The Düsseldorf Regional Court had to decide whether it is misleading under competition law that the former proprietor of a patent advertises with the fact that there is patent protection for a product (wrongful representation of an article as patent-ed/arrogation of patent), although the patent had expired at the time of arrogation on account of his failure to pay the annual fee, but the patent proprietor was granted a reinstatement in the status quo ante because of the failure to observe the payment date later. Such a reinstatement is possible under German law according to Sec. 123 German Patent Act under certain conditions, if someone was prevented from observ-ing a deadline through no fault of his own, and the failure to observe this deadline results in a legal prejudice according to the statutory provisions.

In the decision dated 5th July 2011 (file no. 4b O 177/10) the Düsseldorf Regional Court initially affirmed a relevant misleading act. Although Sec. 123 of the German Patent Act did not specify how wrongful acts have to be assessed which took place in the period before the reinstatement, the court held that, for reasons of equity, it was justified to assume a misleading act in the present case, because the expiration of the patent was due to an event that took place in the patent proprietor’s sphere of influence, and it was therefore more appropriate and more in keeping with the interests at stake to prejudice the patent proprietor than to retroactively assess the act of use as being lawful. This was because the competitor observing the advertising and the products of its rivals had to rely on the fact that an unlawful state in the sphere of the patent proprietor which was given notice of in a warning letter following a search would not be subsequently eliminated, because the competitor had no influence on it and it was therefore not justified to place the (cost) risk on the competitor.

In addition to that, the Court also confirmed a damages claim on this basis, because the patent proprietor was liable, although the German Patent and Trademark Office had denied a liability on account of the late payment of the annual fee in the context of the reinstatement proceedings. The Regional Court did not assume a binding effect in this respect, on the grounds that the finding that the patent proprietor did not cul-pably miss the period for making subsequent payment of the annual fee, had no influ-ence on the assessment as to whether the patent proprietor can be held liable with respect to the advertisement of a product with a non-existent patent. Seeing that the defendant was a company specialised in the art, the Court affirmed negligence and in addition to that also intent as of receipt of the warning letter, because the defendant had not taken any measures to stop the unlawful advertising.

The proceedings are not final. The proceedings before the Düsseldorf Higher Regional Court bear the file number I-2 U 92/11.

Gemcitabine is part of the family of nucleosides which are compounds constituted of two chemical parts: a sugar bound to a nucleobase through a glycosidic bond. As any nucleoside can have two isomers (the alpha-anomer and the beta-anomer) depending on the orientation in space of the glycosidic bond, it must be clarified that Gemcitabine is a nucleoside of the beta-anomer type where the nucleobase is situated above the sugar part. This beta-anomer constitutes Gemcitabine and presents a therapeutic effect whereas the alpha-anomer, where the nucleobase is situated below the sugar part, has no therapeutic effect.

Gemcitabine is used as an antiviral and antineoplastic medicine and marketed in France by the U.S. company Eli Lilly (hereinafter referred to as Eli Lilly) under the trade name Gemzar.

Eli Lilly has already been the holder of the basic patent EP 122 707, covering Gemcitabine, which has been the subject-matter, in France, of an SPC expired in March 2009.

But Eli Lilly is also the holder of European patent EP 0 577 303 whose subject matter is a “stereoselective glycosylation process” for preparing 2’-deoxy-2,2-difluoro-beta-nucleosides, which include Gemcitabine.

The subject-matter of the patent is a synthesis process of an beta-anomer (Gemcitabine) enriched mixture consisting in using an alpha-anomer enriched starting carbohydrate, including a mesilate leaving group, which reacts with another compound, a nucleobase, through a glycosylation reaction performed by means of a second-order nucleophilic substitution (SN2; a nucleophilic substitution may only be of two types, SN1, first-order nucleophilic substitution, or SN2, second-order nucleophilic substitution), and in deblocking to achieve a mixture containing more beta-anomer (Gemcitabine) than alpha-anomer by the effect of an anomeric inversion.

That is the reason why the patented process is a “stereoselective glycosylation process”: it fundamentally consists in a glycosylation reaction aiming at a high yield of beta-anomer, at producing preferentially a certain type of anomer, an alpha-to-beta ratio greater than 1:1. This idea of an improved yield does not appear in claim 1 but in the description so that the Cour d’Appel of Paris is of the opinion that any product in which the beta-to-alpha anomeric ratio is greater than 1:1 falls within the scope of claim 1.

