Tuesday 30 November 2010

The PCC Page no.8: Last chance to make your voice heard!

The PCC Pages is a series of Tuesday features on the new regime for litigation before the recently revamped Patents County Court (PCC) for England and Wales, hosted by PatLit but furnished by the Chartered Institute of Patent Attorneys (CIPA). In this post, CIPA President Alasdair Poore urges readers to act fast.

Angry scenes as litigants hurl screwed-up pages
of the Copyright, Designs and Patents Act 1988
at members of the consultation team ...
The consultation on the proposed limit on recoverable damages (£500,000 plus interest) in the Patents County Court finishes on 3 December [that's this Friday]. Some commentators are in favour; others want a lower limit; and some want a higher limit – or no limit at all.

Lets clear up some misconceptions. Understanding them will come in useful later.

First, when a damages limit is introduced – I should be open-minded and say “if” – that means what it says (mostly at least): it is a limit on recoverable damages. It does not mean that a case in which the value of business is higher cannot proceed in the PCC, but only that if you want damages and the other party does not agree, then the maximum you can recover is £500,000 + interest. An injunction might worth much more than £500,000. That does not mean the judge cannot award an injunction or that the case cannot proceed in the PCC.

Secondly, it does not prevent you from bringing a claim in which the damages are more than £500,000 in the PCC. It just means you will have to abandon the excess and the Court has no jurisdiction to award more – (Copyright Designs and Patents Act (CPDA) s 282(2)).

Building on this, because the power to make the rule comes under the CPDA 1988, the judge does not have a discretion to award a higher amount than whatever limit is put in place, unless the parties agree. In any event it would simply lead to lots of special pleading. But, it is open to the parties to agree a higher limit (CDPA s 288(4)) – all they have to do is to follow the approach in that section.

I should add, to avoid any misunderstanding, that the value of the case may be one of the factors taken into account in considering whether the case is appropriate for the PCC, so the £500,000 limit would not be altogether irrelevant (PD30 9.1(2)(a))

Should the limit be lower? In the writer’s opinion, the answer is a pretty clear no. If it were lower, it would mean that the cap on recoverable costs would start to look disproportionately high for almost all cases in the PCC, and that cases just above the limit would often have disproportionately high costs in the High Court. Let's say that the limit was £250,000. Parties seeking damages of a little more than £250,000 would have to proceed in the High Court, where they could expect costs of, well maybe well in excess of £250,000 (and a possible exposure to the other side's costs of the same magnitude). This does not make sense, even if you factor in the value of an injunction, which in an IP case might be several times the value of damages.

What of a higher limit? The last argument suggests the limit could be much higher. However, in an average intellectual property case with damages of £500,000, the damages might cover a couple of year’s infringement. An injunction could push the total value of the claim quite a lot higher. A lot is at stake. Parties will start to spend more on preparation and strategy, and develop ways of complicating the procedure, and arguing for complicated procedures. That is not an attractive prospect for the PCC, especially at this stage.

There is no perfect answer. One possibility was to look at value. As some commentators have said, it is very difficult to assess value. For that reason opting for a definite figure, albeit imperfect is a good idea.

After all, the new rules make some cases worth litigating when they were not before. They do not stop anything which could have been done before. It's much better to start with a limit which provides a real opportunity for SMEs to bring some of their cases before an affordable court, rather than to clog up the court with applications for transfer and complicated cases with which parties seek to complicate the procedures. That is a view supported by the decision in ALK-Abello v Meridian Medical Technology [2010] EWPCC 014 (noted on PatLit here). Lets give it full support.

My vote is for the proposed limit.

By the way, there is an additional twist. The CDPA 1988 does not allow a limit to be applied to cases which are not patent and design cases. However, it is likely that a power under the Courts and Legal Services Act 1990 will be used to create a corresponding limit on trade mark and copyright (and other IP) cases in the PCC.

Monday 29 November 2010

Scottish springboard leads to account of profits

PatLit sends its most grateful thanks to the invaluable Susan Snedden (Associate, IP & Technology, Maclay Murray & Spens LLP) for the following note on a piece of Scottish litigation that raises extremely interesting issues relating to relief for infringement: Bayer Cropscience KK v Charles River Laboratories Pre-clinical Services, Edinburgh Limited and Albaugh Inc [2010] CSOH 158, a decision of the Scottish Court of Session to the effect that springboard relief for patent infringement is available in terms of an account of profits as well as damages [note: the "springboard" effect is caused by an infringer using his infringement as a springboard to leap ahead of other traders by entering the market before them]. Previous UK springboard relief authorities related only to damages/injunctions. Says Susan:
"This case provides, for the first time, useful confirmation that a springboard claim can be made in respect of an accounts of profits as well as damages, under the Patents Act 1977, s.61(1)(d). It also demonstrates that the Scottish Court of Session’s debate procedure can be used effectively to focus the issues in dispute and thus save costs. For example, had the defender’s argument been successful, there would have been little benefit in incurring the expense of a full trial as no remedy would have been available.

The parties to the dispute were Bayer Cropscience (the pursuer/claimant), Charles River Laboratories (the first defender/defendant) and Albaugh Inc (the second defender/defendant). Bayer was the proprietor of a European patent which expired on 31 March 2006 and the equivalent US patent, which expired on 21 January 2006. Bayer never sold the patented product on its own, and only once incorporated it into an end product. Albaugh was a competitor of Bayer Cropsciences.
Around a year before expiry of the patents, Albaugh applied to the US Environmental Protection Agency for registration of an insecticide containing the patented product as its active ingredient. The EPA required chemistry test data before it could register the product, so Albaugh instructed Charles River to carry out the necessary tests and arranged for the patented product to be imported from China to Scotland for this purpose. Albaugh did not dispute that these acts amounted to patent infringement. However, Albaugh's position was that the products were not placed on the market until the expiry of the European Patent in April 2006.
Charles River settled their involvement in the case extra-judicially.
A debate (this is the term for a Scottish preliminary hearing on a point of law) then took place at which Bayer argued it should be entitled to a springboard account of profits for Albaugh’s sales in 2006, 2007 and 2008. Albaugh argued that the court had no power to order a springboard account of profits. Albaugh's profits were derived from lawful transactions, namely the post-expiry sales, rather than the infringing acts. The infringing acts were not commercial transactions capable of generating profits. They were no more than a precursor to profit- generating activities which all occurred after expiry of the patent.
In response, Bayer noted that Albaugh did not dispute that the purpose of the infringement was to allow it to enter the market earlier than it otherwise would have done on expiry of the patent. Bayer pointed out that Section 61(1)(b) of the Patents Act 1977 specifically allows the Court to order an account of the profits, "derived by [the infringer] from the infringement." In this case Albaugh had generated unfair profit which, but for the infringement, would not have been generated. The fact that the profits were achieved after the expiry of the patent was of no significance. The matter should go forward to a Proof (full trial) to give Bayer an opportunity to prove that the profits were derived from the infringement.
Lord Malcolm reviewed the case law in respect of springboard damages/injunctions. In his view the authorities supported the validity of Bayer’s claim for an account of profits. The basic purpose of the remedy sought by Bayer was to deprive Albaugh of unfair or unjustified profits. Albaugh deliberately used the invention to obtain an unfair advantage over its competitors and then exploit it for financial gain. The fact that the sales were lawful acts did not automatically sever the chain of legal causation between the infringements and the profits.
The matter will now go to Proof (trial). It will be interesting to see what evidence Bayer leads to support its claim that the profits not just in 2006 but also in 2007 and 2008 derived from the infringing acts. Their position is that, had it not been for the infringement, Albaugh would not have been ready to launch on to the market until the end of 2006 and also that, as a result of its early entry into the market place, Albaugh achieved enhanced levels of sales in 2007 and 2008".
Thanks so much, Susan.

