IP Report - 2017-3

The Inteo IP Report is a newsletter reporting on noteworthy developments in Belgian and EU intellectual property law. To receive these updates by e-mail, you can subscribe here.

Trade marks – applications made in bad faith – In its judgment of 16 May 2017 in case T-107/16, the EU General Court annulled a decision by the EUIPO Board of Appeal. The Board of Appeal had dismissed an invalidity action on the basis that the composite mark ‘AIR HOLE FACE MASKS’ was filed in bad faith. The case is noteworthy because the trade mark application was filed by an EU distributor of the products concerned. The manufacturer sought the invalidity of the mark, asserting that it was filed in bad faith because the distributor did not have the right to file a trade mark in its own name. The General Court’s judgment explains that the considerations in the CJEU’s judgment in Lindt & Sprüngli are only examples drawn from a number of factors that can be taken into account to determine whether a trade mark application was filed in bad faith. After an assesment of all circumstances of the case (including correspondence between the parties, earlier trade mark registrations by the manufacturer in the US and Canada and the terms of the distribution agreement) the General Court decided that the trade mark had been applied for in bad faith.  

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Patents – As was reported in the Inteo patent law update in April, the Mons Court of Appeal has issued guidance on the effect of res iudicata (claim preclusion) on a second invalidity action by the same claimant against the same patentee. After an invalidity defence directed to a patent for a liposuction device had been dismissed in a final decision, the court allowed, in a judgment issued on 3 April 2017, a new invalidity action on legal grounds that had not been relied on in the previous action (added subject matter). However, the court declared the invalidity action inadmissible to the extent that it relied on the same legal grounds as the earlier action (obviousness, lack of novelty). The fact that the obviousness claim was supported by new evidence, i.e. prior art documents that had not been used in the earlier proceedings, was not enough to allow a new action in this respect.

Internet intermediaries – ISP and subscriber information – In a decision of 19 January 2017, the Antwerp commercial court ordered internet service provider Telenet to disclose the identity of two of its subscribers to Siemens PLM. The subscribers in question had tried to activate an unlicensed copy of Siemens product life-cycle management software. Siemens relied on the right to information that rightsholders enjoy in accordance with Article 8 of the IP Enforcement Directive. Telenet was ordered to disclose the identity of its subscribers only if the subscribers were commercial undertakings. The court ordered Siemens to pay 160 EUR to cover Telenet’s costs of compliance with the order.

Copyright – CJEU reference on copyright in flavours: In the Netherlands, the Court of Appeal of Arnhem-Leeuwaarden has issued a reference for a preliminary ruling to the EU Court of Justice on 23 May 2017. The referring court asks whether copyright can be claimed in a taste and, if it can, what conditions apply. The case relates to the taste of a popular cheese product (Heksenkaas). The referral contains specific questions, inter alia whether the instability of the food product and the subjective sensory experience play a role and – if claiming copyright in flavours (or ‘sensory copyright’) is accepted in principle – how the rightholder would have to establish originality and infringement. It is expected this matter will draw some attention, as its outcome will likely be relevant for perfumes and other luxury products as well. 

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Designs – indirect comparison – On 14 March 2017, the Brussels Court of Appeal decided that Vasco Group’s registered Community design for heating radiators was infringed by Quinn Group. The validity of the design was not in dispute. In its infringement assessment, the court found that minor differences between the products and the registered design do not lead to a different overall impression for the informed user. The court takes into account that the designer of such products enjoys a substantial degree of freedom. The infringement assessment was made on the basis of an indirect method of comparison based on an imperfect recollection of the designs. The court notes, in that regard, that a direct comparison of heating radiators will not always be possible for the informed user.   