The company Sandoz France (hereinafter referred to as Sandoz) produces and places on the French market, as holder of the marketing authorisation, generic substitutes of the Eli Lilly products.

Considering that, using the new invention covered by patent EP 0 577 303 as pretext, Eli Lilly retained its monopoly of use arising from the patent covering the Gemcitabine product fallen in the public domain, Sandoz summoned Eli Lilly before the Tribunal de Grande Instance of Paris for the revocation of the French designation of European patent for lack of inventive step.

The Tribunal de Grande Instance of Paris having dismissed, on 2 July 2010, Sandoz’s claim for invalidity of the claims of the European patent EP 0 577 303, the latter lodged an appeal before the Cour d’Appel of Paris, maintaining again the lack of inventive step but maintaining also the invalidity of the patent for insufficient disclosure.

In a 13 January 2012 decision, the Cour d’Appel of Paris affirms the judgment handed down by the Tribunal de Grande Instance of Paris, decides that the patent claims involved an inventive step and dismisses the claim for invalidity of the patent for insufficient disclosure.

The decision is very interesting because of its very detailed appraisal of the inventive step.

From a pure legal point of view, it firstly recalls – and constitutes so an example in this respect – that, in contrast to the assessment of novelty which shall only be based on a comparison of the claimed invention with each individual item from the prior art (see EPO, Case Law of the Boards of Appeal of the European Patent Office, 6th ed. 2010, p. 109), the assessment of inventive step may be based on each item or a combination of items from the prior art. In the present decision, inventive step has been assessed over each Hertel, Chou and Howell document but also over the Chou and Howell combination.

It may be underlined also that the Cour d’Appel has applied the “problem and solution approach”, recommended and applied within the EPO, to assess inventive step. The formal divisions of the decision even reflect the successive steps of the problem and solution approach as defined by the case law of the Boards of Appeal of the European Patent Office.

So, this problem and solution approach (see EPO, Case Law of the Boards of Appeal of the European Patent Office, 6th ed. 2010, p.  162) consists essentially of:

a) identifying the “closest prior art”, (“4 – The state of the art at the priority date of the patent” which states that the litigants agree that the publications disseminated by Mr. Hertel and Mr. Chou, relating to the production of Gemcitabine, were the closest prior art at the priority date of the patent in question and that Sandoz also adds the Howell document, relating to the synthesis of a type of nucleosides other than Gemcitabine).

b) assessing the technical results (or effects) achieved by the claimed invention when compared with the “closest state of the art” established, (“4 – 1 The Chou and Hertel documents”; “4 – 2 The Howell document”)

c) defining the technical problem to be solved as the object of the invention to achieve these results, and (“5 – On the technical problem to be solved”)

d) examining whether or not a skilled person, having regard to the closest state of the art, would have suggested the claimed technical features in order to obtain the results achieved by the claimed invention (“6 – On the inventive step of claim 1”; “6 – 1 Inventive step over the Hertel document? ”; “6 – 2 Inventive step over the Chou document?”; “6 – 3 Inventive step over the Howell document?”; “6 – 4 Inventive step over the Chou and Howell combination? ”).

About this last step of the problem and solution approach, the Cour d’Appel also draws from the case law of the Boards of Appeal of the European Patent Office, the idea that “the point is not whether the skilled person could have arrived at the invention by modifying the prior art, but rather whether, in expectation of the advantages actually achieved (i.e. in the light of the technical problem addressed), he would have done so because of promptings in the prior art” (EPO, Case Law of the Boards of Appeal of the European Patent Office, 6th ed. 2010, p. 177). The person skilled in the art, in the present case, should be a specialist in organic chemistry, more particularly in the field of sugar chemistry, and still more particularly in that of the stereoselective synthesis of nucleosides. He must possess strong basic general kwowledge in these specialities without however being a researcher who devotes his activities to cutting-edge research.

