European IP Law Patents Catania May 5 6

European IP Law (Patents), Catania, May 5 -6, 2014 Scope of Protection Prof. Dr. Martin Senftleben VU University Amsterdam Bird & Bird, The Hague

Contents • Legal sources • Interpreting the claims • Equivalence • Infringement – exclusive rights – exceptions – prior use

Legal sources

European patent law European Patent Convention Community Patent Convention concluded in Munich, Luxemburg, October 5, 1973, December 15, 1975, revision: EPC 2000 not in force

European patent law Agreement on a Unified Patent Court concluded in Brussels, February 19, 2013, not yet in force

Art. 1 European Patent Convention (EPC) ‘A system of law, common to the Contracting States, for the grant of patents for invention, is established by this Convention. ’. . . 38 Contracting States, 2 extension States

Territorial reach of the EPC system

European patents (art. 2 EPC) ‘Patents granted under this Convention shall be called European patents. ’ ‘The European patent shall, in each of the Contracting States for which it is granted, have the effect of and be subject to the same conditions as a national patent granted by that State, unless this Convention provides otherwise. ’

European and national phase centralized registration procedure at the result: bundle of national patents European Patent Office (EPO) (national phase)

National phase and harmonization no full harmonization of substantive patent law but harmonizing effect of: Community Patent Convention Agreement on a Unified Patent Court result: bundle of national patents (national phase)

Dream of a Community Patent EU registration procedure carried out by an EU Patent Office result: Community Patent = unitary patent right for the entire EU territory

Compromise • European patent with unitary effect – International Agreement on a Unified Patent Court 2013 (UPCA) – EU Reg. 1257/2012 (2012) on the institution of a European Patent with Unitary Effect – EU Reg. 1260/2012 (2012) on translations • applicant of a European patent can opt for unitary effect = uniform protection in all countries participating in this unitary system

Applicable law • European Patent Convention • Unified Patent Court Agreement – – – substantive patent law rules in Arts. 25 -29 direct en indirect infringement limitations exhaustion prior rights • EU law – does not cover substantive patent law – CJEU jurisprudence undesirable? • other international treaties

Applicable law • national law – transfers and licenses – compulsory licensing • still fragmentary regulation of European patent with unitary effect

European Patent with Unitary Effect centralized registration procedure at the patent governed by substantive law of European Patent Office (EPO) Unified Patent Court Agreement and national law

Interpreting the claims (EPC)

Art. 69(1) EPC ‘The extent of the protection conferred by a European patent or a European patent application shall be determined by the claims. Nevertheless, the description and drawings shall be used to interpret the claims. ’

Addressee of the patent specification • person skilled in the art • artificial, objective standard • (average) specialist – skilled technician rather than leading expert – has working experience in the relevant field – has standard knowledge – knows the specific, relevant state of the art

Source material for interpretation • elements of the patent specification: – claims – description, drawings • different approaches to interpretation: – literal (wording of the claims) – teleological (core of the inventive idea) • in addition: application file?

Aims underlying interpretation validity: infringement: narrow reading to shield the patent against prior art wide construction to obtain broad scope of protection

Approaches in EPC countries • EPO allows consultation of application files • art. 69(1) EPC does not seem to preclude use for claim construction • rather reluctant: UK courts – nonetheless: if narrow meaning was given to a term to secure the patent grant, a later argument of wide interpretation unlikely to be accepted • more liberal approach in other countries – additional aid to clarify meaning of the claims – example: The Netherlands

Dutch Hoge Raad, December 22, 2006, Dijkstra/Saier • at issue: strength of a bucket sealing mechanism • use application file in favour of patent owner: – possible, but: cautious approach required – only if claims remain unclear after careful study of description and drawings • use application file against patent owner: – no reason for restricting use of the file if this supports position of the defendant

Protocol Concerning Art. 69 EPC • ‘Article 69 should not be interpreted as meaning that the extent of the protection conferred by a European patent is to be understood as that defined by the strict, literal meaning of the wording used in the claims, the description and drawings being employed only for the purpose of resolving an ambiguity found in the claims. ’ = literal interpretation (English tradition)

