The Patent Litigation Law Review: Slovenia
The main act regulating patents in Slovenia is the Industrial Property Act (ZIL-1).2 The act contains substantive rules relating to industrial property rights, including patents, as well as some procedural rules specific to litigation concerning said rights.
Issues concerning patent infringement and invalidity, and owing to very limited possibilities of prosecution of patents in Slovenia, are resolved by the competent courts (i.e., the Ljubljana District Court in first instance, the Ljubljana High Court in the second instance, and the Supreme Court of the Republic of Slovenia, which deals with extraordinary legal remedies in patent matters).
In Slovenia, the volume of patent litigation cases is quite low, with only a couple of cases pending each year. The court practice concerning patent invalidity and enforcement issues has been evolving, mainly in the past decade, but it is still rather limited. On the other hand, as ZIL-1 also regulates other industrial property rights, certain court practice – for example, in trademark cases (the volume of which is a bit larger) – may also be useful to patent cases.
Types of patent
Two main types of patent exist in Slovenia: a national patent and a European patent for which protection is sought also for Slovenia.
A national patent is applied for and granted by the Slovenian Intellectual Property Office (SIPO). Prior to the publication of a patent application, the SIPO examines whether the invention: (1) is prima facie new, involves inventive steps and is industrially applicable; and (2) is not excluded from patentability (exclusions based on public order and morality as well as of certain medical treatment). If SIPO is satisfied with the outcome of this examination, then it resolves that the application shall be published. A national patent application is generally published 18 months after the application date or after the date of priority (if sought). Grant of the patent is published at the same time.
The term of the patent is 20 years from the application date. During the term of the patent and at the latest until the end of the ninth year of patent validity, the patentee is required to present a document evidencing that the invention is fully compliant with the requirements for patent protection. This document of evidence can be a European patent granted for the same invention. If a European patent was not applied for, then the document of evidence may be a Slovenian translation of a patent for the same invention that was granted by any other institution holding a status of an international preliminary examining authority under the Patent Cooperation Treaty (PCT) or another patent office with which an applicable contract was entered into. Alternatively, the patentee can request SIPO to obtain this evidence from the mentioned authorities against a payment of applicable fees. If this document of evidence is not submitted, the national patent expires at the end of the 10th year of its validity. If the document of evidence is submitted, then SIPO issues a decision declaring that the invention is fully compliant with the requirements for patent protection (this decision is also called a declaratory decision).
Before the declaratory decision is issued, although the patent is valid, its enforceability is limited. Based on this patent, an infringement action may be started, but the court will stay the proceeding pending the issuance of the declaratory decision. After the declaratory decision is issued, the proceeding may continue, but for the term between the patent grant and the issuance of the declaratory decision the only available relief is damages (which may even be reduced considering the circumstances).
On the other hand, Slovenia is a party to the European Patent Convention (the EPC) and as such European patents may also be valid in Slovenia. Under ZIL-1, a European patent confers upon its proprietor the same rights as a national patent, provided that the proprietor lodges a translation of claims of the European patent to SIPO in three months after the date of publication of grant of the European patent. Failure to submit the translation of claims within the time limit renders the European patent null and void in respect of Slovenia.
The 20-year term of validity of a patent can be extended for up to five years with a supplementary protection certificate (SPC). In that regard, the EU regulations concerning SPCs for medicinal products and for plant protection products apply directly in Slovenia. SPC applications are lodged with and SPCs are granted by SIPO. Slovenian law provides that a SPC is valid up to five years. However, given the direct applicability of the EU regulations, a further six-month extension under the EU regulation on medicinal products for paediatric use3 is also available.
An extension to the patent term may also be available in case of war or similar extreme circumstances, for the duration of the circumstances, but no longer than five years.
For an invention that is novel, industrially applicable and achieved with a creative work, a short-term patent can be granted (excluded from such type of patentability are inventions of a process, plant type and animal variety). A short-term patent is valid for 10 years following the application date. Short-term patents are also granted based on a prima facie review of patentability. Generally, rules applicable to patents apply mutatis mutandis also to short-term patents, unless provided otherwise by the law. No declaratory decision is issued in respect of a short-term patent. There is no established court practice on what the mutatis mutandis application of rules regulating patents means; for example, in relation to enforcement of a short-term patent.
