by Bernward Zollner

Earlier this year the Ministry of Justice has submitted a bill which intends to grant a better protection to license agreements in case the licensor has to file a motion for the commencement of insolvency proceedings. According to the current statute the liquidator (insolvency administrator) has the right to terminate a license agreement. The suggested new regulation shall give the statutory right to licensee to request the liquidator to continue the license agreement under reasonable conditions. While the request of licensee is receiving attention by the liquidator the licensee shall have the right to continue the use according to the conditions of the terminated license agreement. If no other license agreement is concluded within three months upon the licensee’s request the licensee shall have a right to continue the use according to the conditions of the former license agreement under the two further conditions that (1) a reasonable royalty is paid by the licensee and (2) the licensee submits evidence within a term of two weeks that he has filed an action requesting the court to order that a license agreement be concluded. Altogether this scheme will give the licensee the chance to reconsider his situation within a time of four months and to launch an action asking for the conclusion of the new license agreement which in most cases will bring the advantage of gaining additional time.

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In ruling on an application to transfer a passing off and trade mark infringement action from the Patents County Court (PCC) to the High Court, HHJ Birss QC has provided further useful guidance for prospective litigants on use of the PCC as the chosen forum for intellectual property (IP) litigation.

The Claimant, Comic Enterprises Limited, is the owner of UK registered trade mark “the Glee CLUB” in class 25 (for various items of clothing) and class 41 (including entertainment services, production and presentation of television programmes). In September 2011, the Claimant issued proceedings in the PCC against Twentieth Century Fox Film Corporation over Fox’s use of the mark GLEE in connection with its popular television programme of the same name. The proceedings included an invalidity attack on the defendant’s UK registered trade mark for GLEE (covering cosmetics) which additional claim allowed the proceedings to be served within the jurisdiction.
In January of this year, the defendant issued an application to transfer the action from the PCC to the High Court. The contested application came before HHJ Birss QC on 17 February 2012. While it is now well understood that the PCC is set up to assist small and medium enterprises (SMEs) gain access to justice in IP matters, the weight that should be given to allowing an SME access to justice by retaining a case in the PCC where that SME was suing a large defendant had not until this case been given judicial consideration.
Contrary to the defendant’s assertions, the judge found that an SME’s access to justice was not just another factor that was to be weighed up against all of the others. However, this did not mean that SMEs had an unfettered right to litigate in the PCC as each case ultimately would turn on its own facts. It is HHJ Birss QC’s analysis and application of the facts in this case that provides the further useful guidance for litigants seeking to maintain an action in the PCC. On a review of the facts, the judge found that the claimant had sought to run its case like a High Court action, and so ordered the requested transfer. This finding was based upon the following aspects of the claim and the claimant’s behaviour in relation thereto:

• The claimant alleged that the broadcasting of the defendant’s television programme was an act of trade mark infringement and passing off. The claimant sought an injunction that would cause the defendant’s television programme (in its current form) to be taken off the air. This, the judge found, had a substantial financial significance for the defendant, and was a strong factor in favour of transfer to the High Court. In this regard, the judge asked the claimant whether it would be prepared to withdraw the claim for injunctive relief if the matter was maintained before the PCC but the claimant was not prepared to do so. This was highly significant.

• The claimant was found to have maintained its passing off and trade mark claim on “a broad and unspecific basis despite a proper request for further information”. The judge gave the example of paragraph 7 of the Particulars of Claim which plead a case of trade mark infringement based on similar goods (inter alia) but did not say what goods of the defendant are said to be similar to what goods covered by the registration. The judge also gave the example of the claimant not pleading all of the instances of confusion it relied upon. HHJ Birss QC described this as “not a Patents County Court approach to litigation”.

• The PCC does not normally hear cases for longer than two days, but in appropriate circumstances will do so. The claimant ran a prominent argument that the defendant “knowingly and calculatingly committed the acts complained of”. The judge noted that this was a “highly charged issue which will inevitably require disclosure and no doubt cross-examination and will lengthen the proceedings.” This particular plea was required to support the claimant’s claim for enhanced damages.

While each case will turn upon its own facts, it is useful for an SME considering the PCC as a forum for litigation to note the points listed above and the compromises that may need to be made in order for it to avoid the greater financial risks of High Court litigation and preserve the advantages offered by the PCC.

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Last month both the U.S. Supreme Court and the U.S. Court of Appeals for the Federal Circuit issued important decisions relating to method of use patents in the Hatch-Waxman Abbreviated New Drug Application (ANDA) patent litigation framework. These cases underscore unique aspects of method of use patents in the ANDA context.

The Hatch-Waxman ANDA Framework

The Orange Book

When a brand manufacturer obtains FDA approval for a new drug product or method of treatment, it submits to the FDA a list of relevant patents and their expiration dates. For method of use patents, the brand manufacturer must provide a description of the methods, which is referred to as the “use code narrative.” The FDA does not investigate or verify the identified patents or uses, but publishes the information in its “Approved Drug Products With Therapeutic Equivalence Evaluations,” a/k/a, the Orange Book.

