The Patent Litigation Law Review: Switzerland
i Patent litigation landscape in general
Until the end of 2011, each of the 26 Swiss cantons had one court that acted as the court of first instance for patent-related disputes. Most of these 26 courts had only limited experience in patent law because the majority of the patent cases were brought before the four commercial courts of the cantons of Zurich, Argovia, Saint-Gall and Berne. Even these four commercial courts were not as experienced as the stakeholders would have wished because the number of cases handled by each of the commercial courts was still relatively low. The shortcomings of the old system were evident, but efforts to establish a new federal court before which all patent disputes could be concentrated failed for a long time because of constitutional restraints. This changed in 2000 when the Swiss Constitution was amended and the power to legislate in the field of civil procedure law moved from the cantons to the federal level. In a common effort, stakeholders sought to convince the federal government of the need to improve the legal system for patent litigation by creating a specialised court to serve as the sole court of first instance in patent matters in Switzerland. These endeavours were successful: the federal legislator addressed the issue and passed the Federal Patent Court Act (PCA) in March 2009, establishing the Swiss Federal Patent Court in Saint-Gall, a city in the north-eastern part of Switzerland, one hour away from Zurich.
The Federal Patent Court is vested with Switzerland-wide exclusive jurisdiction over those actions that require the application of substantive patent law, and the PCA provides for concurrent jurisdiction of the Federal Patent Court and the cantonal courts for other patent-related disputes, such as disputes arising from patent licensing agreements. Accordingly, the Federal Patent Court has exclusive jurisdiction over:
- actions regarding the validity of patents, patent infringement actions and actions for compulsory licences;
- applications for preliminary measures; and
- enforcement proceedings regarding judgments issued under the Federal Patent Court's exclusive jurisdiction.
The Swiss Federal Patent Court shares its name with the German Federal Patent Court. This coincidence should not disguise that the two courts play fundamentally different roles in the patent litigation systems of the two countries. While the German Federal Patent Court is not competent to adjudicate claims regarding the infringement of patents, the Swiss Federal Patent Court's jurisdiction extends to any and all questions that may arise in a patent litigation, including infringement and validity.
A notable feature of the Federal Patent Court is that it comprises both legally and technically trained judges. Roughly two-fifths of the technical judges graduated in chemistry, biochemistry or biology, a third in physics, and the rest in mechanical and electrical engineering. The vast majority of the technically trained judges are qualified European patent attorneys. While the president is the only full-time judge of the Federal Patent Court, one technically trained judge has a part-time appointment and the further judges are called on a case-by-case basis.
In litigations before the Federal Patent Court, the parties are free to use for their submissions and pleadings any of the official Swiss languages – German, French, Italian and Romansh. If all parties agree, they may also use English. Parties make use of this option in roughly one-third of the cases.
ii Unitary patent territory Switzerland and Liechtenstein
According to a treaty between Switzerland and Liechtenstein, the two countries constitute one single patent territory. Swiss national patents and European patents designating Switzerland or Liechtenstein are also valid in the respective other country and can only be invalidated for both countries together.
Nullity actions can be initiated before courts in Switzerland or in Liechtenstein. In both cases, a final appeal is possible to the Swiss Federal Supreme Court. While Switzerland has a specialised patent court (the Swiss Federal Patent Court), the ordinary courts are competent in Liechtenstein.
Types of patent
Switzerland is a signatory to the European Patent Convention, so Swiss national patents and European patents granted by the European Patent Office coexist in Switzerland. The granting authority for Swiss national patents is the Swiss Federal Institute of Intellectual Property (IPI) in Berne, which also maintains the register for Swiss national patents and the Swiss parts of European patents. Unlike European patents, Swiss national patents are granted without the IPI examining whether the invention is new and inventive in light of the prior art. Despite this difference, a Swiss national patent confers the same rights on its proprietor as the Swiss part of a European patent.
Under Swiss law, supplementary protection certificates (SPCs) for medicinal products and for plant protection products may be granted on the basis of Swiss national and Swiss parts of European patents. The Swiss regime for SPCs closely follows the corresponding legislation of the European Union. However, because Switzerland is not a member of the European Union, judgments of the European Court of Justice on the interpretation and application of the EU legislation on SPCs are not binding in Switzerland. A Swiss SPC's maximum term of protection is five years.
