Rantasaari on Wrongful Patent Enforcement in the E.U.

I've been working recently on a book proposal relating to wrongful patent enforcement--something I've been thinking about, off and one, for a long time (see, e.g., this post and thispost, both from 2013, the second of which cites Christopher Heath's important article Wrongful Patent Enforcement—Threats and Post-Infringement Invalidity in Comparative Perspective, 39 IIC 307 (2008)).  Anyway, just the other day I came across a new paper by Krista Rantasaari titled Abuse of Patent Enforcement in Europe:  How Can Start-Ups and Growth, 11 JIPITEC – Journal of Intellectual Property, Information Technology and E-Commerce Law 358 (2020).  Here is a link to the paper, and here is the abstract:

The aim of this article is to examine whether smaller companies have any adequate measures to defend themselves against abusive claims. Patent holders can assert their patents inappropriately, thus going against the functions of patents, and going outside the claims and boundaries of what is protected. This is more damaging for smaller companies as they have fewer financial resources. As a corollary, start-ups and growth companies must be able to defend themselves against abusive claims. This article evaluates the abuse of patent enforcement and analyses the abuse of rights principle, the abuse of dominant position, the Enforcement Directive (IPRED) and unjustified threats. The article analyses whether these elements provide tools for start-ups and growth companies when acting as defendants in patent infringement cases that could be considered abusive. The abuse of patent enforcement is increasing for several reasons, such as, the increase in the number of patents, the fact that they are becoming more valuable, the emergence of a growing market for the sale of patents, and the introduction of new entities specialised in patent licensing and litigation. The article argues that the elements presented in this study mitigate, to a certain extent, the potential ill effects of abusive legal proceedings. However, there are limitations and uncertainties; for example, the case law often only applies to specific circumstances, and national practices vary. As a corollary, these legal tools are rather complicated for start-ups and growth companies to apply.

The article provides a good overview of European law as it relates to the concepts of abuse of right, abuse of dominant position, and unfair competition/unjustified threats, as applied to allegedly abuse enforcement of patent rights.

From Around the Web

1. I fell behind a bit in checking out the EPLaw Blog, so I missed a couple of important posts.  One, from March 20, 2020, noted the publication by the European Patent Academy of a study titled Patent Enforcement in Europe:  A Country-by Country Overview.  The study is over 500 pages long, and covers every country within the EPC.  I may have more to say about it after I looked through it more carefully.

2.  Another EPLaw post I missed was by Nadine Westermeyer and Stefan Lieck, titled DE-"Leiterklemme"--Requirements for the Reasons for a Preliminary Injunction in Patent Litigation.  The post links to a translation and remarks on the Bardehle Pagenberg firm's website, which in turn links to the original judgment.  According to the post, the judgment (a December 2019 judgment of the Munich Court of Appeals) overturns previous case law from that district, and conforms to case law from Karlsruhe and Düsseldorf, to the effect that a patentee may obtain a preliminary injunction only if, inter alia, "the patent in suit has already survived first instance opposition or nullity proceedings or if an exception applies."  For another EPLaw post on this case, with a link to further analysis by Philipp Rastemborski, see here.

3.  Also relevant to the topic of interim injunctions are Norman Siebrasse's two posts on the decision of Canada's Federal Court of Appeal in Arctic Cat, Inc v Bombardier Recreational Products Inc 2020 FCA 116, discussing the criteria for granting a stay pending appeal (see here and here).  Professor Siebrasse is surprised that the court denied the application for a stay without any discussion whether the patentee (Bombardier) had provided an undertaking in damages for the harm the defendant (Arctic Cat) might incur in the event the judgment for the patentee is reversed on appeal.  He also discusses whether the question of potential harm to third parties should be taken into account as part of the irreparable harm or balance of convenience stage of the analysis--the relevance being that, according to some Federal Court decisions, a court will reach the balance of convenience stage only if it concludes that there is irreparable harm.

4.  Gowling WLG has made available an interesting webinar titled The Game Begins:  Strategies for the Early Stages of Patent Litigation--The Claimant's View.  The webinar discusses, among other matters, the likelihood (or not) of obtaining preliminary relief in various countries, including China, Russia, France, Germany, the U.K., Canada, and the U.S.  Hat tip to Norman Siebrasse for calling this to my attention.

5.  The German firm Kather Augenstein will be hosting an English language webinar on August 20 on Sisvel v. Haier.  Information here.  For previous discussion on this blog, see here and here. 

