Sunday, 30 March 2014

Special courts to gain IP expertise in Serbia

"Concentration of IP cases in Belgrade courts: a step towards specialised IP courts" is the title of a piece by Gordana Pavlovic (Cabinet Pavlovic, Belgrade and Brussels), posted on World Trademark Review, 25 March 2014.  In relevant part it states as follows:
"With the enactment of the new Law on Seats and Jurisdictions of the Courts and Public Prosecutor Offices ... and the amendments to the Law on the Organisation of the Courts ..., which came into force on January 1 2014, Serbia has made a step towards the introduction of more specialised IP courts.

Until January 1 2014, IP cases where both parties were undertakings were in the competence of the Commercial Courts .... Where at least one of the parties was an individual, IP cases were in the competence of the High Courts .... There are currently 16 Commercial Courts and 26 High Courts in Serbia. These courts rule on a wide variety of matters, and judges rarely get an opportunity to specialise in IP matters.

With the reorganisation of the court system ..., all IP cases are concentrated in the Commercial Court or the High Court of Belgrade, respectively. Although the Commercial Court and the High Court are not specialised IP courts as such, the concentration of all IP cases in these courts will enable judges to hear a much larger number of IP cases and become more specialised in IP matters over time. This is similar to the situation in Slovenia and Hungary ...

IP cases which were instituted before any of the Commercial Courts (or High Courts, respectively) outside of Belgrade, and were still pending on January 1 2014, were transferred to the Commercial Court (or High Court, respectively) in Belgrade. The exceptions are IP cases pending before the Appellate Courts, which will be decided by the courts where the appeals were initially filed.

The change in the legislation did not affect the organisation of the Administrative Court, which is the body in charge of administrative disputes involving decisions of the Patent and Trademark Office. There is one Administrative Court for the entire territory of Serbia with its seat in Belgrade, and three offices in Kragujevac, Nis and Novi Sad".

Thursday, 27 March 2014

U.S. patent litigation and attorneys' fees: a case study

"Patent litigants beware: awards of attorneys' fees just got easier with Federal Circuit's Kilopass decision" is the title of a Current Intelligence note written for the Journal of Intellectual Property Law & Practice (JIPLP) by Allen & Overy attorneys Paul Keller and Annsley Merelle Ward. It's an analysis of the recent decision of the Court of Appeals for the Federal Circuit, USA, in Kilopass Technology, Inc v Sidense Corporation No 2013-1193 (Fed Cir Dec 26, 2013). According to the abstract
"In further clarifying the burden of proof required to prove that fee-shifting should apply under 35 USC s 285, the Federal Circuit's decision continues to demonstrate the court's attempts to minimize gamesmanship in patent infringement cases and discourage unsupported allegations from being brought".
Paul and Annsley's note is one of a number of pieces of content that has been made available to subscribers and non-subscribers alike via the journal's jiplp weblog here.

JIPLP is also interested in receiving articles on this issue from jurisdictions other than the United States.  If you are thinking of writing one, please contact Sarah Harris, Commissioning Editor, at

Adult TV channel blocking patents held invalid

Via Paul England (a professional support lawyer at Taylor Wesing and an occasional guest blogger with the IPKat) comes the following note on a mammoth judgment delivered yesterday by Mr Justice Arnold in the Patents Court, England and Wales, in Starsight Telecast Inc. and United Video Properties Inc. v Virgin Media Limited, Virgin Media Payments Limited and Tivo Inc. [2014] EWHC 828 (Pat). The ruling, which spans 316 paragraphs, is richer in terms of analysis of the facts than in establishing any new principle of law, but still has plenty in it in the manner in which it holds invalid a pair of patents for blocking adult TV channels.  Explains Paul:
Starsight and United Video (collectively "Rovi") claimed that Virgin and TiVo (collectively "Virgin") infringed EP (UK) 1 763 234 which was an "Improved electronic television program schedule guide system and method" and EP (UK) 0 821 856 for "Merging multi-source information in a television system" by supplying two different classes of set-top box ("STBs"). Specifically, both of Virgin's STBs were capable of providing the user with a "TV Guide" and performing functions that allowed the user to "Hide Adult Channels" or have an "Alternative Adult Listing Display" by entering a PIN and accessing the STBs' respective parental controls menu.

