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 - 24 January 2025 - is below:

SPAIN

New law in Spain requiring ADR before initiating Court proceedings.

On 3 January 2025, a new Regulation (Organic Law 1/2025 on measures for the efficiency of the Public Justice Service) was published to introduce reforms to the Spanish judicial system. The Regulation will come into force on 3 April 2025.

One of the most significant changes is the introduction of requirements for parties to seek alternative means of dispute resolution (ADR), such as mediation, private conciliation or direct negotiations, in respect of civil and commercial matters. In particular, the new law requires that parties first resort to an appropriate means of ADR before starting legal proceedings (subject to specific exceptions) in order for the claim to be admissible and it sets out the requirements for proving that such ADR has been attempted.

The Regulation also makes a number of other changes, including to the structure of the court system and oral proceedings.

UPC

Brussels Local Division rejects infringement by equivalents.
(UPC_CFI_376/2023). 

This case concerns devices used to prevent a patient’s tongue slipping back and blocking the airway whilst the patient is asleep. These devices work by bringing the patient’s lower jaw forward, which tenses the neck muscles and forces the tongue forward, opening up the airway.

These devices have an upper and lower section that fit over the teeth, and are joined by a coupling element. The patent claims such a device where the closing of the jaw is prevented by a "contact surface" and a "stop" within the coupling element. 

The patentee claimant, a Belgian orthodontist, sued OrthoApnea and Vivisol in the Brussels Local Division, asserting infringement on both a literal and equivalents basis. 

The Court found that the OrthoApnea product did not prevent the closure of the mouth using parts within the coupling element, but instead by the meeting of the upper and lower sections which fit over the teeth. On this basis there was no literal infringement.

The claimant asserted infringement by equivalents under two tests – "function-way-result" and "insubstantial differences".  The Court found that a necessary element for both tests is the existence of technical functional equivalence.  The technical function of the "stop" and "contact surface" within the coupling element was to prevent the upper and lower sections from making contact.  As these sections do make contact in the OrthoApnea device, the functional effect sought in the patent is not present in the OrthoApnea device, and therefore there was no infringement by equivalents.

EU

EU Challenges China at WTO Over Global Royalty Rate Setting for SEPs.

The European Commission has initiated consultations with the World Trade Organization (WTO) to address what it views as unfair Chinese trade practices related to intellectual property rights. The dispute concerns standard-essential patents (SEPs) that are critical to wide range of technologies. Specifically, the EU objects to Chinese courts setting global royalty rates for EU SEPs without patent holders’ consent. According to the EU, this practice forces European companies, particularly in the high-tech sector, to lower their global prices, giving Chinese manufacturers unfair access to advanced EU technologies.

The Commission argues that these actions encroach upon the jurisdiction of European courts over EU patent issues and violates the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). After unsuccessful dialogue with China, the EU is seeking WTO consultations as a first step in the dispute resolution process. If unresolved within 60 days, the EU may escalate the matter by requesting a WTO panel to adjudicate the matter.

The Commission also links these concerns with another WTO complaint brought in 2022 by the EU involving Chinese anti-suit injunctions, which prevent high-tech patent holders from enforcing their rights outside of China. A WTO panel report on this related dispute (DS611) is expected in early 2025.

For further details, the European Commission’s press release can be found here, and the official WTO consultation request is available here.

UPC

Paris Central Division refuses to set aside decision by default.
(UPC_CFI _412/2023).

In the revocation proceedings between ItCiCo v BWM, the Paris Central Division had previously given a decision by default in respect of the applicant’s defence to counterclaim which had not been filed within the required timeframe. The applicant (ItCiCo) had filed a request for an extension on the day the defence fell due, but that extension request was subsequently refused. ItCiCo made an application pursuant to r. 356 RoP to set aside that decision in default and sought to justify this request by providing an explanation for the default; namely, it was unclear whether service of the statement of claim had been properly effected and the applicant’s long-standing European Patent Attorney, who was expected to provide technical input to the defence, was unavailable due to illness.

In its decision of 9 January 2025, the Paris Central Division held that the applicant’s explanation was not sufficient to meet the test for setting aside the decision by default.

In considering the relevant provisions, the Court found that it was inherent that r. 356 RoP required more than a mere explanation of the default but rather the applicant must demonstrate that the default was due to reasons beyond its control (i.e. unforeseeable circumstances or force majeur).  Interpreting to rules in the manner proposed by the applicant, that any explanation would suffice, would have deprived the rule of any significant value and would allow parties to obtain an unwarranted extension of procedural deadline (there were justifications for the extensions, the justifications were just not good enough in the Court’s eyes). Such an outcome would have been contrary to the principles of efficiency, fairness and equity and endanger the goal of having the first instance final oral hearing within one year.

Further, the applicant’s reasons did not meet the required standard. The Court considered the statement of claim as served contained all of the information essential to enable the applicant to understand the claim against it and as such the date of its delivery was the date from which time started running for the deadline for the defence. Additionally, the applicant should have addressed the issue of the unavailability of its preferred patent attorney in a more timely manner, by consulting with another professional or at least seeking an extension from the Court as soon as it learnt of his health issues.