6.  Also relevant to this last item, on JUVE Patent Matthieu Klos published a piece titled Haier files constitutional complaint over FRAND judgment.  According to the article, Haier is asking the German "Constitutional Court to review whether the decision of the Federal Court of Justice . . . is compatible with European law."

Resources on Anti-Suit Injunctions

As readers may be aware, in at least three cases (Microsoft v. Motorola, TCL v. Ericsson, and Huawei v. Samsung, the last of these discussed on this blog here and here) U.S. courts have issued anti-suit injunctions in FRAND/SEP cases.  In preparation for my presentations later this week in Tokyo and Nagoya, I've been reading up on anti-suit injunctions, and would like to draw readers' attention to three sources in particular.  The first is Thomas Raphael, The Anti-Suit Injunction (Oxford Univ. Press 2008), with a 2010 supplement. The book provides an exhaustive discussion of anti-suit injunctions in the U.K.  The second is a 2015 Ph.D. thesis by Mauro Magro titled Anti-Suit Injunctions in Transnational Litigation:  Is Their Usage Still Justifiable?, which among other things provides a comparative overview of the subject in Europe, the U.S., Canada. (Although the civil law countries generally disapprove of anti-suit injunctions, the author notes a few possible exceptions.)  The third is a paper I previously noted on this blog, namely Jorge Contreras & Michael Eixenberger, The Anti-Suit Injunction-A Transnational Remedy for Multi-Jurisdictional SEP Litigation, in The Cambridge Handbook of Technical Standardization Law: Patent, Antitrust and Competition Law (Jorge L. Contreras, ed. 2017).  Here is a link to the ssrn version.

All three of these sources cite to other relevant primary and secondary literature, so if you're looking for source material on anti-suit injunctions--which I suspect are going to be more frequently requested in the common-law countries that permit them, particularly in FRAND/SEP cases--these are good places to start.

FRAND Perspectives from India, Spain

1.  Subhajeet Roy has published a post on SpicyIP titled Deconstructing the FRAND Regime vis-à-vis Recourse to Injunctive Relief.  The author provides a brief recap of the debates for and against injunctive relief in SEP cases, notes some of the governing standards in the E.U., the U.S., China, and India, and concludes that "The key takeaway from this debate is that it is crucial to encourage the parties to engage in good-faith negotiations and induce them to reach a consensus. More often than not, in the absence of a universally acclaimed method of determining FRAND royalty rates, courts go into the negotiating history of the parties. This often turns out to be the single most important factor in grant of an injunction in FRAND encumbered patents."

Also of interest on SpicyIP is Divij Joshi's recent post tiled "Drugs Are Not Sweets"-Bombay HC Imposes Exemplary Costs for Pharma Trademark Infringement.  If I understand correctly, the court in Glenmark v. Curetech awarded 1.5 crores (about $US 200,000) in exemplary damages (not costs in the sense of attorneys' fees) to be payable to charity, which the author says is probably the largest such award in Indian trademark law.

2.  Judge Enrique Sanjuan and Professor Ana Belen Campuzano have posted a paper titled Valuation of Patents in Spanish Law.  Here is a link to the paper, and here is the abstract: 

This study deals with the necessary adaptation of Spanish law to the new European regulations on FRAND licenses and focuses on the valuation of the so-called standard-essential patents (SEP). From the criteria followed in the USA and UK, our regulations must adapt to the valuation system in these new cases given the lack of rules and according to the European Union legal ordering. However, a consideration of the nature of such licenses is necessary first, that American and European doctrine put in the contractual field.

From Around the Blogs: Damages in Canada and France, Injunctions in the U.K., and More

1.  On Sufficient Description, Norman Siebrasse has published a post titled Compound Interest is Here to Stay.  The post provides a detailed discussion of a recent Federal Court decision, Grenke v. DNOW Canada ULC, which (in addition to awarding compound interest, as per the the title of the post) addresses the calculation of lost profits and reasonable royalties, and denies a request for punitive damages.  Highly recommended. 

2.  On the EPLaw Blog, Pierre Véron has published a post titled FR – Novartis v. Teva / Valsartan – €13,000,000 advance on damages, discussing a recent case in which the Tribunal de grande instance de Paris awarded a preliminary injunction and €13,000,000 as an advance on damages.  M .Véron notes that "[t]his is probably the highest amount ever granted by a French court as an advance payment on damages in a patent infringement case," and provides a copy of the decision (in French) here.  Also on the EPLaw Blog recently, Olivia Henry published a post titled UK – Edwards Lifesciences v. Boston Scientific Scimed, about an English case staying an injunction, which also was recently discussed on IPKat and on this blog here.