A generic drug manufacturer may seek FDA approval to market a generic version of an approved drug by filing an Abbreviated New Drug Application (ANDA). An ANDA must include a certification regarding each patent listed in the Orange Book for the product at issue, chosen from the following:

A paragraph I certification states that there is no patent information listed in the Orange Book
A paragraph II certification states that the listed patent has expired
A paragraph III certification seeks approval on the date on which the listed patent will expire
A paragraph IV certification states that the listed patent is invalid or will not be infringed by the generic product

Generic Carve-Out Labeling

When a product is covered only by one or more method of use patents (as opposed to product patents), a generic manufacturer can file an Abbreviated New Drug Application (ANDA) that seeks FDA approval for a use that is not covered by the patent(s). Under these circumstances, the generic manufacturer must make a ”section viii” statement certifying that the method of use patent “does not claim a use for which the [ANDA] applicant is seeking approval,” as reflected in the generic manufacturer’s proposed labeling. When reviewing this type of ANDA, the FDA compares the brand product’s use code narrative with the generic manufacturer’s proposed labeling to confirm that there is no overlap between the uses.

ANDA Litigation

According to the Hatch-Waxman Act, the filing of an ANDA with a paragraph IV certification constitutes an act of patent infringement. By its express terms, 35 USC § 271(e)(2) makes it an act of infringement to file an ANDA “for a drug claimed in a patent or the use of which is claimed in a patent.” In accordance with the 2003 Federal Circuit decision in Warner-Lambert Co. v. Apotex, Corp., the artificial infringement pertains only to “a patented use that has been approved by the FDA.”

The Hatch-Waxman ANDA litigation framework enables a patent owner to bring an infringement action against an ANDA applicant who has made a paragraph IV certification, permitting resolution of the patent issues before the generic product enters the market. Indeed, the FDA will approve the generic drug notwithstanding the Orange Book listed patent(s) unless the patent owner brings an infringement action against the ANDA applicant within 45 days of receiving notice of the paragraph IV certification. If the patent owner commences ANDA litigation, the FDA will not approve the drug for thirty months (this is often referred to as a “thirty month stay”), unless the litigation is resolved earlier.

ANDA Litigation Counterclaim

The Hatch-Waxman Act ANDA litigation provisions include a clause introduced by a 2003 amendment (21 USC § 355(j)(5)(C)(ii)(I)) that permits a generic manufacturer to challenge the Orange Book listing under certain circumstances:

[The ANDA] applicant may assert a counterclaim seeking an order requiring the holder to correct or delete the patent information submitted by the holder under subsection (b) or (c) of this section on the ground that the patent does not claim either–
(aa) the drug for which the application was approved; or
(bb) an approved method of using the drug.

The Supreme Court Decision in Caraco

In a decision issued April 17, 2012, the U.S.  Supreme Court issued a unanimous decision in Caraco Pharmaceutical Labs., Ltd. v. Novo Nordisk A/S, finding that 21 USC § 355(j)(5)(C)(ii)(I) provides a mechanism for a generic drug manufacturer to challenge the accuracy of a use code associated with an Orange Book listed patent.

The issue presented in Caraco was whether this statute permits a counterclaim when the listed patent does claim an approved method of using the drug, but the use code narrative (allegedly) describes the use over-broadly.

The product at issue was the drug repaglinide, which Novo Nordisk A/S markets under the brand name Prandin®. The FDA has approved the drug for three uses:

1. repaglinide by itself (i.e., monotherapy)
2. repaglinide in combination with metformin
3. repaglinide in combination with thiazolidinediones 

The Orange Book listed two patents for Prandin®: 

1. U.S. RE 37,035, which includes product claims and expired March 14, 2009
2. U.S. 6,677,358, which includes combination product and method claims using repaglinide and metformin, and which is set to expire June 12, 2018:

A method for treating non-insulin dependent diabetes mellitus (NIDDM) comprising administering to a patient in need of such treatment repaglinide in combination with metformin.

The Orange Book listing for the ’358 patent was amended to have the following use code:

U-968–A method for improving glycemic control in adults with type 2 diabetes mellitus.

Caraco asserted a counterclaim in the ANDA litigation, “requesting an order requiring Novo to change the use code for the ’358 patent” and alleging that the new use code “was overbroad because it incorrectly suggested that the ’358 patent covered all three approved methods of using repaglinide even though it claimed only one approved method.”

The Supreme Court Decision

In a unanimous decision, the Supreme Court held

a generic manufacturer can use the counterclaim provision of 21 U. S. C. §355(j)(5)(C)(ii)(I) to “force correction of a use code that inaccurately describes the brand’s patent as covering a particular method of using the drug in question.”

The Supreme Court arrived at its interpretation of the statute after considering together both its “statutory text and context.” The Supreme Court also noted that the FDA itself does not review the accuracy of the use code information provided by the innovator patent holder, but “takes that code as a given.” The Supreme Court explained: 

The statutory scheme, in other words, contemplates that one patented use will not foreclose marketing a generic drug for other unpatented ones. Within that framework, the counterclaim naturally functions to challenge the brand’s assertion of rights over whichever discrete use (or uses) the generic company wishes to pursue. That assertion, after all, is the thing blocking the generic drug’s entry on the market. The availability of the counterclaim thus matches the availability of FDA approval under the statute: A company may bring a counterclaim to show that a method of use is unpatented because establishing that fact allows the FDA to authorize a generic drug via section viii.