Swiss lawmakers also partially followed the EU's endeavours to improve the health of children by incentivising pharmaceutical companies to perform paediatric tests for their drugs by extending already granted SPCs by an additional six months (Paediatric Extensions). The Swiss legislator, however, went one step further and decided to not only grant the benefit of an additional six months' exclusivity period to those who have already been granted an SPC, but also to those who, for whatever reason, have not previously obtained an ordinary SPC (Paediatric Certificate). The detailed regulations for the Paediatric Extensions and the Paediatric Certificate can be found in the Federal Ordinance on Patents.
Procedure in patent enforcement and invalidity actions
i Patent enforcement actions
In Switzerland, the Federal Patent Court has exclusive jurisdiction for patent enforcement actions. An enforcement action is initiated with the filing of a written and substantiated statement of claim and payment of an advance on court costs, which is followed by the written statement of defence. In the statement of defence, the defendant may either file a counterclaim on invalidity or simply raise the invalidity of the patent in suit as a defence. In the case of a counterclaim, the Federal Patent Court declares the patent invalid with erga omnes effect if it finds that the challenge has merit, while in the case of a successful invalidity defence, the infringement claim is dismissed without the court revoking the patent. Challenging the validity of a patent is usually not considered a reason for staying infringement proceedings.
Swiss courts have a long tradition of actively facilitating and promoting settlements. The Federal Patent Court is faithful to this tradition. The procedural step that serves this purpose is the preparatory or settlement hearing, to which the parties are typically summoned after the first exchange of submissions. At the preparatory hearing, a court delegation typically consisting of a legal and a technical judge provide their preliminary opinions on how they would decide the case in light of the submissions and evidence produced so far. Because at this stage the fact-finding has not been concluded and only the opinions of two out of three to five judges that would render a final judgment are given, this preliminary assessment does not prejudice the final outcome of the case. In order to reinforce the preliminary nature of their opinions, the opinions are only provided orally, and the parties are prohibited from referring to them in their subsequent submissions and pleadings. The preliminary opinions of the judges serve as starting point for subsequent settlement discussions with the involvement of the court delegation. Historically, the majority of patent disputes was settled at this stage. In recent years, this percentage has decreased dramatically.
The further course of the litigation depends on whether the case is settled at the preparatory hearing or not. If no settlement is achieved, the plaintiff is given the opportunity to submit the statement of reply, followed by defendant's statement of rejoinder. After the double exchange of briefs has been completed, a technical judge provides a written opinion that is then provided to the parties for commenting. The final step is a hearing that is the first and last opportunity for the parties to directly address the full panel of judges. While the parties are precluded from introducing new facts at this stage, they typically use this opportunity to emphasise certain points and summarise their view, in particular on the technical judge's opinion. The court then renders its judgment on infringement and, if relevant, the invalidity counterclaim, typically within around 18–24 months of commencement of the action.
In the case of infringement actions, it is standard practice in Switzerland to request the court to decide on the infringement or liability first, to then order the defendant to provide information on his or her sales and profits and to decide on the quantum only thereafter. This course of action is called 'action by stages'.
Under Swiss law, the owner of a patent as well as any person who holds an exclusive licence under the respective patent is entitled to bring an infringement action, irrespective of whether the licence is registered in the patent register.
The following table provides an overview of the steps and the timing of a typical infringement action before the Federal Patent Court.
|Plaintiff||Federal Patent Court||Defendant||Timeline (tentative)|
|Statement of claim||Day 0|
|First advance on court costs||3 weeks|
|Statement of defence (invalidity counterclaim or invalidity defence possible)||8 weeks|
|Instruction/settlement hearing. Litigation terminates if there is a settlement. If no settlement is reached, litigation continues|
|Second advance on court costs||3 weeks|
|Comments on new allegations in rejoinder||3 weeks|
|Written opinion of technical judge||1–6 months|
|Comments on written opinion of technical judge||Comments on written opinion of technical judge||6 weeks|
|Main hearing||Approximately 3 months after last submission|
|Appeal proceedings at Federal Supreme Court||Approximately 6–9 months|
ii Invalidity actions
Invalidity actions follow the same structure and are typically also decided within around 18–24 months of the filing of the action. Exclusive jurisdiction for invalidity actions is with the Federal Patent Court.