3. On the IAM Blog, Timothy Au has published a post titled Fear about massive PAE litigation abuses in Europe is unfounded, new report concludes, discussing a  report authored by Igor Nikolic and published by the 4iP Council titled Are PAEs a Threat to Europe?  The abstract of the report itself reads as follows:

Patent Assertion Entities are often negatively portrayed as harmful “patent trolls” that engage in speculative and abusive patent litigation against manufacturing companies. Although mass PAE litigation has mainly been US phenomenon, a recent study indicated that PAEs are on the rise in Europe and a number of changes to the European patent and litigation system have been recommended. This paper provides a different perspective on PAEs. It will first show that not all PAEs engage in harmful activities and that most are in the legitimate business of patent licensing. Further, Europe has in place different patent and litigation incentives than the US, which effectively guard against any abusive patent litigation. Finally, the available evidence does not in fact show the presence of mass and harmful PAE litigation in Europe.

4.  On Patently-O, Dennis Crouch published a post on Huang v. Huawei, a nonprecential opinion handed down by the Federal Circuit last week affirming a grant of attorneys' fees against a pro se litigant.  This morning, by contrast, the Federal Circuit published a precedential opinion affirming a judgment denying attorneys' fees in Stone Basket Innovations, LLC v. Cook Med. LLC.  The opinion is fairly fact-specific, but basically holds that the district court did not abuse its discretion in denying fees in a case in which the patentee voluntarily dismissed its suit following institution of an IPR, and requested entry of an adverse judgment before the PTAB after the IPR was instituted.

Darts-IP Report on NPE Litigation in the European Union

Many readers of this blog already may have come across darts-ip's February 2018 study "NPE Litigation in the European Union:  Facts and Figures," but if not here's a link; it's an interesting study.  From the executive summary:

This report provides a factual overview of Non-Practicing Entity (NPE) related litigation and patent enforcement activities across the European Union (EU), including opposition actions filed before the European Patent Office (EPO). The findings are based on Dartsip’s database of IP case-law. With information on more than 3 million cases worldwide, this database constitutes the largest IP case-law database in the world. The reported statistics are calculated from the set of all patent-related actions contained in the database which have had their first registered procedural event in an EU court or IP office between the 1st of January 2007 and the 31st of December 2016. The majority of cases are infringement, invalidity and opposition actions.

The overview reveals a marked year-on-year upward trend in the number of actions involving NPEs in the EU, with a dramatic increase in the last five years, primarily concerning Information and Communication Technologies. . . .

The report finds that, in the EU, NPEs prefer litigating in Germany. During the 2007-2017 period, about one in every five infringement actions in Germany was NPE initiated. 

The report states that NPEs' preference for Germany may stem from, among other considerations, the bifurcated nature of Germany infringement litigation, "with injunctions often being granted prior to completion of the invalidity action."  For fairly extension discussion of the report on the IPKat Blog, see here and here, and on the IAM Blog, see here.

On a related note, in February the China IPR Blog reported on a report on an article on NPEs in China authored by King & Wood Mallesons, which report however appears to be in Chinese.  According to these sources, however, NPE activity in China at present appears to be at a minimum, though there are a variety of NPE-type business models operating there.

EPLaw Patent Congress in Brussels This Coming Friday

Information here and here, courtesy of IPKat (more about which, see below) and EPLaw.  I won't be at this one myself (though I will be in Amsterdam the following week, see here), but it looks like it will be a rewarding event, with sessions on the UPC, patent damages, the reimbursement or royalties following the invalidation of a licensed patent, and FRAND, among other matters.

Monday Miscellany: Saisies-Contrefaçon, Border Measures, Design Crime, and Noninfringing Alternatives

1.  Pierre Langlais and Deborah Dayan have published a paper titled Saisie-Contrefaçon:  points de vigilance -- Panorama de Jurisprudence (juin 2013 - septembre 2014) in the November 2014 issue of Propriété Industrielle at pages 8-13.  The abstract reads as follows (my translation from the French):

The saisie-contrefaçon is a fundamental method of proof in regard to infringement.  Because of its extraordinary character, the saisie-contrefaçon procedure is subject to strict rules, and decisions calling saisies into question are myriad.  2013 and 2014 have been richer still in teachings in this regard.  The retrospective table below has for its objective the presentation of a panorama of cases in order to call to the attention of litigants the different risks tied to the saisie-contrefaçon. 