 The Federal Circuit Decision in Bayer v. Lupin

On April 16, 2012, the Federal Circuit issued its decision in Bayer Schering Pharma AG v. Lupin, Ltd., holding that the Abbreviated New Drug Applications at issue did not infringe the asserted patent related to Yasmin. In particular, the Federal Circuit agreed that the FDA had not approved Yasmin for the method of use claimed in the patent, and so filing the ANDAs could not amount to infringement of the patent. While this case is similar to Caraco in that it relates to a method of use patent in the ANDA framework, it raised different issues.

The Product At Issue

The product at issue was Bayer’s Yasmin product, which is approved for oral contraception. The patent at issue was U.S. Patent 5,569,652, which claims methods of “simultaneously achieving . . . a gestagenic effect, antiandrogenic effect, and an antialdosterone effect ….” (Two other patents listed in the Orange Book for Yasmin are not at issue in this case.)

The ANDA Litigation

The defendants in this case—Lupin, Watson and Sandoz—each filed ANDAs with paragraph IV certifications regarding the Orange Book listed patents, including the ’652 patent. Bayer sued each defendant, alleging infringement under 35 USC § 271(e)(2) of the ’652 patent  (only).

Watson and Sandoz moved for judgment of noninfringement on the pleadings (under Federal Rule of Civil Procedure 12(c)), arguing that “their ANDAs related to the use of the generic form of Yasmin only for oral contraception and not for the combination of uses claimed in the ’652 patent.” The district court agreed, and granted their motions. In so doing, the court “noted that the FDA had approved the use of Yasmin only for oral contraception, and not for the simultaneous treatment of three conditions . . . [as] claimed in the ’652 patent.” Moreover, because “there was nothing in the record to indicate that the defendants sought to promote their generic versions of Yasmin based on the anti-androgenic or anti-aldosterone properties claimed in the ’652 patent, the court rejected Bayer’s claim that the defendants were liable for inducement of infringement.” Based on that ruling, Bayer and Lupin stipulated to, and the court entered, final judgment in that suit as well.

The Federal Circuit summarized the governing principles as follows:

Based on Warner-Lambert and Allergan, the defendants’ conduct would constitute infringement under section 271(e)(2)(A) (or inducement of infringement under section 271(b)) only if the defendants’ ANDAs sought approval for the use protected by the ’652 patent, i.e., for the combination of a gestagenic effect, an anti-androgenic effect, and an anti-aldosterone effect in patients needing that combination of effects.

Given the ANDA framework, “the use or uses for which the ANDAs seek FDA approval are necessarily the same as the uses for which the FDA has given its approval by granting Bayer’s NDA.” Thus, the “narrow” question before the court was:

whether the FDA has approved the use of Yasmin to achieve the combination of the three effects claimed in the ’652 patent.

In deciding this issue, the Federal Circuit noted that the “Indications and Usage” section of the approved Yasmin label states:

Yasmin is indicated for the prevention of pregnancy in women who elect to use an oral contraceptive.

The court noted that “that characterization tracks the FDA’s approval letter for Yasmin, which stated that the NDA ‘provides for the use of Yasmin . . . for oral contraception.’” Although information in the “Pharmacodynamics” subsection of the “Clinical Pharmacology” section of the label referenced the effects claimed in the ’652 patent, the Federal Circuit disagreed that the presence of that information indicated that the FDA had approved Yasmin for those uses. To the contrary, the court found no indication that the FDA had determined that Yasmin is “safe or effective in inducing those effects.”

The court concluded:

The defendants’ ANDAs seek approval to market the generic form of Yasmin solely for contraceptive use, and there is no valid patent on the use of the drug for that purpose alone. The FDA-approved label for Yasmin does not indicate to physicians that the specific use claimed in the ’652 patent, i.e., producing contraceptive, anti-mineralocorticoid, and anti-androgenic effects in premenopausal and menopausal women with a specific need of all three effects, is safe and effective. Therefore, we agree with the district court that the FDA has not approved such use and that the defendants cannot be held liable for infringement of the patent.

The Unique Role of Method of Use Patents

In addition to addressing specific issues that surround method of use patents in the ANDA patent litigation framework, these cases underscore the unique role of method of use patents in the pharmaceutical context. In both cases, patents directed to the drug and to first therapeutic uses of the drug had expired or were close to expiring. The brand manufacturers were able to supplement their patent positions by obtaining new method of use patents, but ultimately were not able to prevent regulatory approval of generic products. Once generic products are on the market, however, the brand manufacturers can police their marketing programs for activities that might amount to inducing infringement of the method of use patent(s).

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Fairly recent case law of the EPO suggests that the concept of individualized disclosure may reach further than many people think. This can have severe implications for the validity of patents and patent applications, especially in the field of chemistry and life sciences. In the following these decisions and their potential consequences are analyzed and some recommendations are given.

