Infringement proceedings re injector pens derailed, Supreme Court holds that appearence of bias has to be re-assessed

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Case No. 4A_243/2020 (Supreme Court) | Decision of 5 November 2020 on appeal against O2017_022 | Order of 8 April 2020 (unpublished)

The defendant / respondent in this matter had been sued for infringement of three patents by certain injector pens back in November 2017 at the FPC. The case number is O2017_022; nothing has surfaced about this case by now. The panel of judges is Dr. Christoph Gasser (presiding judge), Dr. Tobias Bremi (judge-rapporteur) and Dr. Kurt Sutter. Judge Bremi’s expert opinion was sent to the parties for comment on 7 January 2020. In the expert opinion, judge Bremi inter alia held that one of the three patents was valid and infringed. 

Less than a week later, on 13 January 2020, yet another party sued the very same defendant for infringement of its patent by the very same injector pens which are at stake in O2017_022. This second case is referred to as O2020_001. From the details reveiled in the Supreme Court decision, it is clear that the plaintiff in the second proceedings is represented by MLL.

Nothing out of the ordinary this far. But the defendant then requested that judge-rapporteur Bremi recuse himself from the first proceedings O2017_022. The defendant argued that judge Bremi’s employer, the patent attorney firm I&P of which he is a partner, was registered as the representative of patents of the plaintiff in the second proceedings O2020_001 before the Swiss IPI, including the patent-in-suit in that case. The second action O2020_001 was directed against the same injector pens of the defendant as in O2017_022, which was why the outcome in O2017_022 had considerable prejudicial significance for O2020_001.

You cannot make this up. Here is the factual setup again, in short:

Factual setup

With decision of 8 April 2020, the Administrative Commission (AC) of the FPC dismissed the request for recusal. In sum, the AC held that a part-time judge who is an employee of a firm that only performs administrative support tasks for a third party who brings an action on a different legal basis against the defendant cannot objectively give rise to any mistrust in the impartiality of the part-time judge in proceedings in which the employee is acting as a part-time judge.

The Supreme Court did not agree. At least not for now, and not so easy. Rather, it depends. But the facts have not (yet) been sufficiently established by the FPC’s AC for the Supreme Court to decide.

But first things first. Let’s have a closer look at some of the extensive case law that is referred to by the Supreme Court about cases in which a part-time judge (or arbitrator) was particularly connected to a litigant because of his activity in a law firm. If you are only interested in the case-specific issues, feel free to jump here.

Case law review

In general terms, the Supreme Court held that the guarantee of a constitutional judge applies equally to full-time and part-time judges. The fact that the use of part-time judges increases the likelihood of professional relations with one of the parties to the proceedings compared to full-time judges who do not pursue any other gainful activity does not justify a less stringent application of the constitutional requirements (139 III 433, ¶ 2.1.3).

In the interest of the credibility of the FPC with only two full-time judges and a vast majority of part-time judges particular attention must be paid to judicial independence. Still, the legislator deliberately set up a specialised court for patent law and staffed it with specialised judges whose main profession is also related to patent law. The Supreme Court held that this must also be taken into account.

According to settled case law of the Supreme Court, a lawyer acting as a judge appears to be biased if there is an outstanding mandate with a party or if he has acted as a lawyer for a party several times in the sense that there is a kind of permanent relationship between them. This applies irrespective of whether the mandate has a factual connection with the subject matter of the dispute or not (140 III 221, ¶ 4.3.1; 139 III 433, ¶ 2.1.4; 138 I 406, ¶ 5.3; 135 I 14, ¶ 4.1). In such a situation, the lawyer acting as judge may be tempted, even if unconsciously, not to want to alienate his client by making a decision that is unfavourable to him (135 I 14, ¶ 4.3).