Pursuant to the Swiss Patent Act, anyone with a proven interest may bring an invalidity action. An invalidity action may be brought despite pending proceedings before the European Patent Office, but the Patent Act provides that the Federal Patent Court may stay its action pending a final decision of the patent office. In practice, the Federal Patent Court only makes very reluctant use of this option. Rather than staying an invalidity action, the Federal Patent Court prefers to invite the European Patent Office to accelerate its proceedings.
Whenever the validity of a patent is challenged, be it in an invalidity action or in the case of a counterclaim in infringement proceedings, the patentee is free to amend the patent claims in the court proceedings. In principle, the same is true for situations where the defendant only raised an invalidity defence, in which case, however, limitations only have effects as between the litigant parties. The patent may be limited by deleting patent claims altogether, by combining an independent claim with one or more dependent claims, or otherwise, provided the restricted claim still relates to the same invention and defines an embodiment that is included in the specification of the published patent and in the version of the application that determined the date of filing.
iii Interim relief
Anybody who has standing to bring an infringement action is entitled to interim relief, in particular in the form of a preliminary injunction, if he or she provides prima facie evidence:
- that the defendant has committed or intends to commit an act of infringement; and
- that he or she is threatened by a loss that is not easily reparable.
Such requests are decided in inter partes proceedings, unless the urgency is so great that hearing the defendant prior to ordering measures is not warranted, in particular because it would frustrate the very purpose of the requested measure. If an interim measure is ordered ex parte, it needs to be confirmed inter partes.
For inter partes interim relief, immediate urgency is not an independent requirement. According to case law, a claim for preliminary relief is forfeited if the petitioner, after having learned about the infringement, files the request for preliminary relief so late that a decision on this request may no longer be expected to issue sooner than a judgment in an ordinary proceedings initiated immediately after the petitioner had learned about the infringement would have issued. This is called the concept of 'relative urgency'. Pursuant to the case law of the Federal Patent Court, the requirement of relative urgency is no longer met if the petitioner initiates interim relief proceedings more than 14 months after having learned of the infringing activities.
As in proceedings on the merit, the defendant can raise invalidity of the asserted patent as a defence.
The Federal Patent Court may, upon request or ex officio, make an interim measure conditional on the payment of security by the applicant if it is anticipated that the interim measures may cause loss or damage to the alleged infringer.
A party expecting a patentee to file an ex parte request for interim measures can deposit a protective letter explaining to the Federal Patent Court the reasons why such a request should be dismissed, or at least not decided ex parte. The patentee is only informed of the protective letter after having filed a request for interim measures.
Interim relief proceedings before the Federal Patent Court typically take between three and nine months, depending on the number of asserted patents and the complexity of the issues raised by the parties.
The applicant is liable for any loss or damage caused by unjustified interim measures. An action for damages must be substantiated and proven in a separate lawsuit. Where the exact value of the loss or damage cannot be quantified, the court may estimate the amount, provided the claimant has sufficiently substantiated the factors required for the estimation. On the other hand, the court may reduce the damages or entirely release the applicant from liability if the latter proves that he or she applied for the interim measure in good faith. Whether full or any damages are awarded therefore depends on whether the applicant is found to have applied for the interim measure for legitimate reasons and has conducted the proceedings in good faith.
iv Means of evidence
Patent actions are largely based on written evidence such as written prior art, evidence in writing for the skilled person's general knowledge, drawings and photographs of the allegedly infringing embodiment, correspondence between the parties and the like. Other means of evidence are used much less frequently; witnesses are heard but not as a matter of routine, affidavits and private expert opinions do not qualify as means of evidence, and because the Federal Patent Court usually finds the required expertise among its judges, it does not need to rely on the opinion of external experts.
