternatively, if CH’572 was held valid, that it be transfered to Harcane. See Swissreg for further bibliographic information on CH’572; an automated translation can be found here.

Comadur partially waived CH’572 with the rejoinder; Art. 24(1) lit. c PatA. The FPC had dismissed Harcane’s requests and maintained CH’572 in partially waived form.

Harcane’s appeal has now been dismissed by the Supreme Court.

On a formal issue, I have learned from the Supreme Court decision that deletion of dependent claims 7-10 in the conclusions of the FPC decision (p. 41-42) happened by accident. A rectified decision has apparently been issued ex officio on 13 November 2019 (unpublished):

On appeal, Harcane challenged admissibility of the partial waiver, for various reasons: In first place, the amended claims were not directed to the same invention (contrary to Art. 24(1) lit. c PatA); alternatively, the claimed subject-matter was obvious (contrary to Art. 1(2) PatA) and not applicable in industry (contrary to Art. 1(1) PatA). The Supreme Court held that these objections have apparently not been raised before the FPC — but they could and should have been raised there:

L’argumentation ci-mentionnée est nouvelle et elle ne s’impose pas en raison des motifs du jugement attaqué. La demanderesse ne paraît pas avoir été empêchée de la soulever déjà devant le Tribunal fédéral des brevets, notamment au stade des débats principaux; elle a simplement omis de le faire.

The Supreme Court thus held that the appeal was inadmissible to the extent nullity / allowability of the partial waiver is concerned.

Still, there is an interesting sidenote on late stage partial waiver in general, and the procedural issues they cause. The Supreme Court did not mince matters (loose translation):

The partial waiver obviously introduced a very important change in the subject matter of the dispute. Neither the CPC nor the PatCA explicitly provides for a procedure appropriate to this situation. Usually, however, a partial surrender is suitable to allow a simplification of the proceedings ([…]). At first glance, it would have been appropriate to issue an interim decision in accordance with Art. 237 CPC on the partial waiver requested by the Respondent and then to invite the Claimant to refocus their arguments. This could have been done in the context of Art. 125 CPC, since this provision does not exhaustively list measures to simplify the proceedings ([…]).

Here is the original wording in French:

In my understanding, compliance of a partial waiver with Art. 24(1) lit. c PatA has to be examined ex officio. Accordingly, the Supreme Court notes that the court must examine (“[…] doit […] vérifier […]”) whether the newly formulated claims validly reduce the scope of the patent in suit; ¶3. By the way, the FPC did so (even though very briefly):

Frankly, I am not fully convinced that an interim decision would really simplify the proceedings. On the contrary, I feel it would rather lengthen the proceedings, except for clear cut cases of non-compliance with Art. 24(1) lit. c PatA — which I understand was not the case here, in the FPC’s view; and Harcane did apparently not argue that in first instance proceedings, either.

In my perception, the current practice of the FPC to instead invite the counterparty to comment on new factual allegations in the rejoinder within a time period fixed by the court is fit for purpose. The partial waiver clearly is a new factual allegation, and the counterparty actually is already provided with a possibility to refocus their arguments.

On the other hand, in a situation where the FPC considers that a partical waiver is non-compliant with Art. 24(1) lit. c PatA but both parties remained silent on this issue, the parties could be invited to complete their pleadings on this issue in any event, with or without a subsequent interim decision in this respect; Art. 56 CPC.

A further aspect of the decision relates to the value in dispute. The parties had proposed widely differing values, i.e. kCHF 80 and kCHF 660, respectively. The FPC had fixed the value in dispute to kCHF 500, in view of the hard fight of the parties before the various courts and the considerable economic value of the subject-matter of the patent. The Supreme Court held that the FPC has some discretion in fixing the value in dispute, and that there was no apparent abuse of this discretion. In particular the Supreme Court held (¶5, loose translation):

Contrary to the plaintiff’s opinion, the outcome of the litigation cannot influence the estimate of the value in dispute and it is therefore irrelevant whether the patent will eventually be deemed invalid.

With respect to the cost issue, the appeal was thus held admissible, but ill-founded.

