Costly showdown of a case with a history

Case No. O2012_013 ¦ Order of 29 May 2013 ¦ “Abschreibungsverfügung nach Klagerückzug”

This case pertains to a composition for the treatment of fungal nail infection. The FPC issued a dismissal order after the plaintiff had withdrawn the suit. The allegedly infringing product was a precision applicator available on the market under the brand Excilor®; cf. website screenshot below for illustrative purposes.

http://www.excilor.com/CorporateEN/ (Screenshot 15 June 2013)
http://www.excilor.com/CorporateEN/
(Screenshot 15 June 2013)

The competing product Nailner® is apparently authorized by the plaintiff. The timeline of the case is as follows:

  • On 11 February 2011, the plaintiff had filed the suit (still with the Commercial Court of the canton of Zurich; case HG110024-O). The three defendants provided their answers on 10 May 2011. Reply and rejoinder were filed on 30 August 2011 and 07 November 2011, respectively.
  • On 11 January 2012, the case was transferred to the FPC. A preparatory hearing was conducted on 07 December 2012, and  the parties were provided with the assessment of the reporting judge Dr. Tobias BREMI on 10 December 2012. The parties provided their written comments in due time.
  • Next, the parties were summoned for the main hearing on 25 April 2013.

Nothing out of the ordinary this far. But on 24 April 2013, i.e. only one day prior to the main hearing, the plaintiff had withdrawn the suit. Consequently, the hearing was cancelled (cf. the list of public hearings on this Blog here). Thus, we will not see any decision on the merits anymore. But what about the costs? According to Art. 106 CPC, the costs are charged to the unsuccessful party. If an action is withdrawn, the plaintiff is deemed to be the unsuccessful party. However, the court may diverge from the general principles of allocation and allocate the costs at its own discretion if a party was caused to litigate in good faith (Art. 107 lit. b CPC); or if there are other extraordinary circumstances that would result in an allocation according to the outcome of the case being inequitable (Art. 107 lit. f CPC). Based on these provisions, the plaintiff requested an allocation of costs with a share of 2/3 (plaintiff) to 1/3 (defendants). In brief, the plaintiff argued that prior to the filing of the lawsuit he had not been aware of any issues with respect to the following:

  1. (lack of) right of action;
  2. (lack of) validity of the patent in suit; and
  3. (lack of) infringement of the patent in suit.

The FPC shot this down harshly:

This allegation is against plaintiff’s better knowledge. The defendants had already asserted these issues in prior summary proceedings at the Commercial Court Zurich (HE100006; decided on 11 February 2011). The plaintiff was thus well aware of these issues at that time when the action was brought.

This seems worth being looked at in more detail. The decision of the Commercial Court Zurich in prior summary proceedings was appealed to the Supreme Court; the decision in appeal proceedings is published as 4A_142/2011. Even though the publication number of the patent in suit is not identified in the former decision of the Supreme Court, the wording of the independent claim 1 is literally reproduced. It reads as follows:

Topical application products free of water and film- and lacquer-forming additives for the treatment of onychomycoses and nail care containing
a) one or more active substances
b) one or more C1-C4-alkyl esters of lactic acid, malic acid, tartaric acid or citric acid as carriers and
c) optionally physiologically compatible adjuvants.

A simple Google search of the claim wording reveals the patent in suit: EP 1 143 950 B1. The complete file wrapper is available directly at the EPO. Now, with this information at hand, let’s have a closer look at the three issues (right of action; validity; infringement):

(Lack of) Right of Action

Lack of right of action was not an issue in the decision 4A_142/2011 of the Supreme Court. Apparently, the Commercial Court ZH rejected the request for preliminary injunctive relief already for reasons of lack of prima facie evidence of infringement (see below). However, the issue of lack of right of action may well have been raised by the defendants in summary proceedings as a plea in objection.

BioEqual AG is indicated as patentee in both the European Patent Register and Swissreg. However, from the file wrapper one may well guess that factual ownership might be complicated. BioEqual AG was entered into the European Patent Register as owner with effect as of 22 July 2004; cf. EPO Form 2544 of 12 August 2004. This transfer of ownership was registered on the basis of a declaration of transfer of ownership from IPR-Institute for Pharmaceutical Research AG (in liquidation) to BioEqual AG of 03 June 2004. However, yet another declaration of transfer of ownership is on file which is dated earlier. According to this declaration, IPR-Institute for Pharmaceutical Research AG had already transferred ownership to Dr. Tobias A. THOMMEN by contract of 15 May 2002. Factual ownership of BioEqual AG might thus be doubtful.

