IP Report 11 - October 2019

Inteo is a Belgian law firm focused on intellectual property and related practice areas. This newsletter reports on noteworthy developments and court decisions relevant to intellectual property and technology law in Belgium and the EU.

Patents – added subject matter – method of treatment : On 3 September 2019, the Brussels enterprise court revoked the Belgian part of Roche’s European patent EP 1 951 304 (“EP 304”) for a method for the treatment of joint damage in patients with rheumatoid arthritis. The patent claimed re-treatment of a specific patient population with an inadequate response to TNF inhibitors. Roche alleged infringement of this patent by the commercialisation of Rixathon®, a Sandoz biosimilar of Roche’s rituximab product Mabthera®.

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Sandoz counterclaimed to have EP 304 invalidated. The patent had been revoked by the Opposition Division of the European Patent Office, but the title remained in force pending appeal proceedings before the Technical Board of Appeal.

The Belgian enterprise court aligns with the Opposition Division’s decision on added subject matter. Sandoz asserted that the granted claims of EP 304 were an intermediate generalisation of a disclosure in the PCT application. Specifically, claim 1 extended the patient population from the disclosure in the application by including subjects with and without symptoms of rheumatoid arthritis in active form. Further, the granted claims did not specify that the active substance methotrexate (“MTX”) is a component of the re-treatment schedule. The court agrees that the selection of the patient population is an essential feature of the claimed treatment. It also opines that there is a functional relationship between the administration of MTX and rituximab in the disclosure of the application. On that basis, it finds that the patent as granted contains impermissible added subject matter under Article 123(2) of the European Patent Convention.

The court finds that Roche’s auxiliary requests do have basis in the application as filed and that these meet the requirement of novelty. However, it holds that the invention so claimed is obvious over a 2005 publication and the common general knowledge of a rheumatologist.

Health claims – dietary products : In a judgment issued on 19 June 2019, the president of the Brussels enterprise court assesses a set of health claims in advertising for the dietary supplement XtraSlim700 marketed by Forté Pharma. Forté Pharma’s advertising stated inter alia that consumers could burn up to 700 kilocalories per day thanks to the ingredient complex. Competitor Omega Pharma asserted that these claims did not satisfy the conditions of Regulation 1924/2006 on nutrition and health claims made on foods.

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The court was asked to rule on a series of claims made by Forté Pharma in its advertising. Forté Pharma asserted that its product packaging, including the health claims, had been notified to the Belgian Federal Health Service and that a notification number had been granted. According to Forté Pharma, this implies approval by the authorities. The court dismisses that defence inter alia because the Health Service’s notification expressly indicates that no such approval should be inferred from the grant of a notification number.

The court proceeds with a detailed and methodical analysis of the claims objected to by Omega Pharma. It decides that the statement that a combination of turmeric and wakame lead to an average weight loss of 700kCal/day is not a permissible variation of the claim that this combination contributes to the lipid metabolism. Conversely, Forté Pharma is allowed to say that ingredients such as wakame, turmeric and cassis contribute to a reduction of appetite and weight control. The court issues an injunction for inter alia the claims that the product burns 700kCal per day with ‘proven efficacy’, but it allows Forté Pharma’s claim that the product contributes to weight loss.

Trade marks – Benelux Court of Justice issues first judgment as appellate body for office decisions – On 18 October 2019, the second chamber of the Benelux Court of Justice issued its first judgments as the appellate body for decisions of the Benelux Intellectual Property Office (“BOIP”). Until 1 June 2018, jurisdiction for such appeals vested in the courts of appeal in Brussels, The Hague and Luxembourg. It has been centralized in the Benelux Court of Justice inter alia to minimize divergence in the case law.

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The very first appeal was lodged by bakery product manufacturer Grupo Bimbo. It was directed against the refusal on absolute grounds of the trade mark ‘THINS’ for inter alia chips, bread and meat products. BOIP held that ‘THINS’ is a common name for the products within the meaning of Article 2.11.1.d of the Benelux Intellectual Property Convention. It further decided that the Benelux public would recognize the English term ‘thin’ in the trade mark, making it descriptive for a characteristic of the products (Article 2.11.1.c). This, in turn, lead to a lack of distinctiveness (Article 2.11.1.b). Grupo Bimbo appealed on all three accounts. It argued that ‘THINS’ is a grammatically incorrect term and that non-native English speakers would not reduce it to ‘thin’ without further thought.

The Benelux Court of Justice dismisses the appeal. It decides that the Benelux public's English proficiency is enough to recognize 'Thins' as the plural form of a noun to indicate that the products concerned are 'thin'. It even - surprisingly - accepts the Office's position that the term is a common sign to indicate such foods in the course of trade. The decision may be subject to a point-of-law referral before the first chamber of the Court.