Procedure in patent enforcement and invalidity actions
In Slovenia, the Ljubljana District Court has exclusive jurisdiction to decide on patent enforcement and invalidity actions as well as on interim injunction applications. Judges who are designated to hear patent cases are judges of the commercial division of the Ljubljana District Court; they are not designated solely to patent matters.
Prosecution of patents in Slovenia is very limited as SIPO does not undertake a full examination of national patents. Therefore, invalidity issues are raised and resolved mostly in litigation before the court.
ZIL-1 provides that any interested party may start an action for determination of nullity of a patent. The term 'interested party' is not defined in the law. While according to court practice a patent nullity action is not actio popularis4 (where anyone could file such claim) the bar for legal standing is not set high. For example, a competitor claiming it would be interested in using the invention will normally have legal standing. An entity sued for infringement will have legal standing for a nullity counteraction.
If there are several holders of the patent, a nullity action shall be brought against all of them; otherwise the lawsuit shall be rejected on that basis alone.5
A nullity action may be started at any time during the patent term and also after the patent expired. If a nullity action relates to a European patent in respect of which an opposition was filed before the EPO, the court shall stay the proceeding pending a final decision by the EPO on the opposition. A patent cannot be amended in nullity proceedings.
A patent infringement action can be brought by the patentee, by the holder of a licence in the scope within which the rights have been assigned to it by law or with a contract, if the patentee consents to this, the holder of an exclusive licence if the patentee does not initiate infringement proceedings within an appropriate period and by professional associations established for the protection of industrial property rights to the extent to which the owner's rights are assigned to them by law or with a contract. A licence holder can also join the proceedings initiated by the right holder for the purpose of obtaining compensation for damage suffered by it. A patent infringement action can be filed during the term of validity of the patent. A claim for damage can be filed up to three years after the patentee had learned about the damage and the perpetrator, but no more than five years after the damage had emerged.
As regards disclosure of evidence not held by the party who would benefit from it, such party may request the court to order its adversary in possession of a relevant item of evidence to submit it. The court then decides whether to not to issue such order. If the party does not follow the court order, it cannot be forced to submit the evidence; however, the court may consider that the content of the respective evidence is such as argued by the party requesting submission. For any evidence so requested and presented the court should, however, ensure confidentiality of confidential information, and that the court proceeding is not used in bad faith with the sole purpose of obtaining confidential information of the adversary.
ZIL-1 also provides for a possibility for a party to request a securing of evidence. This request may be lodged even before a main action is started. The applicant may request any type of evidence to be obtained (e.g., seizing of samples, review of documents, hearing of witnesses, etc.). The party requesting such measure shall show reasonably available evidence that it is a holder of a patent, that there is an infringement or an actual threat of infringement, and that the respective evidence will be destroyed or will not be available later. Perhaps mostly owing to the latter condition, the proceeding is in practice hardly ever used in patent litigation. Securing of evidence cannot be granted on the basis of a national patent, for which a declaratory decision was not issued yet. Further, the measure cannot be granted if more than three months have elapsed since the right holder learned about the alleged infringement.
In terms of the technical aspects of the case, no technical judges are involved in hearing patent cases. To assist with technical questions, the court can appoint an expert who provides responses to any questions raised by the court, and with the approval of the court, also the parties. Opinions of any experts engaged by the parties themselves are not regarded as expert opinions but are in terms of evidentiary value closer to statements of parties themselves. Nevertheless, presenting opinions via experts engaged by the parties may be useful in view of presenting the party's technical arguments that are later assessed by the court-appointed expert. The parties are able to challenge the findings of the court appointed expert, mainly by follow-up questions and hearing of the expert. The findings of the court-appointed expert will typically play an important role in the court's decision.
A defendant in an infringement action may challenge the validity of a patent as a defence in the infringement proceedings. However, it shall do so by formally filing a counter action; raising the argument in infringement proceeding alone (irrespective of how well it is founded and supported by evidence) is insufficient.6 If a nullity and an infringement action are pending at the same time, they will initially be regarded as separate proceedings. It is at the court's discretion whether to join the two proceedings into one or not. It is also at the court's discretion whether to stay the infringement action pending the outcome of the nullity action.
The time it takes from filing a lawsuit to obtaining a first instance court judgment varies but is usually about two to three years.
