France is an attractive jurisdiction in which to bring a claim for patent infringement, not least because of the powerful 'saisie-contrefaçon' mechanism that enables claimants to gather evidence ex parte, which can then be used in parallel infringement proceedings in other jurisdictions.
The Paris courts have exclusive jurisdiction to hear both validity and infringement claims, and these cases are heard by specialist judges. Recent developments in French patent litigation include both procedural and legal changes. As regards procedural changes, the major change relates to preliminary injunctions, which appear to be less difficult to obtain than a few years ago. The Paris courts have also increased the amount of the awarded damages. As regards legal developments, a new bill (the PACTE law) has recently modified the landscape of patent law.
II TYPES OF PATENTS
The French Intellectual Property Code (IPC) provides three types of titles that protect inventions and confer upon their owners an 'exclusive right of exploitation'. These are patents, utility certificates and supplementary protection certificates. An invention can be protected under one of these titles if the relevant patent, utility model or supplementary protection certificate is delivered by the French Intellectual Property Office (IPO).
French national patents are granted for inventions that are new, inventive and capable of industrial application. Such patents last for 20 years.
Under French law, various fields of inventions are expressly excluded from patentability, including:
- the human body (and notably the total or partial sequence of a gene);
- methods of surgical or therapeutic treatment of the human or animal body and diagnostic methods applied to the human or animal body; and
- inventions whose commercial exploitation would be contrary to the dignity of the human person, public policy or morality.
Contrary to the case law of the European Patent Office (EPO), the patentability of a dosage regime remains unsettled. Although one decision indicated that a particular dosage could be patented where the purpose of such dosage is to achieve a specific technical effect,2 it is usual for patent applications for dosage regimes to be rejected to allow doctors freedom and flexibility in their provision of treatment.3
The PACTE4 law provides some very significant changes with respect to the examination and opposition proceedings before the IPO. Indeed, it will notably introduce the reinforcement of the examination process by the IPO, which will be entitled to assess inventive step of French patent applications5 and an opposition procedure before the IPO, so that the latter can review the main grounds of validity (including inventive step).6
The IPO will continue to verify that the application conforms to other classical substantive conditions: the application should relate to a technical invention, respect the principle of unity of the invention, and the claims should be based on the description. Once this examination has been carried out, the IPO provides a search report to the applicant that lists patents and documents relevant to the invention that is the subject of the application, along with an indicative opinion on the patentability of the invention. The applicant then has the option to respond and amend its claims. Following any submissions or amendments from the applicant in response to the IPO's first search report, the IPO will grant or reject the application.
France is a party to the European Patent Convention (EPC) and can consequently be a designated jurisdiction in a European Patent.
France is a party to the Patent Cooperation Treaty (PCT) and can be designated in a PCT application, as a member of the EPC.
ii Utility certificates
Utility certificates are issued by the IPO for six years, without the need for a search report. However, such report will be required if infringement proceedings are initiated.
A patent application can be converted into a utility certificate application. The PACTE law provides that a utility certificate application will last for 10 years and can be converted into a patent application.7
iii Supplementary protection certificates (SPCs)
SPCs are governed by Regulation (EC) No. 469/2009 of 6 May 2009 concerning the supplementary protection certificate for medicinal products.8
SPCs can be filed at the IPO by any owner of a patent that has effect in France and that relates to:
- a medicinal product;
- a process for obtaining a medicinal product;
- a product necessary for the production of that medicinal product; or
- a process for the manufacture of such a medicinal product, and that is the subject of a marketing authorisation (MA).
SPCs must be filed within six months after the grant of the first MA (or within six months of the grant of the patent if the MA is granted before the patent).
The IPO has implemented both the Seattle Genetics and the Incyte Corporation decisions of the European Court of Justice,9 regarding the definition of the date of the first MA in the Community (notification date).10 However, in the case of a French MA, the starting date of the six-month time limit is still the date on which the MA is granted.11
SPCs enter into force once the basic patent expires. They last for the duration specified in Article 13 of Regulation (EC) No. 469/2009, and up to a maximum of five years.12 The maximum term of an SPC can be extended by six months if the medicinal product obtains a paediatric extension.
Several questions regarding SPCs remain unsettled. The question of whether an SPC can be granted for a new application or new formulation of an active ingredient when the latter is already the subject matter of a previous SPC remains open following the Abraxis decision.13 The scope of protection of an SPC covering a combination of active ingredients has also generated significant litigation in France.14
New Regulation (EU) No. 2019/933 entered into force on 1 July 2019 and modified former Regulation (EC) No. 469/2009 by introducing waivers to the protection conferred by an SPC. These waivers allow for the manufacturing of medicinal products and all 'related acts', within the territory of protection of an SPC, for holding and export (outside the EU) purposes. The notion of 'related acts' being undefined in the regulation, we may expect some litigations in the near future on this topic.
III Procedure in Patent Enforcement and Invalidity Actions
i Competent jurisdictions
The Paris courts have exclusive jurisdiction to hear civil actions relating to patents (which include infringement and invalidity proceedings).
ii General procedural aspects
The burden of proof (in both infringement and nullity actions) rests with the claimant. The claimant's writ of summons must contain detailed arguments in law and in fact, so that the Court can form a judgment by itself. A case management judge sets the timeline of the proceedings and it is typical for both sides to file two or three briefs. Once the case is ready to be heard, the instruction is closed, which means that the parties can no longer exchange any brief or exhibit, and a final oral hearing is set. Hearings generally last between three and five hours, depending on the complexity of the case.