Furthermore, the Supreme Court repeatedly held that a lawyer acting as judge or arbitrator does not only appear to be biased if he represents or has represented one of the litigants in another proceeding shortly before, but also if such a representation relationship exists or has existed with the opposing party of one of the litigants in the other proceeding (139 III 433 , ¶ 2.1.4;  138 I 406, ¶ 5.3; 135 I 14, ¶4.1-4.3; 139 I 121, ¶ 5.1; 139 III 120, ¶ 3.2.1). There is an appearance of bias insofar as the litigant could objectively fear that the judge might not want to rule in his favour because he was acting for the opposing party of his client in the other proceedings. A litigant often transfers his or her negative feelings towards the opposing party to the latter’s legal representative, as the latter supports the opposing party in the dispute. For many parties, the lawyer of the opposing party is considered as much an adversary as the opposing party itself, all the more so as he is perceived as the actual strategist. It is therefore understandable that a party does not expect a judge who is fighting against it in other proceedings as a representative of the opposing party and who — from its point of view — will possibly deprive it of its rights or has deprived it of its rights, to suddenly face it with complete impartiality (138 I 406, ¶ 5.3; 135 I 14, ¶ 4.3). This applied irrespective of whether or not the lawyer’s mandate had a factual connection with the subject matter of the dispute (138 I 406, ¶ 5.4.1). In such cases, the Supreme Court regularly assumes a prima facie case of bias irrespective of the further concrete circumstances (139 III 433, ¶ 2.1.4; 138 I 406, ¶ 5.4.1). In particular, in the case of an ongoing relationship with a party to the proceedings, it cannot matter whether the mandate exercised is considered important or less important by the party or the lawyer (139 III 433, ¶ 2.1.4).

Further, the Supreme Court had held that an appearance of bias also arises from the fact that it is not the part-time judge himself, but another lawyer in his firm who has a mandate with a litigant or who has had such a mandate several times before or in the sense of a permanent relationship. The client expects loyalty not only from his contact person within the law firm, but from the entire firm. The uniform approach is also in line with the law governing the legal profession, which treats all lawyers in a law firm as one lawyer with regard to a conflict of interest (140 III 221, ¶ 4.3.2; 139 III 433, ¶ 2.1.5).

The Supreme Court has also held that it is inadmissible for a lawyer to participate as a judge in a case that may have significant prejudicial significance for a similar proceeding in which he is representing a third party as a lawyer (139 III 433, ¶ 2.1.6). Thus, there would be a prima facie case of bias if a part-time judge was appointed to rule in a case in which the same legal questions arose as in another pending case in which he or she was acting as counsel (128 V 82, ¶¶ 2a and 3d; 124 I 121, ¶ 3). With reference to these two decisions, the Federal Supreme Court later considered that the question of recusal could arise if a judge represented a third party in parallel proceedings who pursued the same interests as one of the parties to the proceedings. This was to avoid the judge deciding on a dispute in a way that could improve his or her position as a lawyer in the parallel proceedings (133 I 1, ¶ 6.4.3).

Even purely administrative activities of a lawyer acting as a part-time judge or of his law firm are not per se unobjectionable. But not every relationship of any kind of an economic, professional or personal nature in itself gives rise to the appearance of bias (125 II 541, ¶ 4b). For such a relationship to give rise to concerns of bias, objective circumstances must indicate a certain intensity of the relationship (9C_257/2016, ¶ 4.2.1; 8C_467/2014, ¶ 4; 4A_256/2010 ¶ 2.4). Whether a relationship reaches this degree of intensity is assessed on the basis of the specific circumstances of the individual case. See, for example, 4A_256/2010 ¶ 2.5 regarding a patent application. If the objected relationship is not with a party to the proceedings but with its opposing party or a third party in another proceeding, the effect of the two proceedings on each other must also be taken into account when deciding on the recusal.

The case at hand

In its internal Guidelines on Independence, the FPC does not equate purely administrative activities and the provision of an address for service with (patent) attorney activities. However, the FPC also does not assume that such activities are unproblematic with regard to the appearance of bias in every case. According to Art. 4 lit. f of the Guidelines, a judge shall recuse if he (or the company for which he works) is or was acting as addressee for service of the patent-in-suit. According to Art. 4 lit. g, the judge shall also recuse if he (or his company) is or has been directly mandated by the party to the dispute as addressee for service and to maintain the validity of its IP rights within the year or on a regular basis.