The concept of individualization, i.e. singling out a specific embodiment from a generic disclosure, in various instances is a key concept of the EPO for assessing the “quality” of disclosures. It is applied in the examination of novelty of selection inventions. If the features of the claim characterize an individualized embodiment, the claim is novel with respect to a generic prior art disclosure encompassing this embodiment. It is equally important for the comparison of claims with the disclosures of the application as filed or the priority document when examining added matter and entitlement to priority, respectively. A claim pertaining to an individualized embodiment contains added matter in respect of a generic original disclosure and it cannot validly claim entitlement to priority of a generic disclosure in the priority application. Of course, the situation is reversed if the claim and the respective other disclosure are both generic, or if both are individualized. The following tables summarize the different scenarios:

In the past, the author (and presumably other practitioners, too) relied on some simple rules when determining whether a contemplated amendment is “safe” in view of the risk of creating added matter or losing priority. For instance, it was considered that a single selection from a single list should be safe (relying on the two lists theory established in T 12/81 and T 7/86), and that a shrinking of lists should also be safe, provided the majority of previously claimed embodiments is maintained in the amended claims (relying on T 615/95). In both cases it was thought that the amendment keeps the subject-matter of the amended claim at the same level of generality as in the claim before amendment, so that no individualization is created where there was none before.

The following decisions suggest that it may be time to reconsider whether such simple rules of thumb are generally applicable:

• The patent-in-suit in T 98/09 was about compositions containing a fungicide in combination with an insecticide. During examination already, the main claim has been restricted to one single fungicide representing a member of a list of originally disclosed 47 individual fungicides. During opposition, the insecticide was restricted, starting from a generic formula (I) as granted, to all specific embodiments originally disclosed (i.e. 6 compounds). The Board held that the resulting combination contains added matter in relation to the original disclosure. This finding was primarily based on the understanding that the 1×6 combination in the claim individualizes all six combinations claimed, while the original 47×6 combination was generic in nature. It is conspicuous that the reasons given by the Board would apply in exactly the same manner if the six specific insecticides had been present in the claim already at the time of filing, i.e. if only a single restriction of the claim had been effected.

• In T 1808/08, patentee amended a claim directed to a polymerization process by canceling four of the eight listed monomer types, and by deleting one of the three listed catalyst types. The Board found these deletions to give rise to a novel selection from the previous claim. In the absence of better support elsewhere, the amendment was not allowed. Whilst not being expressly stated in the reasons of the decision, it is apparent that the Board considered the 2×4 combination of the amended claim to individualize all eight combinations, whereas the previous 3×8 combination was apparently found to be a generic disclosure.

• T 783/09 was in the field of pharmaceuticals. The claim at issue concerned a combination of a single dipeptidylpeptidase (“DPP”)-IV inhibitor with at least one of three listed antidiabetic agents. This feature combination was based on an original disclosure of preferred combinations of two DPP-IV inhibitors with 22 antidiabetic agents. The Board took the view that the amendment complied with Article 123(2) EPC mainly because all 44 combinations of the original disclosure were found to be disclosed in individualized form – just like the three combinations after the amendment.

The following table summarizes the rulings of the above decisions with respect to the concept of individualization.

The conclusions to be drawn from these decisions are:

• In some instances, an individualized disclosure may be created by a single selection.

•  A presumed shrinking of lists risks may turn out to be an individualization of feature combinations even if only a minor part of the embodiments is deleted.

•  An individualized disclosure may be found in (or created by) feature combinations covering far more than a simple 1×1 combination.

So, how may this affect our daily practice?

1. When drafting applications, it is recommended to expressly describe not only preferred and more preferred features, but also different combinations of such groups of preferred features. But beware, a mere listing of all conceivable permutations could be counterproductive if the total number of listed combinations becomes too large: it has already happened in such cases that EPO examiners completely disregarded such disclosures of feature combinations as being of no technical significance.

2. When amending the claims – especially before grant – one should be even more careful not to delete alternative feature combinations from the claims if not strictly necessary in view of the raised objections.

3. When defending amended claims in opposition proceedings, T 783/09 may prove to be helpful if there is a disclosure of a subgenus of comparable level of generality that could provide support for an amended claim.

4. When attacking in opposition proceedings, all of the above decisions may provide good ammunition for denying novelty by selection. Depending on the circumstances, these decisions may also be useful for attacking amendments, especially if they were justified by patentee as being a mere shrinking of lists in accordance with T 615/95.

Of course, each case is different and a variety of further factors will also have to be considered, such as the information content in the examples or the presence or absence of technical effects associated with the selection. Hence, the applicability of the above case law and conclusions should be checked on a case-by-case basis. Moreover, it is clear that there are many other decisions of the EPO, which apply different standards. Keeping the above decisions in mind may nevertheless be advantageous – especially when prosecuting important cases – to avoid unpleasant surprises after grant.