In respect of the "Hide Adult Channels" function, claims 1 and 11 of the '234 patent were held not to be infringed, because entry of the PIN would not in itself change the availability of the adult channels, as was required by these claims. It would instead merely allow the user access to the relevant menu to edit the adult channel settings. In relation to the "Alternative Adult Listing Display", Virgin did not dispute infringement of claim 1. However, on the basis that this function would not operate by checking a record of schedule information in a database, as disclosed in the '234 patent, but would check whether the parental control option was turned on or off, the alleged infringement of claim 2 of '234 was disputed. Despite this argument, the judge found that claim 2 was infringed.But, Mr Justice Arnold also held the '234 Patent as a whole to be invalid for obviousness.
Claims 1 and 12 of the '856 patent were held not to be infringed by Virgin's STB as it only had one source and source device, as opposed to a "plurality of sources" as claimed by the '856 patent. In addition, the sequence of steps specified in the '856 patent that would be required to infringe were performed in a different order by Virgin's STB. Further, all the claims under the '856 patent were found to lack novelty and were held obvious over the prior art. '856 was therefore also invalid.As a final note, Mr Justice Arnold stated that even if the claims of the '856 patent were valid, Virgin would not have infringed them. 
The judgment, which followed eight days of hearings, contains one small item that attracted my attention: the notion, at [126], that a witness who was essentially a lone inventor might not be considered as being representative of a member of a skilled team who whom a patent is addressed.

Wednesday, 26 March 2014

Claim preclusion, issue preclusion and the Kessler doctrine: game, set and match!

The famous Kessler Twins
Just a few days ago, while drafting a post on the 'actual controversy' requirement in declaratory judgment actions, I came across an interesting article by Michael G. Munsell. The article briefly mentioned an obscure theory I had never heard of. 'The Kessler doctrine', the author explained, 'bars an infringement suit against a customer or seller who has previously prevailed against the patent owner because of invalidity or noninfringement'. I made a mental note to dig deeper, as I was curious to understand how the Kessler doctrine correlated with res judicata (after all, I thought, which additional arguments could the patent owner raise against the alleged infringer's customer, after losing suit against the former?). Luckily, the Federal Circuit was kind enough to look into the matter in Brain Life LLC v Elekta Inc., an interesting opinion published on Monday. The panel discussed how a final judgment of non-infringement prevents relitigation under three different doctrines (claim preclusion, issue preclusion, and Kessler doctrine), reviewing the characteristics and limitations of each of them.

To understand the Federal Circuit's decision, it is necessary to go back to 1997, when MIDCO sued Elekta, alleging that three products sold by the defendant (GammaKnife, GammaPlan, and SurgiPlan) infringed US Patent No. 5,398,684. The patent at issue contained only two independent claims, respectively disclosing an apparatus and a method for generating a video image from a variety of scanner imaging sources, including a computerized axial tomography image, a nuclear magnetic resonance image, and an X-ray. During discovery, MIDCO focused on the apparatus claims and did not oppose Elekta's motion for dismissal of the method claims prior to trial. Accordingly, the district court dismissed the method claims without prejudice. The jury rendered a verdict in favor of the plaintiff, finding that Elekta's products infringed claim 1 of the '684 patent. On appeal, the infringement finding was reversed, and the case remanded to the district court to enter judgment of non-infringement as a matter of law in favor of Elekta.

A few years after these events, MIDCO licensed its patent to a third party, which, in turn, licensed it to Brain Life. The licensee filed suit against Elekta (and several other defendants), maintaining that four of its products (GammaKnife, GammaPlan, SurgiPlan, and ERGO++) infringed the method claims of the '684 patent. At first instance, the district court granted summary judgment in favor of the defendant. Finding that there was no material difference between the accused products and those adjudicated in the previous proceeding between MIDCO and Elekta, the court held that allowing the plaintiff to assert the method claims would amount to impermissible claim splitting. Thus, it concluded that 'Brain Life cannot revisit the decision MIDCO made many years ago to forego including in its infringement action [the method claim], when it could have been asserted in the first litigation, and revive that allegation now against products that are essentially the same as the accused products that were found not to infringe'.

The Federal Circuit reviewed the district court's decision under the three doctrines mentioned above. First, it discussed the applicability of claim preclusion. Under the law of the Ninth Circuit, claim preclusion applies where the prior suit (i) involved the same claim or cause of action as the later suit, (ii) reached a final judgment on the merits, and (iii) involved the same parties or privies. The presence of a final judgment, which ended a cause of action, bars the parties from relitigating both the claims that were brought and those that could have been brought in the prior suit. In this perspective, the doctrine of claim preclusion effectively prevents claim splitting (as expressly acknowledged, for example, in Shaver v F.W. Woolworth Co. - the Tenth Circuit, in Hartel Springs Ranch of Colorado Inc. v Bluegreen Co., reviewed several decisions that recognized a similar correlation). The court highlighted that, according to the teaching of Nystrom v Trex Co. Inc. and Foster v Hallco Mfg. Co., the party that demands the application of the doctrine of claim preclusion in a patent case must demonstrate that the accused product is 'essentially the same' as that accused in the prior suit.

