On the Way to Fair Balance, the French Approach to Patent Litigation

Pierre Véron - Véron & Associés

Isabelle Romet - Véron & Associés

Two of Europe's leading experts provide an interesting insight into recent developments that have affected the way patent litigation is done in France.

Isabelle Romet and Pierre Véron

Isabelle Romet and Pierre Véron

The desire to achieve a fair balance between patentees and the public domain, the increasing number of international exchanges between European judges and the pressure created by forum shopping are only some of the numerous factors stimulating legislators, judges and lawyers to improve the quality and efficiency of patent litigation in their jurisdictions. Those who were familiar with French patent litigation only before 2007 will be surprised by the significant evolutions and new practices adopted in subsequent years by French judges, who seek an efficient and reasonable approach, as shown by the results of a statistical study performed by the law firm Véron & Associés on the patent decisions issued by Paris judges over the period of 2000 to 2009.

Paris, Capital of French Patent Litigation

Since 1 November 2009, the court of Paris, both in first instance and in appeal, has exclusive jurisdiction over patent cases, including for the grant of orders authorising the hundreds of seizures performed every year. In the first instance, all the patent cases are handled by the third chamber of the Tribunal de grande instance of Paris, which comprises four panels (sections) composed of three judges each and which handle only intellectual property cases (patents, trademarks, designs and copyright). In appeal, patent cases are handled by two panels, each made up of three judges specialising in intellectual property.

This concentration of patent litigation is praised by all practitioners. It enhances the quality of patent case law since all decisions are issued by specialist judges. It increases legal security since it is no longer possible for a plaintiff to choose a court with less experienced judges for a weak case. It also simplifies patent litigation by avoiding collecting evidence specifically intended to justify the jurisdiction of the most experienced court.

French Patent Litigation in Figures

On average, in France, approximately 350 new patent cases are initiated every year in first instance and 110 appeals are lodged. This volume makes France the fourth country in the world for patent litigation, after the United States, China and Germany (preceding Japan, Italy, Canada, the United Kingdom, the Netherlands and Australia). This represents a litigation rate of less than one patent for every 1,000 patents per year, considering that, over the 2004 to 2008 period, there were about 385,000 patents in force in France every year according to the French Industrial Property Institute (key figures of the Intellectual Property Observatory, 2004 to 2008).

Patent Case Typology

The study of the 1,820 decisions issued by the Tribunal de grande instance of Paris over the 2000 to 2009 period is quite instructive. Infringement litigation represents 81 per cent of cases, including the few actions seeking a non-infringement declaration. Employee invention litigation falls very far behind, representing a little more than 5 per cent of the litigation, but shows a significant increase as compared to the 2 per cent rate over the 1990 to 1999 period. Decisions handed down in contractual disputes also total 5 per cent, followed by ownership claims (4 per cent). Main actions for patent nullity lodged independently of any infringement action represent no more than 3 per cent. This low percentage results from the fact that, until now in France, a counterclaim for invalidity has been as efficient as a main claim for revocation. The comparison of the number of new cases every year and of the number of decisions suggests a settlement rate of about 40 per cent in first instance.

Figure 1: Paris first instance court, nature of actions over the 2000-2009 period.

Figure 1: Paris first instance court, nature of actions over the 2000-2009 period.

Competitive Calendars

Ten years ago, first instance proceedings could last up to three or four years and France seemed to be increasingly left out of the running by countries such the United Kingdom, the Netherlands and Germany. Nowadays, France competes with the quickest jurisdictions, as shown by several major cases. In the multi-jurisdictional case brought by Novartis against Johnson & Johnson on the grounds of a patent relating to extended-wear contact lenses, the French first instance decision was issued within 17 months, exactly like the Dutch first instance decision, and far quicker than the English and German decisions. This result was obtained by a new case management policy adopted by the judges upon consultation with the lawyers. However, the French system remains flexible so that the duration of proceedings may significantly vary according to the cases.