Costs order knocks spots off pimple patent

Pimpled ... but not
the finished product
PatLit thanks Richard Kempner (Kempner & Partners) for drawing its attention to his firm's note on a recent Patents Court for England and Wales decision, Select Healthcare v Cromptons [2010] EWHC 3055 (Pat).  In this case Mr Justice Mann emphasised how important it is for a claimant to provide proper details of its claim, in order to allow a defendant to understand the case against it.  In this action the claim was for infringement of a patent relating to a patient slide sheet with a “pimpled finish”. The defendant asked for clarification, including details of what was meant by “pimpled finish”, and where the pimples were alleged to be found on the defendant’s product. Following a refusal by the claimant to provide any such information, the defendant applied to the court for an “unless order” (that unless the requested information was provided, the claim should be struck out).

Mann J did not strike out the claim, but he did order the claimant to provide a statement of case and an expert report explaining it.  Most unusually the judge also awarded the defendant costs on the higher, indemnity, basis, on the ground that the claimant had wilfully refused to disclose its case until compelled to do so at the hearing.  Said the judge
"13. In my view this is a case in which the claimants have given every impression of playing games in this action. I do not need to make a finding as to whether are not they actually were playing games but they have certainly given that very strong impression. The claimants have also given the very strong impression that they do not know what their case is and they have been reluctant to be pinned down, and have demonstrated a tendency from time to time to change their case.
14. There is nothing inherently wrong with changing a case; it happens all the time in these courts. When it happens in the manner in which it happened in this case and with decreasing rather than increasing clarity as to what the case is, then that is a practice which must be stopped. It has been said more than once, particularly in the context of patent litigation, that it must be conducted efficiently, properly and with a proper regard to costs. All litigation must be conducted with a proper regard to the need to disclose what a case is so that the other party can understand it and meet it.
15. In this respect the claimant has, in my view, fallen lamentably short of the standards required of patent litigants in this court. I am quite satisfied that the claimant has brought this application on itself and has brought itself close to having its claim struck out and, therefore, as a matter of principle the claimant ought to pay the costs of this application.
16. I also have no doubt that the claimants should pay the costs of this application on an indemnity basis. The wilful, as it seems to me, refusal to disclose its case until asked point blank by a judge of this Division what the case was and their reliance on totally misconceived technicalities arising out of the patent, and a reliance on an assertion that the defendant really ought to ask the right questions, are, in my view, rather remarkable in the context of the litigation that I have seen. It is simply not the way in which litigation ought to be conducted and is plainly, in my view, within the category of conduct which falls to be penalized by an award of indemnity costs. I therefore order that the claimant pay the costs of this application on an indemnity basis".
Claimants always face the challenge of having to provide sufficient information to comply with the Civil Procedure Rules while striving as far as possible to “keep one’s powder dry” as to certain aspects of a claim. A claimant is not required to disclose full details of its entire case before trial, but it is clear in this case that the judge believed the claimant had overstepped the mark, penalising it by ordering indemnity costs.  The moral of the story, says Kempner, is that a claimant, facing a request for clarification and/or further information from the defendant, must ensure it has provided proper details of its claim before it can safely decline to provide the requested clarification and/or further information.

Friday 26 November 2010

Recent publications

Patent Law in India, by M. B. Rao and Manjula Guru, is a bit of a curiosity.  Just out this September, this book is part of Wolters Kluwer's Law & Business series (web page here).  The authors are, respectively, a senior consultant on tax, corporate and arbitration issues and member of the Law Commission of India, and a law-and-economics consultant, with an interest in the agricultural sector.  There is nothing in the biographical details of the authors, or in their acknowledgements to those who have assisted them, to suggest that they have any practical experience in patent law or any specific first-hand experience of the subject.   This is no crime: the fact that an author has extensive professional expertise in an area no more guarantees the high quality of his writing in that area than the absence of such expertise disqualifies him from producing a good book.  However, in an area such as patent law, a purchaser preparing to spend US$196 on a book may wish to be reassured that, at that price, he is purchasing more than the authors' thoughts.

As for the book itself, its ambit is set out clearly by the publishers:
"The 2005 Amendments to the Indian Patent Act expanded the scope of patentability by (among other provisions) allowing patenting of new substances brought about by incremental innovations. What exactly is an ‘incremental innovation’? And how does the amended Act alter the legal definition of patentable subject matter and restructure the essential criteria - utility, novelty, no prior publication, and non-obviousness - around which patent law revolves?

This masterful analysis of patent law in India, by two of India’s most distinguished jurists, investigates thoroughly the scope of the possible answers to these crucial questions. Recognizing the character of the revolution taking place in patent law globally under the regime of multinational corporations - and India’s central role in its development - Dr. Rao and Dr. Manjula Guru’s analysis focuses on the patenting of substances arising out of advances in biotechnology, genetically engineered products, and computer-related devices. But they do not neglect the practical details of application, registration, and proceedings as constituted under the amended law; in fact, this book is the most detailed and insightful procedural and practice guide to the subject we have".
The publishers conclude with the following boast:
"No legal, administrative, or business professional in any of the many areas touched by patent law - not only in India, and elsewhere - can afford to bypass this deeply-informed study of a topic of huge global significance. Corporate counsel seeking an Indian patent will find no better guide".
It is plain from the book's content that the authors are more highly focused on issues such as policy regarding what should be patentable and how patented matter should be made more widely available under mechanisms such as TRIPS than on the detail of procedural matters and patent litigation itself.  Once the large amount of comparative material, looking at US and UK/EU law and practice, is stripped out, it would appear from this volume that Indian patent law has much less substance to it than a reader of SPICY IP might imagine.  This reviewer does not feel that this book matches the claims made for it and hopes that, when a second edition is published, both the title and the publisher's blurb more closely match its contents.



The eight-times-a-year Journal of Business Law (JBL), published by Sweet & Maxwell, carries an interesting article entitled "Arbitration of Patent Disputes in Turkey" by Armagan Ebru Bozkurt Yüksel. This piece looks at public policy, jurisdictional and procedural issues and will be handy for anyone facing a contentious patent matter to settle in Turkey.  The author's critical appraisal of patent arbitration rules and their operation in Turkey is likely to leave readers with the strong impression that, unless the matter is a simple one and the parties can keep firm control of costs, logistics and enforcement, litigation before the courts (Turkey's Decree-Law No. 551 on the Protection of Patent Rights, in force from June 27, 1995, provides for special courts for the resolution of patent disputes).