Brain Life acknowledged the similarity between the products litigated in the MIDCO trial and those accused in the later suit. However, it contended that the final judgment rendered in the prior suit could not bar the assertion of the method claims, which were dismissed without prejudice. The Federal Circuit disagreed, clarifying that '[w]hile the dismissal without prejudice allowed for the possibility that acts of infringement of the method claims could be subject to a future cause of action, that possibility was cut-off for all such acts predating the final MIDCO judgment once that judgment was entered'. The court observed that the doctrine of claim preclusion does not prevent Brain Life from asserting either the apparatus or method claims against Elekta, for acts of infringement occurred after the judgment rendered in the prior suit. The panel recited the recent decision of Aspex Eyewear Inc. v Marchon Eyewear Inc., which clearly explained that 'if the party could not have asserted particular claims - because the tortious conduct in question had not occurred at that time - those claims could not have been asserted and therefore are not barred by res judicata'.

The opinion then looked at the doctrine of issue preclusion, or collateral estoppel, under which 'once an issue is actually and necessarily determined by a court of competent jurisdiction, that determination is conclusive in subsequent suits based on a different cause of action involving a party to the prior litigation' (Montana v United States). Actual litigation and determination of an issue of fact or law in a final judgment is the element that distinguishes issue preclusion from claim preclusion. The court found that the method claims originally asserted by MIDCO against Elekta 'were not fully, fairly, and actually litigated to finality'. Therefore, it held that issue preclusion does not bar a second suit on those claims. Similarly, as the ERGO++ product was not included among the accused products in the prior suit, issue preclusion cannot bar the assertion of any claim of the '684 patent in relation to said product.

Finally, the panel turned to the Kessler doctrine, suggesting that it 'fills the gap between [claim preclusion and issue preclusion], allowing an adjudged non-infringer to avoid repeated harassment for continuing its business as usual post-final judgment in a patent action where circumstances justify that result'. In particular, this doctrine applies to new acts of (alleged) infringement, which are excluded from the applicability of claim preclusion. The Kessler doctrine was created, in 1907, by the Supreme Court in Kessler v Eldred: Eldred, after losing an infringement suit brought against Kessler's electric lighters, had sued a customer of Kessler that was selling the same products accused in the first suit. According to the Federal Circuit, the Kessler decision went beyond the perimeter of the doctrine of claim preclusion, as the Supreme Court 'granted Kessler a limited trade right to continue producing, using, and selling the electric lighters that were the subject of the first suit and to do so without fear of allegations of infringement by Eldred - even when the acts of infringement occurred post-final judgment and even when it was third-parties who allegedly engaged in those acts of infringement'.

The court acknowledged that its past reliance on the Kessler doctrine has been sparse, but recalled the cases of Rubber Tire Wheel Co. v Goodyear Tire and Rubber Co. and MGA Inc. v General Motors Corp. The latter described Kessler as a doctrine that 'bars a patent infringement action against a customer of a seller who has previously prevailed against the patentee because of invalidity or noninfringement of the patent; otherwise, the effect of the prior judgment would be virtually destroyed'. The Federal Circuit suggested that the Kessler doctrine may be less valuable today than at the time of its creation, as the strict doctrine of mutuality that was applied at that time has been replaced by the development of defensively applied issue preclusion. Applying Kessler, the court found that, after the final judgment of non-infringement, Elekta was free to continue engaging in the accused commercial activity as a non-infringer, in relation to all the products adjudicated in the MIDCO litigation. 'Simply', explained the court, 'by virtue of gaining a final judgment of noninfringement in the first suit - where all of the claims were or could have been asserted against Elekta - the accused devices acquired a status as noninfringing devices, and Brain Life is barred from asserting that they infringe the same patent claims a second time'. The panel reiterated, however, that this conclusion does not apply to Elekta's ERGO++ product, which was never included in the prior suit. Thus, it reversed the district court's judgment regarding this product, remanding for further proceedings.

Tuesday, 25 March 2014

Disclosure of documents and a patent attorney's duties: a question of proportionality

Bromhead & Co and others v Baillie and others is an extempore 25 February decision of Mr Justice Arnold, sitting in the Chancery Division, England and Wales, on one of those most delicate of issues: the extent to which a patent attorney, seeking to defend himself against accusations of professional negligence, can obtain information in the possession of his former client in order to do so.