Accordingly, judge Bremi may not participate as a judge in the second case O2020_001 due to the administrative relationship of I&P with the plaintiff in the second case. The Supreme Court holds that on the other hand, according to the Guidelines, there is no bias («besteht keine Befangenheit») on the part of judge Bremi for the first patent infringement case, as his law firm was not mandated by a «party to the dispute directly» as an addressee for service and to maintain its IP rights. The firm was rather mandated by a third party, namely the plaintiff in the second case O2020_001, which is not a party to the first case O2017_022.

I respectfully disagree with the Supreme Court in this respect. Art. 4 of the Guidelines is an open list of grounds for recusal («insbesondere»). Accordingly, it cannot be said that the Guidelines hold that there is no bias in the situation at hand. Anyway, the Supreme Court rightly emphasises that the Guidelines can help judges to better assess their potential bias in the specific case. But what ultimatley counts is the law itself (139 III 433, ¶ 2.2). In particular, the Guidelines must not lead to the conclusion that a judge can in no way be biased by administrative work, apart from the specific situations governed by Art. 4 lit. f and g. Whether a reason for recusal exists has to be assessed according to Art. 47 CPC (to which the Guidelines refer to in the general clause of Art. 3), taking into account the principles flowing from Art. 30(1) FC (to which the Guidelines do not explicitly refer to), according to the specific circumstances of the individual case. Accordingly, even in the case of purely administrative activities, a concrete and case-specific assessment must be carried out to determine whether there is an appearance of bias.

Now, does the relationship between I&P and the plaintiff in the second patent infringement proceedings reach such an intensity under the specific circumstances for judge Bremi to appear to be biased in the first patent infringement proceeding?

To answer this question, the Supreme Court held that two aspects need to looked at more closely:

    1. The extent of the relationship between I&P and the plaintiff in the second proceedings; and
    2. the effect of the outcome of the first proceedings on the second proceedings.

As to the first aspect, i.e. the relationship between I&P and the plaintiff in the second proceedings, the contested decision of the FPC’s AC only stated that I&P’s activities were limited to purely administrative representation at the IPI. The appellant argued that it is not clear from the contested decision how the FPC could even know this. Indeed, the Supreme Court held that the FPC merely stated that I&P’s activities for the plaintiff in the second proceedings were limited to purely administrative representation. But there was no evidence for this statement, which the appellant rightly complains about. It was not baseless from the outset when the appeallant argued that in a business relationship lasting more than 15 years, it cannot be assumed without further clarification that I&P does not represent any interests of that party other than receiving mail from the IPI. Accordingly, the Supreme Court held that the FPC’s AC should have clarified the nature, scope and duration of the specific business relationship between I&P and the plaintiff in the second proceedings and, in particular, the FPC should have verified whether I&P did not provide the plaintiff in the second proceedings with more extensive (patent) legal advice, as the appellant suspects.

As to the second aspect, i.e. the effect of the first proceedings on the second one, the FPC only stated that in the second proceedings an unnamed third party asserts infringement of a not specifically identified patent by the same injector pens of the appellant. Further details are missing; not even the name of the plaintiff in the second proceedings is known (what a pity, indeed). Further, it is not known whether the two actions are directed against the same embodiment of the (type of) injector pen. Nor is it known whether the plaintiff in the second action is a competitor of the appellant who could benefit from the first action being upheld.

The Supreme Court acknowledged that due to the different patents-in-suit, the second proceedings against the appellant presumably raise different technical and legal questions than the first proceedings. Still, there may be delicate interferences. For instance, according to the appellant’s submissions, which have yet to be established in evidence by the FPC, the plaintiff in the second proceedings could pursue the same interests as the plaintiff respondent in the first proceedings, namely a ban on the manufacture and distribution of the attacked injector pens. Accordingly, such a ban in the first proceedings would also serve the plaintiff in the second proceedings. Further, the Supreme Court did note that, if the respondent’s action were to be upheld, the appellant could well come up with a workaround that lies outside the scope of protection of the patents asserted in proceedings O2017_022. However the Supreme Court held that, as the appellant rightly argued, it is generally known that medical products cannot be adapted and brought to market overnight, but are regulated products, so that the plaintiff in the second proceedings may well have an interest in the respondent’s complaint to succeed.

