Clifford Chance

When a preliminary injunction is lifted, the debate arises regarding the amount of damages that the company affected by the preliminary injunction may claim against the applicant. A recent judgment of 6 May 2013 from Commercial Court number 6 of Barcelona has shed some light on this topic. The background of the case can be summarized as follows:

On 26 June 2009, Commercial Court number 6 of Barcelona ordered an “ex parte” preliminary injunction preventing a Spanish company from marketing generics of a patented medicament. After hearing the defendant, the preliminary injunction was then lifted on 29 January 2010. After the preliminary injunction was lifted, the defendant filed a complaint claiming 3,700,000 Euros against the applicant for the damages suffered. This amount was calculated taking into account the period while the preliminary injunction was in force, plus a projection of the lucrum cessans that the defendant would allegedly have suffered until 2014 as a result of not having been able to benefit from the advantages allegedly derived from being the first company to launch the generic.

After considering the evidence filed by both parties, which included two expert opinions from two accountants, the Court reached the conclusion that the period to be compensated was limited to 1 November 2009 – 30 April 2010. This is because according to the Court the defendant would not have been able to launch until 1 November 2009 and although the preliminary injunction was lifted on 29 January 2010, the defendant could not have launched immediately thereafter, as it needed time to order product and supply the product to the distribution chain (hence the 30 April 2010 “end” date). As regards the damages claimed for the loss of profit allegedly suffered until 2014, the Court found that these damages had not been proved. In particular, the Court noted that the cause-effect relationship between the preliminary injunction ordered and the damage alleged could not be established, as other companies that had launched generics of the same product at a later stage had higher sales than those that had launched first. In the end, the compensation to be paid to the defendant was reduced to approximately 473,000 Euros.

All in all, this decision made a small contribution to an area in which case law is still relatively scarce in Spain.

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Trevisan & Cuonzo

In an earlier post, I reported the news that a new piece of legislation (the so called “Balduzzi Decree”, Law No. 189/12 of 8 November 2012 confirming Law Decree 158/12 of 13 September 2012 – a consolidated version of the Decree is available here) introduced a rule which some have already labelled as “reimbursement price linkage”. In substance, according to Article 11 of the Balduzzi Decree, the Italian regulatory Authority will refrain from granting a reimbursable price to approved generic drugs when the reference product is still covered by a patent or SPC.

Last week, AIFA officially confirmed that it will apply such a rule, by issuing a communication to all pharmaceutical companies that is currently available via the AIFA website.  In this communication, AIFA explained the guidelines it is going to follow to implement the overall new set of rules introduced by the Balduzzi Decree, including the “reimbursement price linkage” provisions.

The Balduzzi Decree provisions in fact reorganized the procedure of marketing approval and price negotiation quite a bit. Historically, the Italian rules aimed at the grant of a Marketing Authorisation and those aimed at the determination of a reimbursement price have always been merged together.  In particular, a generic could start selling its product only once the Marketing Authorisation had been published in the Official Journal of the Italian Republic (OJIR) and no such publication was made before the determination of the reimbursement price as well. In fact, the document published in the OJIR used to contain both (i) the announcement that the permit to market had been granted and (ii) the relevant reimbursement price. The generic could start selling as of the day following such a publication in the OJIR. Based on the rules of the Balduzzi Decree, the stage of Marketing Authorisation and that of price determination have somehow been split. In particular, the price classification “C-nn” (i.e. “C – non negotiated”) has been added to the already existing price classifications (“A” for reimbursed products; “C” for non reimbursed products; “H” for hospital only reimbursed products). In the new framework, if the Marketing Authorisation procedure has been completed, the approval may be published in the OJIR even before the determination of the price, if no request of price negotiation has yet been filed by the relevant company, or else if the price negotiation procedure has not been completed when the time has come, according to the more stringent calendar now in place at AIFA, to publish the Marketing Authorization. In this case, the product will be classified as “C-nn”, which classification will be changed if and when a proper price negotiation procedure will be completed.

As regards the “reimbursement price linkage” provisions, in particular, the AIFA guidelines state what follows: “Article 11, paragraph 1, last sentence, of the Decree does not prevent the filing of an application to obtain that the product be classified as reimbursed even before the expiry of the patent rights, nor the commencement of the possible procedure for the negotiation of the price. In case the procedure for the determination of the price is completed before the expiry of the patent rights, the order concerning the classification of the price of the medicinal product shall indicate that the product has been included in class “C(nn)” until the expiry of the patent, and shall also indicate the prospective classification of the product as reimbursed by the National Health Service and the relevant price, which classification will enter into force as of the date of expiry of the patent or the supplementary protection certificate as indicated by the Ministry of Economic Development”.