Infringement and nullity can be dealt with during the same hearing, as both can be invoked as counterclaims (unless they are time-barred, in which case nullity could be raised only on an exception basis, namely inter partes).
The claims of a patent can be amended during the proceedings, even throughout an appeal.
The total average length of first instance proceedings is between 18 and 24 months. Appeals last for a similar length of time. In cases where urgency is demonstrated within an ex parte request, a summons to appear on a fixed date under special emergency rules can be authorised to obtain a quick judgment on the merits (approximately five to six months). This is rarely sought but has been attempted in the context of the revocation of a patent and a declaration for non-infringement.15
Summary proceedings may last between three and five months in first instance (and around six months on appeal).
iii A unique tool: the saisie-contrefaçon
Infringement can be proved by any means, for example a bailiff's report or a saisie-contrefaçon. Unlike litigation in the United States or the United Kingdom, French proceedings do not include discovery or disclosure and there is no incentive for a party to admit or concede any points (for example, there is no cost consequence). As such, any affirmation must be proven by written evidence.
The saisie-contrefaçon is a very specific and efficient probative measure, which must be carried out with caution. It is performed as a first step in almost all infringement proceedings. It allows any claimant or potential claimant to instruct a bailiff to enter any location and write a detailed description of the alleged infringing product (with or without the taking of samples) or process. The bailiff may also be assisted by experts (for example, patent attorneys) designated by the claimant.
To perform a saisie-contrefaçon, the claimant must obtain an order from the president of the Paris Court of First Instance by way of an ex parte request. The order should specify very precisely the scope of the bailiff's mission.16
The claimant only needs to prove that he or she is entitled to bring an infringement action (i.e., that he or she is the owner or exclusive licensee) and that the patent is in force (i.e., that annual fees have been duly paid). The Paris Court of Appeal recently recalled that it is not necessary to prove infringement to obtain permission to carry out a saisie-contrefaçon, because the exact purpose of the saisie-contrefaçon is to determine whether an infringement has occurred and to what extent.17 However, bringing 'reasonably available evidence of infringement' is still required.18
Challenging the validity of saisie-contrefaçon has become a 'national sport', which has given rise to a wealth of case law. Alternatives such as bailiff reports can be used, but case law around the validity of such alternatives is very strict.
Both the ex parte request and the order for a saisie-contrefaçon must be notified to the seized party before the commencement of the saisie-contrefaçon.
Once the saisie-contrefaçon has been performed, the requesting party must bring an infringement action on the merits within a month. If it fails to do so, the saisie-contrefaçon can be annulled, without prejudice to any compensatory damages that the seized party may claim for any losses incurred.
The seized party also has the ability to challenge or modify the order or request its withdrawal in summary proceedings. It can also seek a court order to protect the confidentiality of seized material.
To ensure that seized material is kept confidential, 'confidentiality clubs' may be established between the lawyers and patent attorneys of each party, subject to non-disclosure agreements being entered into by the participants.
iv Right of information
The claimant has a right to request any documents and information necessary to determine the origin and distribution networks of the alleged infringing goods or processes. This right can be exercised even if the claimant has not applied for or performed a saisie-contrefaçon.
The Supreme Court has ruled that the right of information could also be used in acquiring documents and information to determine the extent of the infringement and to refine claims for damages.19
In practice, this right is generally granted once a judgment ruling on infringement has been rendered and damages are then assessed through further separate proceedings before the same judge based on the information disclosed.
v Standing to sue
Standing to initiate an infringement action
Infringement proceedings must be initiated by the owner of a granted patent or patent application. In the latter case, the action will be stayed until the patent is granted.
If the patent is co-owned, each of the co-owners may initiate infringement proceedings for its own benefit but it must inform the other co-owners, unless otherwise provided in the co-ownership agreement.
If the patent has been assigned, the assignee will only be able to act if the assignment agreement has been registered at the IPO and such registration has been published. Further, unless expressly agreed upon between the parties, the assignee cannot claim damages for infringing acts that happened prior to the publication of the assignment. Such situation may be regularised until the Court has ruled.20
The beneficiary of an exclusive exploitation right (i.e., an exclusive licensee) may, unless otherwise stipulated in the licence agreement, initiate infringement proceedings if, after formal notice, the patent owner does not exercise that right. A non-exclusive licensee is entitled to intervene in the infringement proceedings to obtain compensation for its own prejudice (unfair competition).
Order No. 2018-341 of 9 May 2018 (that will enter into force together with the agreement on the Unified Patent Court) will modify those provisions, so that the exclusive licensee can initiate an infringement action unless otherwise provided for in the licence agreement, and the non-exclusive licensee can initiate an infringement action if expressly allowed in the licence agreement (both subject to prior information to the patent holder).21
Standing to initiate a nullity action
In a nullity action, the claimant must demonstrate that the patent is likely to hinder its business activities.
vi Stay of proceedings
A stay of proceedings is automatic when the action is based on a patent application but is optional in other situations. A common example of optional stay is when the validity of a patent is about to be adjudicated upon, for example, by the EPO or in a parallel nullity action.
A party seeking a stay must file a motion at court and attend a hearing, otherwise the application may be ruled as inadmissible.22 In determining whether to order a stay of proceedings, the focus must be on ensuring a sound administration of justice and must take into account:
- the seriousness of the nullity grounds invoked;
- the stage of the opposition proceedings; and
- the extent of any harmful consequences on the patentee.
vii Statutes of limitations
Civil actions for infringement are confined in a five-year period. The PACTE law has modified the starting point of this period. Formerly set on the day of the infringement, the new relevant starting point is the day on which the rightholder knew or should have known the last fact allowing him or her to initiate the action.23 Accordingly, each infringement act does not generate an autonomous time limitation period anymore. It also means that there is a risk of dichotomy between the time for suit and the relevant period for damages.24
This change could significantly reinforce the rights of the patentees as they could potentially obtain damages for acts committed prior to the five years preceding the launch of the infringement action.