Recovery of legal costs – On 8 May 2017, the Antwerp Court of Appeal issued a long-awaited judgment in another case involving Telenet, after a preliminary ruling by the EU Court of Justice. As the prevailing party in a patent infringement case against Rovi, Telenet claimed lawyers’ fees in excess of the statutory maximum that applies in Belgium. The CJEU had ruled in C-57/15 that a flat-rate scheme for the recovery of lawyers’ fees is irreconcilable with Article 14 of the IP Enforcement Directive if the cap is too low to allow the prevailing party to recover at least a significant and appropriate part of reasonable costs. The Court of Appeal rejected Telenet’s claim for lawyers’ fees beyond the statutory maximum in the main proceedings because – even if it were to accept that the Belgian statutory maximum is in fact too low – it could not adversely affect Rovi’s legal position by means of a contra legem interpretation of national law. In contrast, Rovi was ordered to pay the fees of Telenet’s technical counsel. 

Contact - For more information about the topics covered in this newsletter, please contact our lawyers Kristof Neefs (kristofneefs@ip.be / +32476900364) or Sofie Cubitt (sofiecubitt@ip.be / +32479735776).

Patent law update: a costly second try at invalidity

Kristof Neefs (contact)

[ this update has also been published on the EPLaw patent blog ]

On 3 April 2017, the Mons court of appeal issued a judgment in a patent revocation action between Nouvag and Dr. Jean Malak (Docket nr. 2016/RG/263). The judgment, the latest in a series of decisions in relation to Dr. Malak’s patent nr. EP 0971754 for a liposuction apparatus, includes interesting considerations on res judicata and legal costs in Belgian patent litigation.

Res judicata - The judgment provides guidance on the impact of res judicata on a patent revocation action based on new prior art documents and on validity arguments not relied upon in previous litigation between the same parties in relation to the same patent.  

On 15 October 2009, the Brussels court of appeal imposed an injunction and awarded damages for infringement of the Belgian counterpart of the patent. The court dismissed Nouvag’s counterclaim for revocation. That counterclaim was based on lack of novelty, insufficiency and inventive step. After this judgment was confirmed by the Cour de Cassation on 3 February 2012, Dr. Malak sought and obtained penalties in the amount of 915.000 EUR for violations of the injunction because the infringing device was still offered for sale on Nouvag’s website.

Nouvag then launched a second revocation action before the Mons commercial court, alleging insufficiency, lack of novelty and obviousness on the basis of 10 prior art documents not relied upon in the first action, as well as an alleged public prior use. The ‘new’ prior art documents had been used by Nouvag in parallel invalidity proceedings in Germany after the judgment by the Brussels court of appeal was issued. Nouvag also argued invalidity for added subject matter for the first time in the second action.

The Mons court of appeal has now declared Nouvag’s action inadmissible to the extent that it was based on lack of novelty, insufficiency and inventive step. The court decided that the rule of res judicata (Article 23 of the Belgian Judicial Code: “gezag van gewijsde” or “autorité de la chose jugée”) prevents a subsequent invalidity action between the same parties that is based on the same legal basis, regardless of whether new evidence is submitted. The judgment explains that patent litigation does not differ from other procedures in this respect. To the extent that Nouvag relied on added subject matter, an new invalidity argument that was not run in the first proceedings, the action was declared admissible but unfounded.

Two comments can be made on this aspect of the decision. The first is that Article 23 of the Judicial Code, determining the scope of res judicata in Belgium, has since been amended. The provision that applied to the litigation prevented new actions having the same object and the same cause of action, litigated between the same parties, in the same capacity. The provision has been changed to include that res judicata extends to actions having the same object and cause of action, “regardless of the legal basis”. Under the new regime, Articles 23 and 25 of the Judicial Code may have also barred Nouvag from filing a second revocation action based on new grounds, i.e. added subject matter.

The second is that all is not necessarily lost when new prior art documents come to light after a final decision was rendered. The route is – in the author’s opinion – not a second action, but rather a request for a retrial of the first decision (“verzoek tot herroeping van het gewijsde”). Article 1133 of the Belgian Judicial Code allows for such a request inter alia in cases of deception or if, since the decision, “determining evidence came to light that was withheld by the prevailing party”. Admittedly, this route is limited because the Cour de Cassation’s case law on retrials is strict: a request will in principle not be granted if it is based on reasons that the claimant knew or could have known at the time of the decision (Cour de Cassation, 26 May 1995). Arguing that the prior art document was not public to the extent that you could have been aware of it, could be a tall order.