I have to admit, I still have to see one case in which these guidelines have in fact been applied, i.e. in which a class “C-nn” classification was granted due to existing patent / SPC rights. At the same time, there is no clear indication on whether these guidelines are already in force and whether they will apply to all cases or to newly filed Marketing Authorisation applications only. We’ll see…

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Foley&Lardner LLP

In a divided en banc decision, the U.S. Court of Appeals for the Federal Circuit affirmed the district court’s holding that the claims at issue in CLS Bank v. Alice Corporation are invalid under the “abstract idea” exception to 35 USC § 101. While a majority of the judges agreed that the method and computer-readable medium claims are invalid, they disagreed as to why. Further, the court was evenly split as to whether the systems claims are invalid. (With no majority agreement on that issue, the district court decision is affirmed). Even if this case makes its way to the U.S. Supreme Court, patent-eligibility will remain a murky area of U.S. patent law for the foreseeable future.

The Federal Circuit Decision

The en banc appeal was heard by Chief Judge Rader and Circuit Judges Newman, Lourie, Linn, Dyk, Prost, Moore, O’Malley, Reyna, and Wallach. The en banc decision is set forth in a one page per curium opinion:

Upon consideration en banc, a majority of the court affirms the district court’s holding that the asserted method and computer-readable media claims are not directed to eligible subject matter under 35 U.S.C. § 101.

An equally divided court affirms the district court’s holding that the asserted system claims are not directed to eligible subject matter under that statute.

AFFIRMED.

The Claims At Issue

As summarized by Judge Lourie, the patents relate to “computerized methods, computer-readable media, and systems that are useful for conducting financial transactions using a third party to settle obligations between a first and second party so as to mitigate ‘settlement risk,’” e.g., the risk that only one party will satisfy its obligations.

Briefly, the claimed process requires the supervisory institution to create shadow records for each party that mirror the parties’ real-world accounts held at their respective “exchange institutions.” At the start of each day, the supervisory institution updates its shadow records to reflect the value of the parties’ respective accounts. Transactions are then referred to the supervisory institution for settlement throughout the day, and the supervisory institution responds to each in sequence by adjusting the shadow records and permitting only those transactions for which the parties’ updated shadow records indicate sufficient resources to satisfy their mutual obligations. At the end of each day, the supervisory institution irrevocably instructs the exchange institutions to carry out the permitted transactions.

Judge Lourie also noted that “the parties have agreed that the recited shadow records and transactions require computer implementation.”

The CRM claims recite “[a] computer program product comprising a computer readable storage medium having computer readable program code embodied in the medium for use by a party to exchange an obligation between a first party and a second party, the computer program product comprising program code ….”

The systems claims recite “[a] data processing system to enable the exchange of an obligation between parties, the system comprising: a data storage unit … and a computer, coupled to said data storage unit, that is configured to ….”

As noted above, the district court found that all of these claims are invalid, and the en banc Federal Circuit decision affirms that result.

The Federal Circuit Opinions

Judge Lourie wrote a concurring opinion that was joined by Judges Dyk, Prost, Reyna, and Wallach. These judges agreed with the district court that all of the claims at issue are invalid.

Chief Judge Rader wrote an opinion concurring-in-part and dissenting-in-part that was joined by Judges Linn, Moore and O’Malley with regard to its dissent, but only joined by Judge Moore with regard to its concurrence. Chief Judge Rader and Judges Linn, Moore and O’Malley would have upheld the systems claims against the § 101 challenge, although Chief Judge Rader and Judge Moore agreed that the method and CRM claims are invalid.

Judge Moore wrote an opinion dissenting-in-part that was joined by Chief Judge Rader and Judges Linn and O’Malley, focusing on her views that the systems claims satisfy § 101.

Judge Newman wrote a dissenting opinion urging the court to focus on the breadth of patent-eligibility under § 101, and perhaps abandon the judicially-created exceptions, including the abstract idea exception at issue here.

Judges Linn and O’Malley jointly wrote a dissenting opinion explaining their view that, on the specific record of this case (including the procedural posture and stipulations), all of the claims should have been upheld against the  § 101 challenge.

Chief Judge Rader wrote an opinion with “Additional Expressions,” regarding the mantra he adopted early in his days as a judge at the Federal Circuit: When all else fails, consult the statute!

(For a more detailed review of the opinions by Judge Lourie and Chief Judge Rader, please see this article.)

Has The Court Taken § 101 Too Far?

I share Judge Moore’s concerns that recent decisions under § 101 threaten to send the U.S. patent system into a “free fall,” and Judge Newman’s concerns that the ballooning uncertainty and unpredictability surrounding § 101 could undermine the effective functioning of the U.S. patent system. While it seems likely that the U.S. Supreme Court will take up this case for review, I am not confident that its decision will reign in  § 101 or offer any more useful guidance than existing jurisprudence.

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	Valuation of Patents by Alexander Wurzer, Dieter Reinhardt, Theo Grünewald € 160
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Clifford Chance

One of the remedies introduced by Directive EC 2004/48, of 29 April 2004, was preliminary injunctions aimed at prohibiting acts of infringement when there are indicia indicating that an act of infringement may be “imminent.” It is the nature of preliminary injunctions, which require an element of urgency, that patentees may be required to prove the need of a provisional prohibition before the main case is resolved. This is where the “imminent” requirement comes into play.