As regards preliminary relief, interim injunctions are available in relation to patent infringement. For an interim injunction to be issued the claimant needs to prove the degree of likelihood that: (1) it is a holder of a European patent or a national patent, holding a declaratory decision of SIPO (see Section II); (2) there is infringement or actual threat of infringement; and (3) at least one of the following further conditions is fulfilled:
- danger exists that enforcing the claims of the patentee shall become impossible or considerably more difficult;7
- the interim injunction is necessary for the prevention of hardly repairable damages;
- the person allegedly infringing the patent would not suffer greater unfavourable consequences if it were established later that a granted interim injunction was unjustified, than the consequences suffered by the patent holder, if an interim injunction was not granted; or
- the person allegedly infringing the patent shall suffer only insignificant damages, if the interim injunction is granted.
In addition to the above-mentioned conditions provided by ZIL-1, the courts also sometimes refer to a Constitutional Court decision,8 which (in a non-patent related matter) provided the basis for granting interim injunctions that in terms of claims match the claims of a final injunction (called in Slovenian legal theory and practice 'regulatory interim injunctions'). The Constitutional Court, while at the time broadening the concept of interim injunctions, set a rather high standard for regulatory interim injunctions as they present a significant interference with the defendant's rights before a main action was carried out. It seems that, considering that in patent infringement matters a 'regulatory interim injunction' (claiming prohibition of patent infringement for the term of the interim injunction) is the most effective way to assert the rights conferred by a patent, the limited term of validity of a patent as well as specific provisions in ZIL-1 allowing for such interim injunctions, the standards from said Constitutional Court decision may be applicable by courts to patent matters, but in a less restrictive form.
General rules that regulate interim injunctions and that also apply mutatis mutandis to interim injunctions in patent matters, unless provided otherwise by ZIL-1, offer a possibility to the claimant to provide security instead of proving the existence of conditions for an interim injunction. However, according to a High Court decision,9 this possibility is not available for patentees seeking preliminary relief that is equivalent to a final relief (such as prohibition of infringement).
Interim injunctions can be requested ex parte, but for the court to grant such request, the applicant needs to show as likely that any delay in issuing the interim injunction would cause the applicant hardly reparable harm. Ex parte injunctions are rare in practice. On the other hand, there are also no protective letters or similar measures available to lower the risk of an ex parte interim injunction.
According to court practice10 an interim injunction will not be available on the basis of a European patent that is formally valid but in respect of which there is serious doubt as regards its validity, most notably if the asserted European patent was revoked by the EPO Opposition Division, but such decision is not final yet. Judgments of the courts establishing the nullity of the same patent in Europe may also cast such doubt on the validity of the patent that the interim injunction may not be granted for this reason alone.
Appointing court-appointed experts in interim injunction proceedings is possible, but rare in practice. Therefore, materials, such as opinions by experts engaged by the parties or judgments on the same issues by courts in Europe, may play a more significant role in interim injunction proceedings (where the court decides quickly and on the balance of probability) compared to main action proceedings (where the court needs to resolve all disputed issues by itself to a degree of persuasion).
In terms of timing, interim injunctions owing to patent infringement shall be applied for up to three months after the patentee had learned about the alleged infringement. It typically takes from a few weeks to a few months to obtain a decision on an interim injunction application.
There are no specific statutory provisions or any court practice with respect to the question of whether patentees can face liability for threatening infringement proceedings.
As regards costs of proceedings, the total cost of first instance proceedings on infringement or on validity (including stamp duty, attorney fees, court-appointed expert fees, and translation fees), varies, but it could typically be expected to be about €100,000 to €150,000. The recoverable cost varies depending mainly on the value of the dispute. If no monetary claims are asserted, the value of the dispute is determined by the plaintiff. For example, at a value of dispute of €500,000, the winning party could typically recover about €20,000 to €40,000 in costs.
Slovenia has not yet implemented the decision of the Court of Justice of the European Union No. C-57/15, according to which the amounts of attorney fees to be reimbursed in intellectual property matters need to be reasonable; the current levels of recoverable attorney fees seem too low to be deemed reasonable. There is also no published court practice on the matter so far.