Legal costs – A second interesting aspect of the judgment is that of legal costs. In United Video Properties / Telenet (C-57/15), the EU Court of Justice held, firstly, that Article 14 of Directive 2004/48/EC precludes national rules providing that reimbursement of the costs of technical advisers are provided for only in the event of fault on the part of the unsuccessful party, given that those costs are directly and closely linked to a judicial action seeking to have an intellectual property right upheld. Referring to this decision, the court of appeal awarded compensation to Dr. Malak for the fees of patent attorneys having advised on the matter on the basis of invoices produced.

The CJEU also ruled on the Belgian statutory cap on the recovery of lawyers’ fees. Article 1022 of the Judicial Code provides that prevailing parties in any litigation cannot recover lawyers' fees exceeding the maximum amounts stipulated in the Royal Decree of October 26 2007. This decree features a matrix which provides standard, minimum and maximum costs awards, depending on the amount in dispute. Courts can vary the costs awards between the maximum and minimum amounts on the basis of the circumstances of the case. The statutory amount is usually insufficient to cover the parties' real costs of legal representation. The CJEU held in that regard that Article 14 precludes national legislation providing flat-rates which, owing to the maximum amounts that it contains being too low, do not ensure that, at the very least, a significant and appropriate part of the reasonable costs incurred by the successful party are borne by the unsuccessful party. Against this backdrop, the court of appeal reserved judgment on this aspect of costs and it invited the parties to comment on whether the statutory maximum of 12.000 EUR would cover a significant and appropriate part of reasonable costs in this case.

A copy of the judgment can be downloaded (PDF) here.

IP Report - 2017-2

The Inteo IP Report is a newsletter reporting on noteworthy developments in Belgian and EU intellectual property law. To receive these updates by e-mail, you can subscribe here.

Patents - preliminary injunctions & the requirement of urgency – On 21 February 2017, the Brussels Court of Appeal issued a judgment in preliminary injunction proceedings between medical imaging company Guerbet and Bayer (2016/KR/18). Guerbet sought a preliminary injunction to prevent the marketing of a generic version of its product, a contrast agent, on the basis of a European patent for a process for preparing such agent. The court denied Guerbet’s appeal against the first instance dismissal because the requirement of urgency to obtain a preliminary injunction in Article 584 of the Belgian Judicial Code was no longer met. This requirement entails inter alia that regular proceedings cannot provide timely relief for the party seeking a preliminary injunction. This implies that the claimant must act diligently and without delay to obtain relief in a main action. While Guerbet was aware of the alleged patent infringement since at least January 2016 and it had sought interim relief both in preliminary injunction proceedings and a saisie-contrefaçon, it had not followed up on these actions by initiating main proceedings. Such proceedings had still not been filed on the trial date for the appeal in the preliminary injunction proceedings in late October 2016. In result, the Court of Appeal dismissed the action because it no longer met the statutory requirement of urgency. The Court also held that the action by the co-claimant, the local subsidiary of Guerbet and the holder of a non-exclusive licence that was not notified to the Belgian patent office, was inadmissible.

Copyright – On 17 February 2017, the Cour de Cassation dismissed a point-of-law appeal against a judgment of the Ghent Court of Appeal in Longchamp / Calem (C.15.0144.N). Longchamp unsuccessfully sought an injunction against a handbag marketed by Calem on the basis of its copyright in the classic Le Pliage bag. The Cour de Cassation confirmed the appeal court’s finding that a combination of design features in a handbag that corresponds to a fashion trend is not, as such, a work eligible for copyright protection. Since the subject matter claimed was, according to the court, not a work eligible for protection, the originality test did not need to be applied to dismiss the infringement action. It is worth noting that the Ghent Court of Appeal’s judgment had been the subject of substantial criticism in legal doctrine, not in the least because the Brussels Court of Appeal had confirmed in several decisions that the Le Pliage bag was protected by copyright.