Against this background, in a recent case the parties discussed whether or not “imminence” is also a requirement for upholding an action aimed at prohibiting acts of infringement that have not yet taken place. In its judgment 18/2013 of 21 January 2013 (Eisai Co. Ltd, Eisai Farmacéutica S.A. and Pfizer S.A. v. Mylan Pharmaceuticals S.L.) the Court of Appeal of Barcelona (Section 15, Judge Rapporteur Mr Luis Garrido Espa) concluded that “imminence” is not a requirement for upholding a “prohibition” action in the main proceedings. In particular, the Court noted that “for upholding a prohibition action, it would not be necessary to reach the conviction that the infringement appears as imminent (notwithstanding the fact that when regulating preliminary injunctions, Article 134.1 of the Patent Act alludes, due to the foundation of all preliminary injunctions, to the imminence of the infringing acts)”. The Court added that, “it must be sufficient, in a reasonable assessment, a founded risk that the infringement may materialise, for the sole will of the agent, insofar as it may be deduced from the preparatory acts carried out. The infringement that one tries to avoid, in this case, through the prohibition action is not the marketing of the generics at any time, but its launch onto the market before the complainant’s patent rights expire”.

After applying this legal test to the facts of the case, the Court concluded that in relation to this specific case the “prohibition” action could not be upheld, since the Court considered that both before the litigation and in the course of the litigation the defendant had assumed a firm undertaking not to launch before the patent’s expiry. Does this mean that the “prohibition” action should be upheld when a defendant refuses to accept an undertaking not to launch until the patent expires? The answer will be provided by another Spanish Court shortly. So this blog entry is to be continued…

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Brinkhof

The PI judge in the District Court of The Hague held that under certain circumstances, provisional cross-border jurisdiction can be derived from art. 31 Regulation (EC) 44/2001, which would require a “real connecting link” between the sought measures and the jurisdiction of a contracting state (ECJ C-391/95, Van Uden/Decoline). However, in the present case there are insufficient connecting points for such cross border preliminary injunction, since it’s initiated exclusively against parties without residence in the Netherlands.

A summary of this case will be posted on http://www.Kluweriplaw.com

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	Introduction to the Unitary Patent and the Unified Patent Court. The (Draft) Rules of Procedure of the Unified Patent Court by Pieter Callens, Sam Granata € 125
	The Annotated European Patent Convention - 20th edition by Derk Visser € 99
	Valuation of Patents by Alexander Wurzer, Dieter Reinhardt, Theo Grünewald € 160
	International Licensing and Technology Transfer: Practice and the Law by Adam Liberman, Peter Chrocziel, Russell Levine (eds.) € 375

Brinkhof

The PI judge in the District Court of The Hague held that the processes used to manufacture the generic products in dispute did not fall within the invoked patents’ scope of protection, and particularly that these did not comprise equivalent measures, because the allegedly equivalent substances had significantly different chemical compositions and functionality. Finding the alleged infringing processes to be equivalent would be contrary to legal certainty.

A summary of this case will be posted on http://www.Kluweriplaw.com

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	Introduction to the Unitary Patent and the Unified Patent Court. The (Draft) Rules of Procedure of the Unified Patent Court by Pieter Callens, Sam Granata € 125
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	Valuation of Patents by Alexander Wurzer, Dieter Reinhardt, Theo Grünewald € 160
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Brinkhof

The Court of Appeal held that the duty to compensate the successful party’s legal costs in intellectual property proceedings, pursuant to Art. 14 of the Enforcement directive, also applies to invalidity claims, counterclaims and defenses by the alleged infringing party threatened with patent enforcement. To deny such compensation in respect of nullity claims or defenses that constitute an important defense against enforcements of intellectual property rights would be contrary to Article 6 ECHR.

A summary of this case will be posted on http://www.Kluweriplaw.com

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	Valuation of Patents by Alexander Wurzer, Dieter Reinhardt, Theo Grünewald € 160
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,
for Kluwer Patent Cases

The Board of Appeal ruled that color figures contained in the application when filed could be used as a basis for amendments. The board had to deal with the problem that no original copy of the color figures was available to the board. Therefore, the board considered it appropriate to compare sets of copies of the figures to discover whether it could be consistently determined that one of these sets contained the most information and to assume that the originally filed figures contained at least the information in that one set.

Click here for the full text of this case.

A summary of this case will be posted on http://www.Kluweriplaw.com

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	Valuation of Patents by Alexander Wurzer, Dieter Reinhardt, Theo Grünewald € 160
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Vereenigde

In order to determine whether the features that distinguish the patent claims over the prior art can be considered when assessing inventive ste p and novelty, the Board must consider whether these features make a technical contribution to the invention.

Click here for the full text of this case.

A summary of this case will be posted on http://www.Kluweriplaw.com

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Marccus Partners

The Paris District Court clarified its interpretation of Article 123 EPC regarding disclaimer allowability and allowed a disclaimer restoring novelty of a patent.

Click here for the full text of this case.

A summary of this case will be posted on http://www.Kluweriplaw.com .

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