(Lack of) Validity of the Patent in Suit

Apparently, a negative limitation (disclaimer) to the wording of claim 1 of the patent in suit was introduced during prosecution, i.e. the feature

free of […] film- and lacquer-forming additives

This amendment was carried out already in the proceedings of international preliminary examination; cf letter of 29 November 2000. Allowability of this initially undisclosed disclaimer might be doubtful in view of the decision G 1/03 of the Enlarged Board of Appeal of the EPO.

(Lack of) Infringement

Apparently, the water content of the allegedly infringing product was already the technical key aspect of the earlier decision 4A_142/2011 of the Supreme Court. Literally, claim 1 of the patent in suit requires the absence of water. Already at that time, it was beyond dispute that the allegedly infringing product contained 2% of water. From the requests of the plaintiff, it becomes clear that the allegedly infringing products still contained water (“not more than 4%”; “with a water content of 2% or 4.7 to 7%, respectively”). These amounts of water might have established the lack of infringement. Moreover, the allegedly infringing composition seemingly comprises a “film-forming agent” (see below) — contrary to the wording of the disclaimer introduced into the independent claim 1 of the patent in suit, as outlined above.

http://www.excilor.com/CorporateEN/styletprecision.html (Partial screenshot 15 June 2013)
http://www.excilor.com/CorporateEN/styletprecision.html
(Partial screenshot 15 June 2013)
The cheque, please …

In view of the foregoing, the FPC did not see any reason to deviate from the general principle of Art. 106 CPC and charged the costs to the plaintiff.

The plaintiff himself had estimated the value in dispute to about CHF 1’700’000,–. Based thereon and in accordance with Art. 1 CostR-PatC, the court fee was fixed to CHF 70’000,–. Court fees of the Commercial Court ZH were fixed to CHF 2’000,–.

All three defendants defended their own case; their costs were compensated independently from each other. In accordance with Art. 3 lit. b in connection with Art. 4 and 5 CostR-PatC, a compensation of about CHF 80’000,– was held reasonable by the FPC. De facto, the costs of defendants (1.) and (3.) were in this range and were fully awarded. Costs of defandant (2.) were much higher, but only CHF 85’000,– were awarded.

Costs for patent attorneys in an advisory capacity were claimed as necessary expenses by defendants (2.) and (3.), according to Art. 3 lit a in connection with Art. 9(2) CostR-PatC. These costs were held reasonable by the FPC and were thus awarded in full.

Including some further, yet minor expenses — this is the bill:

  
  70'000,-- CHF   Court fees of the FPC

   2'000,-- CHF   Court fees of the Commercial Court ZH (HG110024-O)

                  -----------------------------------------------------------

                  Defendant (1.), Doetsch Grether AG:

  81'513,40 CHF   Compensation for legal representation 
                  (incl. fees for 228,95h à CHF 320,--; awarded as requested)

                  -----------------------------------------------------------

                  Defendant (2.), Oystershell NV:

  85'000,-- CHF   Compensation for legal representation
                  (requested: fees for 290h à CHF 700,--; sharply reduced)

  59'830,-- CHF   Compensation for patent attorney
                  (Schaad, Balass, Menzl & Partner AG; awarded as requested)

     418,-- CHF   Expenses (awarded as requested)

   2'095,80 EUR   Expenses (awarded as requested)

                  -----------------------------------------------------------

                  Defendant (3.), JeCare SA:

  78'795,-- CHF   Compensation for legal representation 
                  (incl. fees for 170h à CHF 400,--; awarded as requested)

   4'271,-- CHF   Compensation for patent attorney
                  (E. Blum & Co. AG; awarded as requested)

     940,30 CHF   Expenses (awarded as requested)

   1'653,80 EUR   Expenses (awarded as requested)

