The latest newsletter from the team at Steinhauser
Hoogenraad foreshadows some interesting developments in the Netherlands
from 1 July 2006.
Take home
Factors including relatively low cost and good prospects of
success have meant that the Netherlands is one of the most
popular jurisdictions in which to enforce IP rights. The latest round of amendments to the
civil procedure will support this trend.
They include:
Exp
parte interim injunction proceedings.
(An injunction without the defendant having the opportunity to be heard on
the application — see below).
Descriptive seizure.
(This is basically a civil search and is similar to (but not the same as) Anton Piller Orders as discussed in
the my article of 5 May 2006.)
The patentee may take possession of
equipment used to commit patent infringement or demand that they be removed
from circulation or have them destroyed.
The patentee may require middlemen who
are being used by third parties as part of the infringing activities to cease
undertaking such activities.
The new provisions will only
apply to proceedings commenced after 1 July 2006.
Comment
Exp
parte interim injunction proceedings.
This
procedure has been used in Germany for some years and to great effect. Under the German system, the defendant has
the opportunity to challenge the grant of the interim injunction within a set
period. As pointed out in the Steinhauser Hoogenraad newsletter,
the Netherlands
version provides for compensation to the defendant should the injunction be
revoked.
Descriptive seizure.
This sounds
very similar to the Saisie Contrefaçon which
is almost always granted at the commencement of patent litigation in France (Belgium
and Italy
have similar procedures). Click here
for a great summary of European procedures for obtaining evidence prior to
commencing litigation. (The article is
by Jochen Bühling of Krieger Mes
& Graf v der Groeben and appeared in iam’s ‘IP
Value 2006’).
Possession, removal from circulation
or destruction of equipment.
These are
common remedies in many countries today.
Remedies against middlemen
This presents
an intriguing possibility as the Court may in many circumstances be ordering
a prohibition (or injunction) against a person (or company) who is not party
to the proceedings.
On 2 May 2005, Mr Justice Pumfrey of the UK High Court
(Patents Court) handed down this interesting interlocutory decision in Baxter v
Abbott [2006] EWHC 919 (Pat).
Take home
This is the latest round of global litigation concerning
Abbott’s Ultane (Sevoflurane) anaesthetic. The proceedings were commenced by Baxter
for a Declaration of Non-Infringement in respect of Abbott’s patent EP
(UK) 0 967 975. Abbott sought
better particulars of Baxter’s Product and Process Description
(‘PPD’). Mr Justice
Pumfrey refused the application, stating in effect that Abbott had been in
possession of the relevant information for some time (in an Abbreviated
New Drug Application which they had neglected to show their own experts).
Comment
An unusual aspect of this case is that the patentee, Abbott
has not counter-claimed for patent infringement. Instead, as Mr Justice Pumfrey has pointed
out, the pleadings filed by Abbott (the Defendant in this case) merely state:
“The
Defendants raise no positive case of infringement within this action. The
burden is on the Claimants to prove non-infringement of claims 2 to 4 of the
patent.”
Thus, Abbott would presumably not be entitled to the
remedies which would normally flow from a finding of infringement (such as an
injunction or damages), and would be unable to later commence infringement
proceedings in relation to the same product or process (due to Issue Estoppel or Res Judicata).
The question arises as to why Abbott have taken this course
of action and Mr Justice Pumfrey’s comments on Abbott’s
difficulty in proving infringement shed some light:
‘It is plain that Abbott have confronted
difficulties in attempting to demonstrate that Baxter’s sevoflurane is
stabilised by water, and it is equally obvious from the emphasis on the epoxy
lining to the aluminium container that every possible source of Lewis base
has been investigated in the hope of demonstrating infringement. The difficulty
is made still more clear by Abbott’s steady refusal to make any assertion of
infringement in the present proceedings, stating themselves content to rely
upon the burden of proof.’
For a
link to the IPKat’s article on this case from 3 May, click here.
The Australian Federal Court has just issued new Federal
Court Rules which codify the procedure for obtaining Marevaand Anton Piller orders.
Click here for a copy of the new Federal Court Rules.