Protocol Concerning Art. 69 EPC • ‘Nor should [Article 69] be taken to mean that the claims serve only as a guideline and that the actual protection conferred may extend to what, from a consideration of the description and drawings by a person skilled in the art, the patent proprietor has contemplated. ’ = teleological interpretation (German tradition)

Protocol Concerning Art. 69 EPC ‘On the contrary, [Article 69] is to be interpreted as defining a position between these extremes which combines a fair protection for the patent proprietor with a reasonable degree of legal certainty for third parties. ’ literal (legal certainty) teleological (fair protection) ‘position between these extremes’

Dutch Hoge Raad, January 13, 1995, Ciba Geigy/Oté Optics • Ciba Geigy: – has European process patent for disinfecting and cleaning contact lenses – according to the claims, the process is based on a specific sodium chloride solution which is isotonic • Oté Optics: – markets a cleaning product for contact lenses with a different solution that is isotonic

Dutch Hoge Raad, January 13, 1995, Ciba Geigy/Oté Optics • no strict, literal interpretation • core idea underlying the invention = starting point of the interpretation • but: additional test of legal certainty • third party interests may require correction of the interpretation • criterion: degree of novelty

Equivalence

Doctrine of equivalence the same function in the same way with the same results

Impact in practice doctrine (+) doctrine (-) no need to specify more detailed each and every claims advisable to variant of the close potential invention in the loopholes for specification competitors

Dutch Hoge Raad, October 31, 2003, Van Bentum/Kool • Van Bentum: – has a product patent concerning a truck for the transport of laden pallets – achieves optimal use of space by combining a movable lowest load floor with a fixed highest load floor • Kool: – markets a truck that has a movable highest load floor and a removable top

Dutch Hoge Raad, October 31, 2003, Van Bentum/Kool

Dutch Hoge Raad, October 31, 2003, Van Bentum/Kool • claims not drafted carefully • nonethelss: interpretation required that strikes a proper balance between fair protection for the patent owner and legal certainty for third parties • equivalent variant of the invention (+)

Different approaches in EPC countries • ‘Epilady’ saga (1990 -1993) • plaintiff – holds patent rights to ‘Epilady’, a gadget for removing body hair with a coiled spring • defendant – applies same inventive idea – but: uses a rubber tube instead of the coiled spring • DE and NL: infringement (+) • UK: infringement (-)

UK approach: three questions • variant having material effect upon the way the invention works? – if yes, infringement (-) • if no: absence of material effect obvious at the date of patent publication? – if no, infringement (-) • if yes: claim indicating that strict compliance with the primary meaning of the terms essential to the invention? – if yes, infringement (-)

UK approach: three questions • inherent problem: last question takes the court back to interpretation • critique led to departure from the test – Kirin-Amgen vs. Hoechst Marion Roussel, [2005] RPC (9), 169 – no mechanical application, in particular less helpful in case of complex chemical or biotechnological inventions – example: claim to a whole group of chemical compounds expected to have similar characteristics

Protocol Concerning Art. 69 EPC, as amended under the EPC 2000 ‘For the purpose of determining the extent of protection conferred by a European patent, due account shall be taken of any element which is equivalent to an element specified in the claims. ’ = recognition of the doctrine of equivalence? • guarantee of a more uniform interpretation of patent claims in EPC countries?

Exclusive rights (UPCA)

Art. 25(a) UPCA ‘A patent shall confer on its proprietor the right to prevent any third party not having the proprietor’s consent from the following: making, offering, placing on the market or using a product which is the subject-matter of the patent, or importing or storing the product for those purposes; …’

Art. 25(b) UPCA ‘using a process which is the subject-matter of the patent or, when the third party knows, or should have known, that the use of the process is prohibited without the consent of the patent proprietor, offering the process for use within the territory of the Contracting Member States in which that patent has effect; …’

Art. 25(c) UPCA ‘offering, placing on the market, using, or importing or storing for those purposes a product obtained directly by a process which is the subject-matter of the patent. ’

Overview direct infringement product patent process patent acts relating to the product use of the acts relating to (making, offering, process the product using etc. ) directly obtained from the process

Problem 1: identical product may be obtained with a different process A process C process B process D