In regulating the rights conferred by a patent, ZIL-1 follows the wording of Article 28 of the Agreement on Trade-Related Aspects of Intellectual Property Rights. According to ZIL-1, a patent confers on the patentee the following exclusive rights:
- where a patent protects a product: to prevent third parties, who do not have the consent of the patentee, from manufacturing, using, offering for sale, selling or for these purposes importing the relevant product; and
- where a patent protects a process: to prevent third parties, who do not have the consent of the patent holder, from using the process and offering for sale, selling or for these purposes importing the product that is obtained directly by this process.
ZIL-1 contains very limited provisions that indicate a person who contributed to the infringement may also be liable for infringement. Although there are no specific statutory provisions in relation to indirect patent infringement, there is some guidance from the court on the matter. In a first instance court decision of 2015 (in a main infringement action that related to a patent with a Swiss type claim), which was confirmed by a High Court decision,11 the courts took a position that a patentee may also seek prohibition of indirect infringement of its patent. The courts came to such conclusion by looking at the respective regulations in some other countries and by seeking analogies with other areas (civil and criminal) of Slovenian law. Further, according to the general principles of liability for damages, the parties who do not directly infringe rights but nevertheless make contributions to the infringing acts of others are jointly and severally with the infringers liable for damages. There are no specific provisions, but it seems that the patentee can also seek injunctions against several persons who act together to infringe a patent.
As Slovenia is party to the EPC, the Protocol on the Interpretation of Article 69 EPC is applicable also in Slovenia. The courts do take the interpretation guidance from said Protocol into account, including the doctrine of equivalents. According to a recent guidance from the Ljubljana High Court12 (in a case that related to construction of a snowboard), an element should be considered equivalent to the element of the invention if it has the same technical effect or resolves the same technical problem in the same way as the respective element of the invention, meaning that it has essentially the same function and that an expert with his or her common general knowledge would be able to identify the allegedly equivalent element as an alternative working in the same way.
There are no specific provisions in ZIL-1 on the potential personal liability of directors or officers of infringing companies. Although personal liability could in certain circumstances be construed from general rules on liability for damages, there seem to have been no cases finding for such personal liability yet.
ii Invalidity and other defences
A patent is declared null if:
- the invention lacks novelty (content of the prior filed but not yet published patent applications for Slovenian national patents, applications for European patents that designate Slovenia, and international applications that were initially filed under the PCT but that SIPO received as an elected Office under Article 39 of the PCT, is novelty destroying);
- the invention lacks inventive step (i.e., it is obvious to a person skilled in the art – content of the applications from previous paragraph is not taken into account when assessing inventive step);
- the invention lacks industrial applicability (i.e., the subject matter of the invention cannot be produced or used in any commercial activity);
- the subject matter of the invention was not patentable; a patent cannot be granted for an invention, the use of which is contrary to public policy or morality, or of surgical or diagnostic methods or methods of treatment practised directly on a living human or animal body, with the exception of inventions relating to products, in particular substances or compositions for use in any of these methods. A short-term patent cannot be granted for an invention of a process or plant or animal varieties;
- the patent description does not disclose the invention in a manner sufficiently clear and complete for it to be carried out by a person skilled in the art to which the invention relates; or
- the content of the protection extends beyond the content of the first received application or, if the patent was granted on a divisional application, beyond the content of the initial application.
According to the Ljubljana High Court resolution,13 the test of novelty is carried out by individual comparison whereby the subject matter of the patent is compared with the whole contents of each individual information. The decisive point is what an expert can directly find out from a publication. In assessing the content of information in the prior art, the (fictitious) knowledge of the expert plays a decisive role.
In addition to challenges to validity, other defences to infringement claims exist, such as private and non-commercial use; research and any type of testing regardless of their goal; individual preparation of medicinal product in pharmacies in accordance with doctor's orders or prescription; certain uses of inventions in ships and aircraft temporarily located in Slovenia.
A Bolar-type defence is provided by the Medicinal Products Act,14 according to which the carrying out of studies necessary to fulfil the requirements of said act and fulfilment of other requirements that relate to obtaining a marketing authorisation for medicinal products shall not be considered as infringement of patent or SPC for the medicinal product.
To defend against infringement, the defendant may also argue prior use. A person is entitled to continue to use the patented invention, if it used it, or prepared for its use, in good faith in Slovenia prior to the patent application date or priority date.