 ----------------------------------------------------------------------------

 382'767,70 CHF
+  4'499,52 EUR
 ==============

Reported by Martin WILMING

BIBLIOGRAPHY

Case No. O2012_013 ¦ Order of 29 May 2013 ¦ “Abschreibungsverfügung nach Klagerückzug”

BioEqual AG
./.
(1.) Doetsch Grether AG, CH-4002 Basel
(2.) Oystershell NV, BE-9031 Drongen
(3.) JeCare SA, BE-1420 Braine-l’Alleud

Subject(s):

  • Patent Infringement

Composition of the Board of the FPC:

  • Dr. iur. Dieter BRÄNDLE (President)
  • Lic. iur. Jakob ZELLWEGER (First Court Secretary)

Representative(s) of Plaintiff:

Representative(s) of Defendant:

Full text of the decision right here:

Download (PDF, 98KB)

Expert opinions not being sealed / no further explanation of prior order of the FPC (O2012_022 cont’d)

Case No. O2012_022 ¦ Order of 31 July 2012 ¦ “Ablehnung Erläuterung”

This order of the FPC relates to a prior order of 03 May 2012, commented in a separate post. The earlier order of the FPC dealt with the presentation of new evidence / nova. In brief, the FPC did not admit the expert opinions from parallel proceedings in other countries into the proceedings – except as evidence for the conclusions drawn in these expert opinions which were explicitly referred to in the writ of the defendant.

Subsequently, the plaintiff requested that the expert opinions were to be sealed until a decision of the whole case has become final, in order to prevent that a member of the board of the FPC or a court expert consults these expert opinions any further. The plaintiff argued that the human nature could otherwise prompt a non-permanent judge or a court expert to revert to these expert opinions – contrary to the gist of the prior order of 03 May 2012.

In reply, the defendant requested an explanation by the FPC as to what extent the expert opinions may still qualify as (i) evidence for statements made in earlier writs of the defendant (except for the writ accompanying the expert opinions); and (ii) counter-evidence for statements made in earlier writs of the plaintiff. With respect to the statements made in the writ accompanying the expert opinions, the defendant argued that the FPC must have access to the expert opinions as such, in order to verify the respective citations. However, the parties evidently had a different understanding of whether or not the expert opinions may still qualify as (counter-) evidence for statements made in other writs of the defendant and the plaintiff.

The FPC now reiterated that the prior order of 03 May 2012 only pertained to the writ accompanying the expert opinions, without any further necessity of explanation. Only if facts (not points of law such as e.g. novelty, inventive step or undue extension of subject matter) would remain under dispute which are legally relevant, a procedure of taking evidence will be conducted in accordance with Art. 150 ff. CPC. If the defendant then would rely on the expert opinions, the FPC would have to judge admissibility of this evidence.

The FPC further held that there is no need to seal the expert opinions. These opinions will not be further consulted anyhow, for the time being: Since it is beyond dispute between the parties that the conclusions of the two expert opinions were correctly cited by the defendant in the writ, there is no need for the FPC to revert to the evidence as such.

Kurz, das Fachrichtervotum wird erstattet werden, ohne dass Einsicht in die beiden Gutachten genommen wird, weil sie weder – über die Noveneingabe hinaus – als Parteivorbringen noch, im gegenwärtigen Stadium, als Beweismittel zu berücksichtigen sind.

Consequently, the requests of both the plaintiff and the defendant were dismissed.

Reported by Martin WILMING

BIBLIOGRAPHY

Case No. O2012_022 ¦ Order of 31 July 2012 ¦ “Ablehnung Erläuterung”

(not identified) ./. (not identified)

Subject(s):

  • Declaratory judgement of nullity

Composition of the Board of the FPC:

  • Dr. iur. Dieter BRÄNDLE (President)

Representative(s) of Plaintiff:

  • (not identified)

Representative(s) of Defendant:

  • (not identified)

Substantiation of statements in writ by reference to physical records / applicable Procedural Code

Case No. O2012_022 ¦ Order of 3 May 2012 ¦ “Anwendbares Prozessrecht, Berücksichtigung ausländischer Gerichtsgutachten”

This nullity case regarding the Swiss part of a European patent filed on 18 July 2008 with the Commercial Court of the Canton of Zurich was transferred to the FPC on 17 January 2012. As of 1 January 2012, the FPC has become the competent court according to Art. 41 in conjunction with Art. 26 PatCA.