Wednesday 24 November 2010

Solvay cross-border injunction dispute heads for Court of Justice ruling

Via Paul England (Simmons & Simmons) comes news of a reference to the Court of Justice of the European Union (CJEU) for a preliminary ruling on the controversial question of cross-border injunctions in cases of patent infringement.  As Paul explains:
"An important reference has been made ... by the District Court of The Hague in the Netherlands. It essentially asks whether the District Court can issue cross-border injunctions for patent infringement under the provisions of Regulation 44/2001 on the Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters.

Details of the judgment are yet to emerge in English, and the exact questions to be referred to the EUCJ have not been decided. However, if the CJEU agrees with the District Court, certain consequences may follow:
• Forum shopping could again become a feature of European patent litigation, in particular:
-- The Dutch ‘spider-in-the-web doctrine’, seeking cross-border injunctions in the Dutch courts, may be alive and well as a strategy;
-- So-called ‘Torpedo’ actions, where suits are strategically filed in countries with slow proceedings, may again become popular and
-- The complexity of European patent litigation may actually be reduced in some circumstances, because of the ability to obtain an injunction covering a number of European countries in one court. 
Whatever the exact scope of the referred questions, the Opinion of the Advocate General and then the implications of the decision of the CJEU on this issue is likely to be deliberated upon for many years to come.
The Background
The referral arises from Solvay v Honeywell Fluorine Products Europe (Case No. 09-2275). It concerns Solvay's patent for a method of preparing 1,1,1,3,3-pentafluoropropane, in force in a number of countries. Solvay alleges that its patents to this method are infringed in several countries by three Honeywell companies. Two of these companies are Dutch and one is Belgian.
In respect of the Belgian defendant, Solway argues that, because the Defendant infringes in more than one country, all infringements should be dealt with by the District Court to avoid irreconcilable decisions between the courts of various jurisdictions (further to Article 6(1) of the Regulation). 
The District Court agrees. It has decided that a further Article of the Regulation, Article 2, gives it the jurisdiction to rule on a defendant that is based in the Netherlands (the Dutch Honeywell company) and also to rule on the infringement of foreign patents by that defendant. Therefore, in order to avoid irreconcilable decisions under Article 6(1), the District Court says it follows that it must also be able to rule on the infringement of the same foreign patents by a foreign defendant (in this case the Belgian Honeywell company).
Hadn’t Roche v Primus settled this issue already?
Not according to the judgment of the District Court. In outline, in Roche v Primus (Case C-539/03, noted here by the IPKat) the Defendants were infringing patents in their respective jurisdictions only. Therefore, the ECJ (so named at the time) held that, further to Article 6(1) of the Regulation, the infringements must be litigated separately, in those respective jurisidictions. Whilst decisions on infringement of parallel patents in respective countries might be different, they would not be ruling on the same infringement with exactly the same facts, as would be the case here. In Roche v Primus there was therefore not the same risk of irreconcilable decisions".
Many thanks, Paul, for this information.  We look forward to further news as it arrives.

Interim relief in Argentina: a useful summary

Following the adoption of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), patent legislation in Argentina was brought into compliance with the minimum TRIPS standards.   TRIPS Art. 50, which governs the enforcement of IP rights, requires that courts have the power to order prompt and effective provisional measures to prevent the infringement of any IP right. It was assumed until 2003 that the remedies available to patent owners in Argentina were already fully enforceable, and that consequently it was possible to use such remedies to prevent an alleged infringement during the prosecution of a substantive infringement action. However, in 2004 an amending statute, Law 25,859 (following an agreement between the Argentine and US governments and World Trade Organisation consultation) imposed new requirements on patent owners wishing to obtain preliminary injunctions. These additional requirements made it more complex and time-consuming for patentees to obtain temporary injunctions.

In Sanofi-Aventis v Sandoz SA, in 2009, Sanofi-Aventis sought a temporary injunction following the amended procedure.  The first instance judge appointed an expert who prepared a report on the likelihood of validity and infringement. The defendant was served notice of the temporary injunction request and the court-appointed expert report. The judge then issued the order, in a decision which was upheld by the Federal Civil and Commercial Court of Appeals for the Second Circuit.

The nature of the 2004 amendments, the details of this litigation and its confidence-boosting impact on patent-owners are described in helpful detail an an article from which this note is taken, "Landmark decision issued on pharmaceutical patent enforcement", by Federico Augusto Aulmann (Obligado & Cia), published on International Law Office here.

Tuesday 23 November 2010

The PCC Page no.7: Cautious first steps -- getting underway

The PCC Pages is a series of Tuesday features on the new regime for litigation before the recently revamped Patents County Court (PCC) for England and Wales, hosted by PatLit but furnished by the Chartered Institute of Patent Attorneys (CIPA). In this post, CIPA President Alasdair Poore focuses on the first few tentative steps taken by our patent litigant company, Cautious Co., in launching proceedings before the PCC.

Pleadings under the old rules
could be quite voluminous ...
Says Cautious Co: “I am ready to go – so let's see what I have to sign up to.”

The Statement of Claim in patent proceedings was always rather unusual. When the PCC started, it was widely acknowledged that statements of claim could be almost entirely uninformative. Indeed, it was not until the experts exchanged evidence that parties would necessarily know much about what they were fighting about.

That state of affairs led to the old PCC rules stipulating that the statement of case should set out all facts, matters and argument. Nturally one should always be careful about giving a lawyer (and perhaps also a patent or trade mark attorney)  a free rein when it comes to argument. One can possibly see the quip “paid by the word” doing sterling service here. As mentioned in last week’s pages, this did not go unnoticed, and in Optical Laboratories v Hayden [1993] RPC 204 the Court of Appeal drew attention to the War and Peace-like scale of the pleadings.

This was a problem which troubled the working group when recommending the new rules. The solution is one word -- “concise” -- and a sensible robust judge. Also, the Patents County Court guide will contain sample/model pleadings to provide some guidance, and we are working on those at the moment.

For the time being however, here is a concise summary.

To initiate the claim Cautious Co needs (a) a claim form, and (b) a statement of case (unless the relevant particulars are included in the claim form, which is relatively unlikely, given the additional matters which must be included for the PCC).

The claim form must have the elements set out in CPR 16.2 (including a concise statement of the nature of the claim, remedy sought, statement of value if it is a money claim, and the particulars required in the practice direction (patent number etc.), and, where the particulars of claim are not supplied with the claim form, the claimant must ensure that they will follow.

The particulars of claim must comply with CPR 16, with the addition that they must set out concisely all the facts and arguments upon which the party serving it relies (CPR 63.20). The following is a summary of what should go in (and some things which should not). I have focused on patent proceedings (and the rules and parts of the Practice Direction relating to them, but the same principles will apply to other IP rights):
1. The patent number – this also needs to go in the claim form: obvious, isn’t it?  But some people seem to have been omitting it (PD 63 3.1 (CPR 63.5))
2. Which claims are infringed (PD 63 4.1(a) (CPR 63.6)).
3. Give at least one example of each act of infringement alleged (PD 63 4.1(b) (CPR 63.6)) – this means each of making, disposing of, offering to dispose of, using, importing or keeping,
4. Provide a copy of each document referred to (PD 63 4.2).
5. Confirm whether the claimant has complied with the Protocol on Pre-action Conduct, para 7 and Annex A.
6. A statement of truth for each person who knows the facts which are asserted in the particulars of claim (CPR 63.21).
The Particulars must also include concise argument (PD 63.20). Both the quantity of detail in evidence and of the argument have been the source of problems previously. Generally however they can be divided into two areas: (i) facts and evidence of the acts of infringement, and (ii) argument (including claim construction) relating to whether the product or process falls within the scope of the claims. The former should not usually require great detail . Pretty bare facts, perhaps supported by invoices, sales contracts, etc. should usually be a good starting point.