The infringement analysis necessarily begins with claim interpretation. The starting point is the wording of the patent claims, whereby in case of a European patent the wording of the claim in the respective procedural language is binding, even if this is English. Pursuant to Article 69 of the European Patent Convention and the parallel provision in the Swiss Patent Act, the description and the drawings must be used to interpret the patent claims. The Federal Patent Court describes the rule of interpretation that it applies as follows:
Patent claims must be interpreted from the perspective of the person skilled in the art, taking into account the description and the drawings. General common knowledge, as so-called fluid prior art, is also a means of interpretation. If the patent specification does not define a term differently, then the common understanding in the relevant technical field is applied. Patent claims must be interpreted functionally, i.e., a feature should be understood such that it can fulfil its intended purpose. The claim should be read such that the embodiments specified in the patent are literally covered; on the other hand, the wording of the claim must not be restricted to the embodiments, if further embodiments may be covered. When case law talks about the 'broadest interpretation' of claim features, the feature must be understood in such a way that it can always fulfil its purpose within the framework of the invention, i.e., the claim should in principle not be interpreted narrower than its wording, but also not so as to cover embodiments that do not realize the effect of the invention.
Rather than providing a conclusive list of infringing activities, the Swiss Patent Act, in a general manner, states that the patent confers on its proprietor the right to prohibit others from commercially using the invention. By way of example, 'using the invention' includes manufacturing, storage, offering, placing on the market, importing, exporting and carrying in transit, as well as possession for any of these purposes. If the invention concerns a manufacturing process, the effects of the patent also extend to the products directly obtained by that process.
With respect to transit, the Patent Act clarifies that carrying in transit may only be prohibited if the proprietor of the patent is permitted to prohibit importation into the country of destination.
The Patent Act further states that 'imitation is also deemed to constitute use'. This provision served as the basis for a long chain of case law that ultimately evolved in today's doctrine of equivalence. According to recent case law, a method or device that does not literally fulfil one or more claim features but employs replacing features is considered an 'imitation' if from the following three questions the first two may be answered in the affirmative and the third in the negative:
- Does the replacing feature in conjunction with the other technical features of the patent claim objectively fulfil the same function as the claimed feature ('same effect')?
- Is the same effect obvious to the person skilled in the art from an objective point of view, taking into account the teaching of the patent, when the features are exchanged ('accessibility')?
- Does the person skilled in the art, upon objective reading of the patent specification, come to the conclusion that the patentee has formulated the claim – for whatever reason – so narrowly that he or she does not claim protection for an embodiment with the same effect that is accessible ('equal value')?
Furthermore, the Patent Act holds that not only the direct infringer may be held liable, but also 'any person who abets any [direct infringement], participates in them, or aids or facilitates the performance of any of these acts'. Illicit contributory infringement, therefore, requires that the person in question contributes to an act that qualifies as direct infringement under the Swiss Patent Act. From this requirement of accessoriness, Swiss courts have concluded that a person may be liable as contributory infringer only if the direct infringement to which he or she contributes takes place in Switzerland. On the other hand, Swiss courts have also decided that it does not matter from where the contributory infringer contributes to a direct infringement in Switzerland. A person may, therefore, be liable as contributory infringer under Swiss law if this person contributes to a direct infringement in Switzerland either from within Switzerland or from abroad. A further requirement derived from the statutory requirement of accessoriness is that there must be a sufficiently close causal connection between the contributory action and the direct infringement. This is the case if, for example, means are explicitly offered for an infringing use or if means may only be used in such a manner.
ii Invalidity and other defences
Swiss national patents and European patents are presumed to be valid. Upon request of an interested third party, a Swiss national and a Swiss part of a European patent may, however, be declared completely or partially invalid if the subject matter of the patent is not patentable – in other words:
- if what is claimed is not novel, not inventive, lacks industrial applicability or relates to unpatentable subject matter;
- if the invention is not described in the specification in a manner sufficiently clear and precise for it to be carried out by a person skilled in the art;
- if the subject matter of the patent goes beyond the content of the patent application in the version that determined the filing date; or
- if the proprietor of the patent is neither the inventor nor his or her successor in title, nor has a right to the grant of the patent on other legal grounds.