2.  In the October issue of GRUR (pp. 921-24), Thomas Kühnen published  the second installement of his Die Haftung wegen unberechtigter oder zu Unrecht unterbliebener Grenzbeschlagnahme nach der VO (EU) Nr. 608/2013 ("Liability for unauthorized or unenforced border measures under Regulation (EU) No. 608/2013).  For my post on Part 1, see here.  Here is the abstract:

Border measures are directed against goods that are suspected of infringing an intellectual property right.  Subsequently it may turn out that there actually was no infringement, in which case the commercial consequences for the victim of the unauthorized seizure can be grave.  On the other hand, the IP owner also can suffer injury to its property, if the Customs Authorities do not take objectively reasonable measures and thus allow, to the detriment of the IP owner, competition from infringing products.  This essay attempts the first systematic analysis of the liability problem.  In connection with Part 1 (GRUR 2014, 811), which addresses the liability of Customs Authorities, Part 2 follows up with the liability of movants and of persons entitled to dispose of the property. 

3.      David Musker has published Design crime: back to the future or forwards to the past?, in 9 Journal of Intellectual Property Law & Practice No. 12, pp. 976-84 (2014).  Here is a link to the paper, and here is the abstract:

The Intellectual Property Act 2014 has controversially created new criminal offences, and magistrates will therefore find themselves dealing with design infringements.  This is not, however, the first time:  the magistrates' courts also had jurisdiction over registered design piracy between 1842 and 1883, and many of the concerns recently raised during passage of the Intellectual Property Act were played out before them.  This article examines some of the cases as reported through the eyes of the Victorian press.

Readers may recall that Professor Sarah Burstein published a guest post here on the new UK design crime law. 

4.  Finally, over at Sufficient Description Norman Siebrasse recently published two very good posts (here and here) relating to the relevance to patent damages of noninfringing alternatives, in the context of a critique of the recent Canadian case of Eli Lilly v. Apotex.  (I blogged about the case recently here.)  He also has a (more favorable) post on the Canadian court's handling of the compound interest issue here.

Patent Litigation Statistics from Europe and Japan

It's going to take me a little while to work my way through all of this material, but several recent publications provide a wealth of statistics on patent litigation and remedies in Europe and Japan.  I hope to report back on some of the papers below in greater detail in the weeks to come.

1.  First, the October issue of Mitteilungen der deutschen Patentanwälte has two articles of interest.  The first is by Malte Köllner & Paul Weber and is titled Rumor Has It:  Statistische Analyse der Rechtsprechungspraxis bei Patentverletzungsklagen (which I would translate as "Statistical Analysis of Adjudication Practice in Patent Infringement Actions").  The abstract reads (in my somewhat free translation from the German):

For a long time, there have been discussions about supposedly distinctive features in German patent infringement case law, which however are based on the weak foundations of subjective feeling and individual cases.  This essay creates a solid foundation for these discussions, by analyzing data from infringement actions in Germany and Europe.  We examine whether conventional assertions about the case law are verifiable or not, and in this manner attempt to contribute an objective basis for the discussions.

The nine conventional assertions the authors set out to test, and their conclusions, are as follows: 

Assertion	Result
(1) There's only literal infringement these days	Confirmed to the greatest extent possible
(2) Courts don't grant stays	Overwhelmingly confirmed for Düsseldorf.  No data for Mannheim and Munich.
(3) They no longer grant preliminary injunctions	Probably not correct
(4) They are biased in favor of patent owners	Contradicted; the patent owner is merely structurally privileged by the bifurcation system.
(5) Every year it's getting worse for patent owners!	Weakly confirmed for Düsseldorf for infringement by equivalents and for the privileging of the patent owner in the court of first instance.
(6) They're always getting more cases	Not confirmed
(7) The BGH is in any event reversing cases again	Contradicted
(8) The Germans are faster	Could be correct for individual courts, if you compare apples with oranges (that is, if you don’t take into account the time it takes to complete the parallel cancellation proceeding)
(9) The German bifurcation system is the best infringement litigation system in the world.	Contradicted.  The bifurcation system should be abolished.

2.  The second article in the October issue of Mitteilungen is by Peter Hess, Tilman Müller-Stoy, and Martin Wintermeier and is titled Sind Patente nur »Papiertiger«? ("Are Patents Only 'Paper Tigers'?").  An English-language version is available here.  The abstract reads:

Patents, whose legal validity is assumed generally and particularly in infringement proceedings, are in fact subject to a considerable risk of being declared invalid. The present contribution confirms this based on a statistical evaluation of the case law of the German Federal Patent Court and the German Federal Court of Justice in nullity matters in the period from 2010 to 2013. A broad discussion on the causes, effects and possible corrective measures seems to be necessary.