Trade marks & debranding – The Brussels Court of Appeal issued a reference for a preliminary ruling to the EU Court of Justice (CJEU) in Mitsubishi / Duma Forklifts (2010/AR/2007) on 7 February 2017. In a lengthy judgment, the Court of Appeal awarded substantial provisional damages for trade mark infringement by importing and marketing Mitsubishi forklifts originating from outside the European Economic Area. In relation to a batch of such forklifts, Duma argued that there was no trade mark infringement because it had removed all Mitsubishi trade marks and serial numbers from the products prior to clearing them in the EEA. The Court of Appeal decided to ask the CJEU whether the trade mark owner is entitled to oppose debranding of products that were not put into circulation in the EEA and whether it is relevant that the products are then marketed in the EEA under the third party’s own trade mark (rebranding). The referral also asks the CJEU to consider the relevancy of the fact that the average consumer could still identify the commercial origin of the products on the basis of their appearance or design.

Design rights & copyright – On 17 January 2017, the President of the Brussels Commercial Court (Dutch language division) issued an injunction against the claimant in Neoz / Imagilights (A/16/03552). Neoz sought an injunction against Imagilights on the basis of registered Community designs (RCD) for cordless table lamps. The claim became a boomerang. The defendant relied upon documents establishing that its own product designs predated the RCDs, counterclaiming for invalidity of the designs and an injunction on the basis of its earlier copyrights in the product design. The court revoked the designs on the basis of Article 25, 1), f) of Regulation (EC) No 6/2002 on Community Designs, providing that a design can be declared invalid if it constitutes an unauthorized use of a work protected under the copyright law of a Member State. The court did not accept the claimant’s defense that its own designs had been independently created, noting that there is no such exception in Article 25, 1), f) and that Neoz failed to establish its own original creation in view of the striking similarities between the designs. Neoz did not provide any information in regard to its own design process. The defendant also disclosed its designs on trade fairs before the application date of the RCDs, making Neoz’s statement that it could not have known of those designs implausible in the eyes of the court. 

Domain names - In ADR proceedings under Section 10 of the Terms and conditions of DNS.be (the .be registry operator), the third party decider rejected a complaint to obtain the transfer of the domain name kingsize.be (Case No 44415). One of the 3 requirements to obtain the transfer of a .be domain name is that it was either registered or is being used in bad faith. Kingsize.be was registered by a domainer almost a year before the complainant was incorporated under the name Kingsize. The complainant offered to purchase the domain name for 500 EUR, to which the holder made a counteroffer of 4.900 EUR. An offer to sell a domain name at a high price can be, and often is, evidence of use in bad faith. In this particular case, the third party decider was not convinced. The decision notes that the domain name is a generic term in the English language and that it was registered prior to the complainant's use of the name. Because the domain name holder did not initiate the contact regarding the sale and no other evidence of bad faith was put forward by the complainant, his asking for a higher price was not sufficient to establish bad faith in this case.  
 

IP Report - 2017-1

The Inteo IP Report is a newsletter reporting on noteworthy developments in Belgian and EU intellectual property law. To receive these updates by e-mail, you can subscribe here.

Trade marks & parallel imports – On 7 November 2016, the Belgian Cour de Cassation ruled on the BMS-criterion of “objective necessity” for the repackaging of parallel imported pharmaceutical products in MSD/PI Pharma (C.15.0206.N). MSD markets a pharmaceutical product in Belgium in 28, 56 and 98 tablet packs. The 98-tablet pack amounted for 89% of the market, prompting a parallel importer to repackage 28-tablet packs imported from Poland into 98-tablet packs. MSD objected that repackaging was not objectively required to access the market. Its action was denied by the Brussels court of appeal. The Cour de Cassation confirmed that decision and held that it follows from CJEU case law that it must be examined whether the packaging size marketed in the export country allows access to the entire market of the product in the member state where it is imported. Perhaps regrettably, the Cour de Cassation refused to issue a reference for a preliminary ruling to the Court of Justice on the matter.

