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 - 8 November 2024 - is below:

PORTUGAL

Portuguese Supreme Court upholds validity of combination SPC.    

In a recent decision, the Portuguese Supreme Court (which is based in Lisbon) dismissed Sandoz’s appeal and upheld the validity of SPC 339, which covers a combination product of sitagliptin and metformin for the treatment of diabetes.

Sandoz appealed the Court of Appeal’s decision on a point of law concerning the Court of Appeal’s obligation to re-examine the factual evidence on the case file, and further requested a stay of the proceedings pending the outcome of the references to the CJEU in relation to the sitagliptin/metformin and ezetimibe/simvastatin combination SPCs. These arguments were dismissed notwithstanding the AG opinion from June this year (see our previous update here) which, if followed by the CJEU, suggests that these combination SPCs should be held invalid for failing to satisfy Art. 3(a) of the SPC Regulation. In dismissing the arguments, the Portuguese Supreme Court held the Court of Appeal is not bound to assess all the evidence indicated by the parties, only that which it considers relevant.

The Supreme Court referred to its earlier decision of 19 September 2024 in which it set out its reasons for refusing a stay of the proceedings. The earlier decision of the Supreme Court, including its reasons for upholding the validity of the SPC, was reported in Weekly Update 43.  

NETHERLANDS

The Hague District Court upholds BMS’ apixaban patent. 

On 30 October 2024, The Hague District Court granted injunctions in the main actions between (i) BMS and Sandoz, and (ii) BMS and Teva, regarding their respective generic apixaban products. This follows the Dutch Court of Appeal granting a preliminary injunction against each of Sandoz and Teva (as well as Stada) back in August 2023. In doing so, The Hague District Court rejected Sandoz and Teva’s nullity counterclaims against BMS’ compound patent and the associated SPC covering apixaban.

Sandoz and Teva’s nullity attacks against the patent relied on an argument of lack of inventive step. In particular, they relied upon a prior art patent application which disclosed a Markush formula within which apixaban fell (but was not individually disclosed). The Court confirmed that under Dutch patent case law, as at the EPO, for a selection invention to be inventive, it must be associated with a technical effect (in this case, factor Xa inhibition). Since the prior art was also aimed at this technical effect, an improved technical effect was required for the patent to be inventive. However, it was argued that BMS could not rely on this technical effect as it was not discernible to the skilled person from the original application, which did not contain any data for apixaban.

The Court applied G2/21 noting that although Dutch courts are not bound by EPO Board of Appeal decisions, they are generally followed, thereby promoting harmonisation of European patent law.  On the facts, the technical effect relied on by BMS (lactam-containing compounds with improved Factor Xa inhibition and selectivity) was disclosed in the original application. Consequently, BMS could rely on this technical effect in support of inventive step and was also entitled to rely on post-filed evidence which showed apixaban’s improved effect compared to prior art compounds.

The main action decisions in The Netherlands are therefore in line with earlier main action decisions from other countries, including France and Spain, but different from those from the UK and Ireland which held the BMS patent invalid.

FRANCE

Court of Appeal confirms French courts have jurisdiction over alleged infringements in the UK and Germany.

In a recent decision, the Paris Court of Appeal asserted it has jurisdiction to rule on the infringement of patents in the UK and Germany, following an earlier decision of the Supreme Court which found that French courts have jurisdiction to rule on patent infringements taking place outside of France.

The dispute is between Hutchinson, a French automotive supplier, and Tyron Runflat, a UK-based automotive supplier, and concerns Hutchinson’s European patent EP 1 262 340 (the Patent) which protects an automotive wheel with improved inflation system. Hutchinson brought an infringement action in Paris against four companies (including Tyron Runflat), seeking a ruling on infringements taking place in France, Germany and the UK (where the Patent was in force).

The defendants challenged the jurisdiction of the French court to rule on infringements occurring outside France and were successful at both first instance and on appeal. However, the decision was overturned by the Supreme Court in 2022. Under Art. 8(1) of Brussels I bis Regulation (in respect of UK-based Tyron Runflat) and Art. 14 of French Civil Code in respect of the South-African based defendant, the French courts have jurisdiction to summon a foreign national, even if not resident in France. The case was referred back to the Paris Court of Appeal to determine.

In the present case, the Court of Appeal (comprising a different panel of judges to the earlier decision) confirmed that the French courts have jurisdiction to rule on infringements taking place in the UK and Germany. The defendant, however, would need to file separate national nullity actions to challenge the validity of the Patent (which is opted out of the UPC) in France, Germany and the UK.

UPC

Düsseldorf Local Division grants tailored PI (UPC_CFI_368/2024).