In addition, exhaustion of rights can also be claimed as a defence. According to ZIL-1, exhaustion relates to actions in Slovenia in relation to a product that was put on the market in Slovenia by or with the consent of the patentee (at this point ZIL-1 allows for exceptions but keeps the rule on a very general level). While ZIL-1 does not specifically regulate EU-wide or EEA-wide exhaustion, it does provide that exhaustion of rights conferred by a patent may extend beyond Slovenia if that is in accordance with an international treaty that is binding on Slovenia.
On the other hand, lack of knowledge is not a defence against patent infringement.
Final remedies for infringement
The patentee or exclusive licence holder can file a lawsuit against the infringer and request one or several of the below non-monetary remedies:
- prohibition of present and future infringing actions;
- recall of objects of infringement from the economic flows (taking into consideration bona fide rights of third parties);
- elimination of the situation occurred with the infringement;
- irrevocable removal of objects of infringement from economic fluctuation;
- destroying of objects of infringement;
- destroying of the objects used for infringement acts, if such objects are exclusively or predominantly intended or used for the infringement and are owned by the person infringing the rights;
- delivery of the objects of infringement to the plaintiff, who pays the manufacturing costs; and
- publication of the judgment.
When deciding on the claims (b) through (g) above, the court takes into consideration all circumstances of the case, in particular the proportionality between the infringement act and the claim and the interests of effective protection of patentee's rights.
Damages can be sought. The general rules for liability for damages also apply to damages in patent infringement cases. With respect to the amount of damages sought, the patentee can claim actual loss suffered as well as lost profit. Alternatively, the patentee can claim damages in the amount of agreed or usual royalties. There is no statutory guidance in relation to the licence analogy and there is very limited court practice on damages for patent infringement. The Ljubljana High Court with its judgment and resolution15 in a patent infringement matter set the damages by using the licence analogy to be 4 per cent of sales, as requested by the plaintiff. During the proceedings, the defendant did not challenge this percentage. The provisions of ZIL-1 on final remedies for infringement apply also to other industrial property rights, and there is more court practice on damages for trademark infringement, mainly calculated by way of licence analogy. Those might also be of some limited use in patent infringement matters.
An appeal automatically stays the enforceability of the final injunctions awarded by the judgment.
Other types of patent proceeding
There are certain other types of proceedings relating to patents available in Slovenia.
In terms of challenge of ownership, an inventor or his or her successor in title can start an action before the court requesting to be declared as the patent holder, if the patent was granted to someone who was not the inventor or its legal successor. Such action can be started at any time during the term of the patent.
Further, a compulsory licence may be requested before the court. According to ZIL-1, a compulsory licence shall be granted if that is in the public interest or if the patentee or licensee abuses the patent in a manner that it restricts competition contrary to the provisions of the law. A compulsory licence may be granted provided that the claimant had tried to enter into a licence agreement with the patentee under reasonable business conditions and that such efforts, given reasonable time, were unsuccessful. Any granted compulsory licence shall be limited in scope and duration with respect to its purpose, shall generally be non-transferable and non-exclusive and its purpose will be mainly to supply the Slovenian market. A royalty to the patentee will also be set. There is, however, no publicly available court practice on compulsory licences.
Customs proceedings based on the EU Regulation 608/2013 concerning customs enforcement of intellectual property rights can be used in relation to patent infringement. However, although patentees sometimes do submit applications for actions by the competent customs authority (the Slovenian Financial Administration) in relation to their patents, seizures for patent infringement are very rare in practice. Said procedures are more common for trademark infringement.
Further, negative declaratory lawsuits are possible, requesting from the court to establish that a right is not infringed if the right holder's legal position is endangered.16
Patent infringement can also constitute a criminal offence and legal entities can be found liable for such offence. A legal entity can be fined for the criminal offence of patent infringement with a fine of up to €500,000 or hundredfold the amount of damage caused or benefit obtained.
The right to appeal a first instance court judgment is a constitutional right. Therefore, any first instance court judgment also in patent infringement or invalidity matters is open to appeal. Grounds for appeal are rather broad as appeal can be brought for incorrect finding of facts and incorrect use of substantive law as well as for procedural breaches. An appeal can be lodged within 30 days of service of the judgment on the respective party. In turn, the adversary can lodge a response to the appeal, in 30 days upon service of the appeal.