In this case the patent attorney had been retained to advise on patents covering his client's glow-in-the-dark material. The client claimed that it had, in seeking to secure patents and to develop commercial products using its material, spent large sums of money that it would not have spent, had it been properly advised that there was no real prospect of obtaining the patents in the first place. The client's case was principally based on the proposition that, since the patent attorney had been retained to provide advice on suggested strategies in order to exploit the material, including a patent portfolio, the retainer was wide enough to allow for the provision of advice on the recovery of losses. The patent attorney however maintained that his client's alleged losses had been caused by other factors. The patent attorney applied for specific disclosure, under the Civil Procedure Rules, CPR r.31.12(2)(a), of any documents, including memorandums and notes, that were related to the downfall of his client's commercial endeavour, the losses suffered, any problems with the material, sales, marketing and market conditions. This application was however refused, the master holding that the disclosure sought was not necessary for determining the scope of the patent attorney's duty towards his client and that only the factual matrix of the events was relevant, rather than an in-depth analysis.

On appeal to Arnold J the court had to consider two issues: (i) were the documents for which the patent attorney sought disclosure actually relevant and (ii) if so, whether this request for disclosure was proportionate. The patent attorney argued that the client's disclosure of management accounts, minutes of board meetings, cash flow documents and business plans to date had been inadequate and that it failed to provide an overview of the causes of the losses, which was relevant to the pleaded case.

Arnold J dismissed the patent attorney's appeal on the basis that it would be possible to conduct an adequate investigation of what caused the client's loss by reference to such material as was already available. In his view

* The documents which the patent attorney wanted disclosed were arguably relevant, if the patent attorney was correct in to say that his duty was merely to provide information (in which case the client's case would probably fail) rather than to furnish advice. It could also be argued that it might be difficult to determine whether the matter was an information case or an advice case, and that determining the scope of the patent attorney's duty required an investigation of the actual causes of the client's losses.

* However, even if the documents were relevant, the request for their disclosure was disproportionate. The disclosure sought was extremely-wide ranging, covering a period of over four years and a wide range of documents concerning a wide range of subjects. The provision of disclosure of any documents pertaining to any problems experienced in the specified areas would clearly be a massive exercise. While it wasn't the patent attorney's fault that the request was made so close to the trial, and there had been no specific evidence that the disclosure could not have been completed before trial, the review and disclosure of such a large volume of documents would have inevitably descended into the minutiae of causation, rather than merely a broad theme.

To the relief of many actual and potential litigants in similar circumstances, Arnold J took a cautiously realistic view of the cost-benefit  ratio of disclosed evidence of the electronic variety when he observed that the disclosure of thousands of emails was not going to remedy the patent attorney's concerns -- but that it would burden both parties with large costs.  This set this blogger thinking: how does one actually charge for the time spent in priming oneself for the task of reading vast quantities of email correspondence and then in reading and evaluating it, given that part of the task involves a degree of professional expertise while another part of it involves ploughing through the detritus of out-of-office messages, copied-in duplications of emails already read, and other evidentially unproductive text.

This item is based on a Lawtel note on the court's ruling.

Thursday, 20 March 2014

Pre-issuance conduct and declaratory judgment actions in the US

cornIn the recent case of Danisco v Novozymes, the Court of Appeals for the Federal Circuit held that the patentee’s conduct prior to issuance of a patent may be sufficient to satisfy the ‘actual controversy’ requirement to establish declaratory judgment jurisdiction (see 28 USC s. 2201(a)). The court reversed the judgment rendered by the District Court for the Northern District of California, relying on the teaching of the Supreme Court in MedImmune v Genentech and adopting a standard based on the ‘totality of the circumstances’. The panel also rejected the district court’s categorical distinction between pre and post issuance conduct.

Danisco and Novozymes are competitors in the market for industrial enzymes used to convert corn and other plant-based material into ethanol. In the past decade, Novozymes repeatedly sued Danisco for patent infringement. Danisco filed a patent application, later issued as US Patent 8,084,240, claiming a BSG alpha-amilase variant polypeptide with an E188P substitution, the active ingredient of the company’s rapid starch liquefaction products. Shortly after issuance of a Notice of Allowance of Danisco’s application, Novozymes amended one of its pending patent applications to claim the same polypeptide, requesting an interference contesting entitlement to priority of invention. The examiner rejected both the interference request and a subsequent request for continued examination. Novozymes noted that it refused to ‘acquiesce’ to or otherwise be ‘estopped’ by the examiner’s erroneous decision. On the day of issuance of Novozymes’ amended application as US Patent 8,252,573, Danisco filed the declaratory judgment action that gave rise to the present dispute.