Take home
These Orders may be obtained ex parte, impose draconian requirements on
the Defendant and are not handed down lightly by the Courts:
a MarevaOrder (from Mareva Compania Naviera SA v International Bulkcarriers
SA (The Mareva) [1975] 2 Lloyd’s Rep 509) is
intended to freeze the assets of the party subject to the Order with the aim
of preventing
frustration or abuse of the process of the Court (ie,
so that they don’t move the assets out of the jurisdiction of the
Court);
an Anton Piller
Order (from Anton Piller KG v Manufacturing
Processes Ltd [1976] Ch 55) is basically a civil search warrant with a
number of important restrictions on the searching party.
This is a great development for
litigants in Australia,
as it creates more certainty and simplifies the process of obtaining these
Orders which are both very prevalent in Intellectual Property
litigation.
The Chief Justice has issued Practice Note
No 23 and Practice Note
No 24 to complement the new Orders (25A and 25B).
Background
For those who are interested,
the Court has power to make such orders (and ancillary orders), under s 23 of the Federal Court of Australia Act 1976
(Cth).
For a leading High Court case on MarevaOrders – Cardile v LED Builders Pty Limited [1999] HCA 18 (6 May
1999)
For a recent Full Federal Court decision concerning
Anton Piller
Orders — see: Maniotis v J H
Lever & Co Pty Ltd ACN 008 220 666 [2006] FCAFC 7 (17 February 2006)
On 27 April 2006, Justice Heerey of the Australian Federal
Court handed down his decision in Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty
Ltd (No 4).
Take home
To quote Justice Heerey “Cadbury does not
own the colour purple and does not have an exclusive reputation in purple in
connection with chocolate in Australia. Darrell Lea is entitled to use purple, or
any other colour, as long as it does not convey to the reasonable consumer
the idea that it or its products have some connection with Cadbury.â€
Comment
In his decision, Justice Heerey
reproduced a long list of confectionary and chocolate products packaged in
the colour purple. It appears that a
number of the listed products have been launched since Cadbury first started
attempting to enforce IP Rights in purple.
One might suggest that this is
copying which underscores the value of the colour to Cadbury and reinforces
their enforcement attempts. However,
on another view, perhaps the competitor companies (such as Darrell Lea and
Nestlé) have moved to make it more difficult for Cadbury to build a monopoly
in the colour by adding to the number of purple products on the market and
detracting from its ability to distinguish the product as coming from Cadbury.
In an unusual step, Darrell Lea
has foreshadowed that they will make an application for indemnity costs
against Cadbury.
Background
In the latest of a long list of attempts by Cadbury to assert
intellectual property rights in the colour purple, Cadbury had sued Darrell
Lea pursuant to allegations of misleading and deceptive conduct in contraventions
of ss 52 and 53(c) and (d) of the Trade Practices Act and the common law tort of
passing off.
It was common ground between
the parties that Darrell Lea products in fact have no sponsorship, approval
or connection with Cadbury or its products, and that Darrell Lea’s
business is entirely unconnected with that of Cadbury. Consequently, the critical issues in this
case related to the representations that, Darrell Lea by its conduct would
convey to a hypothetical ordinary and reasonable member of the class
constituted by prospective purchasers of chocolate products: Campomar v
Sociedad Limitadav Nike International Limited (2000) 202 CLR 45 at [102]-[105].
The court held that the
evidence warranted the following findings (amongst others):
There is wide awareness amongst
Australian consumers of the use by Cadbury of a dark purple colour (i) in
connection with the marketing, packaging and presentation of certain
chocolate products particularly Cadbury Dairy Milk and other block milk
chocolate products, and (ii) as a corporate colour.
Cadbury does not have an exclusive
reputation in the use of this dark purple colour in connection with
chocolate. Other traders have, with Cadbury’s knowledge, for many years
used a similar shade of purple. Cadbury has not consistently enforced its
alleged exclusive reputation. In relation to its chief competitor Nestlé,
Cadbury has, for its own commercial reasons, permitted a use of purple in
relation to popular chocolate products.
Cadbury markets many chocolate
products which have little or no purple in their packaging.
