Inteo is a Belgian law firm focused on intellectual property and related practice areas. The IP Report reports on noteworthy developments and court decisions relevant to intellectual property and technology law in Belgium and the EU.Read more
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 – obviousness - problem-solution approach not mandatory – In a judgment issued on 22 March 2018, the Belgian Cour de Cassation rejected a point-of-law appeal against the revocation of Roquette Freres’ European patent for crystals of maltitol of a particular form. The Ghent court of appeal decided that the invention was obvious in view of two prior art publications and the common general knowledge. The patentee’s defence was based on the problem solution approach. That approach reflects the way the European Patent Office (EPO) typically addresses obviousness. Belgian courts have often sought guidance in EPO practice (including the problem solution approach) for the assessment of patent validity.
In its point-of-law appeal, Roquette Freres raised a plea that the court of appeal violated its duty to state reasons pursuant to Article 149 of the Constitution. It essentially argued that the court of appeal had a duty to individually address its defence based on the problem solution approach. The Cour de Cassation dismissed that plea. It found that the court of appeal properly motivated its decision on obviousness. The patentee’s arguments based on the problem solution approach were, according to the court, “not a separate plea in law, but only an argument to support its plea on the presence of an inventive step”. This judgment supports the view that, while the problem solution approach can be a helpful tool, it is not the only way to establish that an invention was obvious to the person skilled in the art.
Trade marks – acquired distinctiveness – geographical requirement - In its judgments of 25 July 2018 (joined cases C-84/17 P, C-85/17 P and C-95/17 P, KitKat) and of 6 September 2018 (C-547/17 P, Basic Net), the Court of Justice of the European Union quashed hopes that evidence of acquired distinctiveness in a significant part of the territory of the European Union suffices to overcome an ab initio or inherent lack of distinctiveness of EU trade marks.
Both cases related to a trade mark that was found to be ab initio devoid of distinctive character across all EU Member States. Article 7(3) EUTMR provides that such a trade mark can overcome the absolute ground for refusal if it has become distinctive because of the use that has been made of it. In KitKat, Nestlé argued that to meet this threshold, it was enough to show that a significant proportion of the relevant public in the European Union perceived its 3D trade mark as an indicator of origin. It relied inter alia on the CJEU’s judgment in Leno Merken (C-149/11) wherein that standard is applied to the requirement of genuine use of a trade mark.
The CJEU rejects that stance. It explains that the territorial requirement of genuine use cannot be applied by analogy to that of acquired distinctiveness. The Court accepts that evidence for every individual Member State may not be necessary in all cases. It goes on to clarify that although proof of acquired distinctiveness “may be produced globally for all the Member States concerned or separately for different Member States or groups of Member States, it is not, however, sufficient that the party with the burden of providing such evidence merely produces evidence of such acquisition that does not cover part of the European Union, even a part consisting of only one Member State.” Because Nestlé had not established distinctiveness in Belgium, Ireland, Greece and Portugal, it failed to satisfy the requirement of Article 7(3) EUTMR.
In its subsequent judgment of 6 September 2018, the CJEU confirmed its position for a colour combination trade mark applied for by the Italian company Basic Net. It is perhaps not a coincidence that the trade marks at issue were a 3D mark and a colour mark. For these type of trade marks, inherent distinctiveness is accepted only in exceptional circumstances. The KitKat and Basic Net judgments confirm that establishing acquired distinctiveness for EU trade marks can be a very tall order.
Software copyright – functionality – graphical user interface – In a judgment issued on 13 June 2018, the President of the Antwerp commercial court provides guidance on the limits of copyright protection for software. ERA is a network of real estate agents. The Brokery had developed a CRM application for some of the agents in the network. It argued that ERA infringed its copyrights in that software, alleging that an application developed by ERA was a copy. The Court dismissed the action.