At first instance, the district court recognized that many of the circumstances adduced by Danisco, including the parties’ status in the industry, past litigation, and the prosecution history and timing, suggested that Novozymes had pursued the E118P substitution claim in the ’573 patent with the objective of asserting it against Danisco’s products. It noted, however, that the declaratory judgment plaintiff had not provided proof of any affirmative act by Novozymes to enforce its patent rights, and that the temporal coincidence between the issuance of the patent and the filing of the declaratory judgment action suggested that Novozymes had not even had the time to take any enforcement action. The court, dismissing the action for lack of subject matter jurisdiction, concluded that ‘[w]hile matters such as a prior litigation history and statements made during prosecutions sometimes support a conclusion that an actual controversy exists, there is no precedent for finding jurisdiction based on such pre-patent issuance events alone, without any affirmative act of attempted enforcement’.

The Federal Circuit disagreed. Right from the outset, the panel clarified that the lack of specific accusations of infringement against the declaratory judgment plaintiff is not a decisive element to establish whether an actual controversy exists (citing Arkema Inc. v Honeywell International Inc.). Instead, the court recited the teaching of MedImmune, where the Supreme Court held that ‘[b]asically, the question in each case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment’. The Federal Circuit found that the prior litigation history between the companies (see 3M Co. v Avery Dennison Corp.), and the adverse positions taken during prosecution of the ‘240 and the ‘573 patents, satisfied the ‘actual controversy’ requirement as outlined by the Supreme Court. Further, the judges added that Novozymes’ response to the rejection of its interference action suggested that the company believed that Danisco’s alpha-amylase variant infringed its patent.

The court observed that ‘[t]he district court’s categorical distinction between pre- and post-issuance conduct is … irreconcilable with the Supreme Court’s insistence on applying a flexible totality of the circumstances test, its rejection of technical bright line rules in the context of justiciability, and our own precedent’. Novozymes’ conduct, in this perspective, ‘shows a preparedness and a willingness to enforce its patent rights’, which put Danisco in the position of either abandoning the production of its rapid starch liquefaction products, or running the risk of an infringement suit. This situations resembles the same dilemma that, according to MedImmune, the Declaratory Judgment Act aimed to ameliorate.

The evolution of the Federal Circuit’s approach to the ‘actual controversy’ requirement is particularly interesting. After MedImmune, the Federal Circuit definitively abandoned the formalism embedded in its ‘reasonable apprehension of suit’ standard, although it struggled to part with the idea that ‘some affirmative act by the patentee’ is indeed required (SanDisk Co. v STMicroelectronics Inc.). The present case highlights how a multiplicity of factors, including prior litigation history and pre-issuance conduct, can effectively signal the presence of a justiciable controversy between the parties. A couple of articles, here and here, provide a good overview of the matter for all interested readers.

Friday, 14 March 2014

DPMA Challenges SIPO in terms of Growth Rate

Readers who thought that growth rates beyond 20% are only possible in china beware: The German Patent- and Trademark Office DPMA has published a press release on its annual statistics here. The number of granted patents has increased by not less than 22.1% in 2013 (as compared to 26.3% in China). The number of filings has increased by 2.9%, wherein the most important contribution to the latter increase comes from Japan (+ 20.7%) and the US (+9.5%).

According to this blogger's experience, the high official fees of the EPO and the formalistic attitude of the EPO examiners latter drives more and more applicants towards national filings. The modernization in the filed of online services, the extension of the possibilities to use English language and the uncertainty in connection with the quality and the costs of the UPC will eventually further accentuate this trend.

UPC has its first premises - and new rules of procedure

Mr. Rubik, Hungarias model-inventor
The training centre for the future Judges of the UPC has been opened yesterday in Budapest.  According to the press release of the EPO:
Speaking about the Hungarian patent system, Miklós Bendzsel, President of the Hungarian Intellectual Property Office, said: "The system will be 120 years old in 2015. In the European innovation processes Hungary does not merely provide a creative workshop for products like Rubik's Cube, glass concrete or the intelligent surgical knife (iKnife); but our country is among the best as regards the contribution of IP intensive industries to the GDP and to employment." Mr Bendzsel added: "All this provides an excellent background for the operation of a Training Centre for judges working within the system established for the European patent with unitary effect. Budapest ensures a high quality framework for the nurturing of this new legal practice combining technical, legal and economic knowledge."
This blogger likes Budapest a lot and thinks this venue is well chosen.

Besides of this, the 16th draft of the rules of procedure is open for consultation.

Wednesday, 12 March 2014

Adjournment in the UK for amendment in the EPO

PatLit is pleased to welcome this guest post from Paul England (Senior Associate, Taylor Wessing, and an occasional guest blogger on the IPKat). Here Paul picks on an important procedural matter: the adjournment of national proceedings so that one of the parties can make an application for amendment before the European Paten Office.  Paul explains:
Adjourned ...
The electronics cases passing through the courts of England and Wales have resulted in a number of important decisions recently: only last year, IPCom GmbH & Co KG v HTC Europe Co Limited & Others (noted by the IPKat here) refreshed the statement of the relationship between the British patents courts and the European Patent Office; now, a different aspect of that relationship is at issue in Samsung Electronics Co Ltd v Apple Retail UK Ltd and Another [2014] EWCA Civ 250. In Samsung v Apple, the Court of Appeal has taken the step of adjourning appeal proceedings, pending an application for amendment of the patents in suit in the European Patent Office (EPO).