Reported by Martin WILMING

BIBLIOGRAPHY

Case No. 4A_420/2019 (Supreme Court) | Decision of 13 May 2020 on appeal against O2016_001 | Decision of 27 June 2019

Harcane Sàrl (Appellant / Plaintiff)
./.
Comadur SA (Respondent / Defendant)

Panel of Judges:

    • Dr. Christina KISS
      • Dr. Martha NIQUILLE
      • Marie-Chantal MAY CANELLAS

Court Clerk:

    • Antoine THÉLIN

Representative(s) of Plaintiff:

    • Jean-Claude SCHWEIZER (SLB)

Representative(s) of Defendant:

DECISION OF THE SUPREME COURT (II)
→ appeal against FPC decision dismissed
Case no.: 4A_420/2019
Decision of: 13 May 2020

DECISION OF THE FPC
→ patent maintained / partially surrendered; plaintiff’s claims dismissed
Case no.: O2016_001
Decision of: 27 June 2019

DECISION OF THE SUPREME COURT (I)
in a related matter, referred to in ¶13 of the FPC decision and Section B of the later Supreme Court decision 4A_420/2019
Case nos.: 4A_584/2017
4A_590/2017
Decision of: 9 January 2019

PATENT IN SUIT

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Fulvestrant, again

Reading time: 4 minutes

Case No. O2017_014 | Decision of 10 March 2020 | ‘Fulvestrant use’

When you have read the report about the main hearing of 20 January 2020 on this Blog here, you probably won’t be overly surprised by the outcome: AZ’s complaint has been dismissed.

In brief, AstraZeneca asserted that EP(CH) 1 272 195 (see EPO Register and Swissreg for further information) is infringed by Sandoz’s generic version of AZ’s Faslodex®, i.e. Fulvestrant Sandoz 250 mg/5ml (Swissmedic approval no. 56778). The patent has been partially waived after closure of the file, in accordance with Art. 24 PatA (newly added features marked-up):

Additional features in claim 1, by way of a partial waiver

Here are my take-away messages from the decision:

Expert opinion

The decision clarifies in no uncertain terms the nature of the judge-rapporteur’s expert opinion (EO):

... is a legal assessment of the facts as pleaded before closure of the file.

Loose translation to English:

The [EO] is established after closure of the file, and it is the judge-rapporteur’s legal assessment of the facts put forward by the parties. It provides a contribution to the discussion for the purpose of rendering a judgment. The [EO] can therefore only deal with questions of law, but not with questions of fact. Accordingly, [an EO] cannot entitle the submission of new facts from the outset. Certainly, a party cannot use [the EO] as a trigger to remedy incomplete factual allegations.

Admissibility of partial waiver

Nosy? Me too. But it’s not yet time. Admissibility of the partial waiver after closure of the file is left undecided, in view of the appeal in case O2016_012 that is currently still pending at the Supreme Court. Irrespective of the answer to this highly interesting question, the complaint had to be dismissed for other reasons; see below.

Belated and insufficient factual allegations re infringement of the partially waived patent

A partial waiver after closure of the file per se cannot carry the day.

The decision holds that AZ’s pleadings re infringement of the partially waived patent — for the first time at the hearing — were belated and insufficiently substantiated:

... and insufficiently substantiated pleadings re infringement of the partially waived patent.

Accordingly, the complaint was dismissed.

How to (formally correctly) introduce a partially waived patent into the proceedings

AZ had submitted the partially waived patent to the court with letter of 8 August 2019, and Sandoz had been given the opportunity to comment thereon. The decision holds:

... and how it had been introduced into the proceedings.

Loose translation to English:

In this respect, it is not clear to the Court what the defendant means when asserting that the partially waived patent has not yet been asserted or formally correctly introduced into the proceedings.

Frankly, I am confused. My understanding from what had been pleaded at the hearing was that AZ had indeed submitted the partially waived patent — but merely as an annex, i.e. without asserting the substance of the partially waived patent in the submission itself. That could have been an interesting issue, somewhat similar to the situation that gave rise to the order of 3 May 2012 in O2012_022; see ¶¶ 10.4 et seqq. But, maybe, I just got it wrong. Anyway, that’s not the decisive issue here.

UPDATE 27 May 2020:

According to an update on the FPC’s website earlier today, the decision has not been appealed / is final.

Reported by Martin WILMING

BIBLIOGRAPHY

Case No. O2017_014 | Decision of 10 March 2020 | ‘Fulvestrant use’

AstraZeneca AB
./.
Sandoz Pharmaceuticals AG

Panel of Judges:

    • Prof. Dr. Daniel KRAUS
    • Prisca VON BALLMOOS
    • Marco ZARDI

Judge-rapporteur:

    • Prisca VON BALLMOOS

Court Clerk:

    • Susanne ANDERHALDEN

Representative(s) of Plaintiff:

    • Dr. Michael RITSCHER (MLL)
    • Dr. Thorsten BAUSCH (Hoffmann Eitle), assisting in patent matters

Representative(s) of Defendant / Patentee:

DECISION IN FULL

PATENT IN SUIT

EP 195 as granted by the EPO:

 

EP 195 after partial waiver in Switzerland:

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Fulvestrant, the never-ending story(?)