Unfair competition – The Antwerp court of appeal issued a judgment in an unfair competition case between British American Tobacco (‘BAT’) and Belgian cigarette manufacturer Torrekens (2016/AR/357) on 27 January 2017. BAT has phased out the well-known cigarette brand ‘Belga’. Shortly thereafter, Torrekens launched the trade mark ‘B’ with a get-up that was similar to Belga and marketing that was focused on the Belgian origins of the brand. BAT successfully obtained an injunction against the B-mark on 1 February 2016. That was not the end of the matter, because Torrekens then used a modified get-up, in which the ‘B’ on the pack was replaced by a question mark. The Antwerp court of appeal decided that this get-up amounts to misleading advertising and to an act of unfair competition by diverting customers, illegally obtained to begin with, to the new product packaging.

Right of information - On 18 January 2017, the EU Court of Justice of the EU explained in case C-427/15 that the right of information of an intellectual property right owner can also be exercised in the context of proceedings separate to those in which the infringement was determined. A sensible outcome. Several European jurisdictions, including Belgium, provide for expedited proceedings to obtain injunctive relief. Such proceedings usually do not allow for damages, which must then be sought in a separate action. It is in that action that information such as the quantities produced or sold by the infringer and the suppliers and customers of the infringer becomes most relevant.

Innovation Income Deduction (IID) - The Belgian Patent Income Deduction or ‘PID’ regime is replaced with new tax incentives for research & development : the Innovation Income Deduction (“IID”). Under the IID regime, the scope of income deduction for patents and SPC’s is broadened to include orphan drug protection, plant breeders’ rights, innovative software and data or market exclusivity rights for medicinal and plant protection products. ‘Innovative software’ is defined as copyrighted software, improvements to or derivative works of such software, that are the result of research and development projects and programs as defined in Article 275 /3 of the Income Tax Code. Such projects and projects must be notified to the Belgian Science Policy Office (“BELSPO”). ‘Innovation income’ qualifying for the IID not only includes royalties, but it extends to damages awarded by a court or agreed to in a settlement agreement.
 
Double & treble damages - In case C-367/15, the EU Court of Justice decided that Article 13 of the Enforcement Directive (Directive EC 2004/48) allows EU member states to provide for punitive damages in intellectual property matters. Polish legislation gave copyright holders the choice to claim compensation for either the actual harm incurred or a sum corresponding to twice (and in cases of wilful infringement, thrice) the hypothetical royalty that would have been due if the infringer had obtained permission to use the work (a rule referred to as treble resp. double damages). The infringer argued that this legislation could not be reconciled with Article 13 of the Enforcement Directive. The CJEU disagreed, noting that the Enforcement Directive lays down a minimum standard of protection for IP holders and it does not prevent that Member States provide for measures that are more favourable for rightsholders. This decision will surely grab attention, not in the least that of software publishers. The treble damages rule will not benefit the rights holder in the main proceedings, however, because the Polish Constitutional Court meanwhile found that that part of the provision is unconstitutional.   

Supplementary Protection Certificates for medicinal products - The UK High Court has issued a reference for a preliminary ruling to the EU Court of Justice in relation to Article 3(a) of the SPC Regulation. In Teva/Gilead ([2017] EWHC 13 (Pat)), the English court was asked essentially whether a patent claim for "a pharmaceutical composition comprising active ingredient X (...) and optionally other therapeutic ingredients" is sufficient to obtain an SPC for a product comprising a combination of X and Y. Teva argued that it was not, because the EU Court of Justice's judgment in Medeva explains that, to meet the requirement in Article 3(a) that the product covered by the SPC is "protected by a basic patent in force", the product must be specified in the wording of the claims. Noting that EU national courts have continued to interpret Article 3(a) of the SPC Regulation in different ways in spite of several judgments of the CJEU on the subject, the UK High Court decided to repeat the first question in Sanofi/Actavis (C-443/12) in a new referral: “What are the criteria for deciding whether 'the product is protected by a basic patent in force' in Article 3(a) of the SPC Regulation?”. Arnold J suggests that the criterion should be that the product embodies the technical contribution of the patent.