The substantive proceedings concern the validity and infringement of two Samsung patents, which Apple is alleged to infringe with products including the iPhone 4, the iPhone 4S and the iPad 2 3G. At first instance, the patents had been held invalid on the basis that neither was entitled to its claimed priority date and by reason of intervening prior art. They were also, in the judgment of Floyd J (as he was when presiding in the case) obvious. Samsung had also made conditional applications to amend each of the patents before trial, each of which the judge held would not render them valid. The judge declared them invalid by final order on 8 May 2013. However, he granted permission to appeal and the hearing of the appeal was listed for 4 or 5 March with a time estimate of three days.

Subsequently, on 5 November 2013, Samsung filed amendment applications for both the patents in the European Patent Office further to the Article 105 procedure introduced by the European Patent Convention 2000. The timing of these applications, Samsung explained, was due to the need to coordinate these amendments (which would have pan-European affect) with the various parallel actions concerning equivalent parts of the patents being fought in the national courts of Europe. Acceleration of these proceedings was however sought and granted.

In marked contrast to opposition proceedings, as the Court of Appeal noted, the EPO amendment procedure is intended to be simple and quick. In this case, the court accepted that the amendments were likely to be determined by June 2014, before the proceedings in England and Wales were likely to be fully disposed of. The court also stated that the Patent Act 1977 specifically contemplates the possibility of concurrent proceedings between the UK and the EPO and there is no prohibition on central amendment while proceedings are pending in a national court. Accordingly, the Court of Appeal thought there was no abuse of process in the circumstances before it.

Indeed, given the legitimacy of central amendment and the relatively short time periods involved, the Court of Appeal held that it makes obvious sense to accede to Samsung’s request for adjournment pending central amendment. The court’s judgment was reinforced by the risk that it might otherwise come to a decision on patent claims that are deemed, post-amendment, never to have existed.

Tuesday, 11 March 2014

International Patent Forum 2014: who's speaking on litigation?

Last month, PatLit posted this note about the International Patent Forum 2014, organised by Managing Intellectual Property magazine for 18 and 19 March. When that note was posted, it linked to a provisional list of speakers that did not specify who was participating in which session.  The programme has now crystallised and you can get the full details here.

The IPKat's post yesterday suggested that, given recent world events, the session entitled "Russia Focus" on the first day may be memorable.  For investors and portfolio planners this will certainly be the case, but the attention of patent litigators will however be focused elsewhere, and various seasoned campaigners, including Nicola Dagg and David Por (Allen & Overy), Ian Hiscock (Novartis), Gregory Gramenopoulos and Timothy May (Finnegans) and Tony Piotrowski (MPEG LA) will be among those sharing their experience.

A reminder: if any PatLit reader who is attending would like to take some notes and share them with readers of this blog, that would be greatly appreciated!

Sunday, 9 March 2014

Mediation of IP disputes: a forthcoming event

Here's a link to OHIM's IP Mediation Conference website, which has just been published and which contains a link to the conference programme. The conference itself is described like this:
OHIM will hold its first ever conference on IP Mediation between 29 and 30 May 2014 
The conference will take place in OHIM´s home city of Alicante, Spain, and will bring together a wide spectrum of stakeholders and will be led by top names in the mediation world. A full conference programme is available here .

This is how OHIM visualises IP mediation. The reality may
be a little less sweet and pleasant if not handled properly
The conference brings together world-class mediators, practitioners and experts in the mediation field in what promises to be one of the most dynamic and interesting events of its kind.

Mediation is a fast-growing discipline within IP, and for some years now, has been developing into a significant instrument of dispute settlement. The EU Mediation Directive (2008/52/EC), which aims to promote mediation, especially in the context of civil and commercial disputes, has already been transposed into national law in many member states.

This conference focuses on mediation as a practical tool in day to day IP work. We look at how mediation is practiced at international, EU and at national level, with experts from WIPO, the EPO, OHIM, the UK IP Office and the Portuguese IP office, amongst others. We bring in input from key user associations such as ECTA and INTA, as well as experts from private practice, and offer real-world examples of mediation in action.

We also look at issues like the comparisons and synergies between mediation, negotiation and arbitration; how to maximise the mediation experience; psychology and mediation techniques and how to create value through mediation.

