20 March 2007

German Court invalidates drug dosage patent

Germany's highest court, the Bundesgerichtshof rendered its decision in the Carvedilol II case. Subject of the decision of the Federal Court of Justice was the validity of a patent claim containing a specific dosage instruction for Carvedilol, a beta blocker indicated in the treatment of congestive heart failure. The patent claim contained detailed instructions regarding the use of carvedilol as follows:

4.1.1. administering a pharmaceutical formulation which contains either 3.125 or 6.25 mg carvedilol per day,
4.1.2. for a period of 7-28 days,
4.2.1. followed by an increase of the dosage
4.2.2. each with an interval of 14 days
4.3. administering finally a maximum dosage of 2 x 25.0 mg carvedilol per day."

The Federal Court of Justice revoked the claim and underlined that a specific dosage instruction for the use of drugs should be seen as a non-patentable method for treatment of the human body. According to the reasons of the decision the non-patentability results from the spirit and purpose of Art. 52 (4) EPC. The provision reflects the will of the legislator to protect a doctor's freedom to determine an individual therapy plan for patients, in particular to determine the dosage of drugs individually, without being restricted by opposing patent claims. Further, the court concluded from the non-patentability of such dosage instructions that these isntructions should not be considered for the question of novelty and inventiveness regarding the remaining part of the claim. Unfortunately, the court has made no clear statements regarding the question, whether claims containing such non-patentable dosage instructions are entirely invalid even though the remaining part of the claims may still be novel and inventive. While the European Patent Office assessed in several cases that such claims are invalid as a whole, the Federal Court of Justice left this question explicitly unanswered.

Nonetheless, this decision restricts the possibilities for life science companies to expand protection for their patents by simply formulating dosage instructions in their patent claims. Since it cannot be excluded that the use of specific dosage instructions may lead to the revocation of a whole claim, applicants have to draft new patent applications very carefully and should refrain from any reference to dosage instructions for the use of medicines within the claims. They should focus more on the ingredients and substance of the medicine itself.

Dr. Kaya Köklü, Simmons & Simmons, Düsseldorf

17 March 2007

European Commission investigation into Taiwan’s CDR compulsory licences

The European Commission has launched an in-depth investigation into the WTO consistency of the granting of compulsory licenses by Taiwan for recordable compact discs (CDRs) under the Trade Barriers Regulation. This follows a complaint lodged by Philips, the electronics manufacturer which holds patents in the technology for CDRs. A compulsory license is a permission granted by a government which permits a domestic producer to use a patent without having to negotiate a licensing agreement for the use of the patent with the patent owner. The conditions for the grant and use of compulsory licenses are regulated in the WTO TRIPs (Trade Related Aspects of Intellectual Property Rights) Agreement.

EU Commissioner for Trade, Peter Mandelson said: "The proper enforcement of intellectual property rights one of the central planks of the EU's Global Europe Strategy. The allegations made in respect of the grant of these compulsory licences give ground for substantial concerns and the Commission will thoroughly investigate them. I am hopeful that we can find a means to resolve any WTO violations identified in the investigation".

The Commission is acting on the basis of a complaint lodged by Philips, the Dutch electronics manufacturer pursuant to the Trade Barriers Regulation. Philips is the inventor of some of the core technologies for CDRs and holds patents in those technologies. The complaint alleges that Taiwan granted compulsory licences inconsistently with the WTO TRIPs Agreement. In particular, it is alleged that Taiwan granted these licences where Philips had made reasonable efforts to provide its licenses on a voluntary basis by offering terms acceptable to seven of the eight main producers in Taiwan. It is also alleged that Taiwan granted the licence in full knowledge of the fact that the CDRs produced would be for export ( Taiwan produces 80% of the world's CDRs) despite the express prohibition on the use of such licences for export production in the TRIPs Agreement. The Commission is satisfied that there is sufficient prima facie evidence of a violation of the TRIPs Agreement and of adverse effects on the Community to merit an investigation.

The Trade Barriers Regulation provides EU companies and industry associations with a right to file a complaint with the Commission when they face trade barriers in third countries. Following Philips's complaint, the Commission has decided to initiate an investigation procedure. When this happens, the Commission normally has five months to decide on whether to proceed with a commercial policy measure. The investigation process involves gathering information in Taiwan, in cooperation with the Taiwanese government. Member States can assist in the fact-finding process, for instance through their local delegations. EU and Taiwanese companies will also be asked to participate in the investigation by way of questionnaires and meetings. Parties interested in participating in the investigation should consult the Notice of Initiation in the Official Journal of the European Union.