Art. 34(1) TRIPS ‘…if the subject matter of a patent is a process for obtaining a product, the judicial authorities shall have the authority to order the defendant to prove that the process to obtain an identical product is different from the patented process. Therefore, Members shall provide, in at least one of the following circumstances, that any identical product when produced without the consent of the patent owner shall, in the absence of proof to the contrary, …’

Art. 34(1) TRIPS ‘…be deemed to have been obtained by the patented process: a. if the product obtained by the patented process is new; b. if there is a substantial likelihood that the identical product was made by the process and the owner of the patent has been unable through reasonable efforts to determine the process actually used. ’

Art. 55(1) UPCA ‘…if the subject-matter of a patent is a process for obtaining a new product, the identical product when produced without the consent of the patent proprietor shall, in the absence of proof to the contrary, be deemed to have been obtained by the patented process. ’ = implementation of Art. 34(1)(a) TRIPS

Art. 55(2) UPCA ‘The principle set out in paragraph 1 shall also apply where there is a substantial likelihood that the identical product was made by the patented process and the patent proprietor has been unable, despite reasonable efforts, to determine the process actually used for such identical product. ’ = implementation Art. 34(1)(b) TRIPS

Art. 55(3) UPCA ‘In the adduction of proof to the contrary, the legitimate interests of the defendant in protecting his manufacturing and business secrets shall be taken into account. ’ = recognition of need to strike a balance with the protection of confidential information

Problem 2: further products may be required to obtain the final product father mother son production of compact discs final

Process patent infringement? (UK: Pioneer Electronics vs. Warner Music) A is holder of a UK process patent for the production of ‘father’ discs at a particular pressure. He wants to prevent B from importing final discs. father mother B uses the patented process in China to obtain father discs and carry out the further production steps. He offers the final discs in the UK. son production of compact discs final

Indirect infringement

Extending patent rights to preliminary acts direct infringement: rights against those who directly carry out prohibited acts indirect: rights against those who are essentially involved, in a preliminary way, in bringing about complete infringement

Art. 26(1) UPCA ‘A patent shall confer on its proprietor the right to prevent any third party not having the proprietor’s consent from supplying or offering to supply […] any person other than a party entitled to exploit the patented invention, with means, relating to an essential element of that invention, for putting it into effect. . . ’ = supplying means for putting a patented invention into effect to someone not authorized to work the patent

Art. 26(1) UPCA ‘…when the third party knows, or should have known, that those means are suitable and intended for putting that invention into effect. ’ = supplier is treated as knowing what is obvious to a reasonable person in the circumstances

Dutch Hoge Raad, October 31, 2003, Sara Lee/Intergro

Dutch Hoge Raad, October 31, 2003, Sara Lee/Intergro • Sara Lee: – holder of a European patent relating to an ‘assembly for use in a coffee machine for preparing coffee, container and pouch of said assembly’. • Intergro: – offers pouches (coffee pads) on the market that can be used to prepare coffee in the way patented by Sara Lee.

Dutch Hoge Raad, October 31, 2003, Sara Lee/Intergro • infringement (-) because the pouches are not an essential part of the patent ‘It does not follow from the simple fact that a fitting coffee pouch is necessary to apply the patented assembly that this pouch constitutes a means relating to an essential element of the invention…’

Art. 26(1) UPCA ‘A patent shall confer on its proprietor the right to prevent any third party not having the proprietor’s consent from supplying or offering to supply […] any person other than a party entitled to exploit the patented invention, with means, relating to an essential element of that invention, for putting it into effect. . . ’ • fitting pouch is not an element distinguishing the invention from prior state of the art

Art. 26(2) UPCA ‘Paragraph 1 shall not apply when the means are staple commercial products, except where third party induces the person supplied to perform any of the acts [amounting to patent infringement]. ’ = recognition that mass articles may have non -infringing as well as infringing uses • additional requirement: supply for inducing a person to infringe the patent

Indirect patent infringement? A is holder of an Italian process patent for the production of ‘father’ discs at a particular pressure. He wants to prevent B from supplying the Italian producer C with means for working his patent. In India, B supplies C with the means necessary to work A’s patent. C brings these means into Italy and works A’s patent there.

Indirect patent infringement? A is holder of a German process patent for the production of ‘father’ discs at a particular pressure. He wants to prevent B from exporting means for working his patent to Canada. In Germany, B makes up kits of the parts needed to operate A’s patent. He exports these kits to Canada where A’s competitors use the kits to work the patent.

Patent infringement in transit cases? producer of generics in India owner of European patent rights importer of generics in Brazil

Art. 41(1) TRIPS ‘…ensure that enforcement procedures […] are available […] to permit effective action against any act of infringement of intellectual property rights covered by this Agreement, including expeditious remedies to prevent infringements and remedies which constitute a deterrent to further infringements. ’ ‘These procedures shall be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse. ’

CJEU, December 1, 2011, case C-446/09, Philips/Nokia • infringement (-) as long as goods are truly in transit to another country ‘The Court has repeatedly deduced from that fact that goods placed under a suspensive customs procedure cannot, merely by the fact of being so placed, infringe intellectual property rights applicable in the European Union…’ (para. 56)

CJEU, December 1, 2011, case C-446/09, Philips/Nokia • infringement (+) the moment the goods may be put on the internal market ‘On the other hand, those rights may be infringed where, during their placement under a suspensive procedure […], or even before their arrival […], goods coming from non-member States are the subject of a commercial act directed at European Union consumers, such as a sale, offer for sale or advertising. ’ (para. 57)

World policing in transit cases? Legitimate trade in generics Illegitimate trade in fake drugs

Right to compensation

EPC registration procedure publication application examination formal substantive refusal grant a. novelty b. further requirements compensation period opposition

Art. 67(2) European Patent Convention ‘In any event, each State shall ensure at least that, from the date of publication of a European patent application, the applicant can claim compensation reasonable in the circumstances from any person who has used the invention in that State in circumstances where that person would be liable under national law for infringement of a national patent. ’ = compensation for use of the invention prior to the grant

Exceptions

Private, non-commercial use ‘The rights conferred by a patent shall not extend to any of the following: acts done privately and for noncommercial purposes. ’ (Art. 27(a) UPCA) • cumulative requirement of private and non-commercial nature? • activities of governmental, educational and charitable institutions outside the scope of the exception?

Pharmacist’s privilege ‘The rights conferred by a patent shall not extend to any of the following: the extemporaneous preparation by a pharmacy, for individual cases, of a medicine in accordance with a medical prescription or acts concerning the medicine so prepared. ’ (Art. 27(e) UPCA)

Experimental use ‘. . . acts done for experimental purposes relating to the subject-matter of the patented invention. ’ (Art. 27(b) UPCA) • allows testing of claimed properties or different indications • requirement: experiments are directed to the substance itself • problematic: use as research tool

Objective underlying experimental use disclosure rationale: experimental use exception: patent law as a means to make technical knowledge available facilitates the use of this knowledge to advance science

German Bundesgerichtshof, July 11, 1995, Clinical Trials I • plaintiff: – holds patent rights to the medicine ‘Interferongamma’. • defendant: – uses Interferon-gamma to produce the drug ‘Polyferon’ under a compulsory license. – uses Interferon-gamma for clinical trials aiming to identify new uses of the substance.

German Bundesgerichtshof, July 11, 1995, Clinical Trials I • scope of experimental use – all kinds of experiments as long as the use serves scientific research on the subject matter of the patented invention – covers research on applications of the invention • not decisive whether – the experiments are undertaken merely to review the patent specification – user has further intentions, such as use of the results for commercial purposes

German Bundesgerichtshof, April 17, 1997, Clinical Trials II • scope in case of commercial research – all experimental acts that relate to the subject matter of the invention – regardless of whether the tests produce purely scientific or industrially exploitable results – defence applies as long as the research does not specifically aim at impeding or frustrating the sale of the original product = liberal approach to experimental use

Differences in experimental use regimes • distinction between purely scientific and (partly) commercial research • distinction between research ‘on’ and research ‘with’ the patented technology broad scope (Germany) narrow scope (USA) position between these two poles in many European countries

Dutch Hoge Raad, December 18, 1992, ICI/Medicopharma • ICI: – is the holder of a Dutch patent on the medicine ‘Atenolol’. – patent expires on February 20, 1990 • Medicopharma and Pharbita: – use Atenolol to obtain regulatory approval for the marketing of a generic version of the medicine.

Dutch Hoge Raad, December 18, 1992, ICI/Medicopharma • decisive: unauthorized use must be justified by the research objective ‘This is only the case when the person carrying out the research argues and substantiates that the research is of an exclusively scientific nature, and that it aims exclusively at realizing one of the objectives underlying the Patent Act, such as the further advancement of science and technology. ’

Dutch Hoge Raad, December 18, 1992, ICI/Medicopharma • in the case of tests for obtainig marketing approval for drugs (-) ‘With their research, Medicopharma and Pharbita aimed [. . . ] only to carry out, during the term of patent protection, the tests [. . . ] necessary to be able to market themselves the already known medicine enjoying patent protection directly after the expiry of the patent. ’

Extension of experimental use • Art. 10(6) of Directive 2001/83/EC ‘Conducting the necessary studies and trials with a view to the application [for marketing approval for generic versions of patented drugs] and the consequential practical requirements shall not be regarded as contrary to patent rights or to supplementary protection certificates for medicinal products. ’ = so-called ‘Bolar’ exception, included by reference in Art. 27(d) UPCA

‘Bolar’ exception • exempts use of the patented invention for tests necessary to obtain marketing approval for generic drugs • US: Roche Products vs. Bolar Pharma generic version protected medicine expiry

Counterbalance: extended term of protection • ‘The term of protection available shall not end before the expiration of a period of twenty years counted from the filing date. ’ (art. 33 TRIPS) • longer periods? • extensions in certain technical fields?

Supplementary Protection Certificate for Medicinal Products ‘The certificate shall take effect at the end of the lawful term of the basic patent for a period equal to the period which elapsed between the date on which the application for a basic patent was lodged and the date of the first authorization to place the product on the market in the Community reduced by a period of five years. ’ 13(1) EC Regulation 1768/92 (1992)) (Art.

Supplementary Protection Certificate for Medicinal Products ‘Notwithstanding paragraph 1, the duration of the certificate may not exceed five years from the date on which it takes effect. ’ (art. 13(2) EC Regulation 1768/92 (1992)) market approval patented medicine extension expiry

Art. 30 UPCA ‘A supplementary protection certificate shall confer the same rights as conferred by the patent and shall be subject to the same limitations and the same obligations. ’ = extension of the protection enjoyed under the initial patent grant

Need for exceptions for farmers ‘The protection conferred by a patent on a biological material possessing specific characteristics as a result of the invention shall extend to any biological material derived from that biological material through propagation or multiplication in an identical or divergent form and possessing those same characteristics. ’ (Art. 8(1) Biotech Directive 98/44/EC) = biotech patents expanded to material derived by propagation or multiplication

Farmer’s privilege: plants ‘…the use by a farmer of the product of his harvest for propagation or multiplication by him on his own holding, provided that the plant propagating material was sold or otherwise commercialised to the farmer by or with the consent of the patent proprietor for agricultural use. ’ (Art. 27(i) UPCA, see also Art. 11(1) Biotech Directive 98/44/EC) • farmer’s own use of seed exempted

Farmer’s privilege: animals ‘…the use by a farmer of protected lifestock for an agricultural purpose, provided that the breeding stock or other animal reproductive material were sold or otherwise commercialised to the farmer by or with the consent of the patent proprietor. ’ (Art. 27(j) UPCA, see also Art. 11(2) Biotech Directive 98/44/EC) • corresponding provision for animal breeding

Protection of computer programs • international consensus on protection within the copyright system ‘Computer programs, whether in source or object code, shall be protected as literary works under the Berne Convention (1971)’ (Art. 10(1) TRIPS) • but ongoing debate on the possibility of parallel patent protection • software patenting accepted in the US • under certain conditions also in the EU

Discussion about software patents • in the EU not patentable as such • but patentable if part of a broader solution • decisive: technical characteristics copyright law patent law how to regulate overlaps?

Recognition of copyright exceptions ‘…the acts and the use of the obtained information as allowed under Articles 5 and 6 of [the Computer Programs] Directive 2009/24/EC, in particular, by its provisions on decompilation and interoperability. ’ (Art. 27(k) UPCA) = inclusion of copyright exceptions into patent law by reference

Art. 5 Computer Programs Directive • acts necessary for the use of the computer program in accordance with its intended purpose, including for error correction • making of a back-up copy • observe, study or test the functioning of the program in order to determine the ideas and principles which underlie any element of the program

Art. 6 Computer Programs Directive ‘The authorisation of the rightholder shall not be required where reproduction of the code and translation of its form […] are indispensable to obtain the information necessary to achieve the interoperability of an independently created computer program with other programs…’ • but several conditions – license or other right of use required – information not readily available – confined to relevant program parts

Art. 27(f) UPCA

Art. 27(g) UPCA

Exhaustion

Partitioning markets Netherlands: 100 EUR Greece: 75 EUR • patent protection as a weapon against parallel imports? • (+) in case of national exhaustion • (-) in case of international exhaustion

Art. 29 UPCA ‘The rights conferred by a European patent shall not extend to acts concerning a product covered by that patent after that product has been placed on the market in the European Union by, or with the consent of, the patent proprietor, unless there are legitimate grounds for the patent proprietor to oppose further commercialisation of the product. ’ = regional exhaustion in the EU

ECJ, July 11, 1996, case C-427/93 etc. , BMS/Paranova • Bristol-Myers Squibb, Boehringer, Bayer: – market drugs in several EU Member States – have registered their trademarks in Denmark • Paranova: – buys drugs in EU Member States with relatively low prices and sells those drugs in Denmark where prices are higher – uses new packaging showing the trademarks of the original producers and information that the drugs have been imported and re-packaged

ECJ, July 11, 1996, case C-427/93 etc. , BMS/Paranova • to prevent artifical market partitioning, re-packaging is permitted, provided that – the original state of the product is not impaired; – the presentation of re-packaged products is not detrimental to the repute of the mark; – the trademark owner is informed beforehand. • establishment of an individual set of rules for the pharmaceutical sector

Prior use

Different know-how strategies A B trade secret protection patent protection (disclosure)

Determining the patent owner • general principle: The first applicant obtains the patent, not the first inventor. • exceptions: – unfair competition (espionage) – employed inventor

Persons eligible for prior use rights persons who used persons who have in the invention prior good faith made to the patent grant effective and serious without making it preparations to use available to the invention public (infringing acts about to be done)

Right of prior use • scope depends not necessarily on form and extent at the time of acquisition – grows together with the business – expansion into other products problematic • only defence against patent owner, no right against third parties • no licensing permitted • assignment only together with the relevant business

Compulsory licenses

Art. 45(1) Community Patent Convention ‘Any provision in the law of a Contracting State for the grant of compulsory licences in respect of national patents shall be applicable to Community patents. The extent and effect of compulsory licences granted in respect of Community patents shall be restricted to the territory of the State concerned. ’ • national compulsory licensing regimes not harmonized in CPC • nonetheless: harmonization because of the international TRIPS Agreement

Art. 31 TRIPS • detailed list of requirements, such as – efforts to obtain regular authorization – national emergency – limited scope and duration according to purpose – non-exclusive, non-assignable – predominantly for the domestic market – payment of adequate remuneration – judicial review of decisions relating to the compulsory license

Reasons for compulsory licensing necessitated by public interest lack or insufficiency of exploitation required to put into effect a later invention that depends on patented technology

Example: dependent patents • specific international requirements – ‘important technical advance of considerable economic significance’ in relation to the patented prior invention – cross-license on reasonable terms for the owner of the first patent – use authorization with regard to the first patent is non-assignable except with the assignment of the second patent (art. 31(l) TRIPS Agreement)

Appropriate standard of ‘important technical advance’? • problematic in sectors with incremental evolution of new technology • example: innovation in the software industry invention 1 invention 2

Innovation in the software industry • ‘important technical advance’? • ‘considerable economic significance’?

Conclusion

No unitary patent infringement standard in Europe • differences with regard to – claim interpretation – scope of exclusive rights – scope of exceptions • resulting in different decisions on – patent validity – infringing acts • Will the Agreement on a Unified Patent Court lead to further harmonization?

The end. Thank you! For publications, visit www. ssrn. com and search for ‘senftleben’. contact: m. r. f. senftleben@vu. nl