This week in IP: Sisvel ruling unpacked, CJEU kicks out Neurim, new PTAB opinion

The German Federal Court of Justice’s written justification for its May ruling in Sisvel v Haier is a win for both licence holders and implementers because it clarifies the FRAND negotiation process, say German intellectual property lawyers.

Drawing from Mr Justice Colin Birss’s UK ruling in Unwired Planet v Huawei, the document says implementers must actively engage in fair, reasonable and non-discriminatory (FRAND) negotiations and accept a FRAND offer from a patent holder, even if a lower FRAND rate has been offered to a competitor.

Florian Cordes, head of EU litigation for Sisvel in Switzerland, tells Managing IP that the justification of the ruling is a welcome clarification to some unanswered questions about how negotiations should be conducted, and that it provides harmonisation across the across the German legal system.

“FRAND negotiations were really one sided in the past and several courts have mainly spoken only of the obligations of the patent owners,” he says. “Now the Supreme Court has made it clear that if a company is aware it is infringing, it is obliged to take all the necessary steps to obtain a licence.”

Other Managing IP stories from the week that you might like to read include:

• Eeva Hakoranta: my vision as InterDigital’s new CLO

• Starting in a crisis: COVID’s impact on future lawyers

• Interview: WIPO’s Gurry hits out at ‘fake news’

• Uncertainties remain for China’s trade secret guide

• 5G standards crisis: US firms need more leeway with China

In a landmark judgment on Thursday that served as a blow to pharmaceutical innovators, the Court of Justice of the EU ruled that supplementary protection certificates are not available for new uses of previously authorised products.

In its decision in Santen (C‑673/18), the court followed the opinion of Advocate General Giovanni Pitruzzella from January concerning Article 3d of the SPC Regulation, and cast aside its 2012 judgment in Neurim (C-130/11).

The Neurim decision had left open the possibility that previously authorised veterinary medicines could be eligible for SPCs, provided the new marketing authorisation (MA) was for human use.

But the new decision very clearly set out that: “Article 3d must be interpreted to mean that an MA cannot be considered to be the first MA, for the purpose of that provision, where it covers a new therapeutic application of an active ingredient or combination of active ingredients, and that active ingredient or combination has already been the subject of a marketing authorisation for a different therapeutic application.”

Gareth Duncan, partner at D Young & Co in the UK, said that while this decision may disappoint some in the pharmaceutical industry, it may provide much-needed clarity for others on a point of law which has been uncertain for almost a decade.

Jules Fabre, legal director at Pinsent Masons in Paris, noted that the judgment clarifies the application of EU legislation and earlier case law, but that it has major implications for pharmaceutical manufacturers.

In another pending case, the CJEU will soon decide on a similar question concerning Article 3c of the SPC Regulation, which requires that "the product has not already been the subject of a certificate”.

The Patent Trial and Appeal Board should only raise its own grounds of unpatentability against proposed substitute claims in rare circumstances, the Precedential Opinion Panel set out on Monday.

The panel, which decides matters of exceptional importance to the PTAB, said in its precedential opinion that the board should typically stick to the claims raised by a patent challenger.

The decision stemmed from the inter partes review (IPR) in Hunting Titan v DynaEnergetics, where DynaEnergetics had alleged that Hunting obtained and used its confidential information relating to the DS Trinity System, an eight-inch perforating gun used in the oil and gas industry.

Jeff Vockrodt, partner at Culhane Meadows in New York, noted that this opinion embraced the adversarial nature of IPRs at the PTAB, and that it will be interesting to see whether this policy affects other issues.

“This decision further strengthens patent owners' positions in IPR, reducing the risk that the PTAB will come up with its own reasons for denying motions to amend,” he said.

The former head of IP for TiVo will join non-practising entity Intellectual Ventures as chief operating officer of its invention investment fund in September, it was announced yesterday.

Arvin Patel, who left his positon at TiVo as part of the business’s merger with Xperi, will lead commercialisation strategy and execution, business development, and partnerships across the fund’s patent portfolio. He will report to executive vice president Mathen Ganesan.

“Intellectual Ventures is one of the most forward-thinking innovation companies in the world. I’m honored to join this exceptional team,” said Patel in a press statement.

“I hope to continue to build on the mission of impact invention at IV and bring real change not only to the technology industry but in the way that innovation is created and distributed around the world.”

Patel relinquished his position at TiVo last month with a golden parachute of close to $1.8 million after almost three years at the company.

He was one of several executives to depart after the Xperi merger, including CEO Dave Shull.

The highest court in Germany has appointed a new judge from the Düsseldorf Regional Court who specialises in patent law, it was announced on Wednesday.

Tim Crummenerl, who has been a district judge since 1999, was elected to the Federal Court of Justice (Bundesgerichtshof) by the Federal Judge Election Committee (Bundesrichterwahlausschuss) in its session on July 2.

Crummenerl has been presiding judge of a patent litigation chamber at the Düsseldorf court since 2009.

"The selection of the Bundesrichterwahlausschuss underlines once again the important role that Düsseldorf plays as a patent law location in Germany. We are pleased that with Tim Crummenerl, another highly esteemed judge is now represented in Karlsruhe, and we wish him all the best for his new task," said Gottfried Schüll, partner at Cohausz & Florack in Düsseldorf.

While foreign software companies do not often choose to enforce copyright in China, those that do typically achieve high win rates and are often awarded substantial damages, according to new research from IP firms Rouse and Lusheng published this week.

The report suggests that the number of foreign software companies choosing to litigate in China is small. Out of 1,303 cases recorded between 2010 and 2019, just 285 (22%) were bought by foreign plaintiffs. By comparison, three times as many patent infringement cases were brought by foreign plaintiffs during the same period.

The document goes on to show that win rates and compensation levels are both high. The win rate for foreign plaintiffs stands at 85.3% which, though high, is actually lower than the win rate for domestic software plaintiffs.

Analysis shows that this average was brought down by two prolific plaintiffs who filed ‘bulk lawsuits’ and received a markedly lower win rate. Other plaintiffs, who filed far fewer cases, enjoyed 100% success rates.

Compensation awarded by the courts is also high compared with other types of IP cases. The average compensation totalled $70,932, compared to patent case compensation for foreign plaintiffs of $29,037 on average.

And foreign plaintiffs have enjoyed some impressively high compensation amounts in comparison to typical awards for foreign plaintiffs. The highest award in the dataset was $2.8 million, and the top five awards all exceeded $900,000.