From theory to the practice of the present case:

1) firstly, the Cour d’Appel confirms that the person skilled in the art would not have found, without himself engaging in any inventive step, in the Hertel document any incentive to achieve the subject-matter of claim 1. The court argues that the Hertel document differed from the claimed invention in the starting product which is a sugar mesilate in an alpha-to-beta anomeric ratio of 1:1, the protecting groups of the sugar, the nucleophilic substitution mechanism of the SN1 type, the final alpha-to-beta anomeric ratio of 4:1 (and then not greater than 1:1) and that the person skilled in the art, who was aware of the Hertel document, would have first sought to improve the synthesis process of Gemcitabine beginning by modifying the protecting groups of sugar, which was done in the Chou document with only an anomeric ratio of 1:1, as a result.

2) the Cour d’Appel then confirms that the person skilled in the art would not have found, without himself engaging in any inventive step, in the Chou document any incentive to achieve the subject-matter of claim 1. The Chou document described the production of a 2’-deoxy-2,2-difluoronucleoside through a nucleophilic substitution reaction using a leaving group sulfonyloxy such as mesilate, through a process which led to an alpha-to-beta anomeric ratio of 1:1. The Chou document differed from the claimed invention in its starting product which was not alpha-anomer enriched by a stereoselective process, the nucleophilic substitution mechanism (SN1) and the final product (a mixture with an alpha-to-beta anomeric ratio of 1:1). To achieve the invention from this document, the person skilled in the art should first enrich the starting sugar mesilate to distinguish it from the alpha/beta mixture in a 1:1 ratio, then perform glycosylation by the SN2 path to obtain a beta-anomer enriched nucleoside of the Gemcitabine type. However, the person skilled in the art did not have at his disposal, at the priority date, a stereoselective synthesis process to obtain an alpha-anomer enriched starting product – a sugar mesilate – the processes used before to achieve it being long, complex and costly. Moreover, Eli Lilly through the stereoselective process leading to an enrichment in starting carbohydrates in the form of alpha-anomer, which it had patented on the same day than the process in question, had opened up the way to an SN2. Since the Chou document only taught the SN1 path, the person skilled in the art would not have been encouraged (neither by the teaching of the Chou document, nor by the alpha-anomer enrichment processes at his disposal at the priority date) to exploit the SN2 path. The person skilled in the art would not have been encouraged to use a mesilate starting group to obtain Gemcitabine by the SN2 path or, if he had wanted to choose this path, he would have selected a leaving group other than mesilate, a halogenate group, bromine or chlorine for example.

3) the Cour d’Appel then also confirms that the person skilled in the art would not have found, without himself engaging in any inventive step, in the Howell document any incentive to achieve the subject-matter of claim 1. The Howell document effectively sought the preferential formation of beta-anomer through an SN2 like in the patent. However, besides the fact that the Howell process did not apply to the synthesis of Gemcitabine, the alpha-anomer enriched starting carbohydrate showed two differences: the carbohydrate in the Howell document has a single fluorine atom at the C-2 position while, in the patent, it has two fluorine atoms at that position; the bromine atom constitutes the leaving group in the prior art document while a sulfonyloxy or sulfonate or mesilate is part of the starting product in the claimed invention. And the person skilled in the art knew that the sulfonyloxy groups, including mesilate, were excellent leaving groups, better than halogens such as bromine or chlorine, and he also knew that their use led to an SN1 reaction, which did not encourage him to use them since he knew that they did not make it possible to obtain an SN2 reaction.

4) the Cour d’Appel finally confirms that the person skilled in the art would not have found, without himself engaging in any inventive step, in the Chou and Howell combination any incentive to achieve the subject-matter of claim 1. According to Sandoz, in order to obtain an excess of beta-anomer, the person skilled in the art would have been encouraged to apply the SN2 reaction described in the Howell document to the Chou starting products (mesilate) to achieve the claimed invention. The Cour d’Appel does not approve this allegation. It considers that the mesilate leaving group of the Chou document is not suited to solving the technical problem of the patent, which is to obtain Gemcitabine in an anomeric ratio greater than 1:1, the person skilled in the art would have then contemplated taking the halogen leaving group taught by the Howell document, but would not have achieved the subject-matter of the claim since he would have missed the first step, which is the stereoselective production of the (alpha-anomer enriched) sugar mesilate as the starting product. It also considers that Professor Beau’s assertions, underlined by Sandoz, rest on the mere supposition that the person skilled in the art could have used the information acquired on the monofluorated derivatives (Howell) to modify the conditions of the glycosylation reaction in the desired direction, but do not contain sufficient indications to explain why he would have been encouraged to implement them or if he would have done so in the hopes of finding a solution to the posed technical problem, which is to obtain a beta-anomer enriched nucleoside by using the SN2 path from an alpha-anomer enriched carbohydrate of a defined formula.