In this factual situation, the FPC’s AC should have clarified the concrete effects of the two pending patent infringement proceedings for the question of judge Bremi’s recusal in the first proceedings. Based solely on the factual elements established in the contested decision, it was not possible for the Supreme Court to conclusively examine the concrete effects of the first proceedings O2017_022 on the second proceedings O2020_001. The FPC’s AC has thus not established all the relevant facts, which prevented the Supreme Court from correctly applying the rules on recusal.

A contingent reasoning of the FPC’s Administrative Commission did not convince the Supreme Court, either. The FPC had concluded that even if one were to assume that the facts of the case objectively gave rise to the appearance of bias, the appellant could not invoke it in view of a violation of the requirement to act in good faith in the proceedings (Art. 52 CPC), because the appellant had created the ground for recusal itself with the request for recusal and the facts and arguments contained therein. In the FPC’s view, as judge Bremi was not involved in the second proceedings O2020_001, he had not been aware of anything from these proceedings apart from the names of the parties involved. His employer I&P was not involved in the second proceedings. In particular, judge Bremi had not been aware until the appellant’s request for recusal that the second proceedings were directed against the same injector pens as in O2017_022. The FPC had held that it was against the requirement of acting in good faith to provide a judge with the very knowledge that allegedly made him appear biased: If the appellant had not filed a request to recuse herself, no appearance of bias could have arisen because judge Bremi would simply not have known that his employer (allegedly) had an interest in him ruling against the complainant in proceedings O2017_022. The complainant could therefore not invoke the ground for recusal even if it existed.

The Supreme Court held that this line of reasoning is mistaken. Since it is not important for the appearance of bias of a judge whether he is actually biased, it cannot be decisive for the assessment of the reason for recusal whether the judge had already been aware at the time of filing the request for recusal request whether a certain reason for recusal existed, or whether a party first made him aware of such a reason. The Supreme Court notes that, ultimately, the FPC’s contingent reasoning would mean that wherever a judge is not (yet) aware of an existing ground for recusal, no request for recusal could be made because the party would otherwise be violating the good faith principle by making the judge aware of the ground for recusal. This would contravene the very essence of the rules on recusal.

Accordingly, the FPC’s contingent reasoning did not hold, either.

In sum, the Federal Supreme Court could not finally assess whether judge Bremi is biased in the first patent infringement proceedings O2017_022 because the facts have not yet been sufficiently established. The case has accordingly been remitted to the FPC to completely establish the facts and to render a new decision.

Full stop!

That’s a harsh stop to O2017_022 at a very late stage of the proceedings, well after the expert opinion of judge-rapporteur Bremi had been established and most likely only shortly before the main hearing. It will be interesting to see how the FPC deals with the remittal. In particular, I wonder how to properly and openly assess the potential cross-contamination between the two proceedings, while at the same time not to disclose otherwise non-public information of both plaintiffs to each other. They are most likely competitors, and would not normally know about particulars of the respective other proceedings.

Now, who are the parties?

I feel ashamed but I do not feel confident enough (yet) to come up with an educated guess here. But, clearly, there is only a limited number of high-stake companies that could be involved:

Injector pen key market players (see here)

Any one of these companies being sued by two others for infringement of their respective patent(s) by one and the same injector pen will be an interesting setup from a market perspective. We shall see.

Reported by Martin WILMING

BIBLIOGRAPHY

Case No. 4A_243/2020 (Supreme Court) | Decision of 5 November 2020 on appeal against O2017_022 | Order of 8 April 2020 (unpublished)

n/a (Appellant / Defendant)
./.
n/a (Respondent / Plaintiff)

Panel of Judges:

    • Dr. Christina KISS
      • Dr. Fabienne HOHL
      • Dr. Martha NIQUILLE
      • Dr. Yves RÜEDI
      • Marie-Chantal MAY-CANELLAS

Court Clerk:

    • Daniel BRUGGER

Representative(s) of Respondent / Plaintiff:

    • Dr. Andri HESS (Homburger)
    • Dr. Roman BAECHLER (Homburger)

