Monday, 23 November 2015

Mock trial under UPC 18th draft Rules: this will take some pluck ...

EPLIT, the European Patent Litigation Association, is running a mock trial under the recently-published 18th draft of the Rules of Procedures for the Unified Patent Court. The details look like this:
On 22 January 2016, EPLIT will run a mock-trial under the 18th draft of the Rules of Procedure for the Unified Patent Court (UPC). The case to be tried is between Improver Corporation and Remington Consumer Products and concerns a depilatory device, better known as the "Epilady" case. This case was litigated in the late 1980s and early 1990s before various national courts in Europe with drastically different outcomes. For that reason it serves as a reminder of why further harmonization of patent litigation in Europe is a worthy cause. The mock-trial will be staged before the Local Division of the UPC in Munich.

The original Epilady
The panel of judges will consist of Prof Haedicke (Oberlandesgericht in Düsseldorf), Mr Zigann (Landgericht in Munich) and Mr Van Walderveen (District Court in The Hague). The panel has been extended with a technical judge, Mr Klein (formerly of the Boards of Appeal of the European Patent Office). The patent proprietor (Improver) will be represented by Rainer Beetz (Sonn and Partner, AT) and Leythem Wall (Finnegan Europe LLP, GB). The alleged infringing party (Remington) will be represented by Marek Lazewski (Lazewski Depo and Partners, PL) and Jan Stein (Ipracraft AB, SE).

The day will begin with a case management conference (CMC) in the morning, and the afternoon will comprise of the oral hearing. This will be followed by a questions and answers session for the audience.

The event will take place in the Sofitel Bayerpost, Bayerstrasse 12, Munich.

The admission fee is EUR 395 for EPLIT members and EUR 495 for non-EPLIT members. This will include lunch, as well as coffee and other refreshments and snacks throughout the day, and a drinks reception after the proceedings have con­cluded.
Application form here. Please email it to the EPLIT Secretariat here.

Thursday, 19 November 2015

EU Observatory survey on cost of IP infringement: can you help?

The European Observatory on Infringements of Intellectual Property has let it be known that it is currently undertaking a project that is designed to assess the cost of infringement of intellectual property rights to business and government.  Presumably the cost, in this instance, includes the cost of dispute resolution and, in particular, patent infringement litigation.

The Observatory has contracted market research company GfK to carry out a survey on its behalf for this purpos.  The survey itself is a simple questionnaire which is largely comprised of multiple choice questions. It can be accessed here.  It is addressed to a sample comprising the following Member States, in their own language(s): Belgium, Denmark, Germany, Spain, France, Italy, Lithuania, Hungary, Netherlands, Austria, Poland, Portugal, Sweden and the United Kingdom.

The closing date for responding is 4 December 2015, which is not very long away.  If you, your clients or your professional representatives can be persuaded to participate, this would be much appreciated

Wednesday, 11 November 2015

Deciphering Huawei vs. ZTE: A Paper

The intervention of Nicolas Petit at the Training course for technical judges atthe UPC organized by the CEIPI had been discussed here some time ago. Nicolas has now published his observations on the decision Huawei vs. ZTE, which are available for download here and are interesting to read.

Among other points, Nicolas observes that upstream licensing entities are immune against the antitrust defence because he concern of the CJEU lies in the exclusion of competitors, not in the exploitation. This means that the problems of hold-up, reverse hold-up and of FRAND setting are addressed only in terms of procedural courtesy obligations among parties competing on same market and that the question of substantial pricing is left open or left to the national courts.

Monday, 9 November 2015

BGH on Patentability of Mathematical Methods - "Flugzeugzustand"

The decision BGH X ZR 1 /15 "Flugzeugzustand" relates to the patentability of a mathematical method used in the context of monitoring airplane machinery. A rough (and non-official) translation of the headnote is as follows:
a) In view of §1 par. 3. Nr. 1 PatG, mathematical methods are patentable only when they contribute to the solution of a specific technical problem with technical means.

b) A mathematical method can be considered non-technical only when it does not have, in the context of the claimed teaching, any relation to the purposeful use of natural forces.

c) A sufficient relation to the purposeful use of natural forces exists when the mathematical method is used for the purpose of obtaining more reliable information on the state of an airplane using the available measurement data to thereby influence the functioning of the system used for detecting that state. 
d) Subject-matter which is novel and based on an inventive step cannot be considered non-patentable only because it does not offer any recognizable advantage over the prior art.
The decision clarifies that the exception of §1 par. 3. Nr. 1 PatG has to be interpreted very narrow and that even a remote relation to a tangible technical device ("the purposeful use of natural forces") is sufficient.

Letter d) highlights an interesting contrast between the German case-law and the case-law of the technical boards of appeal, where a technical advantage is sometimes required.