Claim 1 involving an inventive step, claims 2 to 14, all directly or indirectly dependent of claim 1, should also be considered as involving an inventive step.

Finally, the decision of the Cour d’Appel is also interesting on the insufficiency of disclosure which Sandoz has claimed for the very first time in appeal. The court also dismisses this claim because of the indications and examples given by the description (“Consequently, the description contains sufficient information to enable the person skilled in the art to carry out the invention”) but also because of the failure of Sandoz, on which was the onus of proof, to provide “beyond a reasonable doubt” the proof of the insufficiency of disclosure. The court introduces this standard (“beyond a reasonable doubt”) which is not familiar to French evidence law and rather seems directly taken from the case law of the Boards of Appeal of the European Patent Office where it is a familiar standard of proof (see EPO, Case Law of the Boards of Appeal of the European Patent Office, 6th ed. 2010, p. 73, 87-91, 290, 306, 373, 429, 499, 558-561, 564, 602, 651, 677, 942). This requirement of a proof “beyond a reasonable doubt” is nothing less than the requirement of a “degree of high certainty” “close to absolute conviction”.

And in the present case, the Cour d’Appel notes: “If each party is responsible for proving, in accordance with the law, the facts necessary to the success of its claim, the party which maintains that the invention is not sufficiently disclosed should provide proof, on the balance of probabilities, that the person skilled in the art would be unable to carry out the invention based only on his scientific and technological knowledge, it being specified that proof should be provided beyond a reasonable doubt and that the benefit of the doubt should be given to the patent holder”.

Original French decision.
English translation .

Author: Nicolas Bouche, Head Legal Research and Literature, Véron & Associés, Paris, France

America Invents Act Effect Dates
Different provisions of the Act take effect at different times, with some effective immediately and some not taking effect until March 16, 2013. The “default” effective date is September 16, 2012, with changes applicable to patents issued on or after that date.

The following provisions took effect September 16, 2011:

• Ban On Tax Strategy Patents—applicable to pending applications.
• Ban On Patents To A Human Organism—applicable to pending applications.
• Change to Inter Partes Reexamination standard from “substantial new question of patentability” to “a reasonable likelihood that the requestor would prevail” with respect to at least one of the challenged claims.
• Appeal of Board decisions in ex parte reexamination to Federal Circuit only—applicable to pending and future Board appeals.
• Changes to requirements for standing to bring False Marking cases and marking requirements—applicable to pending proceedings.
• Limitations on joinder of defendants in infringement actions—applicable to all actions commenced on or after September 16, 2011.
• Best Mode violation no longer a basis for invalidating a patent—applicable to proceedings commenced on or after September 16, 2011.
• Changes to Prior Use Defense—applicable to any patent issued on or after September 16, 2011.

The following changes took effect on September 26, 2011:

• A 15% surcharge was added to most patent-related fees, including patent maintenance fees.
• A “Track I” program was implemented for fee-based expedited examination. (This program has since been extended to applications in which a Request for Continued Examination has been filed.)

The following changes took effect on November 15, 2011:

• An “electronic filing incentive” was implemented to charge a $400 fee for new U.S. applications (but not PCT national stage applications) that are not filed electronically.

The following changes will take effect on September 16, 2012, most with retroactive effect:

• Filing By “Applicant”—applicable to any application filed on or after September 16, 2012.
• Preissuance Submissions by third parties—applicable to any pending application.
• Citation of Prior Art and Written Statements in patent files
• Revised Ex Parte Reexamination procedures
• New Inter Partes Review procedures (replacing current Inter Partes Reexamination procedures)
• Transitional Post-Grant Review procedures for Business Method Patents—applicable to specifically defined ”covered business method patents.”
• Elimination of requirement for no “deceptive intent” to correct errors in inventorship, to correct errors in a reissue application, or to obtain a retroactive foreign filing license—applicable to all proceedings commenced on or after September 16, 2012.