Cadbury products, regardless of the
presence or absence of purple in the packaging, always bear the Cadbury name
in a distinctive script.
Cadbury’s use of purple in
marketing advertising and promotion is, and is seen by consumers to be,
inextricably bound up with the well known name Cadbury in its distinctive
script. Cadbury never uses the colour purple in isolation as an indicium of
trade.
The names Darrell Lea and Cadbury are
quite distinct in sound and appearance (especially with the respective scripts
the parties have adopted) and not likely to be mistaken for each other.
Darrell Lea did not adopt the colour
purple with the intention of leading consumers to believe its products were
Cadbury products or that it, or its products, had some kind of association
with Cadbury.
Most of Darrell Lea’s retailing
occurs in premises which its owns or occupies. Other retailing occurs from
separate stands or displays in retail premises, such as newsagents,
pharmacies, convenience stores and video stores. Darrell Lea has only a minor
presence in supermarkets and only, in the past, to a very limited and
transient extent in the major chains. Its products are not presented for sale
in close proximity to Cadbury’s.
The April 2006 edition of the North Carolina Bar Association
‘IP Links’ Newsletter carries a feature article Steven Gardner
and E. Danielle Thompson Williams of Kilpatrick Stockton
entitled “Basic Framework for Effective Responses to Patent
Trolls”.
The authors advocate an understandably aggressive stance
which is nicely summarized in Bill Heinze’s blog I/P Updates.
Comment
The strategies advocated by Gardner and Williams are not uncommon in
the patent litigator’s toolkit.
However, isn’t there a more long term, strategic approach that
could be taken? Namely — that a
regular, thorough review of the IP landscape relevant to your products and
services would identify the relevant patents well before they are asserted
(or possibly even owned) by the ‘Troll’. If the relevant patents come up on the
radar as potentially relevant to freedom to operate, then presumably their
ownership, status etc would also be investigated at that time. Following this logic to the next step, it
may sometimes be the case that you get the opportunity to acquire the patents
before the troll.
Also — one of the difficulties for a defendant in
proceedings brought by a ‘Troll’ is that counter-suit is very
difficult because the ‘Troll’, almost by definition, will not
have any products or services of their own.
However, given the right factual circumstances, a counter-suit which
should be seriously considered in the USA (where ‘Trolls’
seem to be most active) along with anti-trust, inducement, etc is an
interference proceeding. Again, early
identification of the existence of the relevant patents would make it more
likely that time to copy claims and file the suit would still exist. For the USPTO MPEP section on
Interferences, click here.
What is a
‘Patent Troll’
For anyone who hasn’t yet come across the term, a
‘Patent Troll’ is basically an entity which enforces and licenses
intellectual property without actually making or selling anything. It is now commonly used in the pejorative
due to several high-profile examples of companies buying cheap patent rights
for the sole purpose of suing and extracting license fees from multiple large
players in an industry. Click here for a nice
definition in Wikipedia.
Click here for an excellent article from Jeremy Phillips of the
IPKat Blog explaining why this kind of activity isn’t actually such an
evil thing — “Be kind to
that patent troll, he might just be an inventorâ€.
Click here
for a copy of Bruce Berman’s article from the February/ March 2005
edition of Intellectual Asset Management Magazine on the same point —
‘No more name-calling pleaseâ€.
Click on download button to view the powerpoint presentation.
On 24 April 2006, a Jury in the Northern District of California
awarded Rambus US $306.9 million in damages for patent infringement of all 10
asserted claims of four of Rambus’s patents.
Click here for a copy of the Jury Verdict, here
for Rambus’s press release and here for Hynix’s website.
Background
Rambus has prevailed in the latest round of a complicated
series of patent infringement and antitrust litigation. For those who aren’t familiar with
the memory chip industry, Rambus has previously sued a number of very large
players in that space over allegations of patent infringement.. Click here
for details of their current litigation (including court rulings, opinions
and judgments).
Comment
Rambus’ business model
is focused on creating and out-licensing IP.From an IP Strategy perspective, high-profile litigation is a natural
product of this as it generates further out-licensing opportunities.Another well-known company which has
utilized this strategy is Australian-based Genetic
Technologies Ltd which recently settled its final patent dispute with Applera Corporation.