Sunday, 8 November 2015

Vringo v ZTE: inventive step and the impact of proposed changes to a standard

From Jan Pot (Brinkhof N.V., Amsterdam) comes news of a recent court battle between Vringo and ZTE, which led to a ruling late last month from the District Court of The Hague. The battlefield was Vringo’s EP 1 186 119 (“EP 119”), which the court nullified for lack of inventive step.  This decision [in Dutch here, and with an informal English translation here] contains some interesting considerations on the closest prior art and problem inventions. Jan takes up the story as follows:
Since 2012, ZTE and Vringo have been involved in litigation on a number of patents, which are part of a portfolio of ca. 500 patents which Vringo purchased from Nokia. EP 119 is one of those patents. In the Netherlands, litigation started in 2014 when the Dutch customs stopped several shipments of ZTE equipment. Vringo attached part of these goods, alleging infringement of EP 119. The preliminary relief Judge of the District Court The Hague refused to lift this attachment, inter alia because he considered the outcome of nullity proceedings on EP 119 too uncertain.

In 2007, EP 119 was upheld by the European Patent Office's Technical Board of Appeal (TBA) in opposition proceedings initiated by Qualcomm. It has also been the subject of infringement proceedings in Germany, where in 2013 the Landgericht Mannheim refused to stay the infringement proceedings pending the nullity proceedings before the Bundespatentgericht as it considered the chance of revocation insufficient.

EP 119 claims a method for transmitting a certain sequence of symbols, and is according to Vringo essential for the UMTS standard. More specifically, it pertains to the situation in which a UMTS base stations transmits so-called synchronization information on the synchronization channel when a functionality called time-switched transmit diversity, or TSTD, is in use.

ZTE advanced several nullity grounds, including lack of novelty, lack of inventive step and added matter. The Court only dealt with inventive step. It found the patent obvious, starting from the latest draft for the UMTS standard published before the priority date, referred to as TS 25.211 V2.1.0, as closest prior art, in combination with a document referred to as TSGR1#5(99)677. This document, which was published by one of the working groups working on the UMTS standard at the time, proposed changes to the draft standard. The Court held that the skilled person would read these two documents together, and in doing so would be confronted with the problem for which the patent aims to provide a solution.

Vringo argued that EP 119 was in essence a problem invention. However, the Court held that Vringo failed to make sufficiently clear why that would be the case. A number of factors were only first advanced by Vringo during the hearing, while the same number of factors were only briefly touched upon in a rather difficult to follow declaration by its expert, Dr. Moulsley. Neither the patent nor Vringo’s Statement of Defence mentioned these ‘pieces of the puzzle’ as joint causes of a problem. What’s more, the District Court did not find these arguments persuasive when looking at other prior art publications and an e-mail exchange between several technical experts who already discussed the issue. Although Vringo disputed that interpretation of the e-mail exchange, it did not provide any convincing explanation as to what they would then be discussing. Finally, the Court stated that restraint must be observed in assuming the existence of a problem invention, referring to TBA case law (T 971/92).

The Court then concluded that ZTE had rightly argued that there were essentially two options to solve the problem, both of which were obvious to the skilled person. On this issue the Court disagreed with the TBA, which had held that there were multiple options. The viability of those other options was discussed before the Court by ZTE and Vringo. In the end and having heard both parties’ experts, the Court was of the opinion that the other options were either not viable or less obvious. In other words, the Court was convinced that the two options mentioned by ZTE were the “natural” solution to redress the problem with which the skilled person was confronted due to the change made by TSGR1#5(99)677. The Court concluded that the choice for the one of the two obvious solutions is not inventive and that no pointer to either one is required.
Brinkhof, through a team consisting of Ruprecht Hermans, Richard Ebbink, Gaëlle Béquet and Jan Pot, represented ZTE in these proceedings.  This summary is based solely on the decision itself and not on information from the file not reflected in the decision.

Wednesday, 4 November 2015

Toy beads in court: attempt to get judge to examine merits in interim proceedings fails

Epoch Co. Ltd v Character Options is a decision of the England and Wales Intellectual Property Enterprise Court (IPEC) of 29 October, courtesy of Judge Hacon. Being extempore, the judgment has not been uploaded to BAILII but was potted by the subscription-only Lawtel service.

This dispute revolved around Epoch's patent for a fusible bead toy in which beads could be first arranged and then fused together to form a specific design. CO, a company that imported bead toys from Australia and sold them on the UK market, placed a new type of bead toy on the market which, Epoch said, infringed its patent. Epoch sued for infringement and sought an interim injunction against CO, who alleged that the patent was invalid.