The second question ("Does it fall within the scope of the claims?") is often more difficult., Judge Birss QC has indicated that it would be valuable to include a claim table in relation to each claim, which breaks the claim  down into individual elements and provides a comparison with the elements of the alleged infringement.  This should provide a good basis for understanding the arguments.

One aspect which specifically does not need to be included is facts and arguments which are intended to counter a possible defence. Wait until the defence has been filed before putting those in.

Monday 22 November 2010

A less than overwhelming case for an injunction

Last Friday, sitting in the Patents Court, England and Wales, Mr Justice Floyd gave judgment in Cephalon, Inc & others v Orchid Europe Ltd & another [2010] EWHC 2945 (Pat).  PatLit is delighted to publish this note on the decision by Paul Cole (Chartered Patent Attorney, Lucas & Co, Professor of IP Law, Bournemouth University and an editor of the CIPA Guide to the Patents Acts). Writes Paul:
"An instructive decision concerning an application for an interlocutory injunction was handed down on Friday 19 November by Floyd J in Cephalon v Orchard Europe and Generics.

The patent in issue was based on the proposition that the size of particles of the drug modafinil in a composition in which it is contained is important to the potency and safety profile of the drug, and in the claimed composition at least about (sic) 95% of the cumulative total of modafinil particles were to be of diameter less that about (sic) 200μm.

A first question was whether the allegedly infringing product had particles of the correct size. The experts for the parties were in disagreement as to the effects of the test methods used on the measured particle size, and Floyd J held that the evidence as it stood was very weak that just about cleared the threshold of arguability. A second question was validity, and there was an extremely pertinent earlier reference. Although as the evidence was incomplete and inconclusive Floyd J was not prepared to hold that there was no arguable case that the patent was valid.

An interesting issue of law then arose under the American Cyanamid ruling as to whether prospects of success should be taken into account when deciding whether to grant interim relief pending the full trial. Floyd J held that this was not a case on facts about which there was no credible dispute that the strength of the defendants’ case was disproportionate to that of the plaintiffs. Accordingly the debate turned to balance of convenience, which was held not to favour grant of an injunction, although a speedy trial was ordered.

Although there can be little doubt that the overall result was correct, a more robust approach to the technical facts is possible. A little arithmetic illustrates the point. It seems common ground that the patent would need amendment and that the patentee’s prospects of success could be assessed as at most 50% on the evidence as it stood. On infringement, as the evidence stood, their prospects of success could also be assessed as at most 50%. Since it was necessary to succeed on both issues, their overall prospects stood at not more than 25%. It is not clear that the ratio decidendi in American Cyanamid is that a complete blind eye should be turned to the underlying facts. If the plaintiff needs to win on more than seriously disputed issue and his case appears the weaker on two or more of those issues, it is hard to see how it would be appropriate to grant an injunction except in the most exceptional circumstances".

Spain: Term for amendments during patent registration process

In a ruling dated October 22, 2010, the Spanish Supreme Court accepts the amendments made during the appeal filed at the Spanish Patent and Trademark Office.

The case started in 2003, when patent application no. 200300857 for “Biological removal of metal contaminants” was filed. The Spanish Office requested the applicant for 3 times to amend several deficiencies and finally decided to reject the application. The decision, dated October 3, 2005, was appealed before the Office. With the appeal the applicant introduced further amendments. The Office considered that amendments are not admissible during the appeal and confirmed the decision, without taking in consideration those amendments. Further appeal was also dismissed by the Court of Valencia. The cassation appeal filed against this decision has now been admitted. Main argument for this decision is:

“It was compulsory for the Spanish Patent and Trademark Office to allow the correction of such deficiencies in the description by one the ways mentioned above: giving a new deadline for amendment or, where appropriate, accepting the amendment in the appeal. Regarding this possibility it should be noted that there is no legal obstacle to do it in those procedures, in which there is no lapsing term to amend and involve a kind of dialogue between the applicant and the Administration to correct any errors or deficiencies of patent claims that can by nature be corrected”.
Full text of the Spanish Supreme Court ruling here (in Spanish) (pdf alert).

Friday 19 November 2010

"When to sue" training for university TTOs: is it US-only?

No longer havens of rustic reflection,
universities now have to develop
patent litigation savviness
Earlier this week PatLit commented on the availability of Boot Camp training for expert witnesses in patent litigation in the United States, and on the absence of such training in Europe. Another area in which the US seems to have taken the lead is in training university technology transfer office (TTO) heads how to identify the point at which to take legal action and how far to go.  This advertisement, in a Technology Transfer Tactics email circular, caught my eye:
Patent Infringement: Deciding When and How Your TTO Should Take Action
University technology transfer offices have long had a reputation for being hesitant, if not outright pushovers, when it comes to enforcing their patent rights. The big companies that take liberties with university IP assume the worst case scenario is a non-punitive compulsory license -- and the result of this widespread perception is a weakening of university IP rights and, in essence, a huge discount from its real value. Breaking this cycle can have a massive impact on the overall monetary value of your patent portfolio, and also speaks volumes to both potential infringers, your licensees, and your own faculty innovators who entrust you with their patents. That’s why our Distance Learning Division has recruited a top attorney and a veteran TTO executive to assist you in erasing the “pushover perception,” identifying when a potential breach has occurred, determining when it’s best to take action against infringers, assessing other legal options short of a full-blown court case, and supporting your attorneys throughout the process.
Since universities in the US can be viewed as Non-Practising Entities (trolls), the need for them to mind not only their financial interests but their reputation may be a matter of sensitivity, though the rubric of the advertisement above does not suggest that trollism is part of the course content.  Again, I wonder what level of infringement-response training is available for tech transfer offices outside the States and particularly in Europe.  I'm sure that some information-sharing among universities takes place at national level and possibly even beyond, but at what level, how frequently and to what end? Can any readers advise?

Expiration of a US patent 32 years after application


Merck v Teva: Prosecution laches and inequitable conduct

Last week, Merck reported a victory on appeal in the TEMODAR Patent Infringement Lawsuit here.

The claim (initial pleadings here - pdf alert) was dismissed on January 26, 2010 by District Judge Sue L. Robinson, concluding that the patent was unenforceable due to prosecution laches and/or inequitable conduct:

a) Prosecution Laches ("unreasonable and unexplained delay in prosecution"):

“51. It is the court's conclusion that the "ends" - commercialization of a very successful cancer drug - do not justify the "means" employed by CRCT in this case. Taken in the totality, this case involves eleven patent applications, ten bandonments and no substantive prosecution for a decade”.

b) Inequitable conduct (“applicants for patents and their legal representatives have a duty of candor, good faith, and honesty in their dealings with the PTO”):

“77. It is the court's conclusion, therefore, that the withheld information directly contradicts statements made in the '291 patent's specification regarding the utility of the claimed compounds, and directly contravenes the patentability of (broadly-written) claim 28. For these reasons, the withheld inactivity data is highly material.
...
83. … It is the court's finding that Stevens committed inequitable conduct by failing to disclose, in accordance with his duty, the information discussed supra”.