The reasons of the decision start from the principle laid down in SAS Institute v World Programming (C-406/10) that software copyright protection does not extend to the functionality of a computer program because that would allow the monopolization of ideas. It only covers (original) object and source code, as well as its architecture. The Court clarifies that that architecture must be seen at code-level, in that it comprises the (structure of the) instructions and commands performed. Because the allegedly infringing software was coded in a different programming language and the claimant had not even performed a comparison at code-level, the claim based on software copyright was dismissed. The Brokery also invoked copyright in the graphical user interface (GUI) of its application. The Antwerp court follows the CJEU’s decision in BSA (C-393/09) that a GUI is not subject to copyright protection for computer programs. As in BSA, the Court accepted that a GUI could qualify for protection under ordinary copyright, provided it is established that it meets the criterion of originality. The Brokery asserted that an input screen of its application was original. The court disagreed and held that the structure of the screen was entirely dictated by logic and the input required.
Copyright – collecting societies – abuse of dominant position – In a judgment issued on 12 April 2018, the President of the Brussels commercial court held that Belgian collecting society SABAM had abused its dominant position by unilaterally increasing tariffs for music festivals. SABAM is the Belgian association of authors, composers and publishers. It charges music festival organisers a percentage of ticket sales for the use of its music repertoire.
In January 2017, SABAM increased tariffs for music festivals by up to 37%. 32 music festivals and the federation of music festivals in Flanders initiated injunction proceedings, asserting that the increase amounts to excessive pricing. It was not in dispute that SABAM holds a dominant position as the de facto monopolist for collective rights management for Belgian music festivals. The Court decides that there was no objective justification for the increase of the tariffs. SABAM’s defense was that the increase was made after benchmarking tariffs in neighbouring jurisdictions. The Court did not accept this, inter alia because it would allow for a vicious circle of increases across jurisdictions. The Court further held that SABAM is required to adjust its royalty basis for costs incurred by the festivals that have no bearing on the use of music. Finally, SABAM’s tariffs must take into account how much of the music played at a given festival belongs to its repertoire, for example by using DJ monitoring technologies or playlists. We were informed an appeal against this judgment is pending.
Trade marks – repackaging – pharmaceuticals – generic products – On 12 April 2018, the President of the Brussels commercial court also issued an injunction against the sales of repackaged pharmaceutical products that were imported from the Netherlands. Sandoz is a member of the Novartis group. It markets a generic version of Novartis’ Femara® product (letrozole) in the Netherlands under the Sandoz brand. Impexeco, a parallel importer, had repackaged the generic product using the Femara® brand for sales in Belgium.
The Court held that because the products were sold under the Sandoz trade mark, Novartis’ rights in the Femara® trade mark had not been exhausted. The Court did not accept Impexeco’s defense that the Femara® trade mark is used to artificially partition markets. Novartis succeeded in establishing that the market segments for generic and originator letrozole products are clearly distinct. According to the decision, it does not matter that Sandoz’s product is identical to Femara®. Nor is it relevant that they are marketed by the same corporate group.
Contact - For more information about the topics covered in this newsletter, please contact our lawyers Kristof Neefs or Sofie Cubitt.
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 – pemetrexed – doctrine of equivalents – decisions in other jurisdictions – In a judgment issued on 15 June 2018, the President of the Brussels Commercial Court denied Eli Lilly’s claim for an injunction to prevent Fresenius Kabi from marketing a generic pemetrexed pharmaceutical product. Pemetrexed is the active ingredient of Eli Lilly’s chemotherapy product Alimta.
Eli Lilly relied on a European patent with claims for the use of pemetrexed disodium in combination with vitamin B12 (and, optionally, folic acid) in a medicinal product to inhibit tumour growth. Fresenius Kabi’s product does not comprise pemetrexed disodium, but a different pemetrexed compound (pemetrexed diacid in combination with thromethamine). Lilly inter alia argued infringement under the doctrine of equivalents because pemetrexed diacid performs essentially the same function, in essentially the same way, with essentially the same technical result. The gist of Eli Lilly's infringement case was that Fresenius Kabi’s product embodies the technical teaching of the patent, i.e. reducing the toxic effects of pemetrexed by administering it with vitamin B12.
The Brussels court dismissed the action. The Court notes that Fresenius Kabi’s (later) patent for its pemetrexed diacid product alleges to solve a problem of chemical instability of pemetrexed salt forms (including pemetrexed disodium). Eli Lilly submitted that that effect was obvious. The Court considers that, if this is true, Eli Lilly should not have limited its claims to pemetrexed disodium during the prosecution of its own patent. On that limitation, the Court was not convinced by Eli Lilly’s argument that the claims were limited to overcome an added subject matter objection, rather than one of novelty or obviousness over the prior art. The Court considers that reclaiming subject matter that was not pursued during prosecution under the doctrine of equivalents would run counter to legal certainty.