CO, relying on Series 5 Software Ltd v Clarke [here], submitted as a preliminary point that the court should investigate the merits of the case as a whole on the evidence available at the interim hearing. No, said Epoch: there was a serious issue to be tried and it would suffer irreparable harm without the injunction. This was because

  • the lifespan of individual product designs was short, so CO's products were likely to cut short any interest in Epoch's; 
  • one of CO's products had been under scrutiny in 2007 for containing harmful chemicals; if its products remained on the market there would be a risk of them damaging the reputation of that type of product generally; 
  • there was brand loyalty for Epoch's products, and if Epoch succeeded at trial and the CO's products came off the market, customers would buy Epoch's beads but could not match the colours to what they had left of CO's, thereby damaging the image of Epoch's products.

Judge Hacon refused the application for interim injunctive relief. In his view

* The approach adopted in Series 5 Software had not been endorsed by other courts. While the American Cyanamid principle [which requires the court to look at the balance of convenience, or relative inconvenience, of the parties ahead of the full trial] did not prevent some weight being given to the merits, there should not be a mini-trial, especially where interim relief could influence the commercial outcome. The court would therefore apply American Cyanamid in the usual way.

* There was a serious issue to be tried as to whether Epoch's patent was valid, either because it lacked an inventive step or was unpatentable as a merely an aesthetic creation under the Patents Act 1977 s.1. The court would not however take a view at the interim stage in the absence of full legal argument on the meaning of "aesthetic creation".

* The likelihood of irreparable harm being caused to Eppoch if no injunction was ordered was low, as

  • there was no evidence of overlap in the designs, and it was somewhat speculative to suggest that the lifespan of a popular Epoch design would be cut short by CO's activities, although it was possible; 
  • there was no evidence that CO's products were dangerous; CO's evidence was that the beads were now formulated with a bitter taste to prevent their being swallowed; the evidence showed that there was a lively interest in the products; any damage to Epoch's reputation had occurred in 2007 but had disappeared; 
  • even if there were difficulties in matching the beads as suggested, customers would recognise that it was due to the difference in brands -- there would be no damage to the image of Epoch's products. If there was brand loyalty, on its face that was a reason for not granting an injunction, This was because, if an injunction was granted but CO succeeded at trial, it was liable to find it difficult to re-enter the market. 

* There were only two parties on the market in the UK, and there was a strong inference that, to the extent that CO sold its products, Epoch lost sales on a 1:1 basis. Therefore if no injunction were granted and Epoch succeeded at trial, it should be able to assess its lost sales and calculate appropriate damages with reasonable precision. The balance of irreparable harm favoured not granting the injunction.

Tuesday, 3 November 2015

Rigorous and fruitful? The UPC's 18th, and almost final, draft Rules

The Unified Patent Court website carries a notice that reads like this:
At its last meeting [the most recent meeting, for sure, but this blogger is certain that it isn't going to be the last] the UPC Preparatory Committee adopted the Rules of Procedure of the Unified Patent Court, subject to some further adaptations once the Committee has decided on the court fees. This is a major milestone in the progress of the Committee's work.

The agreed text is draft no. 18 which shows that the text has undergone a rigorous process of development and testing. The Rules of Procedure are the result of a successful and fruitful collaboration between the Preparatory Committee's Legal working group and the Drafting Committee. This will underpin the Court's framework and functioning. The work has benefitted strongly from comments from stakeholders submitted during the written consultation and the oral hearing.

The Rules will be an essential element in the future training of judges of the Court and the decision of the Committee will ensure a smooth transition from the development to the active planning of such training.

Those interested in the Court's operation should familiarise themselves with the text. The UPC-Rules-of-Procedure.pdf is available.
The draft, inclusive of a brief summary of the events leading up to it and a couple of attractive flow charts at the end, runs to 142 pages, so do remember to load up your printer and check your cartridge before you print it out.  The rules end at no.382, but there are more than 382 rules since some rules are already bearing letters in addition to numbers.  The fees are of course still blank.

It is not only these Rules which will govern the outcome of litigation since, in some cases, the Rules of the Court of Justice of the European Union will be brought to bear. Thus:
Rule 266 – Preliminary references to the Court of Justice of the European Union

1. At any stage of the proceedings where a question is raised before the Court and the Court considers that a decision on the question by the Court of Justice of the European Union (“CJEU”) is necessary before the Court can give judgment, the Court of First Instance may and the Court of Appeal shall request the CJEU to give a ruling thereon.

2. The Court shall in requesting a ruling follow the procedure set out in the Rules of the CJEU.

3. If the Court requests the CJEU to apply its expedited procedure the request shall in addition set out:

(a) the matters of fact and law which establish its urgency; and

(b) the reasons why an expedited ruling is appropriate.

4. The Registrar shall as soon as practicable forward the request and any request to apply the expedited procedure to the Registrar of the CJEU.

5. The Court may stay the proceedings. Where it does not stay proceedings, it shall not give judgement until the CJEU has given a ruling on the question.
Given the short life expectancy of patents and the length of time a reference to the CJEU can take, one hopes that the expedited procedure will be the norm in cases where the litigated patent has not already expired or lapsed.