You can read Ms Robinson’s entire opinion here (pdf alert).

On November 9, 2010, The Federal Circuit reversed the District Court’s findings and conclusions. Main arguments are:

a) Prosecution Laches:

“to establish prejudice an accused infringer must show evidence of intervening rights, i.e., that either the accused infringer or others invested in, worked on, or used the claimed technology during the period of delay.

There has been no evidence presented that anyone was deterred from entering the market for temozolomide because Cancer Research’s patent issued in 1993 rather than several years earlier. Thus, the delay had only limited consequences to Barr and the public.

Barr has failed to establish either that it or that others developed or invested in temozolomide or any other claimed tetrazine compound between 1982 and 1991, the period of delay. Accordingly, Barr cannot establish prosecution laches as a matter of law, and we reverse the decision of the district court.
Because we conclude that the district court committed legal error in holding the ’291 patent unenforceable for prosecution laches in the absence of any evidence of intervening rights, we need not decide if Cancer Research’s delay in prosecuting the ’291 patent was unreasonable or unexplained”.

b) Inequitable conduct:

“... materiality and intent are separate requirements, and intent to deceive cannot be found based on materiality alone … In this case, evidence that Stevens coauthored articles that contradict the disclosure of the ’291 patent specification does not alone establish that Stevens with-held those studies
intending to deceive the PTO.

… While publication to the scientific community is not the same as disclosure to the PTO and does not foreclose a finding of deceptive intent, … the prompt publication of data in multiple articles over the entire course of prosecution is inconsistent with finding that intent to deceive is the single most reasonable inference to draw from the evidence in this case… Also, Stevens did not selectively withhold information; the withheld information includes both positive and negative data regarding the claimed tetrazine derivatives… Accordingly, an equally reasonable inference to draw from the evidence is that Stevens viewed publication of all the data as important to his career as a scientist but did not appreciate their potential importance to the patentability of the tetrazine derivatives patent claims”.

The decision has not been unanimous. Judge Prost, in dissent, considers that:

“the majority propounds a new and unsupportable legal standard for prosecution laches. With regard to inequitable conduct, the majority not only creates a new evidentiary standard, but it also ignores virtually unassailable credibility findings made by the district court after a four-day bench trial”.


Ms Prost interpretation of the case:

a) Prosecution Laches:

“Neither the Supreme Court nor this court has required a defendant to establish prejudice to assert prosecution laches.

... even if prejudice is required, there is no basis for the majority’s new requirement that one must confine himself to the period of prosecution delay in determining whether prejudice exists. Such a requirement (1) discounts the relationship between prosecution laches and broad public interests in the timely issuance of patents and (2) imposes a novel time restriction on the harm suffered.

By requiring this particularized prejudice, the majority sidesteps the real harm at issue in this case. The Supreme Court has explicitly recognized that delaying a patentee’s monopoly period harms the public by delaying its free use of the patented invention. Woodbridge, 263 U.S. at 48-49. Here, the applicant first filed the patent application disclosing temozolomide in 1982. By stalling prosecution for its own business purposes for nearly a decade, Cancer Research obtained a patent which does not expire until 2014—almost thirty-two years after the first application in this chain was filed”.

b) Inequitable conduct

“The majority veers from our precedent in at least two respects: (1) it creates
a new evidentiary standard for establishing inequitable conduct, and (2) it
inexplicably rejects the district court’s unassailable credibility determinations, which served as the basis for its conclusion that inequitable conduct occurred... an inventor, Dr. Stevens, withheld important data from the U.S. Patent and Trademark Office (“PTO”) that contradicted the disclosure in the patent applications”.

Full text of both appeal opinions can be found here (pdf alert).

Thursday 18 November 2010

IP Enforcement Report: some real data for SME patent enforcement

For some SMEs, budgeting for
patent litigation takes up all their
time and resources
The IPKat has already reported the publication of "Intellectual Property Enforcement in Smaller UK Firms", commissioned by the Strategic Advisory Board for Intellectual Property Policy (SABIP) as "an independent input to evidence for policy". You can read the report in full here, with some background from the IPKat here.

PatLit advises its readers that much of the Report specifically addresses the issues faced by Small and Medium-sized Enterprises (SMEs) when contemplating or engaging in patent litigation. Among the other content, much of which is predictable, there is some genuine evidence of SMEs' attitudes towards enforcing patents in the form of tabulated survey results, with comments.

Wednesday 17 November 2010

Boot camps: do expert witnesses need them?

I've just been reading an advertisement for a Patent Expert Witness Boot Camp presented by Patent Calls (details here). The very concept, and its presentation, signify instantly that it's a US initiative.  The rubric reads as follows:
"Patent Litigation is often compared to war, and you wouldn't go to war without first going to Boot Camp, would you?

Patent Calls' Patent Expert Witness Boot Camp is intended to help technology experts learn and improve upon the skills needed to be an effective witness in patent trials. Successful participants will be able to approach their work with greater confidence and improved understanding of the role of the expert.

Participant cost is $6,000 and includes both lodging and meals".
An admittedly brief online search has failed to unearth any equivalent Boot Camps or training schemes for patent expert witnesses in the continent of Europe, or indeed anywhere else.  It seems to me that what we regard as training an expert witness is something else -- training the witness to serve the requirements of the party paying hs or her fees and expenses.  Have I missed something? If so, PatLit would like to receive comments from patent expert witnesses, and from those who hire and examine them, as to whether Europe should be building a corps of effective technology witnesses.

Tuesday 16 November 2010

Abbott v Medinol just ruled


PatLit made reference in July (here and here) to the application for disclosure (evidence) made by Abbott in the course of an action in which it sought declarations of non-infringement, and orders for revocation, of three patents for coronary stents owned by Medinol, while this company counterclaimed for patent infringement.

A copy of the full text off the decision, dated November 12, is now available here.

The result: one of the patents is invalid since it lacks of novelty and none of them is infringed by the Abbott stents.

This decision follows those of The District Court in The Hague (Netherlands) and the Regional Court in Dusseldorf (Germany). A brief summary of both actions can be found in the Form 10-Q filed by Abbott at the SEC in May 4, 2010 (here):

“In its 2009 Form 10-K, Abbott reported that litigation is pending in the High Court of Ireland, the District Court in The Hague, Netherlands, and the Regional Court in Dusseldorf, Germany in which Medinol Limited asserts that certain Abbott stents infringe various Medinol stent design patents and seeks damages and injunctions, and in the High Court of Justice in the United Kingdom in which Abbott asserts that its stents do not infringe Medinol’s patents and seeks a declaration that Medinol’s patents are invalid. In February 2010, Medinol appealed the Dutch court’s finding that Abbott’s stents do not infringe Medinol’s patent. In March 2010, the Dusseldorf court found that Abbott’s stents do not infringe Medinol’s European stent design patent, a patent also at issue in the other venues, but that they do infringe two of Medinol’s German stent design patents. Medinol can seek to enforce its right to damages and a provisional injunction in Germany. Abbott has the right to appeal the decision of the Dusseldorf court. In addition, as previously reported in Abbott’s 2009 Form 10-K, Abbott filed an action in the German Federal Patent Court asserting that the three Medinol patents at issue are invalid. If the German Federal Patent Court invalidates Medinol’s patents, then any relief granted by the Dusseldorf court could be rescinded”.