Reading time: 9 minutes

Case No. O2017_014 | Hearing of 20 January 2020

Fulvestrant, a breast cancer medication of the class of antiestrogens, is probably the most frequently appearing bone of contention at the FPC to date.

Fulvestrant (aka ICI 182,780), the active ingredient of AZ's Faslodex®
Fulvestrant (aka ICI 182,780), the active ingredient of AZ’s Faslodex®

Fulvestrant per se is generic since about 2004 (EP 138 504 B1). However, patents relating to certain second-medical uses of fulvestrant are still in force today.

The St Gall’ish part of the story
AZ logo

AstraZeneca asserts that EP(CH) 1 272 195 (see EPO Register and Swissreg for further information) is infringed by Sandoz’s generic version of AZ’s Faslodex®, i.e. Fulvestrant Sandoz 250 mg/5ml (Swissmedic approval no. 56778).

KSSG logo

The FPC’s seat is in St. Gall — you knew this. But this time, even the inventor is based in St. Gall: Prof. Dr. Beat THÜRLIMANN, chief physician at the breast center of the St. Gall cantonal hospital. A very St. Gall’ish part of the complex portfolio of fulvestrant patents and litigation in Switzerland and beyond, isn’t it?

Sandoz logo

Note that Sandoz’s generic has been on the market in Switzerland ever since 26 July 2016, despite various attempts of AZ to stop this; see this Blog here (PI proceedings, based on EP 2 266 573 B1) and here (PI proceedings, based on EP 1 250 138 B2). Yet further proceedings between AZ and Sandoz are currently co-pending at the FPC (O2018_010), with AZ asserting infringement of EP 2 266 573 B1 in main proceedings. I understood from the pleadings that AZ’s reply (incl. the first counter to Sandoz’s nullity plea in defense) was due only after this hearing, i.e. on 23 January 2020.

A quick recap of the procedural history

It all started off with a pretty standard exchange of briefs in infringement proceedings (AZ’s submissions in red; Sandoz’s submissions in blue; court interventions in yellow):

10 Jul 2017 Stmt of claim
11 Oct 2017 Stmt of defense w plea for nullity
8 Dec 2017 Partial reply re validity
4 Sep 2018 Preparatory hearing
22 Oct 2018 Full reply
6 Dec 2018 Rejoinder
11 Dec 2018 Closure of the file
18 Jan 2019 Comments on rejoinder
12 Mar 2019 Expert opinion of judge-rapporteur
5 Apr 2019 Summons for main hearing (28 Aug 2019)
10 May 2019 Cmt on expert opinion Cmt on expert opinion

The judge-rapporteur’s expert opinion had been unfavorable for AZ: In the judge-rapporteur’s view, EP 195 as granted was neither valid nor infringed.

I understood from the pleadings that AZ had apparently asserted EP 195 as granted only, without any ‘verbal limitation’ inter partes, neither as a main request nor as an auxiliary request. Later, proceedings ran off the rails (as defendant put it):

29 Jul 2019 Advance notice, patent will be partially waived
8 Aug 2019 Notice that partial waiver has been filed
12 Aug 2019 Main hearing cancelled; defendant to comment on partially waived patent
11 Sep 2019 Request that deadline be lifted
13 Sep 2019 Setting deadline for defendant
11 Oct 2019 Comments on partially waived patent
15 Oct 2019 Publication of the partially waived patent

I understood from the pleadings that the actual subject-matter of the partially waived patent had never been pleaded by AZ, neither with respect to validity nor infringement. Apparently, it was only at the main hearing that AZ did so — partially due to the fact that the FPC had ordered AZ to respond to defendant’s submission of 11 October 2019 at the main hearing.

the leftovers of the patent in suit after the partial waiver

Claim 1 of EP 195 as granted and maintained in EPO opposition/appeal proceedings was quite concise, a straight-forward second medical use claim:

Use of fulvestrant in the preparation of a medicament for the treatment of a patient with breast cancer who previously has been treated with an aromatase inhibitor and tamoxifen and has failed with such previous treatment.

The partial waiver in accordance with Art. 24 PatA added quite a lot to this (marked-up):

Additional features in claim 1, by way of a partial waiver
The pleadings in a nutshell

AZ argued that validity of the partially waived patent had essentially already been decided by the FPC, in proceedings O2018_009 with decision of 27 May 2019 (in line with T 1680/17 of an EPO Board of Appeal), with only the target patient group being now even more more precisely defined. AZ emphasized that this was the trigger for the partial waiver that had been filed only shortly therafter, on 30 July 2019; not defendant’s nullity plea in defense and/or the judge-rapporteur’s expert opinion.