Eli Lilly has enjoyed considerable success with its action under the doctrine of equivalents in other jurisdictions, including Germany, the United Kingdom, the Netherlands and Switzerland. The Belgian first instance action now went the other way. It is not uncommon that the outcome of infringement decisions differs across EPC jurisdictions and determining the scope of protection of the patent at issue in this case is by no means a straightforward exercise. Regardless of the result, however, it is disappointing that the Court’s final decision does not address or even mention decisions in other jurisdictions, including the UK Supreme Court’s landmark judgment of 12 July 2017 ( UKSC 48). Although those decisions are not binding to the Belgian infringement court, their omission altogether is hard to reconcile with the interim judgment of 15 February 2018. In that order, the Court re-opened proceedings precisely to allow Eli Lilly and Fresenius Kabi to inform and update the Court on “the state of play in other jurisdictions”. It seems likely that Eli Lilly will appeal, if it has not already. It will then be up to the Brussels Court of Appeal to consider the law of infringement by equivalence in Belgium.
Trade marks – red soles and substantial value – On 12 June 2018, the Grand Chamber of the Court of Justice issued a hotly anticipated judgment in case C-163/16 on a request for a preliminary ruling by the District Court of The Hague (The Netherlands). In infringement proceedings, Dutch footwear retailer Van Haren argued that Louboutin’s red sole trade mark is invalid because it consists exclusively of a shape that gives substantial value to the products (Article 3.1, e) of Directive 2008/95).
In just 9 paragraphs, the Court holds that the substantial value restriction under the old Trade Mark Directive does not apply to the red sole mark. A colour, even if it is only claimed for a specific position on the product, is not a shape. In a judgment issued on 18 November 2014, the Brussels Court of Appeal rejected Belgian retailer Van Dalen's invalidity defence against the red sole mark on the same grounds. The EU Court’s reasoning is straightforward. However, the more interesting question is whether the colour can be qualified as ‘another characteristic’ that gives the product substantial value because Article 4.1, e), iii) of the new Directive 2015/2436 broadens the scope of the substantial value restriction from shapes to ‘shapes or another characteristic’. Although the Court of Justice was bound by the terms of the referral, it would have been helpful if it had included an obiter dictum on the new provision.
Patents – saisie-contrefaçon – indications of infringement and decisions in other jurisdictions – On 24 April 2018, the Brussels Court of Appeal upheld a third party opposition action against a saisie-contrefaçon, an ex parte procedure to obtain evidence of intellectual property infringement in Belgium. B. Braun Melsungen (BBM) sought and obtained a saisie at the premises of Becton Dickinson on the basis of a European patent claiming a tip guard for hypodermic needles.
One of the statutory requirements to obtain a saisie is that there are "indications of infringement or of a threat of infringement”. This is generally considered a low threshold, because the purpose of the procedure is to collect and secure evidence. However, the applicant cannot rely on the evidence obtained by the saisie in third party opposition proceedings against the ex parte decision to award the measure. In that context, the court’s assessment is limited to the evidence the applicant provided at the time of the request.
In BBM v. Becton, BBM obtained a saisie for two products: the old and the new version of Becton catheters marketed under the name ‘Venflon Pro Safety’. As indications of infringement for the new version, BBM relied on decisions on the European patent in Germany, Austria and an interim judgment by the President of the Brussels Commercial Court. BBM submitted that all had imposed either a permanent or an interim injunction. According to the Court of Appeal, these decisions did not justify taking evidence in Belgium.
In the German proceedings, it had been announced at trial that Becton’s appeal against the permanent injunction would be upheld because the new version does not infringe. BBM had not disclosed this in its ex parte request. The Austrian preliminary injunction was held to relate to the old version of the catheter, with Becton arguing that the new version does not infringe. The same was true for the interim decision issued by the Brussels court. The Court of Appeal concludes that BBM had not met the threshold of indications of infringement for the new version of Venflon Pro Safety.