In relation to criminal actions, public prosecution must occur within six years of the day on which the offence was committed.
In the absence of any specific text for patent nullity action, limitation periods have been ruled by the general provisions of civil law. The limitation period for a patent nullity action was thus five years from the date on which the owner of a right knew or ought to have known the facts that enabled him or her to exercise the action.
The case law pertaining to the starting point of the five-year period has recently focused on an in concreto approach to determine, on a case-by-case basis, the date the claimant knew, or ought to have known, the facts that enabled him or her to commence the nullity action.25
Statutes of limitation will no longer apply to patent nullity actions, as the PACTE law has modified the IPC to state that 'the patent nullity action shall not be subject to any statutes of limitations'.26
viii Preliminary relief
Any person with standing to bring an infringement action may request preliminary relief against the alleged infringer or its intermediaries in order to stop the infringement or prevent an imminent infringement. In deciding whether to grant preliminary relief, a judge will assess the likelihood of infringement and the seriousness of the invalidity arguments raised by the defendant.
The criteria for assessing the validity of a patent in hearings for preliminary relief are substantially the same as for proceedings on the merits. As such, when validity is raised, it can be difficult for a claimant to obtain preliminary relief. Further, although it is not always clearly stated in the decisions, judges in hearings for preliminary relief tend to adopt an approach that focuses on a balance of convenience and proportionality.
Nevertheless, recent cases show that judges are more inclined to grant preliminary injunctions. For instance, in the healthcare sector, originators obtained significant preliminary injunctions,27 sometimes even in case of extreme urgency,28 accompanied by recall measures and significant provisional damages.29
If successful, the claimant must initiate an action on the merits within one month of obtaining an order granting preliminary relief.
In theory, such order can be granted ex parte in case of emergency; namely, if any delay would be likely to cause irremediable harm to the claimant. In practice, ex parte preliminary measures are almost never granted in patent matters. The judges consider that such measures should only be available in very extreme cases such as repeated infringement by the same infringer.
Preliminary measures may also be ordered in the course of a proceedings on the merits by the case-management judge. In such case, the defendant can only appeal the measures once a decision on the merits has been reached. This delay can be very damaging for the defendant.
If infringement is found, the judge generally prohibits the continuation of alleged infringing acts. The judge can submit the injunction to securities (to ensure the complainant will be compensated if the injunction is overturned on appeal) although it is rare in practice. The judge can also order the seizure of allegedly infringing products to prevent their introduction or circulation in the commercial channels.
If the claimant is able to show that there is a risk that recovery of potential damages may be inhibited by the claimant's behaviour, the judge may order the precautionary seizure of the defendant's movable and immovable property. This includes the freezing of the defendant's assets. These measures are rarely applied in practice.
ix Warning letters and risk of unfair competition
Sending a cease-and-desist letter to infringers is not required before initiating an infringement action.
The IPC distinguishes 'direct infringers' (manufacturers and importers) from 'indirect infringers' (distributors). The latter can only be liable for damages if they are aware that their activities may be infringing.
For this reason, patent owners often send warning letters to put indirect infringers on notice. However, great care must be taken while drafting such letters, as it may constitute unfair competition towards the supplier.30
Moreover, the question of being on notice regarding potential patent infringement is important in relation to damages because serving a writ of summons has been held to establish awareness for the future: as soon as a distributor receives a writ of summons, it is liable for subsequent acts until the decision on the merits.
Protective letters are not admitted, either to prevent a preliminary injunction or a saisie-contrefaçon. This is compensated by the fact that the seized party can file a motion for withdrawal of the order authorising the saisie-contrefaçon to reintroduce the adversarial principle.
IV Substantive Law
Acts constituting infringement
The IPC broadly defines acts constituting patent infringement as:
- the manufacture, supply, placing on the market, use, importation, exportation, transshipment or holding of, for the aforementioned purposes, the product subject to the patent;
- the use of a process subject to the patent or, where the third party knows or where circumstances make it clear that the use of the process is prohibited without the consent of the owner of the patent, the offer of its use on French territory; and
- the supply, placing on the market, use, importation, exportation, transshipment or possession for the aforementioned purposes of the product obtained directly by the process subject of the patent.
Contributory infringement is also prohibited under French law.
As regards pharmaceutical patents covering an active ingredient, the fact that a generic company obtains an MA for its generic product does not indicate imminent infringement for the purposes of obtaining a preliminary injunction. However, additional circumstances, for example arising from correspondence with regulatory authorities or advertising, may help prove imminent infringement. The standard of proof is nevertheless quite high.
Doctrine of equivalents
In principle, a patent is a self-contained title where the sole purpose of claim construction is to understand the exact scope of the monopoly right granted under the patent, taking into account description and drawings, after examination or opposition procedures.
File wrapper estoppel is not applied under French law, although a patentee's declarations before the relevant authorities, including patent offices, in foreign jurisdictions can be taken into consideration to assess the overall credibility of the patentee's assertions.