The arguments used by Mr. Justice Arnold in the new Judgement seem quite usual, but from a procedural point of view, I would point out the following paragraphs:

190. The starting point is that, since Medinol now positively alleges infringement of 901, the burden lies on it to prove what happens to the loops in this scenario. Despite this, Medinol has not relied on any experimental evidence in support of its case. In particular, it has not relied on any finite element analysis ("FEA") of its own despite having in-house expertise in FEA. Following an order for specific disclosure which I made on 8 September 2010, it sought to rely upon an analysis of an FEA model created for Abbott, but ended up agreeing that the facts established by this did not go beyond points (i) and (iii) in paragraph 188 above. Nor has Medinol relied upon any photographs in support of its case.

191. Medinol did rely upon promotional materials issued by Abbott and evidence given by Mr Johnson as to the function of the loops in question in the Abbott Stents, namely to aid flexibility and conformability of the stents. This evidence does not establish, however, that the loops participate in expansion as distinct from bending of the stents.

193. … On the contrary, the burden lies upon Medinol to prove that the loops do widen in this scenario; Medinol have adduced no positive evidence to that effect other than Professor Snyder's opinion; Professor McHugh's evidence is to the contrary; and, even if the Abbott photographs and measurements cannot be relied on as positively proving that the loops do not widen, they are at least consistent with Professor McHugh's opinion. Certainly, Medinol did not conduct an experiment in reply to Abbott's experiment to show that taking photographs and measurements in a manner which was not subject to Medinol's criticisms lead to a different conclusion.

194. Counsel for Medinol argued strenuously that, even absent any other evidence, it should be inferred from points (ii)-(v) in paragraph 188 above that the loops on the outside of the stents widened when bent Abbott Stents were expanded. I am not persuaded that those matters do enable that inference to be drawn, however. Each of those scenarios involves some bending of the stent, whereas the scenario presently under consideration involves just expansion. In that respect, it is closer to scenario (i).

195. For these reasons, I conclude that Medinol has not proved that the loops do widen when the bent stent is expanded".

The PCC Page, no.6: Judge injects meaning into “SME Court”

The PCC Pages is a series of Tuesday features on the new regime for litigation before the recently revamped Patents County Court (PCC) for England and Wales, hosted by PatLit but furnished by the Chartered Institute of Patent Attorneys (CIPA). In this post, CIPA President Alasdair Poore focuses further on the rules relating to the transfer of litigation from the Patents Court.

Cautious Co: “So after all that stuff about costs [see The PCC Page No.5], tell me again what sort of case is suitable for the PCC, and what's all that about that transfer thing again?”

Optical Laboratories v Hayden Laboratories [1993] RPC 204 was a classic case under the “old regime” – that is the very old regime – of the PCC. It stands as one of the benchmarks of what went wrong with pleadings in the Patents County Court. More on that in future posts. Quoting Lord Justice Hirst, one can sense the incredulity: “The pleadings are by any standard astonishing documents” – in relation to a simplified procedure involving a defence of 128 pages and reply of 62 pages. Under the new rules, with Judge Birss QC, it seems likely that would be regarded as excessive. Indeed that concern about pleadings, and how the rules would address that, was one of the worries in the Working Group recommending the rule changes about the new rules. Now those worries are encapsulated in the rules in the word “concisely”.

This was a case started in the PCC, but Judge Ford refused to transfer it to the High Court. On appeal on an issue of calling two expert witnesses, McCowan LJ observed “I cannot help wondering if it is the sort of case for which the Patents County Court was designed”. The writer is sure that that would still be the case.

Judge Birss QC’s has given guidance on the transfer of cases in his judgment in ALK v Meridian Medical Technologies and Dey Pharma [2010] EWPCC 014, discussed here on the IPKat last week. This provides some useful insight into when a case is likely to be suitable for the PCC and when it is not, as well as when to transfer and when not.

Judge Birss QC repeated his conclusion from Technical Fibre, that the new rules apply to transfers, albeit taking into account that the case will be conducted on the basis of the old rules.

This case involved reasonably straightforward mechanical technology, involving a spring loaded syringe with a mechanism for covering the needle after use to prevent injuries by accidental stabbing – the well known Epipen, which allows patients to inject themselves with adrenalin in the case of a severe allergy reaction. The claim was for a declaration of non-infringement: infringement and validity were in issue, with one novelty citation and two obviousness citations. It was a case expected to last between 3 and 4 days at trial (and probably 2 days if it had been conducted under the new rules). In paragraphs 15 to 22, Judge Birss sets out briefly the framework of rules applicable to transfers. Of these, the amendments to the practice direction on transfers between the Courts in relation to the PCC, PD30 9.1 and 9.2 (affordability, value, complexity and trial length), are particularly important. His summary (para 25, last sentence) was that the Judge is
“to have regard to the financial position of the parties. He is not obliged to transfer if it is shown that the proceedings are likely to raise an important question of fact or law. But subject to those rules he should bear in mind that the Patents County Court was established to handle the smaller, shorter, less complex, less important, lower value actions. It was to provide cheaper, speedier and more informal procedures to ensure that small and medium sized enterprises, and private individuals, were not deterred from innovation by the potential cost of litigation to safeguard their rights”.
European Commission guidance on what a small or medium sized enterprise was found helpful (Commission Recommendation of 6 May 2003 concerning the definition of micro, small and medium sized enterprises" (2003/361/EC (see Article 2)) at OJ L 124/36 20.5.2003)

The judge found that it was a case which was suitable for the PCC in relation to the issues arising and the case management aspects. However, the value of the case (turnover over US$ 20 million) and the financial position of the parties (large parties) pushed it towards the High Court, but would not exclude it from being in the PCC. Ultimately (para 54) he found the decisive factor is that
"the court was set up to ensure that small and medium sized enterprises, and private individuals, were not deterred from innovation by the potential cost of litigation to safeguard their rights. With the new procedures in place I intend to devote my energies to making them work in order to achieve that objective. However this is not the case in which to do it”.
This will provide useful guidance for where to draw the line at least in some cases.

Tuesday 9 November 2010

Amendment mid-stream: a question of timing

In Omnipharm Ltd v Merial, a dispute before the Patents Court for England and Wales (extempore, helpfully noted by the Lawtel subscription service), Mr Justice Norris ruled that a party seeking a declaration of invalidity of two patents was permitted to amend its claim to seek a declaration of non-infringement under the Patents Act 1977 s.71, on the basis that questions about its standing to secure such relief could be addressed later in the proceedings.

Omnipharm -- a company that specialised in evaluating pharmaceutical products and clearing obstacles to marketing them -- lodged a revocation claim against two of Merial's patents. One of these patents was a European patent, the other a United Kingdom patent: both were to do with formulations of fipronil used in veterinary applications.

