This case has been remitted by the Supreme Court only for a decision on the apportionment of costs. For the factual background of the matter, see this Blog here.
It has been a highly interesting case that brought some clarification about how partial waiver are to be dealt with while FPC proceedings are pending (and which raises a lot of new questions). But costs have been extremely high, in particular in view of a value in dispute of only kCHF 200. Refundable costs for legal representation have been fixed at kCHF 30, according to the tariff. Defendant’s expenses for the assistance of patent attorneys amount to more than kCHF 300. On the other hand, the plaintiff had asserted expenses for the assisting patent attorneys of only kCHF 50, i.e. slightly above the tariff for legal representation, but not out of the ordinary. Accordingly, the FPC reduced the refund for the assistance of patent attorneys to only kCHF 50.
I am just thinking out loud here, and it may well be that I am overlooking something or should have slept it over once more.
But, at least in my perception, the recent case law of the FPC and the Supreme Court has clearly shown that partial waiver pursuant to Art. 24 PatA at the IPI while proceedings at the FPC are pending are a HUGE PAIN from a procedural point of view. See this Blog here, here, and here, just to name a few.
On the other hand, I cannot see any reason why a partial waiver at that point of time should be possible at all. At least, I cannot see an objective reason why it should be possible.
Clearly, as long as it is possible, parties will try to make use of it. A drowning patentee will catch at any straw.
Noteworthy, partial waiver are already prohibited while opposition proceedings at the EPO or at the IPI are pending; Art. 127 PatA and Art. 98a PatO, respectively. Likewise, the EPC also prohibits requests for limitation while opposition proceedings in respect of the same patent are pending; Art. 105a(2) EPC.
On a national level, wouldn’t it make sense to extend this prohibition to pending judicial proceedings where validity of the patent is at stake, either invoked as a plea in defense in infringement proceedings or in nullity proceedings? I would not mind if this was taken up in the currrently ongoing revision of the PatA.
This is actually no revolutionary thought at all. It has already been proposed in the Resolution of Q189 of AIPPI back in 2006:
The Summary Report expands further on this:
Indeed, I cannot see why a patentee should be allowed to defend the patent in two different fora at the same time in parallel, in administrative and judicial proceedings. It only causes trouble, and does not serve legal certainty at all.
Fritz Blumer had once mentioned that a partial waiver may help to simplify civil proceedings because a partial waiver is registeredmore quickly than judicial proceedings could be concluded («Der Teilverzicht kann dazu beitragen, dass das Zivilverfahren vereinfacht wird. Ein Teilverzichtsverfahren ist i.d.R. kürzer als ein Zivilprozess.» Patentgesetz, Schweizer/Zech — Blumer, Art. 24 N 47). Reality nowadays is very different: Partial waiver do not shorten judicial proceedings, but rather prolong them. Not even a partial waiver immediately after receipt of the complaint in nullity proceedings actually shortens judicial proceedings; see e.g. O2018_008 where a partial waiver had been requested early on in nullity proceedings, actually more than two years ago, and no judgment has been handed down yet. My best guess is that the partial waiver in that case caused more trouble than it resolved. Anyone betting against it?
Any comments below would be appreciated. Thank you.
Harcane Sàrl’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 Sàrl 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 ([…]).
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 Sàrl 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.
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:
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.
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?
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
22 Oct 2018
6 Dec 2018
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
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
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.
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 ¶  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 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.
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).