Construction must be true to the claims and must not change the nature of the patent, but it must also not be too literal. Under the doctrine of equivalents, a party might be held liable for patent infringement even though the infringing device or process does not fall within the literal scope of the claims of a patent, but is nevertheless equivalent to the claimed invention.31 The doctrine considers that two means are equivalent if, despite being of a different shape, they perform the same function in view of the same result, provided the function exercised by the patented device or process is novel.
ii Invalidity and other defences
A French or European patent can be revoked for:
- a lack of novelty;
- a lack of inventive step;
- a lack of industrial application;
- excluded subject matter;
- added matter beyond the content of the application as filed;
- an extension of the scope of the patent claims after limitation or amendment; or
- if the proprietor of the patent is not the inventor nor his or her successor in title (taking into account relevant employment law).
If the grounds of invalidity affect only part of a patent, nullity is affected by limiting the relevant claims.
A trend of French case law is to consider, in the context of inventive step or insufficiency, whether the patent solves the technical problem it is supposed to and if the patent presents a plausible way of solving the technical problem at the date the patent was filed across the breadth of the claims.
In this respect, some decisions have required patents to include tests or data to show that the technical effect or effects of the patent can be reached. In the absence of any such tests, post-filing evidence should be dismissed. This case law was ambiguous and relied on the vague notion of a 'speculative' patent. A more classical approach of plausibility seems to have been adopted by the Paris courts since 2018.32 The Supreme Court has confirmed that there is no legal requirement to provide for clinical data within the description, but admitted that, in specific cases where a patent covers a new therapeutic application of a known compound, the patent application must reflect directly and unambiguously the claimed therapeutic application. How this general ruling will be applied in practice remains uncertain.33
Acts that cannot infringe a patent monopoly
Patent rights cannot be infringed by:
- acts done privately and for non-commercial purposes;
- acts done for experimental purposes relating to the subject matter of the patented invention;
- the extemporaneous preparation for individual cases in a pharmacy of a medicine in accordance with a medical prescription, or acts concerning the medicine so prepared;
- studies and tests required for the granting of an MA for a medicinal product, as well as for the acts necessary for their realisation, for obtaining said authorisation and for obtaining the required advertising (the Bolar exemption); and
- acts related to extra-atmospheric space vessels introduced into French territory.
The French Bolar exemption is not limited to generic drugs, but applies to any drug, including biosimilar drugs. The Bolar exemption also covers the allocation of medical drugs to patients in the framework of temporary use authorisation (by name or cohort).34
Personal prior possession
Any person who, in good faith on the date of filing or priority of a patent, was in possession of the invention subject of the patent, has the personal right to exploit the invention despite the existence of the patent. However, this right is limited and cannot be transferred.
Exhaustion of rights
The rights conferred by the patent do not extend to acts concerning the product covered by that patent carried out on French territory after the product has been placed on the market in France or on the territory of a state party to the Agreement on the European Economic Area by the proprietor of the patent or with his or her express consent.35
Such a solution stems from the principles of free movement of merchandise, goods and services within the EU. Provided that the patent owner has agreed to the marketing of its products in the EU, he or she will not be able to rely on its patent to prevent the circulation of such goods within the EU.
Competition law can be used as a defence in patent litigation. In some cases, patent rights may be limited by the courts to prevent anticompetitive behaviours (such as an abuse of a dominant position).
Notably, the Paris courts will take into consideration fair, reasonable, and non-discriminatory (FRAND) issues related to standard-essential patents before granting an injunction on the basis of such rights.
Good faith is irrelevant
Infringement will be found irrespective of any good faith on the part of the infringer. However, indirect infringers cannot be held liable for carrying out acts that they did not know infringed a third party's patent rights.
V FINAL REMEDIES FOR INFRINGEMENT
i Non-monetary remedies
Where infringement is established, an injunction is generally granted by the Paris Court of First Instance with the following exceptions:
- when the patent has expired at the date of the decision;
- when a FRAND issue prevents any injunction;
- when a compulsory licence has been granted; or
- when a national defence exploitation is at stake.36
The injunction granted by the Court will cover the acts of infringement committed by the defendant, acting on its own or through the intermediary of any third party, and should also prevent all infringing acts as defined by Articles L.613-3–L.613-6 IPC (see Section IV.i).
Injunctions are generally subject to penalties when the defendant does not comply with the decision (per day or per act of non-compliance) and provisionally enforceable (see Section V.iii).
Recall of the infringing products from the channels of commerce
Recall of the infringing products is allowed under French law, both on the merits and in summary proceedings. This measure is carried out at the expense of the infringer and enforced at the claimant's own risk.
Publication of the decision
Upon the request of a party, the Court may, at its discretion, decide to publish the decision in full or in part in newspapers or online.
In practice, an extract of the judgment may be published in magazines or in the press, and also on the main page of the infringer's website. The specifics of the publication (webpage address, font size, duration, language) should be specified by the claimant.
This measure is also carried out at the expense of the infringer.
The claimant may also publish the judgment in full or in part on its own website, and does not need an authorisation from the court for so doing. However, such publication must be done with care to avoid any grievance for unfair competition by denigration (if the judgment is appealed, it should be mentioned).37
ii Monetary remedies
Under French law, the damage suffered must be repaired in full – not less, not more. As such, punitive damages are thus excluded.
In considering whether to order damages, the court must consider:
- the loss, including lost profits, that the injured party has suffered;
- any unfair profits made by the infringer; and
- where appropriate, elements other than economic factors, such as the moral prejudice caused to the rightholder by the infringement.
All those heads of damage must be documented. For this purpose, the claimant can use all available evidence tools, such as:
- the saisie-contrefaçon;
- the right of information;
- general measures of investigation allowed by the law; and
- judicial expertise.