On 31 October 2024, the Düsseldorf Local Division granted a preliminary injunction against Magna which permitted the continued supply of allegedly infringing products to one customer.

The dispute between Valeo Electrification and the Magna Group relating to the alleged infringement of Valeo’s patent EP 3 620 604 (the Patent), which concerns an electric rotary machine for a motor vehicle. Magna manufactures and supplies gearboxes to a number of customers, including BMW. Valeo alleged these gearboxes infringed the Patent and sought a PI.

The Court found the application for provisional measures was admissible and the Patent was more likely than not to be valid and infringed. This was sufficient basis for the PI proceedings.

In deciding whether to grant the PI, the Court used its discretion under Art. 62(2) UPCA to weigh the interests of the parties against each other, and found the interests generally lay in favour of granting the PI to Valeo. However, Magna submitted evidence that granting the PI would cause extensive damage to itself and its customer BMW, which would far exceed the damage suffered by Valeo as a result of infringement of the Patent. The evidence included that the challenged embodiments used in BMW vehicles could not be easily replaced by Valeo’s system, switching these components would be a violation of the homologation/type approval of the BMW vehicles, and BMW did not hold the necessary approvals to place vehicles equipped with a Valeo machine on the EU market. There were further concerns that due to the high levels of CO2 emissions resulting from Valeo’s products, BMW would not accept a switch back to Valeo products. 

In light of Magna’s submissions, the Court held it was necessary to provide a “very special exemption” and limit the scope of the PI as far as supplies to BMW are concerned, to ensure Magna could fulfil its existing obligations to BMW. This narrowly defined exception took into account the particularities of the automotive industry supply market generally, and the specific harm identified in the present case. Magna was ordered to provide security in return.

UPC

Court of Appeal stays preliminary injunction in relation to managing directors. 

On 29 October 2024, the Court of Appeal stayed the preliminary injunction that had previously been granted to Philips against Belkin insofar as it related to certain Belkin managing directors. In September 2024, the Munich Local Division (LD) had granted Philips’ application for an injunction (see our previous update here) against the defendant Belkin companies and certain defendant Belkin directors regarding its patent to wireless inductive power transmission. Belkin appealed and applied inter alia for the appeal to have suspensive effect.

The Court of Appeal accepted Belkin’s application in relation to the injunction against the managing directors. The court held that there had been a manifest error in law. There is no reasonable doubt that company managing directors cannot be held liable as intermediaries (as the LD had done) solely on the basis of being managing directors. A managing director cannot be liable as an intermediary within the meaning of Art. 63 UPCA as, instead, they represent the company. As such, the company cannot be a third party vis-a-vis the managing director.

As to the suspension of the rest of the underlying decision, the Court of Appeal was not convinced that Belkin had been prevented from making statements at the hearing on novelty and inventive step and as such that its fundamental procedural rights to be heard and to a fair trial had been violated. The application for suspension on these points was therefore rejected.

EU

European Commission issues fine for misusing patent system and disparaging rival product. 

On 31 October 2024, the European Commission issued Teva with a fine of €462.6 million for alleged abuse of a dominant position in relation to its blockbuster multiple sclerosis treatment, Copaxone.  

The Commission identified two separate abuses, which it considered to have the shared aim of delaying the emergence of generic competition: 

• filing and selectively withdrawing multiple (secondary) divisional patents; and 
• disseminating false or misleading information questioning the safety and efficacy of an authorised generic alternative. 

This is the first time any competition authority has fined a company for its divisional patent filing and enforcement strategies and the second Commission decision in recent months relating to the illegitimate denigration by a dominant pharma company of a competing drug (following the Vifor commitments decision in July this year - see here).

The full decision, which can be appealed, has not yet been published.  However, the Commission has issued both a press release and a statement by (outgoing) Competition Commissioner Margrethe Vestager, which together provide some basic information on the case. Given the limited information available in the absence of the full decision, there remains some ambiguity over the Commission’s precise reasoning. In particular, it remains unclear on precisely what basis the Commission distinguishes Teva’s conduct in this matter from legitimate conduct in relation to the filing, enforcement and/or withdrawal of divisional patents, and what evidence the Commission had of Teva’s subjective intentions to impede generic competition (which can be an exacerbating factor in an abuse of dominance probe). 

In relation to the disparagement part of the claim, a number of similar decisions have been taken by competition authorities across Europe in recent years. Starting with a series of decisions in France from 2013, competition authorities in Italy, Denmark and Belgium have found infringements based on product disparagement (or denigration, as it is sometime called) and similar investigations are ongoing in the UK and Greece. All of these cases relate to healthcare markets, and all but one to pharmaceuticals.