The novelty test is strict. An invention only lacks novelty if it is anticipated in a single piece of prior art or by prior use. While both the Federal Patent Court as well as the Federal Supreme Court have repeatedly stated that there is no single test for assessing inventive step, both courts predominantly apply a modified form of the problem-solution approach initially developed by the European Patent Office.
Defences to infringement claims include a private use exemption, an experimental use exemption, a Bolar-type exemption and a prior user right. Two further exceptions – doctors' and pharmacists' exceptions – entered into force in 2019. Furthermore, the Patent Act contains a quite detailed provision on exhaustion. The principle rule is that patent rights exhaust on a Switzerland and EEA-wide basis (the principle of regional exhaustion). Exceptions to this rule are international (global) exhaustion if the patent protection is only of subordinate importance for the functional characteristics of the goods in question, and national (Swiss) exhaustion if the prices of the patented goods are publicly fixed. In a preliminary injunction case, the Federal Patent Court held that a patented cooling system for a turbo charger was only of subordinate importance (i.e., 'nice to have') for a car equipped with a combustion engine featuring such a device, and that, therefore, in that case international exhaustion applied.
Final remedies for infringement
The standard forward-looking remedy for infringement is a permanent injunction. Injunctive relief is granted unconditionally and automatically. In addition, the patentee may demand that the unlawful situation be remedied, for example, by withdrawal of infringing goods from the supply chain or destruction of infringing goods.
The successful claimant may also ask for compensation for past infringement and alternatively claim damages based on tort law, the infringer's profits based on the law on the conducting of business without mandate, or a reasonable royalty based on the law on unjust enrichment. While the claim for the infringer's profits requires that the infringer acted in bad faith, damages are awarded if the defendant infringed the patent negligently or intentionally, and the royalty claim is independent of the defendant's fault. If the requirements of all claims are fulfilled, the claimant does not need to elect until the taking of evidence has been concluded and the defendant has rendered account.
The damage claim is designed to put the infringed party in the position it would be had the infringement not taken place. The infringed party bears the burden of proof for its damage, which, in the case of lost profits, requires proof of the infringed party's profit margin.
The infringer's profits are its turnover minus those costs that are directly attributable to the infringement. The burden of proof for these deductible costs lies with the infringer. However, only that part of the profits must be surrendered that may be attributed to the use of the infringed patent. If the infringer can show that other factors also contributed to the profits – for example, the use of other intellectual property rights such as other patents or trademarks – it is at the court's discretion to estimate the portion of the infringer's profits that have to be surrendered to the patentee.
The claim for a reasonable royalty is widely discussed in the literature, but there is no case law available where this method has actually been applied in contradictory proceedings. The reasonable royalty is the royalty that the infringer would reasonably have had to pay if it had obtained the patentee's consent to use the infringed patent. For determining the relevant reference base and the royalty rate, one usually looks at actual licence agreements relating to the specific patent or similar technologies and then adjusts the terms in light of the specific circumstances of the matter; for example, with respect to the relevance of the patent for the specific product, the remaining term of protection and the level of competition.
A compensation action may only be brought after the patent has been granted. The infringer may, however, be held liable for loss or damage caused from the time when he or she first obtained knowledge of the content of the patent application, but at the latest from the publication of the application.
Other types of patent proceeding
i Precautionary taking of evidence
Swiss law provides different instruments that allow the taking of evidence before proceedings on the merits are commenced. These instruments have proven to work well and to deliver results quickly.
The Swiss Code of Civil Procedure provides that courts must take evidence at any time before a case on the merits becomes pending if the requesting party has an 'interest worthy of protection'. According to now established case law, one such interest justifying the taking of evidence prior to the filing of an action on the merits is the requesting party's interest in being better able to assess the chances of success of a potential civil claim. This tool is, in other words, designed to help avoid unnecessary proceedings. It has proved to be helpful in cases where a party requires information that is in the hands of the opponent to decide whether initiating a litigation is warranted or not.
The patent act, on the other hand, introduced a new tool that in the literature has been denominated saisie helvétique. In order to not only preserve but establish evidence, the Federal Patent Court can be requested to order the exact description of an allegedly infringing process, of allegedly infringing products or of the means used for producing such products.