The Court of Appeal one-upped by deciding that BBM had not provided sufficient evidence for the old version either. That decision is remarkable because the President of the Commercial Court had issued a preliminary injunction to stop Becton from selling that version in Belgium, finding prima facie infringement in relation to the old version. The Court of Appeal held that it was not bound by that assessment and that BBM had provided no other evidence, such as a report by a party expert, to substantiate that there were indications of infringement by either product at the time it had filed the ex parte request.
The result of the action was that all evidence collected at Becton during the saisie had to be returned. BBM was ordered to refrain from using any of that evidence, at a penalty of 50.000 EUR per violation of that order. Although the Court of Appeal imposes no sanction on BBM for lack of candour, the judgment does mention BBM’s failure to disclose that the German appeal court had announced at trial that one of the products at issue do not infringe. In view of the Court’s recent case law on the applicant’s duty of full and adequate disclosure (see Inteo IP Report 5), this may well have been one of the factors tilting the case in Becton’s favour.
[Note: we were informed after publication that BBM will file a point-of-law appeal against the judgment before the Cour de Cassation]
Trade marks – technical function - exclusively and necessary – In case T-44/16, the General Court upheld EUIPO’s decision that Novartis’ figurative EU trade mark is invalid because it consists exclusively of a shape necessary to obtain a technical result (Article 7.1, e), ii) EUTMR). Novartis had registered the following sign as a trade mark for pharmaceutical preparations for Alzheimer’s disease:
Novartis markets a transdermal patch as depicted in the trade mark for the treatment of Alzheimer’s disease. The EUIPO Cancellation Division upheld SK Chemicals’ application for a declaration of invalidity and the Board of Appeal confirmed that decision. Before the General Court, Novartis argued inter alia that EUIPO had misinterpreted the terms ‘exclusively’ and ‘necessary’ in Article 7.1, e), ii) EUTMR.
On ‘exclusively’, Novartis submitted that for Article 7.1, e), ii) to apply, the various characteristics of the trade mark should all refer to a single technical result. The Board of Appeal identified several characteristics that all applied to different technical results. For instance, the square shape was to facilitate storage, whereas the knobs surrounding the patch create a space between the patch during transport. Novartis’ argument was that, when the features of the mark refer to several technical solutions, that does not prevent the use of a single technical solution by other companies. The General Court dismissed that plea. It holds that Article 7.1, e), ii) EUTMR (and its predecessor in the CTMR) applies when each of the essential technical characteristics of the trade marks has a technical function, even if it is not a single technical function.
In relation to ‘necessary’, Novartis contended that there are plenty of other shapes available to obtain the technical results identified. The Court held that that alone does not mean that the registration of a shape would have no effect on the availability of the technical solution to other companies. As the Court of Justice held in relation to the equivalent provision in the Design Regulation in case C-395/16, it cannot be excluded that a company would register all shapes that lead to the technical result, resulting in an effective monopolization of the technical result.
Trade marks and freedom of expression – On 12 April 2018, the President of the Brussels commercial court issued a request for a preliminary ruling to the Benelux Court of Justice. The court asks whether, and in what circumstances, freedom of artistic expression amounts to due cause for trade mark use. An artist reproduced Dom Pérignon trade marks in a collection of paintings and erotic photographs under the name 'Damn Pérignon'. He also sold T-shirts depicting the paintings.
The court issued an injunction for the T-shirts but decided to refer the matter of the paintings and the photographs to the Benelux Court of Justice for a preliminary ruling. The questions asked are 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 Commercial Court adds a list of potentially relevant criteria, including 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. Because this is an action under (the Benelux implementation of) Article 10(6) of the EUTMD (use other than use for the purpose of distinguishing goods or services), the question was referred to the Benelux court of justice. However, 'due cause' is a concept of EU trade mark law so it is not unlikely that that court will ultimately turn to the EU Court of Justice for further guidance.
Contact - For more information about the topics covered in this newsletter, please contact our lawyers Kristof Neefs (firstname.lastname@example.org) or Sofie Cubitt (email@example.com). This newsletter is for information purposes only and it does not constitute legal advice.