After transfer of the case, defendant submitted copies of extensive expert opinions requested by the German Federal Court of Justice and the District Court of Rome, Italy, in parallel proceedings and only briefly referred to their respective conclusions in his written submissions. Plaintiff argued that the expert opinions did not constitute evidence in terms of the Swiss civil procedural code (CPC). Further, plaintiff objected to these opinions being treated as defendant’s submissions as the experts’ technical considerations had been enclosed with but not referred to in defendant’s writ.

According to Art. 27 PatCA, the CPC is applicable in cases before the FPC. However, Art. 404(1) CPC states that the previously applicable procedural code (of the respective Canton) remains applicable to pending cases until proceedings within the respective instance are closed. There are no transitional provisions regarding pending cases that have been transferred from cantonal courts to the FPC; only the Guidelines on proceedings before the FPC (Art. 10(2)) hold that the CPC shall be applicable. It has now been decided that based on the fact that Art. 27 PatCA is a lex specialis with regard to Art. 404(1) CPC, it takes precedence over the latter. On entering into force of PatCA, the federal procedural code is to be applied to cases transferred to the FPC. However, the parties will be given an opportunity to make submissions pertaining to any issues that they did not need or were not able to make under the terms of the previously applicable cantonal codes of procedure (cf. Art. 10(3) of the Guidelines on Proceedings before the FPC).

As to the merits of the case, it was held that the foreign court expert opinions submitted by defendant were no court opinions in proceedings before the FPC. Likewise, the foreign court expert opinions are no private opinions since they were not commissioned by the defendant. Thus, court expert opinions from separate proceedings are physical records (Urkunden) in the sense of Art. 177 CPC, only. As such, they are formally to be treated like party submissions. As is the case for all party submissions, any statement made in the writ must be substantiated by indicating how the respective statement relates to the physical record on which it is alleged to be based:

In gleicher Weise wie bei Tatsachenbehauptungen hat eine Partei auch bei Privatgutachten oder Gutachten aus anderen Verfahren ihre darauf gestützten Ansprüche möglichst konkret, d.h. substantiiert zu behaupten. Behauptungen (auch wenn sie in Form eines Gutachtens aus einem anderen Verfahren vorgebracht werden) sind in dem Sinne “zu verknüpfen”, dass ohne weiteres und ohne unzumutbaren Aufwand ersichtlich ist, mit welchen Urkunden bzw. Beweisanträgen welche Tatsachen bewiesen werden sollen ([…]).

Facts that can merely be inferred from enclosures need not be considered by the court. In as far as specific passages within the opinions were not indicated to relate to defendant’s writ these opinions were regarded as inadmissible and were not considered.

Wie erwähnt, geht es nicht an, einen Sachverhaltskomplex (d.h. vorliegend die Schlussfolgerung von Gerichtsgutachten) zu schildern und sich zum Beweis am Schluss dieser Behauptungen pauschal auf einen Stoss Akten zu berufen ([…]).

Reported by Karin BÄTZ

BIBLIOGRAPHY

Case No. O2012_022 ¦ Order of 3 May 2012 ¦ “Anwendbares Prozessrecht, Berücksichtigung ausländischer Gerichtsgutachten”

(not identified) ./. (not identified)

Subject(s):

  • Declaratory judgement of nullity

Composition of the Board of the FPC:

  • Dr. iur. Dieter BRÄNDLE (President, Single Judge)
  • Lic. iur. Jakob ZELLWEGER (First Court Secretary)

Representative(s) of Plaintiff:

  • (not identified)

Representative(s) of Defendant:

  • (not identified)

No plaintiff: Case not considered

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

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

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

The decision has become final.

Reported by Martin WILMING

BIBLIOGRAPHY

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

Strela Development AG (cleared) ./. Artemio GRANZOTTO

Subject(s):

  • Outstanding money

Composition of the Board of the FPC:

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

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

Representative(s) of Artemio GRANZOTTO:

  • (none)

Request for preliminary injunction reaching beyond scope of patent

Case No. S2012_003 ¦ Decision of 2 February 2012 ¦ “Dichtungsvorrichtung für Spannzange” 

Based on a case that was transferred from the Commercial Court of the Canton of Berne on 27 December 2011, this first decision of the FPC has meanwhile become final. The crucial point was the wording of the request for preliminary injunction. The FPC held that the request reached beyond the actual scope of the patent. Thus, the request was dismissed:

Geht das Rechtsbegehren aber über den Schutzbereich hinaus, führt dies zur Abweisung des Massnahmebegehrens, ohne dass auf weitere Fragen noch einzugehen wäre.