In these proceedings Omnipharm applied to amend its amend its claim in order to include a declaration under the Patents Act 1977 s.71 that what it intended to do what not in any event infringe Merial's patents. Merial opposed the application to amend. According to Merial, Omnipharm had no reasonable prospect of success in getting such a declaration since it couldn't show that it had the requisite intention to carry out the allegedly non-infringing acts. In this assertion, Merial sought to rely on evidence showing that Omnipharm inter alia (i) had no website, (ii) had not filed accounts for more than three years and had insufficient assets, (iii) had a registered office care of a firm of accountants and (iv) had no traceable office. Said Merial, if Omnipharm's amendment was permitted the issue of its standing to obtain a declaration of non-infringement should be tried as a preliminary issue.

Norris J granted the application to amend. In his view, in order to show that it was a person intending to perform the allegedly non-infringing act, it was sufficient for a party to declare only that it should like to do the intended act if it could. This application was not however the occasion on which to consider the conflicting evidence concerning Omnipharm's standing and Omnipharm had sufficiently pleaded its case for the amendment to be allowed. He added that there had been no formal application for the trial of a preliminary issue, and it was too soon in the proceedings to consider ordering one; there would however be a window in the proceedings, after disclosure, in which to address the issue of Omnipharm's standing to seek declaratory relief.

The PCC Page, no.5: taking a look at the road map

Navigating the PCC's new rules --
not a subject to take 'lightly'
The PCC Pages is a series of Tuesday features on the new regime for litigation before the recently revamped Patents County Court  (PCC) for England and Wales, hosted by PatLit but furnished by the Chartered Institute of Patent Attorneys (CIPA). In this post, CIPA President Alasdair Poore summarises the topics covered so far.


Time to get on with it then? Cautious Co is on holiday. Unlike most clients, he did not send fresh instructions just as he was leaving. Your advice has left him thinking, and left you some revision time. This note provides you with a quick series of links and reminds you of the speed limits on the way.

The starting point is the amendments to Part 63 of the Civil Procedure Rules (CPR). PatLit provided a neat summary of the effect of the changes. The amendments tie into other provisions of the CPR, and this note provides links to those, as well as flagging up those costs limits again.

When you look at those costs limits again you might get pretty nervous – they look very tight (just look at the actual costs on a pre-New Rules application in Beechwood (II), where summarily assessed costs came to £16,000, admittedly for summary judgment, so not just a straightforward application (para 13)).  Then compare it to the present limit, £2,500 (also interesting in that it sets out a order in full, although under the old rules). But remember:
• these are not limits on what you can spend -- just on what you recover from the other party or pay him. But make sure Cautious Co understands this;
• there are exceptions: conduct amounting to an abuse of the Court’s process (CPR 45.41(2)(a)), or a Certificate of Contested Validity issued by a court (but not the Intellectual Property Office?) (CPR 45.41(2)(b))
• Patent attorneys have better experience than other practitioners: working on cases in the EPO.
Another word of caution first. All the Civil Procedure Rules (CPR) are relevant – and it takes several volumes of the White Book to summarise those. But here are the references to the New Rules and bits referred to in them.

A good place to start is CPR 63 rules 17 to 26. They say that CPR 63 applies generally except to the extent modified, so you need to understand CPR 63. And there is a Practice Direction covering CPR 63. This sets out both useful information as well as specific provisions applicable to intellectual property cases. For example where to issues proceedings – more on that in a later note.

Starting a claim: A claim must be started in accordance with Part 7 (or Part 20 – where you are counterclaiming against the claimant or making any claim against a person who is not a party to the proceedings). Among other things, Part 7 explains that the claim must be issued with or followed within a short time by the particulars of claim.

Transfers: in the wrong place – CPR 63.18 applies and refers to Practice Direction 30.

Setting out the details: Particulars of Claim (speed limit £6,125 – including starting the claim). CPR 63.6 applies to the particulars of claim – it refers to Part 16, but adds some modifications. Then CPR 63.20 adds additional modifications for the PCC – the requirement that all facts and arguments be set out concisely, and confirming whether the claimant has complied with the Direction on Pre-action Conduct.

Statements of Truth (which need to be added to each statement of case and the claim form) – Part 63.21 applies and refers to the general requirements in Part 22 (and Practice Directions), but adds that a statement of truth must be given by the person or people who actually know the facts set out in the statement of case.

Defence (limit £6,125): CPR 63.22 provides that Order 63(7) does NOT apply to the defence; Part 15 applies with modifications set out in Order 63.22.

Case Management (limit for attendance £2,500). CPR 63.23 applies and refers to the Practice Direction on Part 63.

Disclosure and Inspection (limit £5,000): CPR 63.25 applies Part 31, and PD31A (general) and PD31B (electronic disclosure) with modifications, which mean that much will be of little interest.

Costs: there are other elements of costs you can claim. CPR 63.26 sets out all the details: where the Court makes a summary assessment of costs, it will do so in accordance with Section VII of Part 45. CPR 45 provides that in most cases the PCC will make a summary assessment of costs LIMITED on a scale basis (ie you may get less). As a reminder the scale is set out in the Costs Practice Direction at Section 25C. The scale is repeated below for quick reference. Note that the total of the figures adds to more than £50,000 – that does not mean you can get more than the limit set out in CPR 45.42 (£50,000 for the main proceedings; £25,000 for enquiry into damages).
Main proceedings: stage of a claim (maximum amount of costs)
Particulars of claim £6,125
Defence and counterclaim £6,125
Reply and defence to counterclaim £6,125
Reply to defence to counterclaim £3,000
Attendance at a case management conference £2,500
Making or responding to an application £2,500
Providing or inspecting disclosure or product/process description £5,000
Performing or inspecting experiments £2,500
Preparing witness statements £5,000
Preparing experts’ report £7,500
Preparing for and attending trial and judgment £15,000
Preparing for determination on the papers £5,000 
Enquiry into damages: stage of a claim (maximum amount of costs)
Points of claim £2,500
Points of defence £2,500
Attendance at a case management conference £2,500
Making or responding to an application £2,500
Providing or inspecting disclosure £2,500
Preparing witness statements £5,000
Preparing experts’ report £5,000
Preparing for and attending trial and judgment £7,500
Preparing for determination on the papers £2,500

Wednesday 3 November 2010

Pfizer: Abuse of dominant position?


The Italian Antitrust Authority (Autoritá Garante della Concorrenza e del Mercato), has opened a preliminary investigation affecting Pfizer’s Italian subsidiary in order to verify if it has artificially extended the patent protection of the active principle latanoprost in Italy, in order to prevent new generic drugs entering the market.

As the IAA informs in the press release published on October 26:

.- The investigation started with the information provided by Ratiopharm.

.- Investigation is addressed to verify if Pfizer Italy took some actions in order to increase the costs of Generic Companies, taking advantage of Pfizer’s dominant position in the market. Main actions taken by Pfizer would be:

a) Filing a divisional application for a patent, followed by a request for a Complementary Protection Certificate (eventually rejected by the European Patent Office) in order to extend patent protection until 2011.

b) Taking legal actions against Generic Companies that were working to commercialise the drug after patent lapsing term in 2009.