The profits generated by the infringer cannot be confiscated but are taken into consideration when assessing the prejudice suffered.38 When the defender does not provide any financial information on its sales margin, the judge can set this amount based on other public elements.39 This should not lead to damages higher than the prejudice actually suffered by the rightholder, although it has been admitted by the Paris Court of First Instance on 18 May 2017 (judgment currently under appeal).40 This would typically be the case when the margin made by the infringer on the infringing products is higher than the margin made by the claimant.
Upon request from the claimant, the damages may also be a lump sum that should be higher than the royalties the rightholder would have received if the infringer had taken a licence. The rate is determined by the judge and generally corresponds to the average rate applicable in the field at stake, generally increased by 50 per cent. This is not considered as punitive damages, but as taking into account the fact that that the patentee has not been willing to grant any licence to the infringer.41
iii Provisional enforcement
Provisional enforcement may be granted at the Court's discretion (upon request from the parties or on its own motion) for all or part of the decision. It is usually granted for patent cases. Provisional enforcement may be subject to the prior creation of a guarantee.
The rightholder must be careful when deciding to enforce the decision that is provisionally enforceable, notably by notifying it to the defendant. This is a risk where the judgment is overturned in appeal as it could trigger civil liability for damages, without the defendant having to prove any fault.
Provisional enforcement may be lifted upon request from the defendant if it is prohibited by law, or if it is likely to result in disproportionate consequences.
iv Recent noteworthy awards against infringers
The amounts of damages granted by the Paris courts have steadily increased over the past few months. The decisions below illustrate this trend:
- Paris Court of First Instance, 7 June 2018, 16/15196, SAS Teva Santé v. Novartis Pharma AG and al., grants a provisional amount of approximately €13.1 million, reduced to €10.2 million by a decision of 25 October 2018 (parties have then settled and discontinued the proceedings);
- Paris Court of First Instance, 7 March 2019, 17/14664, Mylan v. Merck Sharp & Dohme Corp. & MSD France, grants a provisional amount of approximately €4.36 million (proceedings on the merits are pending);
- Paris Court of First Instance, 18 May 2017, 11/16313, SEE v. Rabaud, grants €1.53 million to the patent-holder, confirming prior decisions from the Paris Court of First Instance and Paris Court of Appeal (additional appeal before the Supreme Court has been dismissed);
- Paris Court of Appeal, 9 February 2018, 16/23925, Pellenc v. Exbanor, grants almost €1.5 million; and
- Paris Court of First Instance, 10 June 2016, 10/05487, Time Sport v. Decathlon and D-H-G Knauer, grants €1.4 million for economical loss and €50,000 for moral loss (appeal pending).
By comparison, below is a list with the top three largest awards against infringers for the period 2010-15:
- Paris Court of Appeal, 20 March 2015, 13/00552, Eurocopter v. Bell Helicopter Textron, grants provisional amount of €3 million (definitive amount unknown);
- Paris Court of First Instance, 29 June 2012, 10/06118, ECA v. BAE Systems, grants provisional amount of €6 million and €20,000 for moral loss (aggregate around €4.1 million after expertise); and
- Paris Court of Appeal, 5 October 2011, 09/02423, Hewlett-Packard and Agilent Technologies v. Waters, grants almost €4 million.
VI OTHER TYPES OF RELIEF SOUGHT IN PATENT PROCEEDINGS
i Application for compulsory licences
Under French law, an application can be made for a compulsory licence in two circumstances, both of which are distinct from the administrative licences that may be obtained by public authorities.42 Compulsory licences are non-exclusive licences that can be withdrawn by the court if their terms are breached by the licensee.
A compulsory licence will be available where a patent owner has:
- failed to exploit, or seriously and effectively prepared for the exploitation of a patent in the territory of a Member State of the European Economic Community (EEC) or the EEA;
- failed to sufficiently exploit the patented product to cover the needs of the French market; or
- stopped exploiting or covering the needs of the French market for more than three years.
For these purposes, importing the patented product into the territory of a member of the World Trade Organization agreement is considered to be an exploitation of the patent.
A compulsory licence may also be available where a second patent is placed in the dependence of a first patent. In such a case, where the invention of the second patent is considered to be: a substantial technical progression from the first patent; and of significant economic interest, the court may grant the owner of the second patent a licence under the first patent to the extent necessary for the exploitation of the second patent. Where such a compulsory licence is granted, upon application to the Court, the owner of the first patent shall also be granted a cross-licence under the second patent.
This type of compulsory licence is also available for patents concerning plant-variety rights.
ii Declarations of non-infringement
A declaration can be sought from the Court that an act, or proposed act, in a territory of a member state of the EEC does not infringe a patent. Prior to commencing court proceedings, a party seeking a declaration of non-infringement (DNI) shall invite a patentee to respond to a request for a DNI.
If the party seeking a DNI is not satisfied with the patentee's response, or if the patentee does not respond within three months, an action can be brought before the Paris Court of First Instance. In such an action, the burden of proof of non-infringement rests with the party seeking the declaration.
The judgment in DNI proceedings is handed down without prejudice to any ongoing nullity action or any subsequent infringement proceedings.
DNIs are relatively rare in France and nullity actions are preferred by claimants.
iii Entitlement claim
Where an application for a patent, utility model or SPC has been made either for an invention unlawfully taken from an inventor or his or her successors in title, or in violation of a legal contractual obligation, the injured party may claim ownership of the application or of the granted title. This may arise where a co-developer of an invention is deprived of its right of ownership, or where an employee develops an invention outside the scope of its employment.