Several outcomes are possible. The Commission may find the claims unfounded and decide to terminate the procedure. The Commission may also decide that satisfactory steps are being taken by Taiwan to eliminate the barrier to trade, and may monitor developments. The Commission may seek a solution with Taiwan. The Commission may also decide to initiate international dispute settlement proceedings in the WTO against Taiwan.

12 March 2007

FD on IPEG as Europe's first IP merchant banking group

Today, in Netherlands financial daily "Het Financieele Dagblad" an article on Europe's first IP merchant banking group, IPEG and its founder, Severin de Wit.
For English translation, click here

07 March 2007

SanDisk Philips-Sisvel - Pumfrey J on jurisdiction

Further to our earlier post about the SanDisk vs. Philips judgement by Pumfrey J, here is a verbatim account on what the court contemplated about the question to what extent this case leaves open issues for the Court of Appeal to decide on jurisdiction

"I am of the view that if this jurisdiction needs to be worked out and if there is no substantial challenge to my approach to the cases such as they are, then this is a matter where the Court of Appeal should themselves decide is a suitable occasion for working out such principles as need to be worked out. I am not satisfied that on the materials that are available there is a reasonable prospect of success. I must acknowledge that further refinements in the statements of the law by the Court of Appeal might create a prospect of success where there is none. That possibility cannot be excluded, but it is not for me to exploit it and the application for permission must be made to the Court of Appeal.

I think, at first instance, unless one is satisfied that there is an arguable case on the present state of the authorities, one refuses leave and one leaves it to the Court of Appeal to see if they want to have to say anything about it. It may be that in fact the one point which is slightly vulnerable, maybe I do not know is Domicrest. That is a first instance decision. None of the rest can I see even them doing anything, but I am bound by it. I am certainly bound by Domicrest, and that is a matter for the Court of Appeal, whether they wish to take it or not."

06 March 2007

Europe in 2010 will be where the US was in 1981

It has been said many times over: EU is not getting where “Lisbon” wants it to be by 2010. According to a study by Chambers– the EU organization of Chambers of Commerce – the EU lags behind the US in R&D spending. Not a new conclusion, both McKinsey and Booz Hamilton reached the alarm bell earlier. Saddest of all, Europe reaches only now the level of R&D investment per capita that the US already achieved in 1978.

So how will 2010 look like? According to this figures Europe in 2010 will look like where the US was already in 1981 (in August of that year IBM announced its first PC). We had not heard about mobile phones and US companies like Dell, Google and Cisco had yet to emerge. So are we wasting our time here in Europe? Did you sense a feel of emergency among European politicians?

05 March 2007

European Patent Opposition Statistics for 2005

In 2005, oppositions were filed against 5.4% of granted patents, compared with a rate of 5.3% in 2004. Fewer oppositions were filed in 2005 (2,960) than in 2004 (3,100), reflecting a slight fall in the number of patents granted over the same period, see James Wilding and Andy Bridle in Managing Intellectual Property

see for full statistics

04 March 2007

US software patents under legal scrutiny

On October 31, 2006 we blogged about the case Microsoft Corp. v. AT&T Corp. where the US Supreme Court accepted to hear a case about “extra territoriality” under US Patent Law art. 35 (USC § 271(f). On February 21, 2007, the court heard arguments in this case.
At issue the question: Is there patent infringement liability for the export of unpatented physical components of a patented combination?

In 1984, the U.S. Congress decided that US patent owners should be able to sue for infringement companies that supply from the U.S. components of a US patented invention off-shore for assembly outside the US that would infringe the patent if it occurred in the US. This rule is codified in US patent law as “Section 271(f)”.

The US and European IT industry are closely watching this case, as this might have implications in the US as well as in Europe.

Prof. Pamela Samuelson in her article, discussing this case and its implications, “Legally Speaking: Software Patents and the Metaphysics of 271(f)”, concludes:

“Because of this, it is difficult to believe that the Court would outlaw software patents altogether. But one can always hope. Based on twenty-four years of studying software intellectual property protection, I believe the software industry would be no less innovative and no less competitive in the world market if software patents disappeared tomorrow.”