The following changes take effect March 16, 2013:

• First-Inventor-To-File—applicable to any application with a single patent claim that has an effective filing date of March 16, 2012 or later, and to all applications that claim priority to such applications.
• New Post-Grant Review procedures — available for any patent encompassed by the new first-inventor-to-file provisions.
• Phasing out of Interference proceedings in favor of new Derivation proceedings—only the new derivation proceedings will be available to applications where all patent claims have an earliest effective filing date of March 16, 2013 or later.

The USPTO Rulemaking Process

While the America Invents Act sets forth the new law, the USPTO will promulgate regulations that will set forth detailed requirements and procedures to implement the many different changes. As set forth on the USPTO’s America Invents Act Implementation website, the USPTO will issue proposed rules and solicit written comments from the public during 90-day comment periods. The USPTO will take the written comments into consideration, and will issue “final” rules at least 30 days before the relevant statutes and rules take effect. This “notice and comment” period is somewhat unique to U.S. administrative law, and gives the public an important opportunity to shape the rules that will govern U.S. patent practice for years to come.

The USPTO has issued its proposed rules to implement a number of the changes that take effect on September 16, 2012, including:

• Changes to the requirements for the “Inventor’s Oath or Declaration”
• Rules to implement procedures for “Preissuance Submissions by Third Parties”
• Rules to implement procedures for the “Citation of Prior Art and Written Statements” in patent files
• Rules to implement procedures for “Supplemental Examination” by the patent owner

(You can find my articles providing detailed summaries of these proposed rules at PharmaPatentsBlog.com)

The USPTO has yet to issue proposed rules to implement the new Inter Partes Review and Post-Grant Review proceedings, but is expected to do so very soon. The USPTO is expected to issue proposed rules to implement the First-Inventor-To-File and Derivation provisions later in 2012.

The Months Ahead

The recent and upcoming changes to U.S. patent law are far-reaching, and will impact filing, prosecution, litigation and licensing strategies. While the international patent community can look to U.S. colleagues for guidance, international stakeholders should not wait to understand the changes that lie ahead, and should begin now to develop strategies for pursuing and protecting their U.S. patent rights under the new regime.

The House of Lords (now the Supreme Court) recently considered the doctrine in the leading case on obviousness of Conor v Angiotech [2008]. In that case Lord Hoffmann stated that “the notion of something being obvious to try was useful only in a case in which there was a fair expectation of success. How much of an expectation would be needed depended on the particular facts of the case.”

In this case, the patent in question claimed an anti-parasite composition (in particular a flea lotion) for treating pets. The composition was designed for localised, or “spot-on”, application to the animal’s coat, after which the composition spreads over the animal’s whole body by non-systemic mechanisms, although these were poorly understood at the priority date. The prior art described an anti-parasitic composition with the same active ingredient but in spray form, to be sprayed all over the animal’s coat.

The party seeking revocation argued that it was obvious to decide to try to develop the spot-on formulation once the efficacy and success of the spray were known. Given that the spray functioned non-systemically, it was obvious to try formulating a non-systemic spot-on and a formulator would be able to come up with a formulation falling within the claim of the patent. The patentee argued that the available spot-ons for pets at the priority date were not perceived as good products; that even if the person skilled in the art had thought to try a spot-on product that it would be worse than the spray; and that there was no scientific basis for supposing that the spot on formulation would distribute non-systemically from the ‘spot’ of application.

Following the line of authorities listed above, Floyd J set out his view on the correct approach to the question of inventive step in a case like this:

“(i) There is but one statutory question: was the invention obvious? It is to be answered by reference to the non-exhaustive list of factors identified by Kitchin J in Generics v Lundbeck , including whether it was obvious to try the invention as a solution to a technical problem, as well as the nature of the invention itself.

ii) “Obvious to try” is not an independent ground of invalidating a patent under the statute, but one of a variety of factors considered in an overall assessment of inventive step. It must be coupled with a fair expectation of success, the degree of success necessary depending on the other factors present in the individual case.

iii) Where an invention is claimed plausibly in terms that it would achieve a technical effect, it is correct to ask whether it was obvious that the invention would achieve that effect, and wrong to ask whether the invention might achieve that effect.”