 
Matthias Wolf/Martin Bachelin

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By decision of 5 April 2012, no. 5497, the Italian Supreme Court resolved an interesting case concerning the application of Article 68 (3) Italian IP Code, according to which “Whoever, in the course of 12 months preceding the filing date of the patent application or its priority date, has made use of the invention in its business, may continue making use of the same within the limits of the pior use”. The case concerned the infringement by Fidia Farmaceutici S.p.A. of two patents held by Chemi S.p.a.: one, filed on 28 April 1999 and claiming a process for the preparation of phosphatidylserine (Ps); the other, filed on 5 December 2001 and claiming a process for the purification of the same active substance. In the first instance, the patents were found valid and infringed. However, it was also found that, prior to the filing of the first of the two patents, Fidia had already made use of both processes (preparation of Ps and its purification) within its production plant, use which had continued after the filing of the patents. As regards the application of Article 68 (3), Fidia in particular argued that the “limits of prior use” had to coincide with Kg. 7,008.80 kg of “purified” Ps that it had produced in the 12 months preceding 5 December 2001, i.e. the filing date of the second patent, being an amount higher than that produced in the 12 months prior to the filing of the first patent. The Court of first instance accepted this reasoning and said amount per year was “taken out” from the calculation of the damages awarded concerning the continued production carried out by Fidia for the period after the filing of the patents. The Court of Appeal partially reversed the decision of first instance concluding that, if after the filing of the first patent, based on prior use, the production by Fidia of a certain quantity of Ps was to be considered lawful, “the filing of the second patent (which only concerned a purification process of the same substance) could not possibly broaden the scope of the lawful production of the same substance”. The “limits of prior use” coincided therefore with the annual quantity of Ps that Fidia had produced and purified in the 12 months preceding the filing of the first patent, i.e. Kg. 2,344.98 per year. The Supreme Court confirmed the decision of the Court of Appeal, by stating that the limit set forth by Article 68 (3) IP Code, besides being a “quantitative” limit, also has a “qualitative” character, in the sense that it “serves to identify the business behaviour which determines the limit of the monopoly granted to the patent holder in respect of the prior user”. Therefore, as the prior use of both teachings resolved itself in one single business behaviour by Fidia, within which it was impossible to attribute an autonomous economic value to the purification process (claimed by the second patent), said prior use could only protect Fidia in respect of the first patent. This reasoning is not convincing and the language used by both the Court of Appeal and the Supreme Court is misleading. in substance, however, the outcome may not be the wrong one: in principle, Fidia had the right to claim prior use in respect of both patents, including the second one; however, as the product manufactured by Fidia and infringing the two patents had always been the same (always simultaneously using both the preparation and the purification processes), as regards the production carried out in the 12 months preceding the second patent application, even if Fidia could have in principle claimed prior use in respect thereof, Fidia was at the same time infringing the first patent. In this situation, as to the quantification of the damages to be awarded, taking out from the overall calculation a yearly quantity of Ps coinciding with that produced in the 12 months preceding the first patent application would seem to be the correct approach.

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The Polish Supreme Administrative Court has recently recognized a contradiction between the decisions of the Polish Patent Office regarding computer-implemented inventions and the practice of the European Patent Office (EPO). However, it is too early to say for certain whether Polish administrative courts have definitely changed their approach to so-called software patents.

In a recent patent case, the Polish Supreme Administrative Court invalidated a decision issued in 2007 by the Polish Patent Office which refused to grant a patent for an invention related to digital electronics. Pursuant to its longstanding practice in the area of so-called software patents, the Polish Patent Office held that the invention was not of a technical character and therefore was not patentable, despite the fact that the European Patent Office had granted a European patent for the same invention. In other words, the Polish Patent Office refused to issue a patent to an applicant already approved by the EPO.

As previously posted on this blog, the Polish Supreme Administrative Court has already focused its attention on the issue of whether the granting of a European patent should have any binding effect on decisions made by the Polish Patent Office. In other words, the question is whether the Polish Patent Office has the authority to refuse a patent if the applicant has already been approved by the EPO. Nevertheless, the judgment of the Polish Supreme Administrative Court of 19 March 2012 is without precedent because it has changed the Polish Patent Office’s usual approach in determining the technical character of inventions. Furthermore, in its ruling, the Court referred not only to the provisions of the EPC and the TRIPS Agreement, but also to the technological advances of humankind.

The Court clearly held that while examining patentability requirements, the Polish Patent Office should take into account the current state of the art, which is variable by its very nature. Furthermore, patentability requirements should be examined in the light of the statutory aims of Polish patent law. The court also noted that great technological advances across many industries have been made in recent years, which must have an effect on the practice of the Polish Patent Office. Thus, the Polish Patent Office, while conforming to the provisions of Polish patent law, should change its approach on the subject matter of the technology. In addition, in order to do so, the Polish Patent Office should use appropriate methods of interpreting legal rules in order to guarantee the fulfillment of their statutory aims.

The Polish Supreme Administrative Court also confirmed that Polish patent law does not provide a definition of what constitutes an invention. However, in order to be patentable, an invention must meet the patentability criteria: an invention should be new, involve an inventive step, and possess potential for industrial application. Furthermore, the Court held that, according to Polish patent law, patents are granted for inventions regardless of the field of technology. The Court also highlighted the similarity between Polish regulations and those expressed in Article 52.1 of the EPC. Thus, because Poland signed and ratified the requirements of patentability formulated in the EPC, the Polish Patent Office should adopt comparable requirements. Furthermore, the Polish Supreme Administrative Court held that as a signatory to the Convention, Polish national law should not only be adjusted to the Convention, but it should also use the broadest interpretation of patentability requirements expressed in the decisions of the EPO.

It can be argued that this judgment encourages a more liberal application of patent requirements for technical inventions and at the same time remains within the bounds of EPC customs in order to account for the technological advances of humankind. Therefore, it may be truly ground-breaking in nature. However, future decisions will show whether this was simply a one-off case or whether it signals the beginning of a new era in judicial decisions related to computer implemented inventions in Poland. Only time will tell if the Polish Patent Office will indeed follow the rules formulated by the Polish Supreme Administrative Court.