Actions claiming ownership of such a right must be brought within five years from the publication of the grant of the right. If the rights owner has acted in bad faith, a claim can be brought as from the grant of the right until its expiry.
iv Claim for additional remuneration or fair price (employees' inventions)
France has an employee-friendly regime. The default position is where employees have an 'inventive job role' (either permanent or temporary, and whether recorded by way of written employment contract or not). Their inventions belong to the employer, but the employer is required to pay the employees an 'additional remuneration' (ranging from €400 to €200,000 per invention). Some decisions have ruled that, to be enforceable against the employees, the means to determine the additional remuneration should be provided for in the employment agreement, a company agreement or a collective bargaining agreement, failing which the statutes of limitations cannot apply and the final amount shall be set by the courts.43 This approach is questionable and not always followed by the Paris Court of First Instance.44
Where an invention is developed by an employee who does not have an 'inventive job role', the invention belongs to the employee, but the employer may exercise a right of first attribution on the invention. If the employer exercises this right, it shall compensate the employee by paying him or her a 'fair price' for the invention (ranging from €3,000 to €500,000 per invention).
In case of a disagreement on who is entitled to the invention or the additional remuneration or what is a fair price or additional remuneration, a party may apply to the National Commission for Employees' Inventions (CNIS) to determine the dispute. This is recommended, as the assessment made by the CNIS is often reasonable and business-oriented. If this process does not settle the dispute, the case may be brought before the Paris Court of First Instance. The case may also be brought directly before the Paris Court of First Instance without any prior CNIS step. Statutes of limitation also apply to the employee's claim for additional remuneration (or fair price), after three (or five) years from the date on which the employee knew or ought to have known the facts that enabled him or her to exercise the action.
v Customs procedures
It is possible to prevent the entry of possibly infringing goods coming to France from outside the Regulation (EU) No. 608/2013; or coming to France from inside the EU (IPC) by filing an action before French Customs. The application must include any and all information that would enable Customs to identify the allegedly infringing goods and to distinguish them from genuine goods. An application granted by French Customs lasts for one year. French Customs are not able to take samples and analyse allegedly infringing products.
vi Protection of trade secrets
The Directive (EU) 2016/943 of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure has been implemented in France through Law No. 2018-670 of 30 July 2018 on the protection of trade secrets.
While trade secrets were already protected in France, this protection is now part of the commercial code, where a harmonised definition of trade secrets has been provided for.
This law sets out a number of practices that were already implemented by the Paris courts in practice, in particular closed hearings and the ability for the Court to take a confidential document into consideration while limiting its communication and adapting the wording of its judgment to preserve trade secrets.
The articulation of the protection of trade secrets with the right to perform a saisie-contrefaçon has generated some litigation. Despite being secret, a seized element that is necessary to evidence infringement should be provided to the claimant. To balance the interests at stake, the judge can order the bailiff to put the seized elements under seals, give only access to designated outside counsels or restrict access to hearings, or both45.
vii Criminal law against infringement
In criminal proceedings, infringement can result in three years' imprisonment and a maximum fine of €300,000.
In addition, the court may make an order for the recall of the products, their destruction and the publication of the criminal sentence. An injunction is not available in criminal proceedings.
Criminal proceedings are rare because no injunction is available and there is a low cap of recoverable damages. Criminal proceedings are more likely to be brought in cases concerning pirated goods or where the claimant wants to prove criminal liability of a company's director.
An appeal can be lodged before the Paris Court of Appeal against any judgment rendered on the merits.
The appeal stays the enforcement of the first instance judgment, but the judgment is usually provisionally enforceable. The appeal is an automatic right and is a second chance for the whole of the case – both the legal and factual elements – to be reviewed before a specialised division (Pole 5). Under a new appeal procedure of appeal, which entered into force on 1 September 2017, the appellant must file a declaration of appeal specifying the reasons of the judgment he or she seeks to overturn.
Additional evidence can be brought before the Court of Appeal. New claims cannot be made, unless they have a sufficient link with the initial claims (for example, if a nullity counterclaim is based on lack of novelty, it would be possible to invoke insufficiency as well).
Hearings are usually short (up to one-and-a-half days) and are held by a court composed of three judges. The judges are not patent specialists but belong to a specialised division that is composed of two chambers and to which intellectual property cases are designated.
VIII THE YEAR IN REVIEW
The following cases were brought in 2018 and 2019 :
- Paris Court of Appeal, 9 Oct 2018, 17/19934, Santen: referral to CJEU regarding the concept of a 'different application' within the meaning of the judgment of 19 July 2012, Neurim (C-130/11, EU:C:2012:489) and whether it should be interpreted strictly, that is to say limited only to the situation where an application for human use follows a veterinary application, or more broadly;
- Paris Court of Appeal, 14 December 2018, 13/00552, Airbus Helicopters/Bell Helicopter: a sale offer on an international exhibition followed by a protocolary signature is an act of infringement committed in France;
- Paris Court of Appeal, 22 January 2019, 18/10532, Merck Sharp & Dohme Corp/Directeur Général de l'INPI: on the refusal of SPC covering a combination of active principles where one of the active principles was already covered by two previous SPCs, alone and in combination with another active ingredient;
- Supreme Court, 27 March 2019, 18-15005, JC Bramford Excavators Ltd/SA Manitou BF: confirming that patent attorneys that have previously worked for a claimant can be appointed by a judge to assist a bailiff during a saisie-contrefaçon;
- Paris Court of First Instance, 7 March 2019, 17/14664, Mylan/Merck Sharp & Dohme Corp & MSD France: regarding the grant of a preliminary injunction against a generic drug and a significant provisional amount of damages (approximately €4.36 million);
- Paris Court of First Instance, 8 April 2019, 15/16933, Koninklijke Philips NV/Wiko: a person who assists a bailiff by purchasing an infringing product must be fully independent from the party instructing the bailiff to draft the official report; a trainee lawyer at the law firm advising the instructing party is not independent; and
- Paris Court of Appeal, 16 April 2019, 15/17037, Conversant Wireless Licensing SARL v. LG Electronics France SAS & LG Electronics Inc: the Paris Court of Appeal ruled that the two SEPs were not essential so that infringement was not established and therefore no FRAND licence rate had to be assessed.