It was also referred to decision X ZR 59/17 of the German Supreme Court, revoking EP 1 250 138 B2 within the same patent family. In AZ’s view, this was due to an incorrect formulation of the technical problem, disregarding the problem-solution approach; and with the threshold for a reasonable expectation of success being set much too low.

Both parties disagreed on what ‘failure with a treatment’ means; see ¶ [0018] of EP 195 for a definition. In AZ’s view, this covers both adjuvant and palliative therapy. Defendant pointed out that switching therapy does not necessarily mean that the first therapy had failed. Rather, therapy is frequently switched before resistance occurs; thus, therapy has not yet failed.

Defendant pointed out that no substantiated assertions had been on file until the day before the hearing concerning the actual scope of the partially waived patent, as well as validity and infringement thereof.

Further, admissibility of the partial waiver after formal closure of the file was a big issue. Note that this has also been at stake in the recent decision O2016_012, where the panel of judges had been split 3:2 in favor of admissibility. However, defendant noted that the factual setup was very different. Contrary to the present matter, the partial waiver in O2016_012 did not require any new pleadings or assertions:

In O2016_012, the partially waived patent integrated smoothly into the proceedings as pleaded beforhand. This was of great importance ('von ganz wesentlicher Bedeutung') for admissiblity in that case.

In any event, defendant apparently considers the partial waiver after formal closure of the file as an improper novum (‘gewillkürtes Novum’; ‘Potestativ-Novum’), contrary to what had been held in O2016_012. Defendant referred to a decision of the Cantonal Court Zug in this respect, i.e. ES 2018 449. This decision is totally unrelated to patents. But it has been held that a document that has only been created after closure of the file cannot be admitted anymore into the proceedings when the respective assertion of the counterparty had already been made in the statement of defense, i.e. when the document could well have been created and submitted before closure of the file; see ¶2.7:

A document that had only been created after closure of the file, even though the respective assertion that the document was meant to counter had already been made in the statement of defense, is belated.
UPDATE 30 January 2020:

I have obtained a copy of this decision only yesterday. Accordingly, this post has been updated today with some more information about the actual content of the decision.

Finally, defendant placed the procedural request that a deadline be set for a written response to AZ’s validity arguments presented at the hearing, should the court admit them into the proceedings.

Please find some quick notes from the hearing below this post.

A hot potato?

The presiding judge made an opening remark that ‘contrary to what defendant  apparently assumed the court has not yet decided on the admissiblity of the partial waiver after closure of the file.’ That was not much of a surprise. However, the presiding judge further noted that the court is not inclined to decide on that issue while the appeal in case O2016_012 is still pending.

I was flabbergasted. I understood from the later pleadings that admissibility of the partial waiver after formal closure of the file might not necessarily be the decisive issue in this case. But let’s assume it was: Is an informal stay of proceedings appropriate? I have my doubts. It might easily take the Supreme Court six months or more to decide on that issue, which is (much) longer than what it normally takes from the main hearing to the decision being handed down.

Meanwhile in Germany

A PI request of AZ based on EP 195 has been rejected by the Regional Court Dusseldorf (4C O 10/18, 5 July 2018). Likewise, AZ’s appeal failed at the Higher Regional Court (2 U 28/18, 9 January 2018). In a nutshell, AZ could not establish that the treatment regime as claimed had actually been used to an extent that could not remain unnoticed by the defendant (if it had been used at all in more recent times).

Nullity proceedings re EP 195 are pending at the FPC since 14 August 2017, with case no. 3Ni32/17(EP).

Reported by Martin WILMING

BIBLIOGRAPHY

Case No. O2017_014 | Hearing of 20 January 2020

AstraZeneca AB
./.
Sandoz Pharmaceuticals AG

Panel of Judges:

    • Prof. Dr. Daniel KRAUS
    • Prisca VON BALLMOOS
    • Marco ZARDI

Judge-rapporteur:

    • Prisca VON BALLMOOS

Court Clerk:

    • Susanne ANDERHALDEN

Representative(s) of Plaintiff:

    • Dr. Michael RITSCHER (MLL)
    • Dr. Kilian SCHÄRLI (MLL)
    • Andreas BRAUN (MLL)
    • Dr. Ulrike CIESLA (MLL), assisting in patent matters

Representative(s) of Defendant / Patentee:

    • Dr. Andri HESS (Homburger)
    • Julian SCHWALLER (Homburger)
    • Dr. Elisabeth GREINER (df-mp), assisting in patent matters

ANNOUNCEMENT

PATENT IN SUIT

EP 195 as granted by the EPO:

 

EP 195 after partial waiver in Switzerland:

T 0108/09 – 3.3.02

Maintenance of EP 195 as granted by a BoA of the EPO:

SOME LIVE NOTES FROM THE HEARING

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