The following contribution is to give occasion for this.FOSS Patents and EPLaw Patent Blog have already blogged on this article to some extent (respectively here and here).  The authors' analysis indicates that nearly 80% of patents challenged in revocation proceedings before the Bundespatentgericht (Federal Patent Court) are invalidated in whole or in part.  The Bundesgerichtshof (Federal Court of Justice) affirmed about 60% of all appeals from these proceedings.

3.  Joachim Henkel and Hanz Zischka have posted a paper titled Why most patents are invalid--Extent, reasons, and potential remedies of patent invalidity, available here. Here is the abstract:

The legal stability of granted patents is uncertain, a fact that entails inefficiencies for the patentee as for third parties. It is an important question for intellectual property policy and management how severe this problem is. Only few patents are litigated, and those that are are not a random selection. We thus ask: if a randomly picked patent underwent revocation proceedings with a thorough search for prior art, what would be the odds of it being invalidated? We address this question for the case of Germany, where revocation proceedings are separate from infringement suits. This bifurcation facilitates a focused analysis of the former. Our study is based on court decisions, expert interviews, and a survey among patent lawyers. We find that patents entering revocation proceedings are about as legally robust as the average patent. However, less than half of all revocation proceedings conclude with a decision, and those that do involve more robust patents. Thus, the share of court decisions that declare the focal patent partially or fully invalid—75% in Germany—is a conservative estimate of the share of all patents that would be partially or fully invalidated if challenged in court. Furthermore, the plaintiff’s budget was seen as having a positive effect on the likelihood of finding invalidating prior art, and so the assumption of a thorough search for prior art increases this share further. We show that our arguments carry over to other legislations. While we concur with earlier studies that a more detailed examination would not solve the problem, we do not consider “rational ignorance at the patent office” a satisfactory explanation. Even patents that are never litigated create inefficiencies. To address the problem that many patents are latently invalid we suggest a significant increase of the required inventive step.

4.  Katrin Cremers, Fabian Gaessler , Dietmar Harhooff, and Christan Helmers have posed a paper on ssrn titled Invalid but Infringed?  An Analysis of Germany's Bifurcated Patent Litigation System.  Here is a link to the paper, and here is the abstract:

We analyze the impact of the probabilistic nature of patents on the functioning of Germany’s bifurcated patent litigation system where infringement and validity of a patent are decided independently by different courts. We show that bifurcation creates situations in which a patent is held infringed that is subsequently invalidated. Our conservative estimates indicate that 12% of infringement cases in which the patent’s validity is challenged produce such ‘invalid but infringed’ decisions. We also show that having to challenge a patent’s validity in separate court proceedings means that more resource-constrained alleged infringers are less likely to do so. We find evidence that ‘invalid but infringed’ decisions create uncertainty which firms that were found to infringe an invalid patent attempt to reduce by filing more oppositions against newly granted patents immediately afterwards.

This paper has been mentioned on the PatLit Blog, here.

5. Yann Basire has a short article in the July-August 2014 issue of Propriété Intellectuelle titled Les dommages et interest alloués dans le cadre des action en contrefaçon:  Étude comparée en France, au Royaume-Uni et an Allemagne (“Damages and interest in infringement actions:  Comparative study in France, the U.K., and Germany”).  The article briefly summarizes a 170-page January 2014 report from the French government on IP remedies in France, Germany, and the U.K., available here.  I hope to start making my way through this document soon.  According to M. Basire, in France in 67% of the patent infringement cases in which damages were awarded the amount was less than €50,000, and in only 11% was it above €500,000.  In  Germany, damages exceeded €100,000 in 58% of cases and in the U.K. damages exceeded €1,000,000 in 50% of the cases analyzed.  French courts award reasonable royalties less frequently than do courts in Germany and the U.K. as well, although they are more likely to take into account préjudice moral.     

6.  An article titled Predictability of Monetary Damages under Article 102(3) of the Japanese Patent Law was recently published (in Japanese) by the Second Subcommittee, the Second Patent Committee, in 64 Intellectual Property Management 219 (2014).  Professor Masabumi Suzuki, who alerted me to this paper, informs me that the article presents a survey of 59 reasonable royalty decisions between 1999 and 2013.  According to Professor Suzuki, courts awarded a 5% rate in 28% of the cases, 3% in 22% of the cases, and 10% in 16% of the cases.  My research assistants will be translating this paper for me over the winter break, and I hope to report back on it in a few weeks.