.- The decision was notified to the company today in the course of inspections carried out by officers of the IAA assisted by the Financial Police (Guardia di Finanza).

.- The proceedings will last approximately a year.

Just a few days before the press release, chatting with Jeremy on “strange times”, I made reference to “the US report Protecting Consumer Access to Generic Drugs: the Benefits of a Legislative Solution to Anticompetitive Patent Settlements in the Pharmaceutical Industry and the Executive Summary of the Pharmaceutical Sector Inquiry Report by the EU Commission”.

The investigation now started in Italy follows the second report, where the EU Commission concluded that “national policy makers and public authorities may decide to take further action”.
We will see how this interesting investigation ends.

In the meanwhile, you may find interesting reading the English translation we have made of the press release published by IAA:

PRESS RELEASE

DRUGS: COMPETITION AND ANTITRUST MARKET GUARANTOR AUTHORITY OPENS PRELIMINARY INVESTIGATION REGRDING POSSIBLE ABUSE OF DOMINANT POSITION BY PFIZER

The proceeding shall verify if the company has tried to artificially extend patent protection of the active principle latanoprost (used to treat eye glaucoma) to prevent or delay generic drugs entering the market.

The Italian Competition and Antitrust Market Guarantor Authority, at its meeting held on the 13th of October 2010, decided to open a preliminary investigation regarding the company Pfizer to verify if, by its actions, the company has artificially extended the patent protection of the active principle latanoprost in Italy, in order to prevent new generic drugs from entering the market.

As a note of the Authority informs, the decision, notified to the company today in the course of inspections carried out by officers of the Guarantor Authority assisted by the Financial Police, was taken in the light of a comprehensive report of the company Ratiopharm. In the complaint was highlighted the behaviour of Pfizer Italy S.r.l. aimed at preventing or delaying entry in the Italian market of generics drugs of specialty Xalatan, drug produced and marketed by Pfizer for the treatment of eye glaucoma. According to the documentation, Pfizer would have fraudulently applied for and obtained an extension of patent coverage, through a divisional application to a patent, followed by a request for a Complementary Protection Certificate (hereinafter CPC) in order to extend patent protection until 2011. The divisional patent, in respect of which the CPC was granted, has also been recently declared invalid by the same European Patent Office of Monaco.

The investigation - which fits in the wake of the recent Pharmaceutical Sector Survey completed in 2009 by the European Commission - will have to check whether the conduct of Pfizer had the purpose of preventing a new generic drug from entering the market, abusing the dominant position held in the market with regard to products for treating the eye glaucoma. In fact, considering that the patent protection would have supposedly expired in September 2009, the generic drugs producers were legitimately relying upon putting on the market a new generic drug on that date: in this context they had faced a series of investments, afterwards made vain with the extension of the patent protection period.

With his behaviour, also in Court, Pfizer would have tried to create a state of legal uncertainty about the possibility to market the new generic drug, in order to make more expensive - for the generic drugs sellers - the actual cost of market entry of the generic drug, in terms of programming and implementation.

The end of the proceeding is scheduled for October 15th, 2011.

Tuesday 2 November 2010

The PCC Page, no.4: ADR -- waste of space or chance of success?

Having opted for trial before the Patents
County Court, Cautious Co was no longer
tempted by other forms of dispute
resolution
To recap: the PCC Pages is a series of Tuesday features on the new regime for litigation before the recently revamped Patents County Court (PCC) for England and Wales, hosted by PatLit but furnished by the Chartered Institute of Patent Attorneys (CIPA). In this episode, CIPA President Alasdair Poore explains that the PCC does not exist in a vacuum and how its procedures can be complemented by Alternative Dispute Resolution.

Cautious Co., whom readers first met here, is quite keen on using the Patents County Court. The company's boss is however impatient to press on and asks:
"PCC: low costs, high speed; why do we need Alternative Dispute Resolution (ADR)? I just want the PCC to decide against my competitor!"
Is this not a good point? Doesn’t ADR just delay the final result? ADR is one of those widely misunderstood terms in the litigation lexicon. Most forms of alternative dispute resolution don’t resolve the dispute unless the parties agree that it can do so. But plenty of them could be helpful. They range from plain settlement negotiations, through conciliation and mediation (assisted negotiations), using Intellectual Property Office (IPO) opinions and early neutral evaluation (eg a trusted practitioner makes an independent assessment) to adjudication and arbitration – see ADR Now for a description of ADR processes, and CEDR, IPO, and the IPO’s list of providers for some mediation links.

Annex A 2.2(2) of the Practice Direction on Pre-Action Conduct suggests the parties should “set out the form of ADR (if any) that the claimant considers the most suitable and invite the defendant to agree to this”. And under the “old rules” His Honour Judge Fysh used to ask parties to add a preamble to the Case Management Order, confirming they had considered ADR.

But, bearing in mind lower costs and faster procedures under the new rules, and in the light of my warnings last week about the risks of forum shopping, does ADR have any place?

Beechwood House Publishing v Guardian Products [2010] EWPCC 12, just decided by His Honour Judge Birss QC and noted here, perhaps shows just why ADR could still be useful, but also highlights some problems. This case was a typical small intellectual property dispute – not a lot of money at stake; talk of settling for £3,000; but what about a “victory”?  The parties spent rather a lot of time on getting towards settlement, but did not quite make it to the finishing line– at least in the claimant’s view.

The first lesson was flexibility (both of the Court and the parties). The old rules applied (see Technical Fibre Products v David Walton Bell [2010] EWPCC 11, noted here – old rules still (mostly) apply to old cases). The hearing was on an application for summary judgment on (a) whether a settlement had been reached, and (b) infringement of database right.

Judge Birss immediately showed the flexibility of the PCC. Having observed that a full trial on such a dispute would be an “unedifying prospect” (para 12), all agreed that the settlement issue be decided on the merits on the papers before the judge – just the sort of determination envisaged more generally for the PCC (to avoid a summary judgment, it would have been enough to show only a real prospect of success.) This is a victory for good sense.

Secondly, to take the case forward, although it was under the old rules, the judge steered the parties towards thinking of expedited procedures such as those under the new rules, with a heavy emphasis on proportionality (para 77).

The issues on settlement were also significant. In IP disputes, ADR is often ruled out on the grounds that an owners want a VICTORY and the publicity which goes with it. One of the reasons the settlement fell apart here was the defendant’s desire for confidentiality. Judge Birss stated “This approach [no confidentiality] by holders of IP rights is a common one and is in my judgment entirely fair.” (para 21)

Consequently, sticking to ones rights while seeking settlement is perfectly sensible and supportable. You can attempt to settle AND ask for a public admission of liability. But you need to make sure that there really is a settlement. ADR can also be valuable in reducing the issues (see the current Patents Court and Patents County Court User Guide para 10 (and in practice probably did so here), even if there is not settlement; and clearly in a case such as this, where the amounts in issue are small, ADR still makes good sense, even after proceedings have been started.

However, the other warning should stand out. If you want to use ADR, make sure it is within firm defined and controlled constraints – time-limited, cost-effective and preferably final. Beechwood House Publishing v Guardian Products [2010] EWPCC 12 can show you how long it could otherwise take take.