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By Stephan von Petersdorff-Campen

Under paragraph 103 of the German Insolvency Act, an insolvency practitioner has the right to choose whether or not to honour existing contracts of the insolvent company. Does this right also apply for any patent licences granted by the insolvent company?

The Regional Court Munich has ruled in a case in which the insolvent patent holder had granted a simple licence to a third party (judgment of 9 February 2012 – Az. 7 O 1906/11). Astonishingly, there is currently no case law for such a constellation – after all, it is of substantial financial importance for the licensee that any investments in manufacturing plants, warehouses and marketing be safeguarded. The Regional Court Munich assumes that, where both parties have met their obligations arising from the licensing agreement, the insolvency practitioner does not have the right to choose. The Court further assumes such obligations to have been met where (i) the licence has been granted irrevocably and without time limit, and (ii) the licensee is no longer required to pay licensing fees, for instance because the licence is a paid-up “one-stop shop” licence or else a royalty-free cross license.

This decision has been criticised as being too narrow on the grounds that simple licences are assets, and as such must be exclusively granted to the licensee and no longer be at the patent holder’s disposal. It would then be irrelevant whether the licensee has outstanding contractual obligations, as in the case of revenue-dependent licensing fees (Haedicke, GRUR-RR 2012, 145).

Conclusion: Insolvency unsolved. The judgment of the Regional Court Munich is not final. It remains to be seen whether a supreme-court pronouncement will follow to clarify the issue: are simple patent licences insolvency-proof?

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In a decision of 21 March 2012, the Cour d’Appel of Paris ruled on the issue of the appraisal which the French judge has to make when a request for a preliminary injunction against acts allegedly infringing a patent or an SPC is referred to him.

Novartis AG is the holder and SAS Novartis Pharma is the licensee of French patent FR 88 02 597 and of SPC No. 98C0033, both relating to “Rivastigmine”, which is a phenyl carbamate with anticholinesterase activity useful in the treatment of senile dementia.

Rivastigmine is marketed by SAS Novartis Pharma in France, under the name Exelon, for the symptomatic treatment of Alzheimer’s disease and Parkinson’s-related dementia.

The rights on SPC No. 98C0033 expire on 31 July 2012.

Since October 2010, Novartis AG and Novartis Pharma (hereinafter referred to as “Novartis”) had become aware that Mylan and Qualimed were carrying out the necessary formalities to place on the French market generic drugs of the proprietary drug Exelon (1.5, 3, 4.5, 6 mg, capsule):

• On 1 and 4 October 2010, the Agence Française de Sécurité Sanitaire des Produits de Santé (AFSSAPS) granted Mylan and Qualimed the marketing authorisation (MA) for the proprietary drugs named “Rivastigmine Qualimed” and “Rivastigmine Mylan” (1.5, 3, 4.5, 6 mg, capsule);
• These MAs were registered in the index of generic drugs by way of a decision of the AFSSAPS dated 23 December 2010;
• Mylan and Qualimed filed an application with the Comité Économique des Produits de Santé (CEPS) for the registration of their proprietary drugs “Rivastigmine Qualimed” and “Rivastigmine Mylan”;
• On 17 February 2011, the CEPS informed Novartis Pharma that Mylan, which is the owner of Qualimed, had indicated that it “could market its generic drugs without infringing Novartis’ rights over SPC No. 98C0033” within six months following their registration in the Official Journal;
• The drugs Rivastigmine Qualimed and Rivastigmine Mylan were registered in the list of refundable medicinal products on 29 April 2011.

Consequently, on 17 March 2011, Novartis summoned Mylan and Qualimed to appear before the Judge ruling in preliminary proceedings of the Tribunal de Grande Instance of Paris, requesting, an order enjoining them from infringing patent FR 597 and SPC No. 98C0033 pursuant to Article L. 615-3 of the French Intellectual Property Code.

According to Article L. 615-3, as amended by the 29 October 2007 Act, implementing Article 9 of Directive (EC) No. 2004/48, any person with authority to bring an action for infringement may request that the Judge ruling in preliminary proceedings order any measure aimed at preventing an imminent infringement of its rights or aimed at putting a stop on allegedly infringing acts.

Article L. 615-3 of the French Intellectual Property Code “Any person with authority to bring an action for infringement may, in preliminary proceedings, request the competent civil court to order, under a penalty of a daily fine if necessary, against the alleged infringer or intermediaries whose services it uses, any measure aimed at preventing an infringement about to be committed against rights conferred by the title or aimed at stopping any further allegedly infringing act. [...]The court, in preliminary or ex parte proceedings, may order the requested measures only if evidence, reasonably accessible to the claimant, make it likely that its rights are infringed or that such infringement is about to be committed”.

In this particular case, the claimants precisely wanted to prevent an imminent infringement of their rights and they requested, pursuant to Article L. 615-3, that the two competitors be enjoined from importing and/or manufacturing, holding, using, offering for sale and selling, and more generally from marketing the drugs Rivastigmine Mylan and Rivastigmine Qualimed (1.5, 3, 4.5 and 6 mg, capsules), under this name or any other name.