Floyd J held that the question for the person skilled in the art to consider was whether the spot-on formulation would distribute from the point of application over the surface of the skin. That person would only consider a spot-on formulation worth trying if they had a fair expectation of success. In the absence of any common general knowledge theory as to how non-systemic spot-ons worked, the person skilled in the art would not have a sufficient expectation of success to render the invention obvious as there was “no basis for predicting that that result [the spreading of the parasiticide over the animal’s coat] could be achieved”. This was even though other anti-parasitic compounds had worked in spot-ons. So despite the fact that patentee had not encountered any difficulties in formulating the spot-on composition, the patent was upheld as involving an inventive step.

In the case in question it was ruled that it was obvious to apply a known concept for sending instructions to a SIM card of a mobile phone via special Short Message Service (SMS) messages that use the so-called SIM application toolkit to the problem of sending information elements of an email via SMS.

The fact that theoretically there is a large multitude of possible solutions different from the chosen one does not change the conclusion, because it is known to a skilled person to be undesirable to leave the context of a standard, as suggestions that require fundamental changes in a standard have little chance of being accepted. Thus, the wish to find a practical solution would lead the skilled person to concentrate on approaches already suggested in the standard.

The FCJ identified three solution paths from the standard for the identified objective problem, but did not accept the patent proprietor’s argument that the general prior art suggested one path in particular. Rather, it was found that the skilled person would have considered each of the paths, as it was recognizable that each had certain advantages and disadvantages.

This new decision is well in line with the FCJ’s case law on patentability, in which it is held that in order to conclude a lack of inventive step, it must be shown that a skilled person was not only able to identify a given problem, but in addition had certain incentives and hints towards the path chosen by the claimed invention (‘Betrieb einer Sicherheitseinrichtung’, April 30, 2009, Xa ZR 92/05). Namely, it has now been added that when dealing with inventions that relate to standards, an incentive to look into solution paths suggested by the standard itself can be assumed. On the other hand this also means that in future cases a plaintiff arguing a lack of inventive step of a standard related invention and drawing upon solutions outside of the standard context will have to take particular care to demonstrate why the skilled person had an incentive to look beyond the standard.
Georg Siegert

Motorola obtained a first instance judgement against Apple, because iPhone and iPad infringe the European patent No. 1 010 336 declared essential to the GPRS standard by ETSI (European Telecommunications Standards Institute).

Apple’s defence of a compulsory licence under anti-trust law failed.

The German Federal Court of Justice recognised in principle that a defendant sued for patent infringement may put forward the defence that the patentee is abusing a dominant position on the market by refusing to conclude a FRAND (fair, reasonable and non-discriminatory) licence agreement (judgment of 6 May 2009, KZR 39/06 – Orange Book Standard). An abuse of the dominant position of the patentee only applies, however, if the party wishing to obtain a licence has made the patentee an unconditional offer to conclude a licence agreement, which the patentee for its part may not refuse without as a result unreasonably obstructing the party seeking a licence. Furthermore, the licence seeker who already begins using the invention protected by the patent before his offer is accepted must also anticipate his contractual obligations and behave as though the pat¬entee had already accepted his offer. This includes in particular his obligation to render account, and to pay – or at least deposit – the resulting royalties.

The District Court (Landgericht) Mannheim has now decided that the licence seeker is obliged to acknowledge his obligation to pay damages for use actions performed in the past, if he used the patent without making the patentee an offer satisfying the criteria laid down in the Orange Book Standard decision (judgement of 9 December 2011, court ref.: 7 O 122/11). Apple had not acknowledged its obligation to pay damages on the merits, but merely undertook to conclude a licence agreement, to make a “one-off payment” (the nature of which was not specified), together with interest, for producing, offering, distributing on the market, using and importing and possessing the licensed products. Motorola was merely supposed to be able to reserve the right to assert higher claims for damages for those actions which exceed the one-off payment. In that case, however, Apple would not abandon its attacks on the validity of the patent in suit. The court decided that the patentee is not obliged to accept such an offer, and is thus behaving in compliance with anti-trust law if he rejects the offer.

Apple’s appeal is pending with the Oberlandesgericht Karlsruhe (court ref.: 6 U 136/11). It will be interesting to see whether the decision will be confirmed on appeal.

Eike Schaper, rospatt osten pross

Click here for the full text of this case. A summary of this case will be posted on http://www.KluwerIPCases.com.

Click here for the full text of this case. A summary of this case will be posted on http://www.KluwerIPCases.com.

A summary of this case will be posted on http://www.KluwerIPCases.com.