The conference features breakout sessions, which concentrate on issues ranging from mediation and new technology and role playing techniques, allowing participants to fully engage with hands on mediation practices, and to learn about new ways of working.
This blogger, who is participating in this event, is a keen supporter of the principle of mediating IP disputes. Patent disputes appear to be a field of conflict in which mediation is substantially underused, and this blogger wonders whether this event might be a good way of raising the profile of this sometimes labour-intensive but generally agreeable means of resolving disputes.

Does India Follow “First to File” or “First to Invent” Rule in Patent Filing?

PatLit is pleased to welcome the following guest post from fellow blogger Sai Deepak (of The Demanding Mistress, here). Here Sai addresses a fundamental issue, that of entitlement to a patent. This is what he has to say:
Does India Follow “First to File” or “First to Invent” Rule in Patent Filing?
It is a common perception that, under the Indian patent regime, whoever files a patent application over an invention first, is the one entitled to a patent on it. But does this perception have a basis in the Patents Act, 1970? Importantly, is this perception correct?

One of the things that a litigator’s training teaches you is that, no matter how pedantic it may seem, interpretation of the law must not be based on what people think or assume, but must be solidly rooted in what the statute says, which is further backed by logic and common sense. In short, the letter of the law must be given its due, and the enquiry must begin with the wording of the provision, as opposed to a pre-conceived notion of what we think the law is, or ought to be.

If one applied this proposition to the issue at hand, the provision to look into is Section 6 of the Patents Act:
6. Persons entitled to apply for patents 
(1) Subject to the provisions contained in section 134, an application for a patent for an invention may be made by any of the following persons, that is to say,—(a) by any person claiming to be the true and first inventor of the invention;(b) by any person being the assignee of the person claiming to be the true and first inventor in respect of the right to make such an application;(c) by the legal representative of any deceased person who immediately before his death was entitled to make such an application. 
(2) An application under sub-section (1) may be made by any of the persons referred to therein either alone or jointly with any other person.
From the above, it is clear that Section 6 governs the entitlement of a person to file an application for a patent. The provision says that “any person claiming to be the true and first inventor of the invention” may file an application for a patent. The provision uses both “true” and “first”, in that order. This means the person must have invented the invention by himself (or by themselves in case there are several inventors) without free-riding on the efforts of another person. The second condition is that the person must also be the “first one to truly invent” the invention. Nowhere does the provision seem to convey a “first to file” rule where entitlement is based on prior filing.

Given this, where do we get the conclusion from that India follows a “first to file rule” when the emphasis is clearly on the first person to truly invent the invention?

Merely because a person files an application for a patent “claiming to be the true and first inventor”, does it follow that his claim is irrebuttable? Since the requirements under Section 6 are conjunctive and hence two-fold i.e. “true and first”, even if the person’s claim of being the true inventor is in fact true, it is possible that he may not be the first inventor. It is only his belief/claim that he is the first inventor because to the best of his knowledge no one seems to have published the invention in public domain or has filed for a patent.

Be that as it may, his belief could be misplaced, and it might be possible for another person to prove that he (the other person) is not only the true inventor, but was also the first one to invent the invention. If so, does the Act provide for a remedy which could be invoked to prove “true and first inventorship”?

To the best my knowledge and understanding, there is no such remedy under the pre and post-grant opposition mechanisms in Section 25(1)(a) or (2)(a) since both refer to an invention which has been “wrongfully obtained”, which is also dealt with under Section 64(1)(c) which deals with revocation of patents. Reproduced below are the relevant provisions:
25. Opposition to the patent
(1) Where an application for a patent has been published but a patent has not been granted, any person may, in writing, represent by way of opposition to the Controller against the grant of patent on the ground—
(a) that the applicant for the patent or the person under or through whom he claims, wrongfully obtained the invention or any part thereof from him or from a person under or through whom he claims; 
(2) At any time after the grant of patent but before the expiry of a period of one year from the date of publication of grant of a patent, any person interested may give notice of opposition to the Controller in the prescribed manner on any of the following grounds, namely:—
(a) that the patentee or the person under or through whom he claims, wrongfully obtained the invention or any part thereof from him or from a person under or through whom he claims;64. Revocation of patents.— 
(1) Subject to the provisions contained in this Act, a patent, whether granted before or after the commencement of this Act, may, be revoked on a petition of any person interested or of the Central Government by the Appellate Board or on a counter-claim in a suit for infringement of the patent by the High Court on any of the following grounds, that is to say—
(c) that the patent was obtained wrongfully in contravention of the rights of the petitioner or any person under or through whom he claims;
“Wrongfully obtained”, as understood from these provisions, refers to a situation where the true inventor has been defrauded by another person who has applied for a patent or who has been granted one. In other words, the patent applicant/patentee is not the “true inventor” since he has obtained the invention “wrongfully”. If the true inventor’s challenge under these provisions is successful, the patent application/patent shall be transferred to his name pursuant to Sections 26 and 52 respectively.