However, by way of an order handed down on 21 June 2011 after hearing all the parties, the Judge ruling in preliminary proceedings of the Tribunal de Grande Instance of Paris dismissed Novartis’ claims against Mylan and Qualimed mainly on the grounds of the dispute relating to the lack of inventive step, based on some prior art documents, likely to deprive of validity patent FR 597, whose claimed protection extends to SPC No. 98C0033.

Novartis then lodged an appeal against this decision.

It set out that, pursuant to Article L. 615-3, the preliminary injunction is subject to the likelihood of the infringement. If the patent seems obviously invalid to him, the Judge ruling in preliminary proceedings is certainly right in deeming the infringement not likely. However, this obviousness of the patent invalidity was not the criteria or the condition held in the order, as the first instance Judge thought he could based his decision on the likelihood of a lack of validity of Novartis’ patent. However, the mere likelihood of a lack of validity is not enough to dismiss the claim based on Article L. 615-3 since the Judge ruling in preliminary proceedings, who is also referred to as the “juge de l’apparence” (judge ruling on appearances) or “juge de l’évidence” (judge ruling on obviousness), does not rule on the merits of the case but only renders an interim decision based on the elements that are brought before him, and therefore does not have at his disposal all the necessary elements to decide whether the patent in dispute should be held valid or not. Therefore, Novartis asserted that the appealed order contained a “serious error” on this issue.

It also set out that, in the present case, the likelihood of the infringement of Novartis’ patent and SPC was neither disputed nor disputable since the generic drugs of Mylan and Qualimed were, by definition, copies of the patented drug. Nor was there any doubt or real dispute as to the imminence of the infringement before the first instance Judge.

Novartis also developed arguments to dispute the invalidity of its patent because of a lack of inventiveness. In turn, Mylan and Qualimed requested that the Cour d’Appel of Paris affirm the appealed order and developed arguments according to which the basic patent was invalid.

In its 21 March 2012 decision, the Cour d’Appel of Paris accedes to Novartis’ reasoning about the condition for initiating preliminary injunction proceedings provided for by Article L. 615-3.

The procedure provided for by Article L. 615-3 is autonomous and the conditions for its application differ from those set by Articles 808 and 809 of the French Code of Civil Procedure concerning general preliminary proceedings.

Article L. 615-3, as amended by the 29 October 2007 Act, merely subordinated its measures “to the likelihood of the infringement of the protected rights and not to the likelihood of the validity of the patent from which they derive”. And “before the Judge ruling in preliminary proceedings, Judge ruling on obviousness, only the obvious invalidity of the title can make it unlikely that these rights are about to be infringed”.

In this case, there was precisely such a likelihood that Novartis’ patent and SPC were about to be infringed and there was no obvious invalidity of patent FR 597, whose claimed protection extends to SPC No. 98C0033:

• Mylan and Qualimed’s generic drugs were, by definition, copies of the patented drug and, consequently, potentially infringing products (“it is not disputed that these drugs, which constitute generic drugs, i.e. products that are drugs having the same qualitative and quantitative compositions in active ingredients as the reference drug as well as the same pharmaceutical form, copy the drug covered by SPC No. 98C0033, whose rights benefit Novartis and expire on 31 July 2012”);
• The mere formalities carried out by Mylan and Qualimed before the AFSSAPS and the CEPS could not demonstrate an imminent infringement. The French legislator had expressly authorised generic manufacturers to carry out all the necessary formalities to place on the market their products before the extinguishment of the intellectual property rights over the proprietary drug (Article L. 5121-10 of the French Public Health Code; see also Article L. 613-5 d) of the French Intellectual Property Code). However, the declaration of Mylan, before the CEPS, that it “could market its generic drugs without infringing Novartis’ rights over SPC No. 98C0033” within six months following their registration in the Official Journal, assuredly demonstrated sufficiently that the infringement was imminent;
• While only the obvious invalidity of the title can make it unlikely that the protected rights are about to be infringed, such was not the case of Novartis’ patent FR 597 whose claimed protection extends to SPC No. 98C0033. Unless he was setting himself up as a scientist, the Judge ruling in preliminary proceedings, in view of his powers, could not consider as obvious all of Mylan and Qualimed’s arguments against the inventiveness while the respondents themselves underline the necessary interpretation of scientific documents and analyses. We must agree with this idea, already stated, for example, by the Cour de cassation in another context (Civ. 1re, 11 July 2006, No. 03-19838): by definition, what needs interpretation is not obvious.

The Cour d’Appel of Paris finally underlines the practical legitimacy of its solution which dismisses the claim for a preliminary injunction against an imminent infringement only on the grounds of the obvious invalidity of the title.

Although they had been granted the MA for their generic drug on 1 and 4 October 2010, had decided to market it approximately fifteen months before the expiry of the SPC in issue, and although patent FR 597 had been filed for approximately twenty years, Mylan and Qualimed waited until the last moment, i.e. the day after the summons to appear in preliminary proceedings which had been served upon them by Novartis (17 March 2011), to serve a summons upon Novartis in order to note the invalidity of patent FR 597 for lack of novelty or inventive step.

Therefore, Mylan and Qualimed could only blame themselves if they suffered from the effects of the immediate injunction based on a patent that might be held invalid later by the trial court. The preliminary proceedings are not appropriate to defend themselves by invoking grounds that are not obvious in support of their claim for invalidity.