This should be encouraging for those that have, for the last two years, argued that software patents should be abandoned in Europe all together as they rather stifle than stimulate innovation

02 March 2007

SanDisk vs. Philips, mp3 litigation in the UK, J Pumfrey denies injunction

In a high profile legal battle on mp3 patents, UK Judge Pumfrey rendered its judgment in a request for interim injunction by SanDisk against Philips et al. The first four defendants (the patentees, registered in the Netherlands, France, France and Germany respectively) own a number of European patents relevant to mp3 technology. The patents have been the subject of an intensive licensing campaign carried out on behalf of the patentees by the fifth defendant, Sisvel, an Italian licensing company. Sisvel claims that five of the patents in dispute are essential for the making and/or selling of an mp3 player in the EU and that if an mp3 player complies with a particular standard, it will necessarily infringe these four “essential” patents. It seems that most of the principal manufacturers and/or sellers of mp3 players (with the exception of the claimant, SanDisk) have entered into licenses, though the terms of those licenses have not been made public. SanDisk, a US corporation, which inter alia imports and sells in the EU (unlicensed) mp3 players was offered a license, upon filing the action, relating only to the four “essential” patents but nevertheless on the standard royalty rate by Sisvel.

In February 2006, SanDisk began invalidity proceedings in the Patents Court in relation to the five patents. In March 2006, SanDisk also started proceedings for declarations relating to essentiality and non-infringement. The Patentees counterclaimed for infringement. These proceedings are ultimately due to come together for trial in February 2008. Subsequent to the start of proceedings in the UK, Sisvel sought to enforce the patents elsewhere in the EU by summary means. It obtained several Border Detention Orders and consequent infringement proceedings are pending in Germany and the Netherlands. Sisvel also sought domestic remedies in Germany and Italy, including the seizure by the Berlin Public Prosecutor of mp3 players exhibited in the SanDisk booth at a major exhibition, an action which resulted in significant publicity (among which this blog posts).
SanDisk alleged several breaches of arts. 81 and 82 EC Treaty. These were considered by Pumfrey J in relation to the jurisdiction issue but they also raised interesting substantive issues, for example whether the offer of an objectionable license could be characterized as an abuse of a dominant position (the patentees refused to grant licenses on an individual basis having agreed that all licenses would be granted by Sisvel).
Relief sought
SanDisk claims that Sisvel and the patentees enjoy a dominant position in two relevant defined markets and that their conduct constitutes harassment amounting to an abuse of that dominant position. It argued that this is actionable in the UK and also justified at least limited interlocutory relief requiring Sisvel to notify SanDisk of any further proposed complaint to the relevant administrative or prosecuting authorities. This would enable SanDisk to approach those authorities and explain to them why it believes the essentiality argument is a bad one before the authorities decided whether to act. SanDisk also complained about certain aspects of the licensing activities of Sisvel, claiming that these also amount to abuse of a dominant position. In respect of both the "harassment" allegation and the licensing allegation, Sisvel argued that there was no jurisdiction either to entertain the substantive complaint or to grant any form of interim relief in England and Wales.
Jurisdiction in the Substantive Claim
Pumfrey J held that the court had no jurisdiction to determine the substantive claim.He started by noting that Sisvel (an Italian company), against whom the greatest complaint was made, could be sued in Italy and that the Patentees could be joined to such proceedings under Article 6(1), Brussels Regulation. However, because none of the defendants were domiciled in England and Wales, SanDisk needed to establish that a special jurisdiction was available under Art 5(3).In order for the English court to possess the exceptional jurisdiction pursuant to Art 5(3) which would allow it to adjudicate upon the alleged abuses of a dominant position in the present case, either the event setting the tort in motion must have been in England and Wales or, alternatively, the claimant needed to show that it was the immediate victim of that abuse suffering direct harm in England and Wales. In addition, the scope of the two jurisdictions was different. The jurisdiction based upon the place of the harmful event was international, while the jurisdiction based upon the relevant harm was restricted to England and Wales. Pumfrey J concluded that SanDisk had not established that any of the first steps of the abuses complained of took place in the UK, nor that immediate damage was caused to SanDisk in the UK by reason of the alleged abuses. SanDisk also needed to demonstrate a good arguable case before jurisdiction would be assumed under Art 5(3). Since there were courts (for example in the Netherlands, Germany, France and Italy) which indisputably had jurisdiction over the individual defendants pursuant to Art 2, something better than a case which was merely arguable was required in order to preserve the necessarily exceptional nature of Article 5(3) jurisdiction and for the purpose of ensuring the uniform application of the Brussels Regulation. In relation to the enforcement steps taken by Sisvel in Germany and Italy (by use of criminal complaints) and in the Netherlands (and possible Germany) by the employment of Border Detention Orders, Pumfrey J noted that - assuming it was possible to invoke these