However, an allegation of an invention being “wrongfully obtained” is distinct from the issue under discussion. The distinction is that while Sections Section 25(1)(a) or (2)(a) and 64(1)(c) address a situation where fraud is committed on the true inventor, the issue under discussion refers to a situation where the patent applicant has not committed fraud, but is merely under the factually misplaced belief that he is the “true and first inventor”.

Based on my reading of the Act, the remedy for the second situation lies in Section 64(1)(b) which provides for a ground of revocation based on to “entitlement to apply for a patent”. This, in my opinion, is a reference to Section 6 which says who says who is entitled to apply for a patent. Reproduced below is Section 64(1)(b):
64. Revocation of patents. 
(1) Subject to the provisions contained in this Act, a patent, whether granted before or after the commencement of this Act, may, be revoked on a petition of any person interested or of the Central Government by the Appellate Board or on a counter-claim in a suit for infringement of the patent by the High Court on any of the following grounds, that is to say—

(b) that the patent was granted on the application of a person not entitled under the provisions of this Act to apply therefor:
To cut a long story short, while Section 64(1)(c) addresses an allegation of the invention being “wrongfully obtained”, Section 64(1)(b) addresses a situation where the “true and first inventor” challenges the grant of a patent by virtue of him being the “true and first inventor”. Therefore, if a person X believes that another person Y ought not to have been granted a patent since X conceived of the invention before Y, and Y is merely the first filer of the patent application, X has a remedy under Section 64(1)(b) after the patent has been granted. Surprisingly, such a remedy has not been provided for under the pre and post-grant oppositions in Section 25(1) or (2). Consequently, X has to wait until a patent is granted in order for him to challenge its grant.

However, what is certainly clear from the above is that the statute adopts a “first to invent” rule, and not “first to file”. Despite the absence of any ambiguity in the statutory framework, it is indeed intriguing that most people assume that India follows the “first to file” rule.

The policy argument that could be used to support the “first to invent” rule is that if the true and first inventor does not wish to file for a patent, and instead wishes to protect his invention as a trade secret, why should another person be granted a patent merely because he is the “first to file”?

Sunday, 2 March 2014

Is proof of damages required in Spain if patentee opts for equivalent royalty?

Colm Ahern
PatLit is delighted to host the following item from Spain, written by Colm Ahern (of Elzaburu, Madrid). Writes Colm:
Article 13 of the Enforcement Directive 2004/48 rather confusingly seems to equate equivalent royalty with damages, whereas in many continental legal systems it might fit more easily into the category of unjust enrichment i.e. the infringer has obtained something to which he has no legitimate right. The reference to damages, which has been transposed in Article 66 of the Patents Act has caused particular problems in Spain where case law has traditionally held that damages must be “real and effective” and strictly limited to those that are proven. Should the patentee then have to prove damages if he opts for equivalent royalty which, after all, has nothing to do with any actual damage he has suffered? This has led to some rather confusing and contradictory case law and the development of the doctrine of “ex re ipsa” which seeks to somehow fit equivalent royalty into the traditional picture by saying that there is no need to prove the existence of damage if by the nature of the thing under analysis (res), the existence of damage is clear (from the thing itself). However it would have been much better to acknowledge that as equivalent royalty cannot really be equated with the continental law concept of damages, as then the question of proving damages does not even arise.

This is exactly what the Madrid Appeal Court has done in Judgment no. 25/2014 of 24 January 2014 in appeal no. 578/2012. The ruling sets out that the purpose of equivalent royalty is not to compensate a loss suffered by the patentee, but rather the illegitimate invasion of his exclusive right. The Court does not say that it is necessary to show that the existence of a loss is self-evident (ex re ipsa) but rather that there is no need to prove or even consider any such loss. This comes as good news to patentees who up to now ran the risk that a court might find that the loss was not as self evident as they claimed e.g. when the patentee himself is not exploiting the patent in Spain and has made no preparations to do so either directly or through the granting of licenses. Even better, the Court gives clear guidance on what type of equivalent license terms can be sought including an up front payment, a fixed minimum monthly royalty and variable royalty based on sales. This is good news for patent litigators in Spain where judges traditionally tend to be guarded in their damages awards. 
This blogger has long been concerned at the relative lack of consistency in the assessment of damages in IP infringement proceedings, as well as being baffled by the paucity of references to the Court of Justice for preliminary rulings on how the Enforcement Directive should be interpreted.  This decision is therefore of particular interest to him.  Do readers from other countries have any thoughts?