Representative(s) of Appellant / Defendant:

    • Dr. Christian HILTI (Rentsch)
    • Dr. Demian STAUBER (Rentsch)

SUPREME COURT DECISION
Appeal against the order of the FPC’s Administrative Commission of 8 April 2020 (unpublished) in case O2017_022, rejecting the request for recusal of judge-rapporteuer Tobias Bremi
Case no.: 4A_243/2020
Decision of: 5 November 2020

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Friendship on Facebook is no ground for recusal of a judge per se

Supreme Court
Case No. 5A_701/2017 | Decision of 14 May 2018 | ‘Friends on Facebook’

This decision of the Supeme Court does not concern a patent case, but it clarifies what might constitute a ground for recusal of a judge in general.

Thumbs up?

Judges are not living in an ivory tower. They even use Facebook and have ‘friends’ there. Now, is it a ground for recusal if a party is a Facebook ‘friend’ of a judge?

Well, the answer is a clear not necessarily, but maybe.

The mere fact that a judge is a Facebook ‘friend’ of a party to the proceedings does not in itself constitute a ground for recusal. Without additional information, it cannot be concluded that there indeed is a friendly relationship that could give rise to the appearance of a judge being biased.

Every person is entitled to have his case decided by an impartial, unbiased and impartial judge. It is not decisive whether or not a judge is actually biased. Even the appearance of bias or the danger of bias is to be avoided. In the case of friendly connections, this requires a certain closeness that goes beyond a mere acquaintance or a ‘dozy relationship’.

Bei freundschaftlichen Verbindungen ist dazu eine gewisse Nähe erforderlich, die über eine blosse Bekanntschaft oder ein ‘Duzverhältnis’ hinausgeht. Eine ‘Freundschaft’ auf Facebook weist noch nicht auf freundschaftliche Beziehungen im traditionellen Sinn hin.

Who’s out there?

The decision holds that a ‘friendship’ on Facebook does not yet indicate friendly relationships in the traditional sense. Mutual affection or sympathy is not necessary to establish a ‘Facebook friendship’. ‘Facebook friends’ may well include people with whom one maintains regular contact in real life; but they can also include people one would only qualify as a simple acquaintance or as a person with whom one would only have a common interest in a social network on a particular subject.

Recent studies have also shown that a number of more than 150 ‘Facebook friends’ typically include people with whom one does not have any contact or one does not even know. Without additional information, one cannot conclude from  a ‘Facebook friendship’ that a friendly relationship actually exists which could lead to the appearance of bias.

In short:
A ‘Facebook friend’ is not necessarily a friend.

Reported by Martin WILMING

P.S.:
The FPC’s Guidelines on Independence can be found here. Grounds for recusal of judges are governed by Art. 3-5.

DECISION IN FULL

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Address for service is no ground for recusal (requested too late anyhow)

Case No. O2014_013 ¦ Order of the Adminstrative Board of Judges of 09 June 2016 ¦ “Ausstandsbegehren”


HEADNOTE

Art. 49 CPC; forfeiture of the right to request recusal; substantiation of internal constellation of a group of companies; acting as address of service for the IPI is not a ground of recusal.

‘As soon as it has become aware’ has to be interpreted strictly; in no case the deadline can be longer than 10 days (r. 5, 6).

If the recusal is reasoned based on the relationship between companies of a group of companies, this relationship must be substantiated in detail (r. 7).

The fact that the judge or the judge’s law firm is acting as a purely administrative address of service for the Swiss Federal Institute of Intellectual Property (IPI) is no ground of recusal (r. 7).


I have already reported on the interim measures in this matter on this Blog here and here. Now, we get a glimpse of what is going on in ordinary proceedings between Gilead Pharmasset LLC and AbbVie, Inc. Actually, the interim assessment of the reporting judge is awaited as the next procedural step.