i New PACTE law
The PACTE law changes the landscape of French patent law, especially by (1) introducing an opposition procedure before the IPO where some validity aspects could be debated, (2) reinforcing the examination procedure further to a French patent application, (3) modifying the statutes of limitations related to both infringement and nullity actions, and (4) strengthening the utility certificates.
ii Nullity actions
The limitation period pertaining to nullity actions has become a significant legal issue in France. Case law has confirmed that a patent nullity action is subject to a five-year limitation period, while new PACTE law now provides that statutes of limitations does not apply to patent nullity actions. Questions about the transitional period issues will probably arise in the very near future.
Paris Court of Appeal rulings allow for a more effective saisie-contrefaçon by limiting the amount of information needed from a claimant to obtain the requisite order. However, the courts remain wary, to prevent saisies-contrefaçon from becoming fishing expeditions.46 In addition, protection of trade secrets is now officially taken into account in the law as a specific regime has been implemented to allow the judge to protect the trade secrets of a seized party.
A party can present evidence of infringement by way of official reports drafted by a bailiff. However, a Supreme Court decision47 provides that a person who assists the bailiff by purchasing an infringing product must be fully independent from the party instructing the bailiff to draft the report. A trainee lawyer at the law firm advising the instructing party is not independent for these purposes. The Paris Court of First Instance has taken this decision into account and it is now difficult to organise a bailiff report safely.48
Undertakings to grant FRAND licences, and more generally FRAND issues, are also of a significant importance in France, especially as the European Telecommunication Standard Institute policy is governed by French law. Standard-essential patents are core issues that are dealt with by the Paris Court of First Instance.
vi Unified Patent Court
The Unified Patent Court is a topic of interest in France, not least because Paris has been elected as a location of the central division for which more than 130 judges have applied. Order No. 2018-341 of 9 May 2018 modified the IPC to prepare the entry into force of the agreement on the Unified Patent Court, which remains suspended to the decision of the German government (which itself seems to be postponed until the United Kingdom leaves the European Union).
1 Pauline Debré is partner and Jean-François Merdrignac is a managing associate at Linklaters LLP.
2 Paris Court of Appeal, 30 January 2015, 10/19659 (MSD/Actavis). See also Supreme Court, Commercial Ch., 6 December 2017, No. 15-19726 (MSD/Teva).
3 Paris Court of Appeal, 19 June 2015, 13/08566 (Mylan/Richter Gedeon), confirmed by Paris Court of Appeal, 2 March 2018, 15/16651 (Richter Gedeon/Mylan).
4 Action Plan for Business Growth and Transformation (PACTE), Law no 2019-486, 22 May 2019 (entered into force as from 23 May 2019; provisions related to utility certificates and opposition procedure will enter into force later, depending on the ratification act of the upcoming regulation ).
5 This modified examination procedure shall concern the French patent applications to be filed as from 22 May 2020.
6 Entry into force of this new opposition procedure requires the adoption of a regulation (to be taken before 22 February 2020). Such regulation shall then be ratified by a confirmatory law (to be voted within six months following the publication of the order).
7 The procedure to convert a utility certificate into a patent application will be specified in a regulation to be issued and should enter into force, at the latest, on ۲۳ May ۲۰۲۰.
8 Prior French regime applied before 1993.
9 ECJ, 6 October 2015, C-471/14 (Seattle Genetics Inc).
10 'Communication from the IPO on SPC examination', 12 January 2016. This concerns all SPCs that have not been delivered yet and that are based on a Community MA. Communication from the IPO on the calculation of the expiry date of SPCs, 15 January 2018: For SPCs that have already been delivered and are still in force, the owner may have the expiry date of their SPCs corrected by the IPO.
11 'IPO Guideline on patents and utility certificates', June 2017.
12 'The certificate shall take effect at the end of the lawful term of the basic patent for a period equal to the period which elapsed between the date on which the application for a basic patent was lodged and the date of the first authorisation to place the product on the market in the Community, reduced by a period of five years.'
13 CJEU, 21 March 2019, C-443/17 (Abraxis) and the Referral C-673/18 (Santen, 30 Oct 2018) on the interpretation of a 'different application'.
14 Supreme Court, 16 May 2018, 16-21638 (Government of the USA/INPI); Paris Court of First Instance, 25 May 2018, 17/09565 (Biogaran/Gilead Sciences Inc) and 16/14214 (Mylan/ Gilead Sciences Inc), and Paris Court of Appeal, 22 January 2019, 18-10532 (Merck Sharp & Dohme Corp v. Directeur Général de l'INPI).
15 Paris Court of First Instance, 28 March 2013, 12/16540 (Somfy/Gaposa).
16 The question of the independence of the expert to be entrusted to assist the bailiff has been debated. It has been confirmed that a patent attorney, who has already assisted the claimant in a previous private expertise may later assist the bailiff in a saisie-contrefaçon. Supreme Court, 27 March 2019, 18-15005, (Manitou/Bramford), quashing Paris Court of Appeal, 27 March 2018, 17/18710.