Unified Patent Court & Brexit – The entry into force of the Unified Patent Court Agreement requires ratification by 13 states, including at least France, Germany and the United Kingdom. The outcome of the Brexit referendum seemed to have derailed the process but in November 2016, the UK announced its intention to ratify the agreement in 2017. On 16 January 2017, the Preparatory Committee of the Unified Patent Court (“UPC”) published an update indicating that the UPC would become operational in December 2017. No more than 2 days after that announcement, British PM Theresa May said that the United Kingdom will take back control of its laws and “bring an end to the jurisdiction of the European Court of Justice in Britain”. The speech of 17 January 2017 appears to shed new doubt over the UK’s intention to ratify, because the Unified Patent Court will be bound by the decisions of the Court of Justice of the European Union. If the UK does ratify, the secretary who would have to formally sign the ratification instrument is, ironically, Mr. Boris Johnson.

Life Sciences update: CJEU reference on Article 3(a) of the SPC Regulation

Lord Justice Arnold's persistence in SPC (supplementary protection certificates for medicinal products) matters will be sorely missed in a post-Brexit world. On 13 January 2017, the UK High Court of Justice issued a reference for a preliminary ruling to the EU Court of Justice on the interpretation of Article 3(a) of the SPC Regulation.

In Teva/Gilead ([2017] EWHC 13 (Pat)), the English court was asked essentially whether a patent claim for "a pharmaceutical composition comprising active ingredient X (...) and optionally other therapeutic ingredients" is sufficient to obtain an SPC for a product comprising a combination of X and Y.

Teva argued that it was not, because the Court of Justice's judgment in Medeva explains that, to meet the requirement in Article 3(a) that the product covered by the SPC is "protected by a basic patent in force", the product must be specified in the wording of the claims. Teva said that the law is clear and that no reference to the CJEU was required.

Arnold J did not agree. Noting that EU national courts have continued to interpret Article 3(a) of the SPC Regulation in different ways in spite of several judgments of the CJEU on the subject, the UK High Court decided to ask the first question in Sanofi/Actavis (C-443/12) again:

What are the criteria for deciding whether 'the product is protected by a basic patent in force' in Article 3(a) of the SPC Regulation?

Arnold J offers his own suggested answer "In the hope that it will assist the Court of Justice to provide a clear answer this time". He suggests that the product must infringe the basic patent because it contains an active ingredient or combination of active ingredients that "embodies the inventive advance (or technical contribution) of the basic patent".

For combination products, the combination of active ingredients, as distinct from one of them, would have to embody the inventive advance. The test proposed by Arnold J would, if considered and accepted by the CJEU, turn the focus from the wording of the claims of the basic patent to their substance.

Belgian intellectual property law firm Inteo launches

Inteo has opened for business. Inteo is a Belgian law firm focused on intellectual property and related practice areas. The firm is dedicated to serving clients driven by brands, creativity, design, engineering, entertainment, innovation, life sciences, research, science and technology. 
 
Inteo is owned and run by Sofie Cubitt and Kristof Neefs. Both partners are experienced intellectual property and technology lawyers. Before founding Inteo, they were members of top-ranked intellectual property teams in leading law firms. 
 
Between them, Inteo’s partners were involved in some of the most complex intellectual property and technology litigation in Belgium in the past years. They represented clients in disputes relating to products and technologies as diverse as pharmaceuticals, diagnostic methods, coffee capsules, software, sugar beet varieties, motor vehicles, textiles and laser sorting machines. Inteo offers services across the entire field of intellectual property, including patents, trade marks, designs, copyright, database rights, plant variety rights, confidential information and unfair competition.
 
Whilst focused on dispute resolution, Inteo also offers general advisory services and transactional support. In addition to her experience in private practice, Sofie Cubitt worked as an in-house advisor for technology and research-driven multinationals. That background brings a business-oriented approach and expertise in licensing and research agreements, IP due diligence and funded research counselling.  
 
Inteo hopes to hit the ground running and continue to provide premium legal services to obtain the best possible result for its clients.