In practice, delineating the two tools is not easy and they are often combined to obtain clarity with respect to a 'missing link'. As a requirement, the requesting party must provide prima facie evidence that the patent would be infringed should the missing link be established. Typically, such requests are decided on in a couple of days, and the description is then conducted by a member of the Federal Patent Court without prior warning of the presumed infringer. In order to protect the confidentiality interests of the affected party, the law provides that the Federal Patent Court must give the affected party the opportunity to comment on the findings before they are handed over to the requesting party, and that the court in general shall take the necessary precautions to protect the affected party's legitimate interests. In particular, the Federal Patent Court typically excludes the requesting party from the description proceedings but allows their legal or patent attorneys to attend the description.
ii Further actions before the Federal Patent Court
Swiss law provides for the possibility of positive declaratory actions (e.g., declaration that a certain patent is valid) and of negative declaratory actions (e.g., declaration that a certain patent is not infringed). Declaratory actions are only accepted if the plaintiff substantiates: (1) an uncertainty regarding a legal relationship; (2) that the uncertainty cannot be reasonably tolerated by the plaintiff any longer; and (3) that the plaintiff has no other option to remedy that uncertainty, in particular that there is no option to bring an action for performance against the defendant to remedy the intolerable uncertainty.
The Federal Patent Court is further competent to hear applications for the grant of compulsory licences and entitlement actions.
iii Further measures not involving the Federal Patent Court
Acts of wilful patent infringement are criminal offences under Swiss law. The maximum penalty is a custodial sentence not exceeding five years or a monetary penalty of up to slightly more than 1 million Swiss francs, or both.
The Swiss patent act also provides for border measures that can be put in place upon request of the proprietor of a patent. Request forms can be downloaded from the website of Stop Piracy, a Swiss association that includes members from the private sector, authorities and consumer representatives.
As a court of first instance, decisions of the Federal Patent Court may be appealed. Such appeals are made directly to the Federal Supreme Court, which is the final court of appeals for all decisions rendered by the Federal Patent Court. The Federal Supreme Court only has very limited competence to review facts, and its decision-making processes are impressively efficient. Presently, appeal proceedings before the Federal Supreme Court usually take around six months.
The year in review
In the past 18 months, the Federal Patent Court and the Federal Supreme Court rendered a few landmark judgments on substantive patent matters and a very important judgment clarifying until what stage a plaintiff may submit limited claims.
The Federal Patent Court had to decide on the validity of numerous patents relating to controlled release formulations comprising oxycodone and naloxone, registered on behalf of Mundipharma Medical Company. The main issue in all these cases was added matter. In particular, the Federal Patent Court had to decide in what circumstances features that were present in the claims as originally filed may later on be omitted. The Federal Patent Court considered that this depends on whether the feature in question is essential and also linked to the other features. Referring to the European Patent Office 'gold standard', the Federal Patent Court held that a feature mentioned in an independent claim could be omitted if either it was immediately and clearly recognisable to the skilled person that the respective feature made no technical contribution to the invention or if, although it did make a technical contribution, it was immediately and clearly recognisable to the skilled person that the feature was not mandatory for the invention and in particular was not linked to the other features of the claim. However, when reading a patent application or a patent specification, the skilled person generally assumes that features, if expressly mentioned in a claim, are relevant and not simply superfluous. A feature may thus be omitted if the skilled person, in light of general technical knowledge, considers the claimed subject matter to be (explicitly or implicitly) directly and unambiguously disclosed in the original version of the application even without the disputed feature.
Another landmark line of judgments concerned the question of until what stage in a litigation the patentee may file an amended version of the patent in suit. The background was always the same. After receipt of the written opinion of the technical judge (i.e., usually several months after the closure of the file (rejoinder)), the patentee realises that the patent in the version asserted so far will most likely be found to be invalid. Because the file has already been closed, the patentee can no longer amend the patent within the framework of the proceedings before the Federal Patent Court. In an attempt to circumvent this barrier, patentees have tried to formally amend the patent before the IPI and to then introduce the thus restricted patent into the litigation as a genuine novum. The Federal Supreme Court has now ruled in a landmark decision that this is not permissible.