Not much of a surprise so far. However, note that the request not only described embodiments of claim features (though the embodiment of one feature of the claim was missing), but also referred to specific trade names of the allegedly infringing articles. Nevertheless, it was not decisive whether or not the allegedly infringing articles as named in the request in fact implemented the missing feature. A product trade name can be changed, and/or a different product can be sold under the same name. Thus, a product trade name cannot replace the detailed description of the technical embodiment of the allegedly infringing product:

Daran ändert auch die Angabe von Typenbezeichnungen im Rechtsbegehren nichts; weil eine Typenbezeichnung jederzeit geändert bzw. unter der gleichen Typenbezeichnung anderes vertrieben werden kann, können Typenbezeichnungen die konkrete Umschreibung der technischen Ausgestaltung der angegriffenen Ausführungsform nicht ersetzen (BGE 131 III 70 E3.3).

(Note that the Commercial Court of the Canton of Zurich decided differently in a case pertaining to a medicament registered and approved by SwissMedic, the Swiss Agency for Therapeutic Products (cf. sic! 2008, 642): In such cases, the product and/or the name cannot be easily changed, and therefore the product name may well aid in precisely defining the subject matter of the request.)

The general approach in the assessment of distinctiveness of requests is prevailing case law in Switzerland based on the 2004 decision of the Federal Supreme Court referred to in the above citation. Later on, the Federal Court again expanded on the proper wording of requests (4C.361/2005). Albeit the request is to be directed to a specific conduct, it needs not to be identically directed to the allegedly infringing product. It may be drafted in more general terms in order to prevent further infringement in only slightly modified form. However, the request must be precise enough for a bailiff to enforce the prohibition by mere factual inspection:

Unterlassungsklagen müssen auf das Verbot eines genau umschriebenen Verhaltens gerichtet sein (BGE 131 III 70 E. 3.3). Dieses muss nicht mit dem konkret erfolgten Verletzungstatbestand identisch sein. Vielmehr kann das Verbot darüber hinaus allgemein formuliert werden, wenn ansonsten die Gefahr der Umgehung besteht. Eine solche Gefahr ist zu bejahen, wenn eine in bestimmter Form begangene Verletzungshandlung nicht nur die Wiederholung der genau identischen Verletzungsform, sondern auch die Begehung zwar leicht abgewandelter aber in ihrem Kern gleicher Handlungen, vermuten lässt (vgl. […] Peter Heinrich, Die Formulierung patentrechtlicher Unterlassungsbegehren und – Urteile, sic! 2006, S. 48 ff., S. 51). Die Formulierung des Verbots muss jedoch in jedem Falle so präzise sein, dass die verpflichtete Partei und die Vollstreckungs- oder Strafbehörden durch blosse tatsächliche Kontrolle ohne weiteres feststellen können, welche Handlungen gegen das Verbot verstossen (BGE 131 III 70 E. 3.3).

In patent matters, finding a proper wording for a request for (preliminary) injunction that fulfills the requirements as defined by the Federal Supreme Court is a slippery slope – not only, but maybe in particular in Switzerland.

Reported by Martin WILMING

BIBLIOGRAPHY

Case No. S2012_003 ¦ Decision of 2 February 2012 ¦ “Dichtungsvorrichtung für Spannzange”

Rego-Fix AG ./. Gewitec AG

Subject(s):

  • Preliminary Injunction (Patent Infringment)

Composition of the Board of the FPC:

  • Dr. iur. Dieter BRÄNDLE (President, Chairman)
  • Dr. Sc. nat. Tobias BREMI (Judge)
  • Lic. iur. & dipl. Mikrotech.-Ing. Frank SCHNYDER (Vice President)
  • Lic. iur. Jakob ZELLWEGER (First Court Secretary)

Representative(s) of Rego-Fix AG:

Representative(s) of Gewitec AG: