Irides: Weekly patent litigation update

The Irides Weekly Update is our round-up of patent litigation news highlights from around the world. Taking its name from the plural of “iris” - a nod to the ability of Irides to see what’s happening around the world.

Our latest edition - 26 July 2024 - is below:

SPAIN - STOP PRESS

Barcelona Appeal Court overturns decision in apixaban litigation.

On 18 July 2024, the Barcelona Court of Appeal reversed the first instance decision of the Commercial Court of Barcelona and found BMS' compound patent for apixaban valid. The Court of Appeal held that BMS’ patent was entitled to its priority date and the patent was inventive.

A full report will follow next week.

ITALY

Supreme Court Clarifies Scope of Bolar-type Exemption.

On 5 July 2024, the Italian Supreme Court handed down its decision affirming the Milan Court of Appeal’s decision that Sicor and its parent company Teva had undertaken acts falling outside of the Bolar-type exemption and therefore infringed Boehringer Ingelheim’s patent rights for tiotropium bromide.

The Court refused Teva’s request to refer questions to the CJEU and instead held that the Bolar-type exemption applied not only to generic manufacturers conducting the necessary activities in house, but also to third parties supplying API to generic companies. However, this was only the case for third party API manufacturers if, before an otherwise infringing act occurs (i) the generic company had “commissioned” the API manufacturer to produce the API; and (ii) that a condition of the supply was that the API would be used by the generic company in accordance with the Bolar-type exemption, with a penalty included for any breach.

GERMANY

Federal Court of Justice Overturns Lower Court Ruling on Calculation of Damages.

On 7 May 2024, the Federal Court of Justice (FCJ) handed down its decision on the calculation of damages in case X ZR 104/22, overturning the finding of the lower courts.

The case concerns the infringement of the German designation of EP 1 070 223 (the Patent) for a steam dryer system. In 2012 the defendant made an offer from its registered office in Germany to construct a fluidised bed evaporation dryer plant in Sweden, which it subsequently built. The Swedish designation of the Patent had expired in 2005. The claimant sought a payment of EUR 1.9m plus interest based on the defendant’s profit from the construction of the plant, or alternatively its own lost profits or a reasonable licence fee.

The FCJ held that as a matter of principle, profits from the performance of a contract causally related to an infringing offer for sale cannot be disregarded on the basis that the performance of the contract took place in a patent-free country. The requisite threshold for causality is an “intrinsic connection” between the infringing act and profits realised. Profits arising from non-infringing acts which had occurred in Sweden may also be taken into account for damages if the required causal relationship with the infringing act is established. The FCJ confirmed that this does not undermine the principle of territoriality since there remains a requirement for an infringing act to take place within the territorial scope of the patent and damages are payable only insofar as they can be attributed to an infringing act.

Further, where there is a sufficient causal connection, the injured party can alternatively elect to calculate its damages on the basis of a reasonable licence fee. However, it must be taken into account that the actions taken in the patent-free country would not have required a licence.

The FCJ also found that the defence of lawful alternative conduct, i.e. that the defendant could have achieved the same economic result through non-infringing acts, does not preclude a claim for damages.

The case has been remanded to the Court of Appeal to determine the issues on the facts.

UPC

Court of Appeal rules on application for preserving evidence.

On 23 July 2024, the UPC Court of Appeal (with Klaus Grabinski, President of the Court of Appeal, presiding) handed down its order (UPC_CoA_177/2024) in Progress Maschinen & Automation v AWM and Schnell concerning preservation of evidence and inspection of premises.

Progress Maschinen (Progress) had its applications for preserving evidence and inspection of premises granted by the Milan Local Division in September 2023 (ORD_576298/2023 and ORD_576304/2023). In October 2023, the experts appointed by the Court carried out the orders and lodged their reports and the evidence gathered in sealed envelopes. In February 2024, Progress filed a request for access to the expert reports, which it then supplemented in March 2024. In April 2024, the Milan Local Division dismissed Progress’ application for disclosure of the expert reports on the grounds that it had not been made until February 2024, four months after the execution of the orders. The Local Division also ordered the revocation of the provisional measures on the basis that Progress had not brought proceedings within the time limit provided by Art. 60(8) UPCA. Progress appealed this decision.

The Court of Appeal held:

• that inherent in Progress’ application for preservation of evidence and inspection of premises was a request to access the evidence obtained from such measures, including the expert reports, which should have been decided by the Milan Local Division without requiring a further application by Progress. This is because the legitimate purpose of the interim measures is the use of the evidence in initiating or substantiating proceedings on the merits.
• The granting of an application for preservation of evidence and inspection of premises is not an unconditional order to disclose all evidence to the Applicant – the Respondent’s right to confidentiality must be taken into account, potentially by the Court granting access only to certain of the Applicant's UPC representatives under terms of non-disclosure. The Respondent should have an opportunity to make submissions to the Court on the confidentiality of the information collected.
• When granting the applications for preservation of evidence or inspection of premises, a Court should specify a time period that starts to run from the date of the disclosure of the evidence to the Applicant or the date of the Court’s final decision not to grant the Applicant access to the evidence.

The Court of Appeal therefore overturned the Milan Local Division’s order and remitted the case back to the lower court to decide on the scope of disclosure.