“Mylan and Qualimed only had to serve the summons for invalidity of the said patent within the time limit allowing them to obtain a judgment on the merits, before proceeding, if necessary, to the marketing of the drug at issue, in order to avoid infringing the rights of the holders of this patent”.

It has some flavour of the “clear the way” concept applied by the English courts (which may be given less weight since the judgement of the High Court in Cephalon v Orchid & Generics (UK) t/a Mylan [2010] EWHC 2945 (Pat)).

Original French decision.
English translation.
Author: Nicolas Bouche, Head Legal Research and Literature, Véron & Associés, Paris, France

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For many years in Denmark, interlocutory injunction proceedings have been organized under the aegis of the bailiff’s department of the municipal courts. This has entailed a number of disadvantages, not least in relation to patent cases. In most other countries it is considered a necessary pre-requisite that the presiding judge in such proceedings has experience with patent litigation but also, preferably, at least a general understanding of the technical field – be it mechanical, chemical or other – relevant to the litigation in question. For many years the practice in Denmark has been a source of great discontent on the part of all parties involved in patent litigation in Denmark.

Against this background the Danish Judicial Council has drafted and now submitted to the Danish Justice Department a report suggesting a number of changes and modernizations of the judicial framework regulating interlocutory injunction proceedings in Denmark.

Some of the most significant changes suggested by the Judicial Council are:

- Transferral of the competence to grant interlocutory injunctions from the bailiff’s court to the civil court department of the municipal courts, thus ensuring (at least in theory) that to a greater extent, the bench will be more experienced (though not necessarily in patent litigation).

- The Maritime and Commercial Court, which today serves as specialty court regarding intellectual property rights is to be given the competence to hear interlocutory injunction proceedings in, inter alia, cases concerning patents.

- The establishment of a system whereby interlocutory injunction proceedings are heard by several judges (as opposed to one) while at the same time giving the courts the possibility of appointing temporary expert judges to join the bench in the adjudication of e.g. a patent case.

And perhaps most controversially, the Judicial Council has suggested the abolition of confirmatory actions except as regards the validity of the enforced right.

The system today is built on an assumption that a patent once granted is valid (until irrevocably revoked). In practice, a defence based on lack of inventive step of the patent-in-suit is never accorded any weight as the presiding judge in interlocutory injunction proceedings regarding patents is not an expert judge and therefore unfit to question validity (and thus enforceability) except in cases involving a clear novelty–destroying citation. By the same token, the bailiff’s cannot invalidate a patent, but only turn down an application for interlocutory injunction on the grounds that it is considered unlikely that the patent will be upheld as valid.

Today, if an application for an interlocutory injunction is granted, the patentee must subsequently file a confirmatory action (during which the court may appoint expert judges as well as expert witnesses of its own) and ultimately invalidate the patent-in-suit whether due to lack of novelty or lack of inventive step.

The Judicial Council in its report now suggests that in future the confirmatory action shall only determine whether or not the patent-in-suit is valid (and thus enforceable), the reason being that if the competence to grant injunctions is moved from the bailiff’s court to the civil court department, there is no reason for the (in the eyes of the Judicial Council more competent) civil court department to revisit its decision to grant an injunction. Instead, the decision to grant an injunction may be appealed to the Maritime and Commercial Court.

The report has only just been made available for comments by any interested parties and, no doubt, its suggestions will be subject to extensive discussions which we will be following the outcome of.

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When does the demonstration of a model at a trade fair, or a similar limited availability of a product, constitute novelty-destroying prior disclosure? Although it will depend on the patent claims, the public’s opportunity to investigate the model may be important as demonstrated in the recent case of Wagner v Earlex*.

As of the implementation of the EPC, prior use in and of itself no longer anticipates a patent claim under UK patent law. The English courts have also now adopted the EPO approach on ‘availability to the public’ (as set out by the Enlarged Board in decision G1/92), although the English courts refer to the requirement for an ‘enabling disclosure’. If the person skilled in the art is able to discover the composition or internal structure of the prior art product and reproduce it without undue burden, then there may be an availability to the public giving rise to an enabling disclosure. However, the disclosure to be derived from the public availability of a product depends on the extent to which the public have unrestricted access to the product.

In this case, the patent claimed a type of paint spray gun. One of the alleged prior disclosures was a prototype example of a paint spraying device demonstrated at a trade fair. The device was demonstrated to members of the public visiting the fair. The public were also permitted to, and did, use the sprayer themselves. The relevant claimed integers (holes in the air cap of the spraying device) would have been visible to anyone who looked at the spray gun with interest.

Having held that that a product falling within the scope of the claims had been demonstrated publicly, the judge had to decide whether it anticipated the patent. Although the person skilled in the art would have seen the holes in the prototype spray gun at the trade fair had he examined the device, the judge held that the invention would not have been disclosed to him. The person skilled in the art would need to have been able to deduce clearly and unambiguously two further aspects of the air holes, which in the circumstances he could not have done. The evidence at trial did not demonstrate that any particular prominence was given at the time to the presence of the air holes, as there was no evidence that the representatives of the company demonstrating the spray gun told any members of the public what the holes were for or of any contemporaneous documentary evidence as to the importance of the holes. On the other hand, the patent claims were held obvious over the prior disclosure of the prototype.

*[2012] EWHC 984 (Pat)

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