The appeal is decided by the Ljubljana High Court. Though possible, the High Court typically does not schedule oral hearings; rather it decides on the matter on the basis of the written appeal and the response to the appeal.
Adducing new evidence is generally not possible in appeal proceedings. In the appeal, a party may only propose new evidence if it can show that it was unable to propose it to the court before through no fault of its own.
The time to resolve the appeal varies, but it typically takes up to a year. The High Court may: (1) decide on the matter with a final judgment, either denying the appeal or granting the appeal and changing the first instance court judgment; or (2) revoke the first instance court judgment and return the matter for a retrial to the first instance court. A judgment following retrial is again open to appeal.
As regards costs of proceedings, the total cost of appeal on infringement or on validity (which typically includes stamp duty and attorney fees) varies but would typically be about €20,000. The recoverable cost varies, depending mainly on the value of the dispute. For example, at a value of dispute of €500,000, the winning party could typically recover about €8,000 in costs.
A change in the law in 2017 abolished the automatic (previously available for any commercial disputes over €200,000) right to lodge further (i.e., an extraordinary) legal remedy called 'revision'. Under new regulation in respect of a final judgment of the High Court, the unsuccessful party may only request the Supreme Court of the Republic of Slovenia for permission to lodge a revision. The Supreme Court will permit the revision if it is well founded and mainly to establish or unify the court practice on legal questions. There is a two-step process in that regard. In the first step, the unsuccessful party may ask for permission to lodge the revision and if permission is granted, then the party may lodge the revision in the scope in which it was permitted. The Supreme Court decides on a revision about a year after the revision was lodged.
The year in review
Over the past 18 months, one Supreme Court resolution (in a trademark matter, but relevant also in respect of patents) was issued and published. This resolution is noteworthy for the fact that the Slovenian Supreme Court with it confirmed that a declaratory judgment can be issued, declaring a non-infringement of a right, based on assertions that, because of the acts of the defendant, the plaintiff's legal position has been concretely endangered.
There are currently no particular hot topics developing in Slovenia and there is also no published forthcoming legislation significantly affecting patent litigation.
1 Aleksandra Jemc Merc is a partner and Eva Gostiša is a senior counsel at Jadek & Pensa.
2 Official Gazette of the Republic of Slovenia, No. 45/01 as amended, in Slovenian: Zakon o industrijski lastnini, abbreviated as ZIL-1.
3 Regulation (EC) No. 1901/2006.
4 Judgment of the Supreme Court of the Republic of Slovenia, No. III Ips 14/2001 dated 18 May 2001. The case related to trademarks but given that the same provision of ZIL-1 regulates legal standing for patent and trademark nullity matters, the decision of the Supreme Court can also be applied to patent matters.
5 Judgment and resolution of the Ljubljana High Court, No. V Cpg 1150/2015 dated 16 September 2015.
6 The Ljubljana High Court with its judgment dated 31 August 2017 in matter No. V CPG 479/2017 concerning a trademark infringement decided that a nullity objection suffices and there is no need to file a counterclaim. The Supreme Court with its judgment No. III Ips 32/2018 dated 19 February 2019 reversed this decision and stated that a nullity proceedings is separate proceedings and needs to be initiated separately. Nullity cannot be claimed only as an objection in a trademark infringement proceedings.
7 Owing to the nature of claims in interim injunction proceedings relating to patent infringement this particular condition, even though specifically mentioned as a possibility in ZIL-1, will typically not be of use (confirmed also by a High Court decision).
8 Decision of the Constitutional Court of the Republic of Slovenia, No. Up-275/97 dated 16 July 1998.
9 Resolution of the Ljubljana High Court No. I Cpg 1014/2010 dated 16 September 2010.
10 For example, resolution of the Ljubljana High Court No. V Cpg 196/2018 dated 12 April 2018.
11 No. V Cpg 723/2015 dated 23 December 2015.
12 No. V Cpg 894/2017 dated 23 November 2017.
13 No. I Cpg 538/2007 dated 14 February 2008.
14 Medicinal Products Act (Official Gazette of the Republic of Slovenia No. 17/2014; in Slovenian: Zakon o zdravilih, abbreviated as ZZdr-2).
15 No. V Cpg 1681/2015 dated 13 July 2016.
16 Supreme Court Resolution No. III Ips 68/2018 dated 19 March 2019, concerning a trademark matter.