On 31 January 2006, a Grand Panel of the Japanese
Intellectual Property High Court held that by recycling (refilling and
reselling) Canon’s inkjet cartridges, Recycle had infringed Canon’s
patent number JP 3278410. Click here for a summary of the case in English.
Take home
The doctrine of exhaustion of patent rights under Japanese
law is by no means simple. In essence:
1. Once a patented product is sold in Japan
by the patentee, it is no longer an infringement to use, assign or lease the
product.
2. If the patentee sells a patented product outside
Japan the patentee may
not enforce patent rights in Japan
unless there is an agreement with the direct assignee not to exploit the
product in Japan.
3. Notwithstanding 1 or 2 (above), it is
an infringement to:
a.
reuse or recycle a patented product after its ordinary life (type 1
infringement);
b. modify or replace the whole or part of the components that
constitute an essential part of the patented product (type 2 infringement).
(In this case, type 2 infringement
was found since in recycling the cartridges to their former function, Recycle
restored two features of the cartridges which were held to be an essential
part of the product.)
Facts
Recycle Assist has bought used inkjet cartridges, recycled
and refilled them and imported them into Japan. Recycle conceded that the cartridges in
question fell within the scope of the claims of the JP ‘410
patent. Recycle argued that
Canon’s rights in the patent had been exhausted on first sale of the
cartridges and cited the Japanese Supreme Court in the BBS Case (Judgment of the Third Petty Bench of the Supreme Court
of 1 July 1997, Minshu Vol. 51, No. 6, 2299).
Canon had brought an action for patent infringement and
lost at first instance, appealing to the Grand Panel of the Intellectual
Property High Court. The Court
reversed the first instance judgment and granted an injunction.
Comment
The doctrine of exhaustion of rights in relation to patent
infringement is complicated and varies in sometimes subtle ways from
jurisdiction to jurisdiction. Please
do let me know if you would be
interested in a brief comparative article.
2006 has been a successful year so far for Canon in
enforcing patent rights relating to ink cartridge technology.In March it was confirmed that Canon had
won an appeal to the Higher District Court of Düsseldorfwhich dismissed an appeal by Pelikan Hardcopy Deutschland GMBH and held that Pelikan infringed Canon’s European Patent number EP 0 879 703 in Germany (see Canon’s press release).
On 10 April 2006, Judges Radar,
Schall and Prost of the United States Court of Appeal for the Federal Circuit
handed down their decision in Aventis Pharma SA v
Amphastar Pharmaceuticals [2006] CAFC
– 10 April 2006.
Take home
While Aventis’s failure to disclose the correct
comparative data was material, there was insufficient evidence before the
District Court to base a finding of intent to deceive the USPTO on summary
judgment.
Facts
In the latest round of a Hatch-Waxman paragraph IV dispute,
Aventis appealed a decision of the US District Court for the Central District
of California which granted summary judgment in favour of Amphastar and Teva
and held US Patent No. 5,389,618
and US Reissue Patent No. 38,743
unenforceable. The ‘618 and
‘743 patents claim mixtures of low molecular weight heparins used to
prevent blood clots and cover Aventis’s Lovenox product.
The district court had granted a motion for summary
judgment of unenforceability without holding a hearing and based on repeated
representations by Aventis of patentability based on the purported half-life
of the claimed products. The court
found Aventis at fault for comparing data based on different doses to show an
improved half-life when a comparison of available data using the same doses
actually showed that there was little if any difference between the half
lives of the prior art and the purported invention.
The Court found the omission by Aventis to meet the test
for materiality but held that based on the evidence before the District
Court, it was inappropriate to find an intent to deceive the USPTO on summary
judgment.
The lower court’s decision was reversed and remanded
for further consideration.
Comment
A patent
challenger seeking summary judgment in relation to inequitable conduct will
do well to establish as far as possible an intent to deceive the USPTO.It will always be open to the patentee,
however, to challenge the motion by pointing to any one of a potentially
large number of remaining genuine issues of fact.
You must be logged in to post a comment.