The Court therefore considered the non-compliance with the deadline for filing the defence was attributable to the application and dismissed the application. As such the Central Division’s prior order revoking the patent still stands.

UPC

Court of Appeal finds UPC has jurisdiction to determine damages arising from a national action
(UPC_CoA_30/2024).

On 16 January 2024, the Court of Appeal overturned the Hamburg Local Division, deciding that the UPC does have jurisdiction to determine damages following a finding of infringement by a Court of a Contracting Member State, and to decide on acts of infringement conducted before the UPC started on 1 June 2023.

In August 2022, a German national court decided that the defendant (REEL) should compensate the claimant (Fives ECL) for patent infringement.  In August 2023, Fives ECL requested determination of damages in the Hamburg Local Division. REEL lodged a preliminary objection that the UPC did not have jurisdiction under Art. 32(1) UPCA.  The Hamburg Local Division agreed with REEL, finding that the UPC had jurisdiction to determine damages only after the UPC itself has ruled on infringement. Fives ECL appealed.

The Court of Appeal noted that Art. 32(1)(a) is ambiguous: it does not exclude separate actions for damages, but nor does it prescribe such jurisdiction explicitly. In resolving this ambiguity the Court of Appeal analysed a number of issues.

First, Art. 32(1)(f), which gives the UPC jurisdiction to determine damages for infringement of a published European patent application, points in favour of the UPC assuming jurisdiction for damages only in respect of a granted patent.  Second, the Brussels Regulation could not assist on this issue. Third, the UPC assuming jurisdiction for a pure damages action was not contrary to the object and purpose of the UPCA. In particular, Art. 68 sets out substantive law on damages and, as a result, there is an advantage to the UPC assuming jurisdiction, as it allows for the application of a complete set of substantive rules across the Contracting Member States. Finally, an analysis of the RoP in light of the UPCA, revealed that r. 126-144 RoP requiring determination of damages to be an application could be ignored, and instead damages could be a separate action.

The Court also rejected two of REEL’s additional arguments; that assuming jurisdiction would enable forum shopping, and that the UPC could not assess infringements from before the start of the UPC in June 2023. On forum shopping, as Art. 68 UPCA had been drafted in conformity with Art. 13 of the Enforcement Directive, which allows for variation between Member States as to statutory limitation periods or the calculation of damages, the possibility of different outcomes was specifically envisaged within the UPCA. On the temporal issue, the Court of Appeal found that as the UPC would be obliged to accept jurisdiction of an action concerning infringing acts partly before and partly after June 2023, it therefore has jurisdiction for claims relating to infringing acts which all occurred prior to June 2023.

The determination of damages was remitted back to the Hamburg Local Division.

EU

European Commission issues Summary Decision in action for misuse of patent system.

Further to our Weekly Update here, Teva has now appealed the decision to fine it for alleged abuse of a dominant position in relation to its blockbuster multiple sclerosis treatment, Copaxone. In parallel, the European Commission (EC) has published the official "Summary Decision" (although sadly not the fully text, which we expect to remain under confidentiality review for potentially a number more months).

While the Summary Decision doesn’t add a huge amount of new information, there are a few points of interest:

• On the assessment of market definition and dominance, the EC looks at the competitive constraints to Copaxone, noting that the approaching market entry of Synthon (a generic-like competitor) changed the nature of competition in the market from non-price competition (as would apply while Copaxone was competing with other therapies) to price competition. This endorses the approach seen in Generics UK and the latest Notice on Market Definition and emphasises that many branded products will be at risk being considered dominant in the period when generic/biosimilar entry is approving.
• On the question of disparagement, the EC refers to Teva having provided “objectively misleading information” (including about “clinically irrelevant differences in molecular structure”). It used “effective mechanisms” to disseminate this misleading information. Crucially, this was considered to be “capable of discrediting” the competing product and capable of affecting competition as a result.
• Finally, on the key issue of the strategy in relation to divisional patents, the Summary Decision adds a little more detail compared to the press materials released on the day the Decision was announced. In particular, the EC observes that the various divisional patent applications “shared essential features with ingrained legal weaknesses” – this seems a clear sign that the EC has drawn conclusions about the specific nature and inventiveness of the patent applications, although it remains to be seen on what evidence these conclusions are based. Subject to seeing the full decision, this appears an obvious point of appeal as the EC is not competent to rule on patent validity.

A detailed review of the full Decision (once finally published) remains crucial to fully understand the EC’s approach in this case. However, the additional details show that:

1. The EC was satisfied there was sufficient evidence of a deliberate strategy to exclude the nearest competitor product; and
2. The case turns on its own facts, including in terms of the information about the purported weakness of the various divisional patents, as well as the timing of their withdrawal. Importantly for patent holders, the filing of divisional patents is not by itself anti-competitive.