Interactive Oral Hearings

Another major change relates to the final oral hearing. In the past, each lawyer would have delivered a monologue before the judges who, more often than not, remained silent. Likely inspired by the European Patent Office and by certain foreign colleagues, most French judges now call for interactive debates: they no longer hesitate to ask numerous questions. It is now more crucial than ever for lawyers and their clients to anticipate all questions that may arise over the course of the hearing. This new interactive approach helps the judges to better assess the strength and credibility of each party’s arguments. For the past few years, judges have welcomed PowerPoint presentations and all appropriate visual aids, which are often the most efficient way for a party to explain clearly and quickly the key technical concepts and issues of the case. Such tools are all the more useful since each lawyer rarely has more than two to three hours to present a complex patent case. The challenge, within this short time slot, is to provide the judges with the necessary keys to understand and correctly assess the detailed arguments developed in writing in the pleadings filed by the parties, in light of the exhibits produced in their support. This short oral hearing is followed by a much more time-consuming work of the judges as they draft the decision based on the parties’ pleadings and exhibits.

Litigation Costs

French judges have also changed their policy relating to awards granted to the winning party on the grounds of article 700 of the French Code of Civil Procedure to provide compensation, at least in part, for its litigation costs. Until 2007, these awards rarely exceeded €30,000. Nowadays, several winning parties have been awarded sums ranging from €200,000 to €300,000 which covered a significant part of their litigation costs. This new policy was presented by French judges in 2007 as a means of rendering patent enforcement easily available to all patent owners.

Trends on the Merits

The study of all the decisions issued by the Paris court from 2000 to 2009 shows that, in first instance, 40 per cent of patents are held valid; and 33 per cent are held valid and infringed:

Figure 2: Paris first instance court, outcome of patent cases over the 2000-2009 period

Figure 2: Paris first instance court, outcome of patent cases over the 2000-2009 period

The success rate of the patentee was significantly higher over the previous decade 1990 to 2000, with around 81 per cent of patents held valid and 54 per cent of patents held valid and infringed. However, this evolution seems consistent with the worldwide trend to ‘raise the bar’. In any case, it seems that the French approach avoids extremes and seeks a fair balance. In particular, a validity rate of 73 per cent remains satisfactory and explains cases, such as Novartis v Johnson & Johnson, in which the French designation of the European patent was held valid both in first instance and in appeal, while it had been held invalid in the United Kingdom, in Germany and in Austria in the period of time between the two French decisions; the Dutch designation was also held valid in first instance, but the Dutch case was settled before the appeal decision. It is too early to assess whether this validity rate will increase as a result of the new post-grant claim limitation procedure before the French Patent Office. Regarding the infringement rate, the percentage of patents held valid and infringed (33 per cent) should be considered in relation to the percentage of patents held valid (40 per cent): the combination of these figures means that about 45 per cent of the valid patents are held infringed. This rate seems also reasonable. It most probably results from the French approach of infringement, based on the concepts of infringement by reproduction of the essential features of the claim and infringement by equivalence, which imply defining the scope of the patent in light of the prior art.

The study of the outcome of appeal proceedings, with a reversal rate limited to 15 per cent, shows the major importance of the first instance decision. The success rate before the Cour de cassation is quite similar, with 9 per cent of decisions quashed and 14 per cent of decisions partially quashed.

Preliminary Injunctions

Only a small number of preliminary injunctions are granted every year (between one and three on average). According to article L. 615-3 of the French intellectual property Code, preliminary injunction may be granted when: “evidence reasonably accessible to the claimant makes it likely that its rights are infringed or that such infringement is about to be committed”. As only a valid patent can be infringed, judges grant a preliminary injunction only when the defendant has no serious argument to challenge the patent validity or the infringement, in order to avoid, as much as possible, the critical scenario in which a defendant has to stop the accused activity on the grounds of a patent which turns out to be invalid or not infringed. However, five decisions of 2010 and 2011 refer to the balance of the parties’ interests and suggest that French judges may have introduced an additional factor – not mentioned in statutory provisions – in the decision to grant preliminary injunctions. This factor is mentioned in two decisions granting a preliminary injunction (on 12 February 2010 in E.I. Du Pont de Nemours and Merck Sharp & Dohme v Mylan (Losartan) and on 28 January 2011 in Novartis v Actavis (Diovan)). It is also mentioned in three decisions refusing preliminary injunction, of 19 August 2010, in actions started by Aventis (Taxoter). Future decisions will tell whether the balance of parties’ interests lead French judges to grant more preliminary injunctions than in the past. It should also be noted that the decision of 12 February 2010 was issued within 10 days from the plaintiff’s request.

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These positive developments should encourage all actors to continue to improve patent litigation in their jurisdictions and share their experiences. France seems in the good direction towards a reasonable balance. The improvements in national systems may well be the best reply to the difficulties encountered in creating a European patents court.

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