administrative actions in an abusive manner, for example by relying upon a patent positively known to be invalid - the damage resulting from the abuse was plainly suffered in the Member State in which the Border Detention Order has been effected. There was no Border Detention Order in the UK. Similarly, in relation to the seizure by the Public Prosecutor in Berlin, both the act itself and the harm immediately flowing from it arose in Germany. Pumfrey J observed it could be thought that all these legal proceedings were duplicative and so potentially oppressive. However, this could not be the case. Although all the patents in question derived from the same European patent applications, the patent system meant that these matured into domestic patents in the designated contracting states and that enforcement had to be undertaken state by state. Infringement could not be litigated for all designated states in only one of them: if validity is or will come into issue, enforcement must be on a country-by-country basis (GAT vs. LuK and Roche vs. Primus).
Enforcement of patent rights as abusive conduct
Pumfrey J also considered a separate issue relating to jurisdiction under both Article 5(3) (see above) and Article 31 (see below) under the heading "Enforcement of patent rights as abusive conduct". SanDisk claimed that there was a sustained campaign of abusive and anti-competitive activity throughout Europe, including the UK. This resulted in loss by SanDisk throughout the EU and immediate damage in every country, thus giving the English court jurisdiction. The core of this argument related to the enforcement steps invoked by Sisvel in various Member States and the interim relief sought by SanDisk was targeted at enforcement measures. Assuming that the Patentees and/or Sisvel have a dominant position within a relevant market, and assuming that the effect of enforcing their intellectual property rights will consolidate that position of dominance, Pumfrey J asked in what circumstances would the law recognize that enforcement through the legal channels provided for either by Community law or by domestic law of the Member States amounted to abuse? He said that a comprehensive answer was provided by ITT Promedia NV vs. Commission (Case T-111/96), a judgment of the EU Court of First Instance. Pumfrey J concluded from this case that where there is no dispute that the patents have been granted to the patentee, the enforcement action can be considered to be merely harassing if the patent is obviously not infringed or if the patent is invalid and in either case the patentee either knows or believes that to be the case. He acknowledged that it might be argued that duplication of patent proceedings takes on a harassing aspect, but, as he had already explained, enforcement must proceed, if it proceeds at all, on a country-by-country basis. As a result, he ruled that that not only was there no arguable case for saying that immediate loss was suffered by SanDisk in England and Wales as a result of the acts complained of, but the basis upon which it can be supposed that the conduct was abusive at all was very thin indeed. In any event, the appraisal of the abusive nature of litigation or other administrative action was surely for the relevant jurisdiction to decide. Article 31, Brussels Regulation and the interim relief sought. Art 31 states that “Application may be made to the courts of a Member State for such provisional, including protective, measures as may be available under the law of that State, even if, under this Regulation, the courts of another Member State have jurisdiction as to the substance of the matter."
Pumfrey J concluded from the case law that jurisdiction under Article 31 is to be exercised by the court best placed to be acquainted with and to understand the effects of the provisional and protective measures which are sought. Jurisdiction was conditional, inter alia, on the existence of a real connecting link between the subject-matter of the provisional or protective measures sought and the territorial jurisdiction of the Contracting State of the court before which those measures are sought. The nature of this connection could be purely physical – there were assets within the jurisdiction – or one of control – the person who was the subject of the order was within the jurisdiction and immediately susceptible to such coercive measures to secure compliance as might be necessary. In any event, Pumfrey J ruled that there was no such connection in the present case. He also noted that none of the defendants were UK companies, that there were no Border Detention Orders in the UK and that no proceedings other than the present set of patent infringement proceedings were on foot in the UK. The courts in the Members States where Border Detention Orders had been obtained were beyond doubt in the best position to decide what, if any, measures of warning it was appropriate for Sisvel to give SanDisk, and it was plain that these courts were live to the possibility of abuse of the various measures available to Sisvel for the purpose of enforcing the patents.
Art. 31 jurisdiction
Pumfrey J noted that the scope of the relief sought was not very wide and should not cause Sisvel any difficulties. However, since the existence of the jurisdiction itself depended upon the factors outlined above, he held that there was no Art 31 jurisdiction to grant the order sought. Pumfrey J also noted that the only part of this dispute which could conceivably support the grant of interlocutory relief was, for various reasons, unarguably bad. For this reason, and also because of the extraordinary delay which had already taken place both before the issue of this application and this hearing, he would in any event have refused any form of interim relief.
see on mp3 software, for alternative padding detection algorithm, dr. Otto Witte @ http://www.ipeg.com/ipeg_institute.php