Procedure – Liability for provisional measures : Belgian legal authors have long debated the nature of liability (faultless v. tort) of a rightsholder for damages incurred as a result of provisional measures (such as a preliminary injunction and a saisie-contrefaçon) after a finding of non-infringement or invalidity in a main action. In 2018, the Brussels court of appeal issued a judgment rejecting faultless liability (IP Report 5, Snowfall). The court inter alia opined that faultless liability would run counter to the Enforcement Directive’s stated purpose to provide effective remedies to rightsholders.

In its judgment of 12 September 2019 in case C-688/17, the European Court of Justice has validated this approach in a preliminary ruling on a referral in relation to Article 9 (7) of Directive 2004/48 (the “Enforcement Directive”). That provision is that where provisional measures are revoked or where it is subsequently found that there has been no (threat of) infringement of an intellectual property right, the applicant may be ordered to pay the defendant “appropriate compensation”.

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In a Hungarian patent dispute between Bayer and generic manufacturers, Bayer sought and obtained a preliminary injunction. It then lost the main proceedings and the defendants claimed compensation for the commercial harm incurred by the preliminary injunction. The Budapest High Court asked the CJEU whether Member States and national courts can establish the substantive rules on liability in such matters.

In its judgment, the Court explains that Article 9(7) of the Enforcement Directive serves as a guarantee to cover the costs and the injury caused to the defendant by an “unjustified” application for provisional measures. According to the Court, the fact that provisional measures have been repealed is necessary to lead to liability, but it is not enough. Paragraphs 65 et seq. of the judgment echo the Brussels court of appeal’s consideration that deciding otherwise would discourage rightsholders from seeking interim relief. Instead, determining whether a request was unjustified requires that the national court takes all objective circumstances of the case into account. Those circumstances include whether the applicant for preliminary measures has abused interim proceedings or whether he has acted to mitigate losses as may generally be expected.

Misleading advertising – economic behaviour of consumers : In a judgment issued on 28 June 2019, the Brussels court of appeal dismisses an action by Werner & Mertz directed against Ecover’s marketing of an ‘Ocean Bottle’ for washing up liquid. The advertising includes the statement that the bottle is made of 50% of ‘ocean plastic’. Werner & Merz submitted that this is misleading advertising. It asserted inter alia that the statement that the bottle is made of plastic recuperated from the oceans is incorrect. The recycled material was in fact recovered from beaches rather than the ocean. Using plastic recovered from the oceans or seas would not, according to Werner & Merz, be possible. It explained that salt and micro-organisms in the water affect the plastic, making it unsuitable for recycling in an economically viable way.

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The court of appeal confirms the first instance court’s decision to reject the action. It was not in dispute between the parties that the Ocean Bottle was made of recycled plastic collected on beaches rather than retrieved from the ocean or seas. The court of appeal decides, however, that this incorrect information would not affect consumers’ purchasing decision. While the ecological message is important, the court finds that the distinction between preventing further harm and remedying existing pollution is not a decisive one for consumers. In its ruling, the court of appeal diverges from the decision in parallel proceedings in Germany. According to the judgment, the Oberlandesgericht Stuttgart decided that consumers concerned with the impact of plastic in the oceans on marine life would make a distinction between plastic retrieved from the ocean and from beaches. The case is a reminder that misleading advertising not only requires incorrect information or omissions, but also a potential effect on the economic behaviour of the public.

Trade marks – freedom of expression – As was reported in IP Report 6, the President of the Brussels enterprise court requested a preliminary ruling to the Benelux Court of Justice in relation to the balance between trade mark rights and the freedom of artistic expression. In MHCS v Cedric Art, the French luxury brand objected to the use of its trade marks in an art collection labelled “DAMN PERIGNON”.

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The questions asked by the enterprise court in its interim judgment of 12 April 2018 were whether freedom of expression is “due cause” for trade mark use and, if it is, what criteria must be taken into account to balance that freedom with the rights of trade mark proprietors. The referring court suggested a list of potentially relevant criteria. These included the commercial nature of the expression, the reputation of the trade mark, the potentially negative impact on the trade mark’s reputation and the intensity of the use in terms of volume, time and territory.

On 14 October 2019, the Benelux Court of Justice issued its preliminary ruling. The judgment is short. The court refers to the 27th recital of Directive (EU) 2015/2436 to confirm that freedom of expression in accordance with Article 10, §1 ECHR can amount to due cause for trade mark use other than to distinguish goods or services. That is the case, according to the Court, if there is an artistic expression that is the result of a creative process. It adds that artistic freedom of expression may not be relied on to cause prejudice to the trade mark holder. That balance must be struck, according to the judgment, taking into account all circumstances of the case. Disappointingly, the Court does not address the relevance of the specific criteria suggested by the enterprise court in its referral, stating that those questions need no separate response.  

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