17 Paris Court of Appeal, 26 May 2017, 15/10201 (Telekom Slovenije/Orange); Paris Court of Appeal, 16 May 2017, 15/15766 and 15/15693 (Philips/CSI).
18 Paris Court of First Instance, 22 December 2017, 17/14521 (Constellium Issoire/Arconic Inc).
19 Supreme Court, Commercial Ch, 8 October 2013, (Maison du Monde v. Home Spirit) No. 12-23349.
20 Paris Court of First Instance, 10 November 2017, 15/10320 (I Do It/Alden).
21 Article 11 of the order No. 2018-341 of 9 May 2018 related to the European patent with unitary effect and the Unified Patent Court.
22 Paris Court of First Instance, 10 February 2017, 16/07227 (3M/Saint-Gobain Abrasifs); Paris Court of First Instance, 15 April 2016, 15/01377 (DSM/Novozymes).
23 A similar provision is provided for the infringement action before the Unified Patent Court.
24 Transitional aspects shall be set by the Courts.
25 Paris Court of First Instance, 16 March 2017, 16/07920 (Actelion/Icos); Paris Court of First Instance, 28 April 2017, 19/09770 (B/E Aerospace/Zodiac Aerotechnics). This could be, for instance, the date on which the patent is opposed by the patent owner in a cease-and-desist letter (Paris Court of First Instance, 6 November 2014, 13/14239, Raccords et Plastiques Nicoll/MEP), the date as from which an MA can be filed (Paris Court of First Instance, 30 November 2017, 16/14466, Mylan/MSD), or the date on which an opposition was filed against a corresponding patent at the EPO.
26 Article 124 of the PACTE law providing for a new article L.615-8-1 IPC.
27 Paris Court of First Instance, 31 January 2019 (JC Bamford Excavators/Manitou), 17-06462, Paris Court of First Instance, 8 February 2019, (MSD/EG Labo), Paris Court of First Instance, 8 February 2019 (MSD/Sandoz) and Paris Court of First Instance, 22 February 2019 (AH/BERA), 18/58204.
28 Paris Court of First Instance, 11 January 2019, 18-60334 (Janssen/Sandoz), preliminary injunction ordering the recall from pharmacies for an SPC expiring only 43 days later.
29 Paris Court of First Instance, 7 June 2018, 16/15196 (Teva/Novartis and al.), Paris Court of First Instance, 7 March 2019, 17/14664, (Mylan/Merck Sharp & Dohme Corp & MSD France).
30 Paris Court of First Instance, 16 November 2017, 14/14922 (SAS Commerce Spectacle Industrie/Philips).
31 Paris Court of Appeal, 27 June 2017, 14/25023 (Vorwerk/Lacor et al); Paris Court of Appeal, 28 November 2017, 15/12176 (K Hartwakk Oy Ab c/ SAS Touraine Emballage Recyclage).
32 Paris Court of First Instance, 26 January 2018, 16/01225 (Ethypharm/MSD).
33 Supreme Court, Commercial Ch., 6 December 2017, No. 15-19726 (MSD/Teva).
34 Paris Court of First Instance, 15 March 2016, 16/51152 (Ono Pharmaceuticals et al/MSD).
35 Article 10 of Order No. 2018-341 of 9 May 2018 related to the European patent with unitary effect and the Unified Patent Court has changed the wording of the exhaustion of rights provision. The 'express consent' of the 'holder' (and not the proprietor) of the patent will no longer be required. Exhaustion could be avoided in case the patent holder justifies of legitimate reasons to oppose the continuation of the product commercialisation.
36 Article L.615-10 IPC provides that:
when an invention which is the subject matter of patent application or a granted patent, is implemented for the needs of the national defence by the state or its suppliers, its subcontractors and subsidiary suppliers, without a licence having been afforded to them, the civil proceedings shall be brought before the First Instance Court sitting in chambers. The latter cannot order the exploitation to be stopped or interrupted, nor it can order the recall provided for by Articles L.615-3 and L.615-7-1.
37 Supreme Court, Commercial Ch, 18 October 2017, No. 15-27136 (Normalu/Newmat).
38 Paris Court of Appeal, 9 February 2018, 16/23925 (Pellenc c/Extrusion de Basse Normandie).
39 Paris Court of First Instance, 7 June 2018, 16/15196 (SAS Teva Sante/Novartis Pharma AG, SA Novartis Pharma AG and SAS Novartis Pharma), parliamentary report indicating that generic companies' margin is about 50 per cent.
40 Paris Court of First Instance, 18 May 2017, 11/16313 (SEE/Rabaud).
41 Paris Court of Appeal, 27 June 2017, 15/09294 (Vorwerk/Taurus et al.).
42 Such administrative licences are provided for in Articles L.613-16 to L.613-19 IPC. The state also has rights to expropriate a patent owner for the need of the national defence, under the conditions laid down in Article L.613-20 IPC.
43 Paris Court of Appeal, 30 May 2017, 16/06557 (Mr Wilson/SKF France) where it was decided that an internal policy is not binding on the employee.
44 Paris Court of First Instance, 23 March 2018, 15/00961 (Mr Raynaud/Meta Systems and Mentor Graphics Corporation).
45 Paris Court of Appeal, 16 April 2019, 15/17037, Conversant Wireless Licensing SARL v. LG Electronics France SAS & LG Electronics Inc.
46 Paris Court of First Instance, 22 December 2017, 17/14521 (Constellium Issoire/Arconis Inc).
47 Supreme Court, civ. 1st, 25 January 2017, 15-25210 (H&M/G-Star Raw CV).
48 Paris Court of First Instance, 8 April 2019, 15/16933 (Koninklijke Philips NV/Wiko).