The parties had been informed already on 05 March 2015 that Dr. Tobias BREMI had been appointed as reporting judge. With notification of 16 March 2016, the parties have been informed that the reporting judge will now establish his interim assessment. Only in reply to this notification, the defendant has informed the court that judge BREMI’s firm, Isler & Pedrazzini AG, represents the Swiss parts of the patents EP 2 079 726 (Gilead Connecticut, Inc.), EP 2 297 105 (Gilead Connecticut, Inc. and Genentech, Inc.), EP 2 611 790 (Gilead Connecticut, Inc. and Genentech, Inc.) and EP 2 611 798 (Gilead Connecticut, Inc. and Genentech, Inc). With reference to the decision BGE 139 III 433 of the Supreme Court (reported here), the defendant requested that judge BREMI shall recuse.

In first place, the Administrative Board of Judges assessed the timeliness of the request. A party that wishes to challenge a judge must file the corresponding request as soon as it has become aware of the reason for recusal; Art. 49 CPC. The FPC now held that any delay of more than 10 days is too late. Decisive is the point of time when the party has become aware or should have become aware when handling the matter with all due care. Subsequent to BGE 139 III 433, the FPC has provided detailed guidelines on how to search for potential grounds for recusal, hyperlinked on the website of the FPC where all judges are listed together with their employer in private practice or industry. A brief database search as outlined in these guidelines would immediately have resulted in at least one of the alleged patents. The FPC leaves no doubt that parties are expected to carry out this check immediately when being notified of the involvement of a certain judge:

Die Vornahme solcher Abfragen ist […] bei pflichtgemässer Aufmerksamkeit jeweils durchzuführen, sobald das Bundespatentgericht die Gerichtsbesetzung bekannt gibt.

Therefore, the order holds that the request clearly is not timely filed and any right to request recusal is forfeited.

But even if the request for recusal would have to be dealt with ex officio (as suggested in some literature), the result would be the same. Note that the plaintiff is Gilead Pharmasset, LLC, not Gilead Connecticut, Inc. No schematic approach in the assessment of an appearance of bias can be applied when connected undertakings are involved; see BGE 139 III 433, r. 2.1.6. It rather depends on the actual circumstances. It needs to be individually assessed whether the indirect relationship (via a connected undertaking) is too close, i.e. comparable to a direct relationship. The FPC makes clear that the mere representation before the Swiss patent office (IPI) is — at least in the present matter — limited to provide a Swiss address for service in case of notifications of loss of rights. It is however unclear whether or not any work on the merits of a case would ever be conducted. This cannot establish a ground of recusal right from the outset, unless specific circumstances indicate the contrary (r. 7):

[A]us der blossen Existenz einer solchen Vertretung, ohne Kenntnis der weiteren Umstände, [kann] nicht auf eine Beziehung zur betreffenden Partei geschlossen werden, die einen Ausstandsgrund darstellen könnte.

Endlich kommt dazu, dass sich im vorliegenden Fall die Vertretertätigkeit darauf beschränkt, als administrative Zustelladresse eine allfällige Rechtsverlustmitteilung des Amtes entgegenzunehmen und – unbearbeitet – weiterzuleiten. Ob die Kanzlei danach mit einer aktiven Vertretertätigkeit beauftragt wird, welche dann auch in Rechnung gestellt werden könnte, und welche einen Ausstandsgrund darstellen würde, ist völlig offen. Aber in dieser Situation als potentieller Beauftragter befindet sich eine Patentanwalts- (und auch Rechtsanwalts-) Kanzlei gegenüber allen potentiellen Klienten, sprich gegenüber allen im Patentbereich tätigen Gesellschaften oder Personen, welche als Auftraggeber in Frage kommen. Das kann von vornherein keinen Ausstandsgrund darstellen.

Reported by Martin WILMING

— BIBLIOGRAPHY —

Case No. O2014_013 ¦ Order of the Adminstrative Board of Judges of 09 June 2016 ¦ “Ausstandsbegehren”

Gilead Pharmasset LLC ./. AbbVie Inc.

Subject(s):

  • Request for recusal

Composition of the Administrative Board of Judges:

  • Dr. Dieter BRÄNDLE
  • Dr. Frank SCHNYDER
  • Dr. Ralph SCHLOSSER

Court Clerk:

  • Susanne ANDERHALDEN

Representative(s) of Plaintiff:

Representative(s) of Defendant:

— FULL TEXT OF THE ORDER —

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