Entitlement to priority for successors in title
On 27 September 2017, the District Court in The Hague (the Netherlands) issued a judgment in Celltrion v. Biogen et al. revoking the Dutch counterpart of European patent EP 1 951 304 (EP 304) for lack of novelty. The Court held that EP 304’s priority claim was invalid because priority rights had not been timely assigned by its US employee-inventors to the applicant. This decision raises concerns for the holders of patents claiming the priority date of a pre-AIA US patent application.
Before the Leahy-Smith America Invents Act (AIA), US patent law required that patents were filed by the inventors, rather than by their employer or other assignees. More often than not, the application would be assigned to their employer who would then pursue patent protection in other jurisdictions, relying on the priority date of the US patent application. Article 4 of the Paris Convention for the Protection of Industrial Property provides for an international right of priority of 12 months as of the date of filing of a patent application for filing in other countries. That right is conferred to “any person who has duly filed an application for a patent […] in one of the countries of the Union, or his successor in title”. The same language is used in Article 87 of the European Patent Convention.
EP 304, a patent for a method of treatment of rheumatoid arthritis held by Biogen, F. Hoffmann-La Roche and Genentech, claims the priority of two US patent applications. These applications were filed by two then-employees of Biogen. According to the judgment, the agreement with their employer, subject to the laws of Massachusetts, contained an active assignment of the employees’ rights in “Proprietary Information” and a promise to assign “Inventions” and any rights that the employee may have and acquire in inventions. Priority rights as such are not mentioned in the employment agreement.
Celltrion argued that the right to priority had not been validly assigned to Biogen, so it was not entitled to claim priority as the inventor’s successor in title. The District Court agreed. It dismissed the patentees’ defence that the priority right had automatically been transferred by the assignment of the priority application. Referring to the case law of the Boards of Appeal of the European Patent Office, the Court ruled that a priority right is an independent right that should be assigned separately, in accordance with the national law that applies to the priority application. After an analysis of the provisions in the inventors’ contract, the Dutch court found that neither the clause with the active assignment nor that with the promise to assign covers priority rights. It continued that the parties to that contract “simply neglected to make concrete arrangements for the assignment of priority rights”.
Because the priority rights had not otherwise been assigned to the applicants of EP 304, the Court ruled that they were not the priority applicant’s successor in title at the time of the European application. In result, priority was not validly claimed and the patent was invalidated for lack of novelty over a study abstract published after the priority date, but before the European application date.
The issue of entitlement to priority as a successor in title is a not new one, but the Dutch court’s take on the matter is decidedly strict for patentees. In the United Kingdom, Arnold J held in KCI v Smith, that “successor in title” for priority means successor in title to the invention. In contrast, the The Hague Court in Celltrion v Biogen et al. referred to the EPO Board of Appeal’s decision in T-205/14 to hold that the right to priority is a right that must be distinguished from the right to the priority application. It is correct that this statement is referred to in the Case law of the Boards of Appeal of the European Patent Office at page 369. The Dutch court’s subsequent reasoning that this implies that the right to priority must be separately transferred, however, is not supported by the decision referred to in the EPO’s case law overview. Instead, the Board of Appeal noted in T-205/14 at page 25 that it did not share the opponent’s view that “the characterisation of the right of priority as a right independent of the right to the priority application implies that the valid transfer of a priority right inevitably requires a separate and express assignment declaration. The requirement for a valid transfer of rights of priority is a matter distinct from the characterisation as an independent legal right.”
While the question of entitlement to priority for successors in title is not specific to patents claiming the priority date of a pre-AIA US patent application, it is particularly relevant to such patents because of the requirement that the inventor files the patent application. The Dutch judgment also refers to parallel proceedings before the EPO Opposition Division and the Landesgericht in Munich, Germany. It appears that a preliminary injunction was denied in Germany on account of the likelihood that the priority claim is invalid. These decisions are a red flag for the holders of patents claiming a US priority date. It remains to be seen whether an appeal will be filed in the Netherlands. In the meantime, it can be expected that this decision will bolster attacks against patents with pre-AIA US priority applications in European jurisdictions.
Contact: Kristof Neefs, firstname.lastname@example.org.
Download a PDF version of this update here.
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.
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.
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 (email@example.com / +32476900364) or Sofie Cubitt (firstname.lastname@example.org / +32479735776).
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.
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.
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 ( 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.